‘ 
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APPENDIX L 
HAITI 
1. 
Government Organization for Civil Avia- 
tion. 
A National Commission for Civil Aviation 
was created in Haiti in 1948 to function under 
the jurisdiction of the Secretariat of State for 
Foreign Affairs. The Commission is composed 
of representatives of various governmental de- 
partments and is charged with the following 
general responsibilities: (1) to maintain con- 
tact with all national and international civil 
aviation organizations; (2) to advise the gov- 
ernment on measures relating to the execution 
of Haitian aviation laws; and (3) to study and 
advise the government on all other aviation 
questions. 
The Aviation Corps of the Haitian Armed 
Forces (Garde d’Haiti) controls and operates 
Haiti’s only domestic air transport service. 
2. 
Civil Aviation Policy. 
Until 1943, there were no air services within 
Haiti. 
Since that time, Haiti has not permit- 
ted a private company to operate domestic air 
services, reserving air transport as a monopoly 
of the Haitian Air Corps, principally for mili- 
tary training purposes. 
As a result, there are 
no licensed civilian commercial pilots in the 
country and only ten licensed private pilots. 
The country has had no occasion to develop 
a formal international aviation policy other 
than to ensure continued adequate service to 
Port-au-Prince 
by scheduled international 
carriers. 
Port-au-Prince has received such 
service continuously since 
1929. 
Although 
. 
Haiti has been a member of the International 
Civil Aviation 
Organization 
(ICAO) 
since 
March 1940, its participation in ICAO activi- 
_ties has been negligible. 
No bilateral 
air 
- 
agreements have been concluded by the Hai- 
| lan Government. 
Haiti’s only international airport, Bowen 
Field near Port-au-Prince, is maintained and 
operated by Pan American World Airways 
(PAA) under a Haitian Government lease ef- 
fective until January 1960. 
3. 
Aijrlines. 
a. Haitian Scheduled Airlines. 
There are no civil airlines operating within 
Haiti, as a result of the Haitian Government’s 
policy of reserving air transport as a monopoly 
of the Aviation Corps of the Haitian Armed 
Forces 
(Garde 
d’Haiti). 
The Haitian 
Air 
Corps, which combines military training with 
operation of an airline, was established in May 
1943 as an air mail carrier and was authorized 
in the following year to accept passenger traf- 
fic. 
Revenue derived from the air transport 
service, 
which 
operates 
under 
the name 
“Garde d’Haiti,” is devoted principally to the 
acquisition and maintenance of equipment 
and to personnel training. 
The Garde d’Haiti 
operates 
three 
scheduled 
flights 
weekly 
throughout Haiti if payloads are available. 
Unscheduled 
freight service 
is also main- 
tained. 
Although this carrier has a good 
safety record, its passenger operations were 
interrupted during 1944-45 as a result of the 
poor condition of its flying equipment. 
Air 
mail service, however, was continued during 
this period. 
As of October 1949, Haiti’s only scheduled 
airline, the Garde d’Haiti, was operating a 
network of 474 unduplicated route miles and 
scheduled 2,570 miles per week. 
Garde d’Haiti (Corps d’Aviation de la Garde 
d’Haiti) 
Routes: Garde d’Haiti operates exclusively 
within Haiti, connecting its capital, Port-au- 
Prince, with other coastal cities along the 
country’s entire perimeter, as well as with one 
point in the interior. 
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Equipment: 
World Airways (PAA) and Royal Dutch Air- 
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1 C-47 
lines 
(KLM). 
PAA’s Caribbean operations 
2 Beechcraft C-45 (damaged) 
include Haiti on flights from the US to the 
2 Cessna C-78 
Ownership: 
100 percent Government 
of 
Haiti. 
b. Foreign Scheduled Airlines. 
Haiti’s capital, Port-au-Prince, is served by 
two foreign scheduled carriers, Pan American 
Dominican Republic and beyond. 
The KLM 
route 
originates 
at Curacao 
and 
touches 
Haiti en route to Kingston, Jamaica. 
Con- 
neclions are maintained by both carriers to 
other points in Central and South America. 
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1. 
Government Organization for Civil Avia- 
tion. 
Civil aviation in Honduras is regulated and 
supervised by a civil aviation office which is 
under the Ministry of War, Navy and Avia- 
tion.* 
| 
2. 
Civil Aviation Legislation. 
The government recently undertook the re- 
vision of the outmoded (1930) civil aviation 
legislation and air traffic regulations. 
Little 
has been accomplished on this project to date, 
however, partly because some elements in the 
government object to the use of US legisla- 
tion and regulations as a model on the grounds 
that they cannot be adapted to basically dif- 
ferent Honduran conditions.** 
3. Honduran Civil Aviation Policy. 
All scheduled airlines, national or foreign, 
must obtain an operating concession author- 
ized by the Congress.. Honduras admits for- 
eign non-scheduled operators only if the coun- 
_ 
. try of origin grants reciprocal privileges to 
- Honduran non-scheduled carriers. 
Otherwise 
the Honduran Government exercises little con- 
trol over airline operations. 
The government 
has a 20 percent interest in the stock of the 
_ 
Pan American World Airways (PAA) affiliate 
in Honduras, SAHSA, but has an investment 
in no other domestic or international airline. 
Honduras does not subsidize any domestic air 
* The new Honduran aviation law (see note **) 
provides that civil aviation is to be handled by a 
Department.of Civil Aeronautics which is set up as 
a dependency of a new Bureau of Aeronautics under 
the jurisdiction of the Ministry of War, Navy and 
Aviation. 
** A new aviation law, possibly restrictive toward 
. 
foreign airlines depending on how it is interpreted, 
was put into effect in March 1950. 
It reflects, how- 
ever, the great haste with which it was forced 
through the legislature by the air force. 
Many ar- 
ticles are ambiguous or obscure in meaning. 
ASECGRET 
APPENDIX M 
HONDURAS 
transport company;, it does, however, grant 
air mail contracts, but in most cases the flat 
monthly fee which the government pays does 
not cover expenses. 
Since many points for 
which air mail service is contracted do not 
have airports, the airlines must freqeuntly 
subcontract with connecting surface carriers 
to provide the service. 
Although facilities are crude and flying 
hazardous, the government has appropriated 
very little money to improve airfields or lessen 
the hazards of flying. 
With the exception of 
the small appropriations made for the main- 
tenance of military aviation facilities, fields 
and facilities have been built and maintained 
by the airlines. 
Honduras has concluded no bilateral air 
transport agreements, and is not a member of 
the International Civil Aviation Organization 
(ICAO). 
4. 
Aijrlines. 
a. Honduran Scheduled Airlines. 
Honduras is served by two domestic air- 
lines and two international 
carriers. 
Pas- 
senger and cargo traffic over Honduras’ in- 
tensive airline network has grown with sur- 
prising rapidity during the past few years. 
There 
is, however, intense and sometimes 
bitter competition between the two domestic 
scheduled operators, the PAA affiliate, SAHSA, 
and the former TACA System Affiliate—now 
privately owned—TACA de Honduras. 
Both 
have improved their services and equipment, 
and are apparently realizing a modest profit. 
Twenty-two towns are served by both, five 
more by TACA de Honduras, and one more by 
SAHSA. 
Although both airlines charge ap- 
proximately the same rates on most routes, 
their efforts to agree on a common uniform 
rate schedule 
have 
so far been 
fruitless. 
SAHSA has recently been growing more rap- 
idly than TACA de Honduras (which was sold 
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by the TACA system early in 1948 to Hon- 
duran citizens), but the latter’s position has 
been enhanced as a result of its contract with 
TACA El Salvador to operate that airline’s 
Central American international 
routes, 
al- 
though the service is still conducted under the 
name of TACA E] Salvador. 
_TAN (Transportes Aereos Nacionales, S.A.), 
a Honduran non-scheduled freight airline, 
operates from Honduras to Habana and Miami. 
TAN is used principally by businessmen and 
contractors for bringing freight from the US. 
It does not compete directly with either of the 
scheduled airlines, since it has confined its 
operation to freight. 
TAN has applied to the 
US Civil Aeronautics Board for a permit to 
transport passengers, cargo, and mail from 
» Honduras via Habana to Miami.* 
TAN uses 
C-46’'s at present. 
(1) SAHSA (Servicio Aeréo de Honduras, 
S.A.). 
Routes: SAHSA’s relatively extensive routes 
include domestic services in the region north 
of Tegucigalpa, as well as to points along the 
entire northern coast of Honduras and in the 
eastern part of the country. 
SAHSA also 
operates international services linking Tegu- 
cigalpa with Belize, the capital of British Hon- 
duras, and San Salvador, the capital of El 
Salvador. 
* The CAB granted TAN such a permit for a three- 
year period beginning June 1950. 
Equipment: 6 DC-3 
Ownership: 40 percent private Honduran 
40 percent US (Pan American World Air- 
ways) 
20 percent Government of Honduras 
SAHSA was established as a Pan American 
affiliate by a 1945 contract with the Honduran 
Government. 
(2) TACA de Honduras (Transportes Aereos 
Centroamericanos, S.A.). 
Routes: TACA de Honduras serves Teguci- 
galpa and all of the other principal cities in 
Honduras. 
An international 
route 
is also 
operated from Nueva Ocotepeque to San Sal- 
vador, the capital of El Salvador. 
TACA de 
Honduras, moreover, operates international 
routes from San Salvador south to San Jose, 
Costa Rica, under contract to and in the name 
of TACA El Salvador (see El Salvador, Section 
4,a.). 
Equipment: 
8 DC-3 
1 Lockheed Hudson 
2 Avro Anson 
Ownership: Believed to be 100 percent pri- 
vate Honduran. 
TACA de Honduras was sold 
by the TACA System to two residents of Hon- 
duras in February 1948 (see Panama, Section 
4). 
There is some evidence, however, that 
.; 
these individuals may be backed almost 75 per- 
cent by US interests. 
AIRLINES OF HONDURAS 
(October, 1949) 
40% Private 
SAHSA 
1,266 
10,194 
{ 
TACA 
1,060 
9,814 
| 
100% Private 
‘TOTAL 
2,326 
20,008 
| 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
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Aside from the TACA El Salvador interna- 
tional service through Tegucigalpa, which is 
actually operated by TACA de Honduras as 
indicated above, there is only one foreign-flag 
carrier 
serving 
Honduras. 
Tegucigalpa 
is 
served by Pan American World Airways (PAA) 
over two routes from Guatemala and E] Sal- 
vador to Nicaragua and Costa Rica. 
PAA’s 
operations, which compete in Central America 
with those of TACA El Salvador, provide con- 
nections from Honduras to points in the US, 
as well as throughout Central and South 
America. 
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APPENDIX N 
MEXICO 
1. 
Government Organization for Civil Avia- 
tion. 
Civil aviation in Mexico is under the juris- 
diction of the Department of Civil Aeronautics 
(DAC) in the Ministry of Communications and 
Public Works. 
~ 
In July 1949, a commission was created by 
the DAC to study the civil aviation situation 
in Mexico and make specific recommendations 
for 
reorganizing 
air 
transportation, 
with 
special attention to the international aspects 
of the problem. 
Although this commission is 
to act only in an advisory and unofficial ca- 
pacity, its recommendations, when published, 
will undoubtedly exert considerable influence 
on the future of Mexican civil aviation. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
Air transportation in Mexico is governed by 
the “Law of General Communications Media 
and Means of Transportation,” which among 
other matters outlined the governmental or- 
ganization for civil aviation and provided for 
the regulation of domestic and foreign airlines. 
It is required by law that: (1) a majority of 
the stock of Mexican airlines must be con- 
trolled by Mexican citizens; 
(2) ninety-five 
percent of the personnel must be Mexicans; 
and (3) only Mexican pilots may be employed. 
The DAC grants permits to Mexican airlines 
in two forms. 
If an operation for which ap- 
plication has been made appears justified, a 
one-year experimental permit is issued to allow 
evaluation of the proposed route. 
If the air- 
line then desires to continue operating the 
route, it applies for a permanent concession. 
Pending a decision on this application by the 
government, 
the experimental permit con- 
tinues in force. 
Most concessions are granted 
for the maximum period of thirty years. 
b. Regulation of Mexican Airlines. 
Although 
the Mexican 
Government 
at- 
tempts to protect its airlines from foreign com- 
petition, it does almost nothing else to aid 
the expanding Mexican air transport industry. 
Mexico does not pay a direct subsidy to any 
airline. 
Rates paid for the transportation of 
mail vary according to the company, but such 
payments represent only a nominal subsidy. 
Some relief is also granted in the exemption 
from import duties of some aviation equip- 
ment. 
Lack of proper government regulation of 
commercial aviation has been largely respon- 
sible for the establishment of an uneconomic 
amount of competition over domestic routes, 
with the result that most of the twenty-eight 
scheduled or non-scheduled Mexican airlines 
are losing money. 
The larger scheduled oper- 
ators particularly are alarmed over what they 
term the “air piracy of shoestring airlines.” 
Moreover, Mexico’s traffic potential is not suffi- 
cient to support the number of airlines which 
the DAC 
has 
allowed. 
Recent 
personnel 
changes in the DAC may improve the situ- 
ation, but the establishment of a logical airline 
pattern in Mexico would probably require the 
elimination of most of the non-scheduled oper- 
~ ators. 
The Pan American World Airways affiliate, 
Compania Mexicana de Aviacion, S.A. (CMA), 
has 
been 
favored 
as 
Mexico’s 
unofficial 
“chosen instrument” for most of the time it 
has operated in Mexico 
(since 1924). 
Al- 
though CMA has not officially been granted 
a monopoly of Mexican flag international 
services, it has been awarded the majority of 
international routes flown by Mexican carriers. 
That its influence with the government may 
be waning, however, is indicated by the fact 
that Aerovias Guest received 
the franchise for 
the coveted route to Madrid and, contrary to 
the early predictions of its critics in Mexico, 
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Aerovias Guest appears to be operating effi- 
ciently and with a fair margin of profit over 
this route. 
Although Mexican law requires a majority 
of the stock of domestic airlines to be held by 
Mexican 
citizens, this regulation does not 
appear 
to be universally 
enforced, 
since 
LAMSA, one of the country’s three leading 
trunk route operators, is a United Air Lines 
subsidiary wholly owned by US interests. 
c. Regulation of Foreign Airlines. 
. 
In an effort to promote its airlines, Mexico, 
to a greater extent than any other Latin 
American country, has pursued a restrictive 
international aviation policy which aims to 
keep foreign airline competition at a minimum 
(see Section 3,a). 
Cabotage traffic, moreover, 
is reserved to Mexican airlines by law. 
Foreign airlines receive their permits to 
operate to Mexico from the DAC. 
Permits to 
airlines of countries with which Mexico has 
concluded bilateral air agreements are issued 
in accordance with the provisions of these 
agreements. 
d. Promotion of Other Aviation Activity. 
Since the Mexican Government has fur- 
nished no airway facilities nor meteorological 
aids and has built only a few airports through- 
out the Republic, most of the existing facilities 
have been developed by the airlines with pri- 
vate capital. 
The apathetic attitude of the 
government toward such matters led to the 
establishment in 1945 of the Aeronautical 
Radio de Mexico, S.A. (ARMSA), 
a non-profit 
company organized by the airlines to give radio 
and weather service to all commercial and 
private flyers. 
ARMSA purchased the sepa- 
rately owned facilities and now operates and 
maintains them, charging the individual air- 
lines a rate proportionate to the amount each 
uses the facilities. 
The failure of a number 
of small, non-scheduled operators to pay this 
company for its services has been largely re- 
sponsible for its present indebtedness. 
For 
reasons of safety, however, ARMSA has been 
required by the government to give service to 
all aircraft, whether the company has been 
paid or not, and it has received no government 
assistance in its efforts to collect from its 
debtors. 
| 
In an effort to force Mexican and US airlines 
to use Petroleos Mexicanos (PEMEX) aviation 
fuel rather than to import US products, the 
Mexican Government has repealed a 1939 de- 
cree permitting tax-free importation of avia- 
tion fuel for civil aviation. 
In spite of the 
increased costs, however, the larger airlines are 
continuing 
to import US 100-octane 
fuel, 
since they claim PEMEX products to be of 
inferior quality. 
Moreover, they lack faith 
in the administration of PEMEX and question 
the reliability of the company’s distribution of 
aviation fuel to Mexican airports. 
Among at least thirty private aeronautical 
schools or aero club training units in Mexico, 
the most important is the Escuela de Aviacion 
Civil “Cinco de Mayo” at Puebla, which offers 
courses 
in flight, navigation, meteorology, 
radio navigation, and related fields. Although 
this school is supervised and managed directly 
by the Department of Civil Aeronautics, it 
has been provided with only meager funds 
from the government for the purchase of 
flight and ground school training equipment 
with which to carry on its program. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
In order to protect the interests of its air- 
lines in both their domestic and international 
operations, the Mexican Government has pur- 
sued a very restrictive air traffic policy. 
In 
negotiations with the US for a bilateral air 
agreement, Mexico has insisted upon monop- 
oly rights over certain routes and upon a regu- 
lated division of traffic between US and Mexi- 
can airlines over certain other routes. 
The 
Mexican position reflects not only fear of the 
technical and financial superiority of foreign 
airlines (especially US airlines), against which 
Mexican carriers believe they cannot eco- 
nomically compete, but also the extreme sensi- 
tivity of the Mexican Government to criticism 
by nationalist groups. 
Since the Mexican de- 
mands are inconsistent with the basic prin- 
ciples of US aviation policy, the US has refused 
to abandon the Bermuda pattern and has con- 
sistently rejected any arrangement providing * 
for a regulated division of traffic. 
Negotiations initiated by the UK and the g 
Netherlands have also been unsuccessful be- 
cause of similar Mexican insistence upon split i 
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traffic arrangements. 
As a result, the only 
Mexican bilateral air agreements now in effect 
are a restrictive agreement concluded with 
Portugal on 22 October 1948, and an agree- 
ment signed with Cuba in June 1949. 
b. International Organizations. 
Mexico became a member of the Interna- 
‘tional Civil Aviation Organization 
(ICAO) 
upon its ratification of the Chicago Conven- 
tion on 25 June 1946 and has taken an active 
part in most ICAO deliberations. 
The Mexi- 
can role was decisive in the failure of the spe- 
cial November 1947 Geneva meeting of an 
ICAO commission convened to draw up a 
multilateral agreement on commercial rights 
in international air transport. 
Apparently 
acting as the spokesman of the weaker civil 
air nations at that meeting, Mexico presented 
a resolution which brought out two conflict- 
ing views: 
(1) the US, the UK, and other 
major air nations sought a multilateral ex- 
change of Fifth Freedom privileges in one in- 
ternational agreement; and (2) Mexico, the 
other Latin American nations present, and 
certain other weak air nations supported the 
Mexican resolution reserving to each country 
the right to withhold Fifth Freedom privileges 
in the negotiation of bilateral route agrée- 
ments supplementing the multilateral agree- 
ment. 
(It had been decided that interna- 
tional air routes should be subject to bilateral 
negotiations.) 
The Mexican resolution was 
accepted by a vote of 13-9, with five absten- 
tions. 
Because of the sharp difference 
of 
opinion, however, no compromise was possible 
and there has been no subsequent attempt to 
negotiate a multilateral agreement. 
Various 
explanations have been advanced for the Mexi- 
can delegation’s action at the Geneva confer- 
ence. 
In any event, it appears that the po- 
sition taken by the delegation was not ap- 
proved in advance by the Mexican Govern- 
ment. 
On the other hand, the Mexican pro- 
posal at Geneva was clearly consistent with 
the generally restrictive policy on air traffic 
rights pursued by Mexico. 
Aerovias Guest is 
@ member of the International Air Transport 
Association. 
c. US Technical Assistance. 
From 1943 to 1947, a US Civil Aeronautics 
Technical Mission composed of flight training 
and aircraft maintenance specialists was as- 
signed to Mexico to work with government of- 
ficials in establishing the pilot training school 
“Cinco de Mayo” at Puebla. 
This mission 
participated in training more than 300 Mexi- 
can flight personnel, 60 percent of whom are 
currently engaged in civil aviation activities. 
4. 
Aijrlines. 
a. Mexican Scheduled Airlines. 
| 
There are thirteen Mexican airlines operat- 
ing scheduled services within the country and 
to points abroad. 
In addition, about fifteen 
non-scheduled operators offer a variety of 
charter services. 
Of the three leading Mexi- 
can airlines, CMA, LAMSA, and Aeronaves, 
CMA continues to hold 
its dominant po- 
sition. 
CMA’s total weekly scheduled mile- 
age makes up half of the Mexican total, is 
more than four times that scheduled by any 
other carrier, and twice the combined mileage 
of its three nearest competitors. 
Aerovias Guest and the two PAA affiliates, 
CMA and Aeronaves, are reportedly the only 
Mexican airlines to be operating at a profit. 
Each of these, however, subsists principally 
on its income from a single lucrative route: 
Aerovias Guest, Mexico City-Madrid; CMA, 
Mexico 
City-Los 
Angeles; 
and 
Aeronaves, 
Mexico City-Acapulco 
(the popular Pacific 
beach 
resort). 
All Mexican 
airlines 
have 
been seriously affected by the general business 
Slump and the devaluation of the Mexican 
peso. 
While passenger traffic has fallen off 
15 percent since devaluation, operating costs 
(equipment, fuel, and repairs, most of which 
have to be paid for in dollars) have increased 
20 percent. 
Freight 
traffic 
has increased 
about 50 to 75 percent, but not sufficiently to 
offset other losses. 
In the face of these con- 
ditions, which mean the inevitable bankruptcy 
of marginal operators, negotiations have been 
proceeding to merge about eight of the smaller 
airlines into a single organization, but no defi- 
nite action has yet been taken.* 
* In the consolidation of the smaller Mexican air- 
lines which took place during the early part of 1950, 
ATSA took over the operations of ALASA and Ja- 
lisio. 
ATSA, which may change its name to Air 
Mexico, will serve 27 cities and towns and conse- 
quently will become one of the largest domestic car- 
riers. 
It is reported also that GPA and Panini have 
been merged with Reforma. 
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Papers of 
HARRY S. TRUMAN 
| PRESIDENT'S SECRETARY FILE 
AIRLINES OF MEXICO 
: 
October, 1949) 
Number 
Airline 
of Aircraft 
| 
Ownership 
| 
(Various Types) 
60% Private 
Aeronaves 
1,876 
34,250 
40% U.S. 
ATSA 
,38 
8,298 
62% Private 
— 
38% U.S. 
; 
Contreras 
1,550 
6,200 
100% Private 
; 
Aerovias Guest 
5,756 
23 ,024 
ALASA 
_ 959 
6,702 
100% U.S. 
Reforma 
3,120 
32,086 
5) 
100% Private| 
| i 
99% 
Private 
CMA 
5,015 
147,502 
41%. 
U.S. 
i 
GPA 
675 
4,524 
100% Private 
: 
LAMSA 
1,573 
29 ,948 
100% U.S. 
z 
Panini 
1,616 
11,016 
100% Private} 
= 
Jalisco 
1,624 
100% Private; 
TAT 
372 
5,874 
100% Private| 
‘TAMSA 
1,317 
7,706 
100% Private 
TOTAL 
25,415 
318 ,754 
Mazatlan-La Paz. 
Equipment: 
4 DC-3 
3 DC-2% 
1 Avro Anson 
Aeronaves also owns a number of other air- 
craft, mostly single engine types, which are 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
) 
are not duplicated by an individual airline. 
(1) Aeronaves (Aeronaves de Mezico, S.A.). 
Routes: The operations of Aeronaves are 
confined entirely to the western part of Mexi- 
co, except for one international stop at No- 
gales, Arizona. 
Its services are divided into 
two main types: 
(1) seasonal, high density 
tourist traffic between Mexico City and the 
Pacific resort, Acapulco; and 
(2) the rela- 
tively unfluctuating traffic carried over routes 
such as Mexico City-Nogales, and Mexico City- 
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obsolete and not believed to be employed in 
regular operations. 
Ownership: 
60 percent private Mexican 
| 
40 percent 
US 
(Pan American qm 
World Airways) 
Aeronaves was established 
in 1934 as a@ 
wholly 
Mexican-owned 
organization. 
Pan 
American acquired its 40 percent holding in 4% 
1940 and, as a result of certain contractual @ 
relationships, elects two of the five members 
of the Aeronaves Board of Directors who can <a 
block any action of the Directors. 
Moreover, 
purchase of equipment and certain other ge 
transactions cannot be undertaken without 
the consent of PAA, which therefore exer-aam 
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trol. 
(2) ATSA (Aero-Transportes, S.A.). 
Routes: ATSA operates only within Mexico, 
except for a stop at Brownsville, Texas, which 
is being served temporarily because of inade- 
quate airfield facilities across the border at 
Matamoros. 
The ATSA route network in- 
cludes most of the important Mexican cities 
between 
the US border and Mexico City. 
These points are served on one north-south 
and two east-west routes, interconnecting at 
two junction points, eerie and San Luis 
Potosi. 
Equipment: 
3 DC-3 
3 Boeing 247-D 
2 Stinson 
1 Vultee Special V-1 
Ownership: 
62 percent private Mexican (9 in- 
dividuals) 
38 percent private US (2 individ- 
uals) 
ATSA was organized early in 1943 and 
started operating early the following year. 
Service has twice been interrupted for several 
months by lack of flying equipment and finan- 
cial difficulties.* 
(3) Contreras (Aerovias Contreras). 
Routes: Contreras operates three routes 
from Tijuana, on the US border. 
Two of 
these serve Lower California: one extends the 
full length of the peninsula to La Paz; the 
other serves the Pacific resort of Ensenada. 
The third route extends to Mexicali and San 
Felipe, on the Mexican mainland. 
Equipment: 
. 
3 DC-3 
3 Avro Anson 
Ownership: 100 percent private Mexican. 
Contreras was founded in 1947 by Mr. Manuel 
Contreras, who is believed still to be the sole 
owner of the airline. 
(4) Aerovias Guest, S.A. 
Routes: Aerovias Guest operates twice week- 
ly service over just one route, Mexico City to 
Madrid, with traffic stops at the Azores and 
Lisbon and non-traffic stops at Miami and Ber- 
* See note page 79. 
SEOGRET 
| 
muda. 
The company has applied to the US 
Civil Aeronautics Board, however, for authori- 
zation to operate a non-stop Mexico City-New 
York service. 
Equipment: 
(According to recent reports, two of these 
aircraft are operated on Guest’s scheduled 
service, two are held'in reserve or for charter 
service, and the fifth is temporarily leased to 
a US non-scheduled carrier.) 
Ownership: 
63 percent private Mexican 
37 percent private US 
Aerovias Guest began operations to Spain 
in January 1948 under a thirty-year license 
from 
the Mexican 
Government. 
Aerovias 
Guest is a member of the International Air 
Transport Association (IATA). 
(5) ALASA (Aerovias Latino-Americanas, 
S.A.). 
Routes: 
ALASA 
operates 
local 
routes 
throughout southeastern 
Mexico 
radiating 
from Villahermoso, which is also connected 
with Mexico City by a trunk route. 
Equipment: 1 DC-3 
ALASA also owns about 25 other aircraft of 
at least 10 different types, all small and obso- 
lete. 
Ownership: Believed to be controlled by US 
citizens; there is no Mexican Government par- 
ticipation. 
Under 
several 
other 
names, 
ALASA dates back to 1932.* 
(6) Reforma (Aerovias Reforma, S.A.). 
Routes: The only route now being operated 
by Reforma connects Mexico City with the 
west coast of Mexico and lower California 
(Mexico City-Guadalajara-Culiacan-Guaymos- 
Ensenada-Tijuana). 
Reforma also holds gov- 
ernment concessions, however, for the opera- 
tion of two other routes: Mexico City-Puebla 
and Acapulco-Puebla-Tampico. 
Equipment: 
3 DC-3 
2 C-47 (cargo only) 
Ownership: 100 percent private Mexican. 
The founder (1945) and sole stockholder is Mr. 
Alberto Rico Pani.* 
* See note page 79. 
Papers 
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HARRY S. TRUMAN 
| PRESIDENT'S SECRETARY FILE 
| | 
SECRET 
(7) CMA (Compania Mezicana de Aviacion, 
Equipment: 
S.A.). 
1 Cessna C-78 
| 
2 Avro Anson 
; 
Routes: CMA serves most of the important 
cities of Mexico, except Acapulco on the Pacific 
coast and those in the interior north of Mexico 
City. 
The CMA domestic route network con- 
sists 
of: 
(1) trunk routes radiating from 
‘Mexico City; and (2) feeder routes extending 
from Monterrey and Mexico City to cities on 
the Gulf coast, as far as Merida in the Yuca- 
tan. 
CMA also operates two international 
routes: Mexico City-Los Angeles and Mexico 
City-Habana. 
CMA is the only airline of any 
nationality serving these two routes directly. 
Connections with the affiliated PAA system are 
made on these routes at both Mexico City and 
Merida for points in Central and South Amer- 
| 
ica and points in the US. 
GMA has also ap- 
plied to the US Civil Aeronautics Board for au- 
thorization to operate passenger and cargo 
services to New Orleans and several Texas 
ports of entry. 
Equipment: 
5 DC-4 
15 DC-3 
1 DC-2'% 
1 C-54 (cargo only) 
1 C-47 (cargo only) 
Ownership: 
59 percent private Mexican 
41 percent US (Pan American World 
Airways) 
CMA was founded in 1924 by two US na- 
tionals to transport payrolls to the Tampico 
oil fields. 
In 1929, Pan American purchased 
the entire capital stock of the company, for 
the purpose of gaining operating rights in 
Mexico. 
PAA’s stock interest in CMA has 
been progressively reduced in recent years to 
55.6 percent in 1944, to 45 percent in 1946 
(thus 
relinquishing 
control), 
and 
to 
its 
present holding later that year. 
(8) GPA (Golfo y Pacifico Aerotransportes, 
Routes: GPA connects cities along the Gulf 
of Mexico (from Gutierrez Zamora to Coatza- 
coalcos) with Mexico City. 
It also connects 
- Coatzacoalcos with Salina Crus on the Pacific 
coast. 
lisco). 
Ownership: 100 percent private Mexican. 
GPA was founded and started operating in 
1945.* 
(9) LAMSA 
(Lineas 
Aereas 
Mezicanas, 
S.A.). 
Routes: LAMSA operates north of Mexico 
City in western Mexico, including a route ex- 
tending from Mexico City to Ciudad Juarez 
with a branch from Torreon to Mazatlan on 
the Pacific coast, as well as a group of routes 
in northwestern Mexico. 
LAMSA operates on 
a temporary basis to Nogales, Arizona, because 
: 
of inadequate facilities on the Mexican side of 
the border. 
No direct connections are made, 
; 
however, with LAMSA’s US parent company, 
United Air Lines. 
LAMSA has also applied 
for US authorization to provide service to Los 
Angeles and several points in Texas. 
Equipment: 6 DC-3 
Ownership: LAMSA is the Mexican subsidi- 
ary of the US scheduled airline, United Air 
Lines, which holds 100 percent of LAMSA’s 
preferred stock and 83.2 percent of its com- 
mon stock. 
The remaining 16.8 percent of 
common stock is held by other US interests. 
(10) Panini (Servicio Aereo Panini, S.A.). 
Routes: Panini serves the central and south- 
ern parts of western Mexico, with Mexico City 
as its eastern terminus. 
Although severalof 
™& 
Mexico's large cities are included in the net- 
@& 
work, the majority of points served are rela- 
tively small towns with inadequate surface 
transport facilities. 
Equipment: 
2 DC-3 
2 Boeing 247-D 
1 Avro Anson 
1 Travelair (not used in 
scheduled service); 
Ownership: 100 percent private Mexican. 
Panini was founded in 1934 by Carlos Panini, 
who is believed still to hold a controlling in- 4am 
terest.* 
(11) Jalisco (Transportes Aereos de Ja-4 
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-PRESIDENT'S SECRETARY FILE 
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Routes: Jalisco serves a small section of west 
central Mexico, from Guadalajara on the east 
to Puerto Vallarta on the Pacific, thence south 
to Tomatian. 
There is no appreciable surface 
transport in this region. 
Equipment: 
3 DC-3 
2 Ford Trimotor 
2 Cessna C-78 
1 Vultee 
Ownership: 100 percent private Mexican. 
Jalisco was founded in 1936.* 
(12) TAT (Transportes Aereos de Tampico). 
Routes: TAT provides local service between 
Tampico and Mexico City and also connects 
Tampico, the chief oil center of Mexico, with 
the oil fields along the Gulf Coast. 
TAT is 
also active as a charter operator along its 
routes. 
Equipment: 
1 DC-3 
5 Avro Anson 
TAT also owns 5 other aircraft of 5 different 
types, all small and obsolete. 
Ownership: 100 percent private Mexican. 
TAT was founded in 1940. 
(13) TAMSA 
canos, S.A.). 
Routes: TAMSA connects Mexico City with 
the Gulf Coast, as far as Merida on the Yuca- 
tan Peninsula, and also serves the more im- 
portant towns on the Peninsula. 
In addition, 
* See note page 79. 
(Transportes 
Aereos Mezi- 
TAMSA operates a very short international 
route, originating in Merida, from Chetumal 
to Belize, British Honduras, where connections 
are made with the TACA System to Central 
America and with British West Indian Air- 
ways for Caribbean points. 
Equipment: 
2 C-47 (cargo only) 
5 Avro Anson 
TAMSA also owns at least a dozen other air- 
craft of various small and obsolete types. 
Ownership: 100 percent private Mexican. 
TAMSA was organized in 1943 succeeding a 
carrier which had operated under various 
other names since 1933. 
b. Foreign Scheduled Airlines. 
Mexico is presently served by four foreign 
scheduled airlines, of which three are US- 
owned or controlled. 
American Airlines oper- 
ates through-flights to Monterrey and Mexico 
City via points in Texas, from the US west and 
east coasts, and from Chicago. 
Pan American 
World Airways (PAA) has a group of routes 
which serve Tampico and Mexico City from 
Texas gateways, continuing on 
(via Tapa- 
chula, on some flights) to Guatemala and other 
points in Central and South America. 
PAA 
also operates Miami-Habana-Merida and New 
Orleans-Merida-Guatemala 
services. 
TACA 
El Salvador, a US-controlled carrier, provides 
service from Mexico City to Guatemala and 
beyond, connecting with other TACA Airways 
System services. 
The Cuban airline, Aerovias 
“Q,” has recently begun operations over a 
route from Habana to Merida and Vera Cruz. 
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APPENDIX O 
NICARAGUA 
1. Government Organization. for Civil Ad- 
ministration. 
| 
Civil and military aviation in Nicaragua are 
~ both controlled directly by General Somoza, 
Minister of War, Navy, and Aviation. 
There 
appears to be no significant aviation organiza- 
_ tion in the government other than an assistant 
to Somoza whd concerns himself with aviation 
matters. 
2. -Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
A Law of Civil Aviation, passed in 1944, is 
presumably still the controlling basic legisla- 
tion for civil aviation, although it has been 
supplemented by various presidential decrees. 
b. Regulation of Nicaraguan Airlines. 
The economy of Nicaragua is largely de- 
pendent upon air transportation. 
Gold is one 
of the country’s principal exports and air 
transportation is almost the only link between 
- the isolated mining areas and the rest of the 
country.. Supplies, mining equipment, and 
personnel are flown in to the mines, while gold 
and personnel are transported on the return 
trip. . 
In order to secure further control over civil 
aviation, Somoza encouraged the formation in 
1948 of a new Nicaraguan airline, FANSA. 
This action was taken in the hope that the 
airline would not only provide a source of con- 
siderable income, but would also train pilots of 
the Nicaraguan Air Force (FAN) and ensure 
the availability of an air transport service on 
which Somoza could depend in an emergency, 
such as revolution or outside attack. 
As a 
means 
of promoting FANSA, Somoza sus- 
_ pended the operating permit of TACA de Nic- 
aragua and forced the liquidation of its assets 
. by suddenly invoking a previously waived Nic- 
araguan law requiring 55 percent of the stock 
of domestic airlines to be held by Nicaraguan 
nationals. 
TACA de Nicaragua was vulnera- 
ble under this law, since it had at one time 
been a wholly foreign-owned subsidiary of the 
TACA System, and had more recently been 
sold to private US and Honduran citizens. 
This action by the Nicaraguan Government 
was in effect an outright expropriation, be- 
cause FANSA immediately took over TACA de 
Nicaragua’s ground equipment and attempted 
to operate its freight business. 
TACA’s three 
DC-3 aircraft, however, escaped to Honduras. 
The principal beneficiary of these develop- 
ments has actually been Lineas Aereas de Nic- 
aragua, S.A. (LA NICA), a Pan American 
World Airways (PAA) affiliate in which PAA 
owns a 40 percent interest. 
The mine owners 
proved disinclined to do business with the obvi- 
ously government-oriented FANSA, and LA 
NICA has gradually secured most of the char- 
ter freight traffic to the mines. 
Moreover, it 
soon received TACA de Nicaragua’s mail con- 
tract and took over all of the domestic sched- 
uled traffic. 
Loss of two aircraft in crashes 
early in 1949 has apparently brought FANSA 
operations almost to a standstill and has forced 
it to negotiate the sale to LA NICA of its re- 
maining two aircraft. 
LA NICA, therefore, is 
now the only scheduled airline in Nicaragua. 
The preferential treatment accorded to LA 
NICA at the same time FANSA was being un- 
successfully promoted is attributable to the 
20 percent share of its capital stock held by 
the government. Somoza himself, moreover, is 
reported to hold directly a substantial portion 
of LA NICA’s privately owned shares. 
Even 
as the principal air transport service now 
available to Somoza, however, LA NICA re- 
-ceives no subsidy except that provided by its 
mail contract with the government. 
c. Regulation of Foreign Airlines. 
The action taken by the government against 
TACA de Nicaragua did not affect the opera- 
tions of TACA, S.A. (TACA El Salvador) or 
PAA, both of which operate international serv- 
ices through Nicaragua. 
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4ARRY S. TRUMAN 
| PRESIDENT'S SECRETARY FILE 
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’ 
a 
d. Promotion of Other Aviation Activity. 
The Nicaraguan Government is financially 
reluctant and technically unable to maintain 
meteorological and navigational aids. 
PAA 
operates Managua airport at its own expense 
and the US Air Force maintains weather and 
communications facilities there. 
A now practically inactive Aero Club, organ- 
ized in 1946, is also controlled by General 
Somoza, but has received 
no government 
assistance. 
There is therefore 
little or no 
market in Nicaragua for civil aircraft. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Since no Nicaraguan-flag carrier operates 
scheduled services outside the country, Nica- 
ragua has had little occasion to develop an 
international air traffic policy. 
It has not 
raised any obstacles to the operation of foreign 
airlines 
into 
Nicaragua. 
The 
Nicaraguan 
Government has negotiated no bilateral air 
transport agreements. 
b. International Organizations. 
Nicaragua was represented at the 1944 Chi- 
cago Conference and became the first Latin 
American member of the International Civil 
Aviation Organization (ICAO) by adhering to 
the Chicago Convention on 28 December 1945. 
Although Nicaraguan representatives have at- 
tended ICAO meetings, they have not taken 
an active part in the proceedings. 
c. US Technical Assistance. 
The airport at Managua was built and 
equipped by the US under the wartime Air- 
port Development Program. 
4. 
Airlines. 
a. Nicaraguan Scheduled Airlines. 
LA NICA, the only scheduled airline in Nica- 
ragua, was organized by PAA in 1945 to com- 
pete with the TACA System’s subsidiary in that 
country, TACA de Nicaragua. 
LA NICA grad- 
ually expanded its services until, by 1947, it 
operated 90 percent of the scheduled service in 
the country. When TACA de Nicaragua was 
expropriated in 1948, LA NICA became the only 
scheduled Nicaraguan airline. 
It has experi- 
ne 
we 
enced only negligible competition from the 
charter operations of FANSA and a recently 
established non-scheduled carrier, INCA. 
- 
INCA Airlines Express Agency was organized 
in Miami late in 1948 and was unexpectedly 
designated by Nicaragua shortly thereafter as 
its chosen instrument for Miami-Managua air 
transport. 
Under the direction of an ex-PAA 
pilot, W. E. Quick, who is President, majority 
stockholder and Chief of Operations, INCA has 
maintained twice weekly non-scheduled serv- 
ice between Miami and Managua via Puerto 
Cabezas. 
It also stops every other week on its 
northbound trip at the Bonanza and Siuna 
mining areas in the interior of Nicaragua. 
Somoza appears to be promoting Quick in this 
enterprise, which accounts for the political 
favor enjoyed by the company at present. 
INCA owns one DC-3, and leases another and 
a C-46 when needed. 
Lineas Aereas de Nicaragua, S.A. (LA NICA). 
Unduplicated 
Miles Scheduled 
Route Miles 
Per Week 
849 
6,738 
Routes: LA NICA connects Managua with 
towns along the eastern coast and with two 
mining communities in the interior, Siuna and 
Bonanza. 
One 
route 
extends 
east 
from 
Managua to Bluefields and then north up the 
eastern coast; the other extends from Mana- 
gua northeast through the interior to the Car- 
ibbean coast at the northern extremity of the 
country. 
Equipment: 
4 DC-3 
1 Boeing 247-D 
Ownership: 
40 percent US (PAA) 
20 percent Government of Nicaragua 
40 percent private Nicaraguan 
b. Foreign Airlines. 
Managua, the capital of Nicaragua, is served 
on the Central American routes of both TACA, 
S.A. (TACA El Salvador) and Pan American 
World Airways (PAA). 
necting service throughout Latin America. 
TACA provides service 
to New Orleans and Mexico City, while PAA 
' 
also provides direct service to the US and con- 4 
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| HARRY S. TRUMAN 
| PRESIDENT'S SECRETARY FILE 
~ 
APPENDIX P 
PANAMA 
1. Government Organization for Civil Avia- 
tion, 
Civil aviation in Panama is under the juris- 
diction of the Ministry of Government and Jus- 
tice, acting through a Department of Civil 
Aeronautics. 
An earlier Department of Civil 
Aeronautics functioned during 1948 under the 
Ministry of Finance and Treasury, but was 
eliminated for economy reasons and its re- 
sponsibilities were transferred to an Inspector 
General of Aviation under the Ministry of Gov- 
ernment 
and 
Justice. 
This 
arrangement, 
which required a Ministry to handle the civil 
aviation function directly, apparently did not 
work well, with the result that the Depart- 
ment of Civil Aeronautics was re-established 
within the Ministry of Government and Jus- 
tice by Decree-Law 5 of 18 August 1949. 
A 
National Civil Aeronautics Board was created 
by this same decree to ‘“‘study and resolve civil 
and commercial aviation problems subject to 
approval by the Executive Organ.” 
2. 
Civil Aviation Legislation. 
It is believed that civil aviation in Panama 
is regulated in part by a decree of 1932, modi- 
fied in 1947. 
Among other matters, this legis- 
lation permits and regulates the registration 
of foreign air carriers under the flag of Pana- 
ma. 
When a particular case is not covered by 
Panamanian civil aviation legislation, it is the 
practice of the Panamanian Government to 
apply a literal translation of US civil air regu- 
lations. 
The 
National 
Civil 
Aeronautics 
Board and the Department of Civil Aeronau- 
tics are preparing a basic civil aviation law 
designed to fit the special aviation situation 
in Panama and to fall within the framework 
of recommendations by the International Civil 
Aviation Organization (ICAO). 
Civil Aviation Policy. 
Because of Panama’s limited financial re- 
sources and the general lack of aeronautical 
‘knowledge on the part of most of its govern- 
ment 
officials, 
civil aviation has not been 
strongly supported or closely regulated by the 
Government of Panama. 
For the most part, 
civil aviation has been exploited for politicai 
purposes by intensely nationalistic elements in 
Panama. 
More recently, however, official at- 
tention has been focused on the necessity of 
formulating a general policy which will sup- 
port all legislative and administrative action 
that is needed to encourage the maximum use 
of Panama’s new Tocumen National Airport. 
The government does not grant any direct 
subsidy to its only scheduled domestic airline, 
Compania 
Panamena 
de 
Aviacion, 
S.A. 
(COPA), which is a Pan American World Air- 
ways affiliate. 
It has concluded a contract 
with COPA, however, granting the latter an 
exclusive franchise (for scheduled air services 
in Panama and an indirect subsidy in the form 
of certain tax exemptions, in return for free 
transportation of Panamanian Government 
officials. 
This contract also stipulates that 60 
percent of the airline’s stock shall be controlled 
by Panamanian nationals and that foreign 
employees will not be hired unless qualified 
Panamanians are not available. 
Although Panama does not pursue a restric- 
tive policy toward foreign airlines, there are 
extreme nationalistic elements within the gov- 
ernment and the country who have periodi- 
cally submitted legislation designed to give 
Panama rather strict control over the opera- 
tions of foreign airlines. 
The government is 
anxious, however, to induce the airlines of as 
many countries as possible to use Panama’s 
new Tocumen National Airport in order to 
derive sufficient revenue to cover the cost of 
its maintenance and operation. 
As a result 
of the US-Panama bilateral air agreement 
signed 31 March 1949, the operations of US 
carriers were transferred from the US Air 
Force Base, Albrook Field (which is in the 
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\ PRESIDENT ' § SECRETARY FILE: 
Canal Zone about one mile from Panama 
City), to Tocumen Airport (which is in the 
Republic, but more distant from the city). 
All commercial airlines serving Panama now 
operate into Tocumen. 
Panama has few trained radio and meteor- 
ological technicians and few qualified pilots 
for commercial-type aircraft. 
Other than at 
Tocumen Airport, ground facilities and radio 
navigation aids are lacking or very inadequate. 
Tocumen and the airports at David and Bocas 
del Toro are currently being improved. 
Three 
flight schools and four flying clubs continue 
to offer a limited amount of private flying and 
flight instruction. 
Panama has Bermuda-type air agreements 
with Peru (1947) and the US (1949). 
Ratifi- 
cation of the US bilaterat by the National 
Assembly constituted an important victory for 
the liberal forces within Panama and for im- 
- proved US-Panamanian relations, since the 
agreement had been bitterly opposed by anti- 
US 
nationalistic 
forces 
in Panama. 
Pro- 
longed negotiations with the UK are expected 
to terminate soon in signature of a bilateral 
air agreement. 
Panama has not joined the International 
Civil Aviation Organization. 
The US has built a number of military air 
bases both in the Canal Zone and in the Re- 
public of Panama for the protection of the 
Panama Canal. 
In compliance with Panama’s 
_ request (in a note accessory to the US-Panama 
bilateral air agreement), a US Technical Civil 
Aviation Mission has been assigned to Panama, 
and several specialists are assisting and train- 
ing Panamanian personnel in the operation of 
Tocumen 
Airport as an international air 
center. 
4. 
Aijrlines. 
a. Panamanian Scheduled Airlines. 
Compania 
Panamena 
de Aviacion, 
S.A. 
(COPA), the only airline presently operating 
scheduled service within the Republic of Pan- 
ama, was organized in 1944 by Pan American 
World Airways (PAA), which retained 40 per- 
cent of the stock. 
COPA commenced opera- 
tions in 1947 over those interior routes which 
had been served until then by PAA under its 
Panamanian cabotage privileges. 
Another important element in Panama’s 
civil aviation is Adams Enterprises in Spanish 
America, S.A. (AESA), owned by John C. L. 
Adams, a retired US Army Colonel. 
AESA 
acts as a Central American representative for 
various US manufacturers of aviation products 
and arms. 
It has also contracted with the 
Panamanian Government to operate both a 
non-scheduled airline, Aviacion General, S.A. 
(AGSA), and an aviation school for the train- 
ing of Panama pilots and mechanics. 
AESA 
has acquired all the properties of an amphib- 
ian base and aviation school at Puerto Pilon. 
It is building up these facilities, especially a 
seaplane ramp, as well as operating the school, 
and conducting thrice-weekly passenger and 
cargo service to several points on the Atlantic 
side of the Isthmus, using Noordyn Norseman 
seaplanes and Grumman Goose amphibians. 
(A special summary of the TACA system is in- 
cluded as Section 5.) 
In October 1949, COPA was operating the 
following route miles and miles scheduled per 
week: 
Unduplicated 
Miles Scheduled 
Route Miles 
| 
Per Week 
522 
4,108 
COPA (Compania Panamena de Aviacion, 
S.A.). 
Routes: COPA serves the western half of 
Panama with a triangular route extending 
from Panama City, the capital, southwest to 
David and Puerto Armuelles, on the Pacific 
coast, then north across Panama to Chan- 
guinola on the Atlantic side. 
The route then 
extends east through Bocas del Toro back to 
Panama City. 
Equipment: 2 DC-3 
Ownership: 
67 percent private Panamanian 
33 percent US (PAA) 
b. Foreign Scheduled Airlines. 
Panama is the hub of an extensive network 
of international scheduled airline services ex- 
tending throughout Central and South Amer- 
ica, as well as to the US and to Europe. 
Air- 
craft of seven foreign airlines, representing 
four nationalities, 
regularly serve Panama 
City. 
Four of these are US-flag carriers: Pan 
American World Airways (PAA), PANAGRA, 
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| PRESIDENT'S SECRETARY FILE 
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Braniff International Airways, and Uraba, Me- 
dellin and Central 
(UMCA). 
Two others, 
British Overseas Airways Corporation (BOAC), 
and Royal Dutch Airlines (KLM), are Euro- 
pean and the seventh is the Colombian-fiag 
affiliate of the PAA System, AVIANCA. 
The 
routes operated by these carriers which serve 
Panama City are indicated below: 
Airline 
Routes from: 
PAA 
US via Central America to Pan- 
ama; US via Jamaica to Pana- 
ma; US to Panama (non-stop) ; 
and Trinidad via north coast of 
South America to Panama. 
PANAGRA 
Panama via west coast of South 
America to Chile and Argen- 
tina.~ 
Braniff 
US via Cuba to Panama and 
west coast of South America. 
UMCA 
Panama to Colombia. 
BOAC 
Europe and US via Bermuda 
and Jamaica to Panama and 
west coast of South America. 
KLM 
Europe and Caribbean area to 
Panama and Costa Rica. 
AVIANCA 
Colombia to Panama. 
In addition 
to the foregoing operations 
through Panama City, service to David, Pan- 
ama is maintained by PAA en route from San 
Jose to Panama City. 
Moreover, two other 
foreign airlines, both Costa Rican, provide 
service to points in Panama. 
The operations 
of TACA de Costa Rica include Panama’s 
northeastern border town of Bocas del Toro; 
LACSA’s only international service crosses 
Panama’s northern border to the Pacific town 
of Puerto Armuelies. 
c. Foreign Non-Scheduled Operations. 
Transocean Air Lines, a US irregular air 
carrier, has operated frequent flights to Tocu- 
men Airport and is negotiating a contract with 
the Panamanian Government permitting un- 
limited operations on a charter basis. 
5. 
The TACA System. 
A study of the TACA System is inserted at 
this point because TACA Airways, S.A., the 
non-operating US-controlled holding company 
for this group of airlines, is incorporated in 
Panama. 
The TACA System grew out of charter oper- 
ations started in 1931 in Honduras. by Mr. 
Lowell Yerex, a New Zealander, under the com- 
pany name Transportes Aereos Centroameri- 
canos, 8.A. (TACA de Honduras). 
Operations 
were confined to that country until 1934, when 
the company began its expansion throughout 
Central and South America chiefly by means 
| 
of the purchase or organization of other local 
lines. 
TACA de Honduras remained the prin- 
cipal company of the system until 1939, when 
TACA Airways, S.A. was founded as the non- 
operating holding company for the operating 
subsidiaries. 
The TACA System reached its maximum size 
about 1947. 
Since that time, however, it has 
been contracted considerably, mostly by the 
sale of component companies. 
The 
following companies make up the 
present system: 
(1) TACA Airways, S.A. 
This company is the non-operating holding 
company of this group of airlines. 
It was 
established in Panama in 1939 as TACA, S.A., 
changed its name in 1943 to Inter-American 
Airways, S.A., and later in that year adopted 
the present name. 
(2) TACA, S.A. (TACA El Salvador). 
This company was established in 1939 in El 
Salvador to operate the international routes 
of the TACA System in Central America, which 
had previously been operated by TACA de Hon- 
duras. 
TACA El Salvador has continued in 
this role and has expanded its operations to 
the US and Mexico. 
In May 1948, TACA E] 
Salvador signed an agreement with TACA de 
Honduras to have the latter operate the Cen- 
tral American international 
routes. 
These 
operations are still conducted, however, under 
the name of TACA El Salvador. 
(3) Linea Aerea TACA de Venezuela, C.A. 
(TACA de Venezuela). 
This company was established as an affiliate 
of TACA Airways in August 1944. 
At present, 
it is the only TACA-affiliated airline operating 
in South America. 
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(4) .TACA de Mezico, S.A. (TACA de Mez- 
ico). 
This company was established in Mexico in 
1944 as a non-operating subsidiary of TACA 
Airways to comply with the terms of the per- 
mit issued by the Mexican Government to 
TACA El Salvador to operate into Mexico. 
(The permit required the establishment of a 
Mexican company to own the TACA System’s 
ground facilities and real estate in Mexico.) 
(5) TACA Airways Agency, Inc. 
This company was established in the US in 
1943 for the purpose of handling business in 
the US for the TACA System. 
(6) TACA Airlines Investing Corporation. 
This company was incorporated in the US 
in 1946 as an inactive subsidiary of the Sys- 
tem. 
It owns one-half of the TACA System 
interest in TACA de Colombia. 
The chart below indicates the relationship 
between the present components of the TACA 
System and the percentage of the stock of 
each component which is held by the Panama 
holding company, TACA Airways, SA. 
The following companies were at various 
times affiliated with the TACA System, but 
have since been sold to other interests or have 
discontinued operations: 
British West Indian Airways (BWIA), which 
Mr. Yerex had organized outside the TACA 
System in 1940, became a part of the System 
in 1943, when Yerex turned over his 40 percent 
stock interest in BWIA to TACA Airways. 
By 
1947, TACA Airways had sold all of this stock 
to British interests. 
Aerovias Brasil, which Yerex had founded in 
1942, was sold to Brazilians in 1947. 
TACA de Colombia was established as a 
TACA Airways affiliate in 1944 but discon- 
tinued operations in July 1947 because of 
financial difficulties. 
The original company, TACA de Honduras, 
along with TACA de Nicaragua, was sold to 
Central American interests in February 1948. 
TACA de Nicaragua is no longer in operation. 
TACA de Costa Rica was sold to Central 
American interests in May 1948. 
The founder of the TACA System, Lowell 
Yerex, 
was 
originally 
its principal 
owner. 
However, in 1943, US investors acquired a 46.2 
interest in TACA Airways, S.A., and subse- 
quent capital increases in 1946 raised this per- 
centage to 62.4 percent. 
A voting trust agree- 
ment was signed in 1947 by the following 
TACA stockholders: Mr. Yerex, The Pennroad 
Corporation, Transcontinental and Western 
Air, Inc. (TWA), and the Waterman Steam- 
ship 
Corporation. 
Under 
this 
agreement, 
which provided that Waterman was to exercise 
the voting privileges of the other parties until 
15 July 1949, Waterman apparently acquired 
effective control of the TACA System. 
It is 
not known, however, whether the voting trust 
agreement has been renewed. 
Although the exact percentage of total out- 
standing stock which US interests presently 
own is not known, it is believed to be about 
75 percent. 
| 
TACA Airways, S.A. | 
| 
Central America 
Mexico 
| 98%, | 
TACA 4 
TACA 
253 | 
| 
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TACA Airways 
TACA de 
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US 
South America 
TACA Airlines 
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TRUMAN 
| PRESIDENT'S SECRETARY FILE 
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HARRY S. 
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APPENDIX Q 
PARAGUAY 
1. 
Government Organization for Civil Avia- 
tion. 
Paraguay’s limited civil aviation activity is 
administered by the Ministry of National De- 
fense, acting through a Directory of Aerial 
Traffic (Direccion de Trafico Aero). 
The lat- 
ter agency was recently removed from the 
jurisdiction of the Commander of the Air 
Force, with the result that civilian control over 
commercial 
aviation 
has 
been 
increased. 
Military and civil aviation functions are now 
theoretically separated, although there is still 
considerable overlapping. 
The effectiveness 
of the “Direccion” 
.in developing civil aviation 
_in Paraguay is still seriously restricted by its 
lack of greater autonomy and sufficient re- 
sources. 
| 
2. Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
There is very little legislation in Paraguay 
affecting civil aviation. 
No information 
is 
available on civil air regulations currently in 
effect. 
Linea Aerea de Transporte Nacional 
(LATN), the national airline, was established 
by Decree No. 4464 of 12 July 1944. 
A second 
Decree, No. 7151, adopted 6 February 1945, 
established operating regulations for LATN 
and also granted the airline a monopoly on 
domestic air transportation. 
bv. Regulation of Paraguayan Airlines. 
Progress in civil aviation, which is at a very 
primitive level in Paraguay, has been retarded 
by political instability, lack of interest, and 
insufficient funds. 
Implementation and en- 
forcement of civil air regulations have been 
lax, and frequent changes of administration 
have interrupted the establishment of a con- 
sistent aviation policy. 
Paraguay is a fertile field for the develop- 
ment of air transport, since it has a limited 
highway system, and rail service is main- 
tained only in the southern part of the country 
(one rail line from Asuncion southeast to the 
Argentine border). 
River transportation and 
fair-weather roads must be depended on for 
most transport requirements. 
Although Par- 
aguayan legislation grants LATN a monopoly 
of domestic commercial air service, the gov- 
ernment also gave tacit approval to the estab- 
lishment of a limited charter service by US 
interests during 1948. 
LATN has protested 
this service, but the government now seems 
determined to encourage any form of aviation 
activity. 
c. Regulation of Foreign Airlines. 
It is Paraguayan policy to encourage inter- 
national carriers to serve the country, but the 
traffic potential is too low to attract many. 
foreign 
operators. 
No 
US 
carrier 
serves 
Asuncion, the capital, at the-present time. 
Although an application by Braniff Interna- 
tional Airways to serve Asuncion en route to 
Buenos Aires is being given priority attention 
by the “Direccion,” it is unlikely that Braniff 
will inaugurate service to Paraguay until Ar- 
gentina authorizes extension of the route to 
Buenos Aires.* 
Commercial airline travel to 
Asuncion is now possible only via Argentine or 
Brazilian airlines. 
Cabotage traffic is reserved to Paraguayan 
enterprises. 
| 
d. Promotion of Other Aviation Activity. 
The excellent runway at the Asuncion air- 
port was built by the US under the wartime 
Airport Development Program. 
Development 
and improvement of other fields (none of 
which is surfaced) has increased the number 
of points served by the national air service. 
Recent aviation policy has encouraged pri- 
vate flying and the reorganization of the Aero 
Club del Paraguay (ACP). 
Reactivation of 
this club, equipped with its own aircraft, and 
* Braniff 
inaugurated 
Lima-La 
Paz-Asuncion- 
Buenos Aires service during June 1950. 
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the development of a small grass field near the 
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- commercial 
services. 
wg 
capital for the use of private aircraft have 
tended to reduce civilian dependence on the 
air force for the latter’s aircraft, personnel, 
and flying facilities. 
There is no airframe or aircraft — in- 
dustry in Paraguay. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Paraguay encourages 
foreign airlines 
to 
serve the country. 
Since its carrier does not 
operate outside the country, Paraguay has no 
competitive reason for desiring to restrict the 
operations of foreign carriers. 
Paraguay concluded a Bermuda-type bilat- 
eral air transport agreement with the US in 
February 1947. 
b. International Organizations. 
Paraguay is a member of the International 
Civil Aviation Organization (ICAO). 
Its abil- 
ity to participate actively in ICAO activities, 
however, is very limited, and failure to meet its 
financial obligations to the organization has 
resulted in suspension of its voting rights. 
Paraguay has not been represented at all ICAO 
functions. 
c. US Technical Assistance. 
No CAA Mission has been assigned to Para- 
guay. 
As indicated in Section 2, however, the 
Asuncion airport was developed with US assist- 
ance. 
4. 
Airlines. 
a. Paraguayan Airlines. 
LATN, the national airline, is operated by 
the air force and handles most of the commer- 
cial air service within Paraguay. 
Both mili- 
tary and non-military transports, and even 
training planes on occasion, 
are used 
in 
LATN was organized 
primarily to provide fast transportation to out- 
lying Army posts. Since its schedules are kept 
at a minimum, LATN’s commercial service is 
mainly on a charter basis. 
* 
ve! 
known as: 
Two US ex-servicemen have established a 
domestic air charter service in Paraguay, using 
two Cessna 
170’s.. 
The government, under 
pressure from LATN, however, may force a sus- 
pension of this service. 
Several approaches have been made to the 
Paraguayan Government by various foreign 
interests for authorization to establish an in- 
ternational 
air service based in Paraguay. 
Various grandiose proposals for operations to 
Europe and the US, involving both Argentine 
and US interests, have been advanced, but 
| 
such operations are not likely to materialize 
for some time, if at all. 
Data concerning LATN 
(Linea Aerea de 
Transporte Nacional) as of 10 October 1949 
are summarized below: 
Unduplicated 
Miles Scheduled 
Route Miles 
Per Week 
LATN 
2,169 
3,737 
Routes: LATN connects Asuncion with out- 
lying towns in Paraguay through four routes 
(1) Northwestern; (2) Northeast- 
ern; (3) Eastern; and (4) Southeastern. 
Equipment: 
2 Stinson Voyager 
4 Stinson Reliant 
2 Republic Seabee 
Ownership: 
100 percent Government of Para- 
guay. 
b. Foreign Airlines. 
The capital of Paraguay, Asuncion, is served 
by two international carriers.* 
Panair do 
Brasil operates one route west from Rio de 
Janeiro 
and Sao Paulo 
via Curitiba 
and 
Iguassu Falls to Asuncion, and a second route 
south 
from Campo Grande 
to Asuncion. 
ALFA, the Argentine carrier, provides service 
to the city on two routes from northern Argen- 
tina. 
* A third carrier, Braniff International Airways, 
now serves Asuncion (see note page 91). 
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Japers of 
HARRY 
S, TR 
| PRESIDENT 
SECRETARY FILE} 
APPENDIX R 
PERU 
1. 
Government Organization for Civil Avia- 
tion. 
Civil aviation in Peru is the responsibility 
of a Ministry of Aeronautics acting through 
a 
Directorate 
General 
of 
Civil 
Aviation 
(DGAC). 
The DGAC is charged with admin- 
istration of civil aviation policy and regulation 
of civil aviation activity. 
The Corporacion 
Peruana de Aeropuertos y Aviacion Commer- 
cial (CORPAC), a government-controlled avi- 
ation corporation, is responsible for implemen- 
tation and administration of DGAC regula- 
tions relating to the construction and opera- 
tion of airports and air communications facili- 
ties. 
A General Directorate of Meteorology 
established in June 1949 replaced the National 
Meteorological Service as a direct dependency 
of the Ministry of Aeronautics. 
A Civil Aero- 
nautics Advisory Committee was created in 
1946 to study aviation policy and act as an 
advisory board to the Minister of Aeronautics. 
This committee 
is composed of the Legal 
Director in the Ministry of Foreign Affairs, 
the Chief of Staff of the Peruvian Air Force, 
the Minister of Aeronautics, the Director of 
Civil Aviation, the President of CORPAC, and 
the President of the Peruvian Tourist Board. 
An almost complete lack of properly trained 
administrative, flight, and technical person- 
nel in Peru, other than those employed by 
the civil airlines, has necessitated a depend- 
ence on military personnel for staffing all civil 
aviation regulatory bodies. 
With the coming 
into power of the Military Junta in late Octo- 
ber 1948, moreover, all phases of civil aviation 
fell under stricter military control. 
This in- 
fluence, however, has not been exerted to favor 
military aviation requirements over commer- 
cial ones. 
Lines of responsibility for the foregoing 
functional groups have been established ap- 
proximately as in the chart below. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
A few of the most important laws, decrees, 
or resolutions dealing with civil aviation are 
listed below. 
(1) Decree No. 27 of 31 October 1945 
charged the DGAC with responsibility for the 
inspection of all civil aeronautical equipment, 
including that of commercial aviation com- 
panies. 
(2) A decree of 15 May 1946 required all 
commercial air navigation companies to use 
multi-engine aircraft in the transport of pas- 
sengers, freight and mail, except when inade- 
quate ground facilities require the use of 
smaller aircraft. 
[si 
Aeronautics 
Advisory Committee aes Ministry of Aeronautics 
Directorate General 
Peruvian Air Facilities 
of Civil Aeronautics 
Corporation — CORPAC 
(Several Divisions) 
(Several Divisions) 
Directorate General 
Military 
of Meteorology 
Air 
| 
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(3) Decree No. 29 of 30 June 1946 reorgan- 
 bitious plans for further expansion. 
The 
; 
ized CORPAC, granting it additional author- 
Peruvian Government’s 
policy of favoring 
| 
; 
ity and funds with which to carry out its 
TAM, however, may adversely affect the devel- 
. 
- 
} 
functions. 
opment of the country’s civil aviation, since it 
t 
i 
(4) Decree No. 31 of 30 June 1946 created 
_is probable that TAM does not have the neces- 
© 
t 
the Civil Aeronautics Advisory Committee. 
Sary skill and experience for operating ade- 
#& 
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i 
(5) Decree No. 33 of 17 July 1946 directed 
 pendable commercial airline. 
tl 
‘ 
| 
that the legal obligation of companies operat- 
. 
The Peruvian Government has on occasion 
-- 
it 
‘ 
ing air services to employ Peruvian nationals 
granted subsidies to civil airlines on a very 
st 
as 80 percent of their employees (Law 75050f8 
limited 
scale. 
The Comparlia de Aviacion 
April 1932) shall be carried out progressively 
Faucett is reported to have received a small 
# 
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| 
until fulfilled or until all qualified Peruvian 
subsidy at one time, for example, but it now 
m 
i 
nationals are so employed. 
has only a contract for the carriage of mail. 
~ 
or 
; 
(6) Decree No. 27 of 12 July 1947 estab- 
| ANDES, formerly ascheduled domesticcarrier, 
— 
(i. 
; 
lished the requirements for concession of oper- 
received a small allotment in September 1949 
3. 
Li 
ating permits to national and international 
for the purpose of reorganizing on a sounder 
& 
ot. 
airlines. 
economic basis as a non-scheduled operator for 
x ) 
th 
; 
(7) Resolution No. 704 of 
23 November 1948 
domestic and international services. 
os 
ste 
; 
cancelled all cabotage rights in Peru of the 
In spite of Faucett’s 20 years of service ex- 
<— 
Ow 
US airline, PANAGRA, as of 1 January 1949. 
_—clusively within the country, the present gov- 
: 
ho 
: 
(8) Resolution No. 389 of 3 May 1949 ap- 
ermment does not consider 
this carrier a 
im 
proved the “Rules of the Air’ drawn up in 
genuine Peruvian enterprise, principally be- 
aic 
accordance with the standards recommended 
cause PANAGRA controls 25 percent of its 
| 
of 
| 
by the International Civil Aviation Organiza- 
stock. 
However, Faucett still retains influ- 
| 
ha’ 
tion (ICAO). 
ence with the government because its services, 
; 
| 
the 
. 
Peruvian Airlines. 
although admittedly inferior to the cabotage 4% 
ger 
of f 
services formerly provided by PANAGRA, are 
tha 
favors 
Contre 
of great value to the country and could not 
rier 
Peruvian airlines by nationals of the country. 
now be duplicated by any other Peruvian 
of ¢ 
The operating contract of the ill-fated Peru- 
organization 
: 
= 
pro 
vian International Airways, for example, re- 
: 
— 
quired majority control of that company by 
In order to promote existing airlines, espe- 
qa 
C 
Peruvians within 10 years of its establishment. 
C!@lly TAM, the government discourages the 
beei 
Moreover, it is required by law that 80 per- 
establishment of additional scheduled or non- @ 
toc 
cent of the employees of each airline be Peru- 
S°Heduled services within the country. 
| 
tion 
: 
vian nationals. 
c. Regulation of Foreign Airlines. 
ns 
: 
Except for the services rendered by the Mili- 
Peru was the most recent Latin American same 
nee 
: 
tary Air Transport Service (TAM), the Peru- 
country to withdraw cabotage privileges fori 
resi: 
, 
vian Government has not participated in the 
foreign airlines. 
PANAGRA lost these privi-ga 
a 
: 
operation 
of air services. 
Until 
recently, 
leges as of 1 January 1949. 
| 
: 
therefore, it appeared that Peruvian 
polic 
endorsed private initiative for the 
airlines must 
for 
pear 
| 
ment of air services. 
The present military 
to ec 
: 
regime, however, is promoting TAM as a com- 
Such services are subject to the terms of bilateyame 
cc 
: 
re 
mercial airline in an apparent effort to com- 
BBreements negotiated between 
| 
pete directly with Peruvian civil airlines. 
Al- 
coun 
By. 
radic 
! 
though the government ostensibly favors rea- 
Foreign non-scheduled flights to Peru mus oe 
E | 
Sist 0 
. 
sonable competition in the airline industry, it 
receive prior authorization, requests for which 
and t 
: 
has followed certain discriminatory procedures 
™ust be made to the DGAC at least five dayaa> 
| 
Pri 
in its efforts to draw additional traffic to TAM. 
in advance of expected entry. 
Peru is 
ment 
| 
Moreover, despite the serious setback of a re- 
known to have put any obstacles in the wayiame 
Was 2 
cent accident, TAM still appears to retain am- 
of such approval. 
ai 
enco. 
. 
M 
~ 
2pers 
of 
TARRY S. TRUMAN 
PRESIDENT 
NT'S SECRETAR 
~ 
—
“Papers 
HARRY 
TR 
RESIDENT'S SECRETARY FILP 
of 
BECRET 
d. Promotion of Other Aviation Activity. 
Peruvian policy with respect to the develop- 
ment, improvement, and operation of air facili- 
ties is executed by the Ministry of Aeronautics 
through the government airport corporation, 
CORPAC. 
To the limited extent permitted by 
the funds which have been made available to 
it, CORPAC has attempted to bring all con- 
struction, maintenance, and operation of air- 
ports, radio aids to navigation, and communi- 
cations facilities under its control. 
For the 
most part, its funds have been spent on devel- 
oping and operating the Limatambo Airport 
_ 
(large, modern airport and buildings outside 
Lima) and in purchasing communications and 
other facilities throughout the country from 
the commercial airlines, which originally in- 
stalled and operated such facilities for their 
own purposes. 
CORPAC has been criticized, 
however, for failing to expend funds or effort to 
improve the communications, radio navigation 
aids and airports at the secondary air centers 
of the country. 
Although airline operators 
have found CORPAC services expensive and 
their charges sometimes discriminatory, it is 
generally agreed that this system is less costly 
than duplicate operations by individual car- 
riers. 
Moreover, more efficient administration 
of CORPAC might lessen the charges and im- 
prove the services. 
CORPAC’s principal current difficulty has 
_been the continued failure of the government 
to contribute sufficient funds for the corpora- 
tion to perform adequately its duties. 
Asa 
result, CORPAC’s administration has recently 
become disorganized, its services have deteri- 
orated, the President of the corporation has 
' resigned, and plans have been advanced for a 
return of its facilities to private operations. 
In September 1949, however, funds finally ap- 
peared to be forthcoming to enable CORPAC 
to continue at a fair level of efficiency. 
CORPAC plans eventually to convert the 
present aircraft communications network to 
radio-telephone. 
The new service would con- 
sist of two networks, one serving northern Peru 
and the other serving southern Peru. 
_ Prior to the October 1948 coup, the govern- 
ment granted small subsidies to aero clubs and 
was about to inaugurate a broader program to 
encourage private flying. 
The present gov- 
ernment, however, has not revived these plans. 
Strict controls on imports of aviation prod- 
ucts, as a result of Peru’s acute shortage of 
foreign exchange, make it unlikely that pri- 
vate flying will receive any substantial stimu- 
lus in the near future. 
There is no airframe or aircraft manufac- 
ture in Peru at present. 
Until 1946, however, 
aircraft manufacturing was an important 
phase of the Faucett Aviation Company busi- 
ness. 
Faucett developed in 1934 a Stinson- 
Reliant type of single-engine plane particu- 
larly suitable for operation into the rough 
Peruvian airports and capable of climbing over 
the Andes. 
About thirty of these aircraft were 
completed by 1946. 
Production was discon- 
tinued at that time, partly because the planes 
were becoming obsolescent and also because of 
the government decree requiring commercial 
airline companies operating in Peru to use 
multi-engine aircraft on all routes except 
those with landing fields not suitable for such 
larger aircraft. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
With one major exception, basic Peruvian 
international aviation policies have closely 
paralleled those of the US, including strong 
support of Fifth Freedom rights, the early 
execution of a multilateral air transport agree- 
ment, and the standardization of regulations 
and practices through representation in and 
adherence to the International Civil Aviation 
Organization (ICAO). 
Since the Bermuda- 
type’ bilateral air agreement was concluded 
with the US on 27 December 1946, Peru has 
negotiated agreements with Cuba, Panama, 
Chile, the UK, and the Netherlands. 
The sole major instance of divergence of civil 
aviation policy between the US and Peru was 
primarily concerned with conflicting interpre- 
tation of the US-Peru bilateral agreement. 
During the summer and fall of 1948, lengthy 
consultation between officials of Peru and the 
US took place as a result of Peru’s attempts 
to impose frequency limitations on US car- 
riers flying through Peru on the west coast 
routes. 
These talks were held in an effort to 
reconcile divergent US and Peruvian views on 
the amount of service which should be allowed 
on those routes under the agreement. 
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Probably as a result of pressure exerted by 
the newly organized Peruvian International 
Airways (PIA), which was faced with the com- 
petition of two experienced and heavily backed 
US airlines, the Peruvian Government can- 
celed the license authorizing Braniff Airways 
(a designated US carrier under the bilateral 
agreement) to operate into Peru, just as Bran- 
iff initiated service in June 1948. 
However, intervention of the US Govern- 
ment resuited in the Peruvian Government’s 
agreement to reinstate the Braniff permit, 
pending consultation as provided for in the 
bilateral agreement. The US took a serious 
view of the entire situation, inasmuch as any 
outcome unfavorable to the US interpretation 
of the bilateral agreement would have estab- 
lished a precedent jeopardizing the numerous 
similar agreements concluded 
by the US 
throughout the world. 
The revolution which 
unseated the Peruvian Government in October 
1948, however, ended all discussions on the 
subject of the bilateral agreement. 
Since PIA 
terminated its operations in February 1949, 
the new Peruvian Government has not re- 
opened the subject. 
c. US Technical Assistance. 
A US Civil Aeronautics Mission has been 
functioning in Peru since February 1946 on 
the basis of notes exchanged on 27 December 
1946 between Peru and the US. 
Specialists in 
the fields of air traffic control, airport engi- 
neering, meteorology, communications, carto- 
graphic engineering, and air safety have been 
assigned to the mission at various times. 
The 
mission has: (1) aided in the compilation and 
issuance of modern air traffic rules; (2) sur- 
veyed and made recommendations on air traf- 
fic control, airports, and air navigation aids; 
and (3) studied and made recommendations 
for the reorganization of civil aviation in Peru. 
Since the Military Junta took over in October 
1948, efforts of the mission to stimulate the 
_ reorganization and coordination of civil avia- 
tion activities and functions in Peru have been 
fruitless. 
Having abandoned its efforts in this 
direction, the mission has concentrated during 
1949 on aiding CORPAC in the improvement 
of its services. 
A meteorological survey has 
also been conducted by a US technical spe- 
cialist, and a study of air transport tariffs with 
SECRET 
Tespect to rising costs of operation led to 
recommendation by the mission of a 25 percent 
increase in traffic rates. 
Moreover, 
a modern 
6,000 ft. airstrip with radio and ground facili- 
ties, which was built by the US at Iquitos, 
Peru, during the war to expedite the move- 
ment of rubber from the upper Amazon, has 
now been turned over to the Peruvian Gov- 
ernment. 
4. 
Airlines. 
| 
a. Peruvian Scheduled Airlines. 
At present, there are only two operators pro- 
viding scheduled domestic airline service in 
Peru: Compania de Aviacion Faucett (Fau- 
cett) and Transportes Aereos Militares (TAM). 
Faucett is a privately owned enterprise, while 
TAM is operated by the Peruvian Air Force. 
A third carrier, Aerovias Nacionales del Sur 
(ANDES), formerly operated scheduled serv- 
ices within Peru. 
Because of financial diffi- 
culties, however, ANDES sought and obtained 
permission in August 1949 to operate domestic 
and international non-scheduled services for 
passengers and freight, using C-46 aircraft. 
The Lima-Caracas (Venezuela) route, inaugu- 
rated 1 September 1949 by ANDES on an ir- 
regular basis, offers a promising traffic poten- 
tial, largely because of the direct connections 
from Caracas to points in the US and Europe. 
Compania de Aviacion Faucett was estab- 
lished in 1928 by Elmer J. Faucett, an Ameri- 
can who had been barnstorming for about five 
years up and down the northwestern coast of 
South America and across the Andes. 
Al- 
though the present regime in Peru is not as 
favorable to Faucett as previous governments 
have been, the company still enjoys considera- 
ble influence in Peruvian aviation circles. 
It 
has earned a profit regularly and has experi- 
enced little difficulty in generating additional 
traffic for its new, larger aircraft. 
TAM was authorized to put its service on a 
scheduled basis in January 1949. 
The govern- 
ment’s desire to extend TAM’s service was 
probably largely responsible for cancellation of 4 3 
PANAGRA’s cabotage privileges, also in Janu- 
ary 1949. 
TAM and Faucett now share the 
former PANAGRA traffic. 
In order to cover 
the routes it attempts to serve, TAM has sub- 
jected its equipment to intensive utilization, 
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to the serious detriment of both the safety and 
efficiency of its operations. 
As its service ex- 
pands under government sponsorship, TAM 
will probably encroach upon Faucett’s traffic, 
- in spite of the fact that TAM has been required 
to increase its commercial rates to a level only 
slightly below that of Faucett.. 
Elimination 
of ANDES from the domestic scheduled service 
competition, moreover, improves the competi- 
tive prospects for both Faucett and TAM. 
Peruvian 
International 
Airways 
(PIA), 
Peru’s former chosen instrument for interna- 
tional air service, operated to the east coast of 
the US until early in 1949. 
This carrier 
opened service to Habana in May 1947 and, in 
accordance with the US-Peru bilateral agree- 
ment, extended its service in July 1947 to New 
York via Miami and Washington. 
Intense 
competition from two US carriers over routes 
partially paralleling those of PIA, in addition 
to insufficient capital support and unsound 
commercial airline practices, was responsible 
for the serious financial 
difficulties which 
forced PIA to discontinue services and declare 
bankruptcy in February 1949. 
(1) Faucett (Compania de Aviacion Fau- 
cett, S.A.). 
Routes: Faucett’s routes are domestic only, 
connecting Lima with all important cities in 
Peru. 
In addition to coastal routes extending 
to the Ecuadoran border in the north and the 
Chilean border in the south, Faucett’s exten- 
sive trans-Andes routes connect the developed 
coastal strip with a number of the most im- 
portant points throughout the relatively unde- 
veloped eastern portion of Peru (including 
Iquitos, Cajamarca, and Pias in the north, 
_ Tingo Maria in central Peru, and Puerto Mal- 
donado, Cuzco, and Iberia in the south). 
Equipment: 
2 DC-4 
7 DC-3 
7 Stinson-Faucett F-19 
Ownership: Faucett is a closely held com- 
pany and details concerning its ownership are 
obscure. 
Although Mr. Elmer J. Faucett, who 
founded and has always directed the airline, 
has probably never held a controlling interest, 
it is believed that majority stock control is held 
by private Peruvian citizens. 
The US airline, 
PANAGRA, through a wholly owned, non- 
operating Peruvian airline, probably holds an 
approximately 25 percent minority interest. 
A Spanish resident of Peru also holds a minor- 
ity interest. 
Faucett was organized and began operations 
in 1928. 
(2) TAM (Transportes Aereos Militares). 
Routes: TAM is the air transport component 
of the Peruvian Air Force and has operated 
commercially principally on a space-available 
basis. 
As a result of its primarily military 
nature, most of its operations are non-sched- 
uled and its scheduled operations are on an 
informal basis. 
TAM operates extensively in 
southern Peru and has four scheduled services 
over two routes from Iquitos: to Yurimaguas, 
and to San Ramon, a military base, via Pu- 
callpa. 
AIRLINES OF PERU 
{ October, 1949 ) 
> 
Unduplicated 
Scheduled 
| 
Route Miles* |Miles Per Wee 
Faucett 
3,904 
37,983 
Obscure 
TAM 
2,588 
10,152 
100% Gov. 
TOTAL 
6,492 
48,135 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-1750 
—SECRER. 
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a. 
/SBOHE T 
Equipment: 7 DC-3 
Ownership: 100 percent Peruvian Govern- 
ment (Peruvian Air Force). 
This airline has been operated by the Air 
Force since 1946, after having been established 
by the Peruvian Navy in 1927 and later oper- 
ated as a civil airline. 
b. Foreign Scheduled Airlines. 
International service to Peru is maintained 
by four foreign airlines. 
The US carrier, 
Braniff Airways, stops at Lima on its route 
from the US to Rio de Janeiro via Habana, 
P 
Panama, Guayaquil and La Paz. 
Asecond US 
airline, PANAGRA, provides non-stop service 
from Panama to Lima en route to La Paz, San- 
tiago and Buenos 
Aires. 
PANAGRA 
also 
serves the Peruvian cities of Talara, Chiclayo 
and Arequipa on various other international 
routes. 
British Overseas Airways Corporation 
(BOAC) transits Lima on its Barranquilla- 
Santiago trunk route, and the Brazilian car- 
rier, Panair do Brasil, maintains service up the 
Amazon from Manaus (Brazil) to Pebas and. 
Iquitos in the northeastern corner of Peru. 
Pia 
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URUGUAY 
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car- 
up the 
APPENDIX S 
1. 
Government Organization for Civil Avia- 
ment. 
PLUNA, however, is now wholly gov- 
tion. 
ernment-owned and new legislation has been 
= 
- 
Administration of Uruguay’s civil aviation 
is the responsibility of a Directorate of Civil 
Aeronautics (DAC), acting under the juris- 
diction of the Ministry of National Defense. 
The DAC supervises 
the national 
airline, 
PLUNA, as well as ah other commercial avia- 
tion activity, air facilities, and aero clubs. 
The government agericies concerned with avi- 
ation in Uruguay are organized as shown on 
the chart below. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
A commission composed of representatives 
of civil and military aviation was appointed 
by the government late in September 1949 to 
draft legislation for the development of avia- 
tion in Uruguay, but little information 
is 
available on Uruguay’s current basic aviation 
legislation. 
The country’s principal domes- 
tic airline, PLUNA, was reorganized in 1945 
on the basis of an organic law of 1944 setting 
it up as a mixed company, including both 
government and private capital. 
law authorized 
the acquisition 
of private 
shares by the State, it did not encompass 
the final organization of the company as an 
autonomous entity of the Uruguayan Govern- 
While this 
° 
drafted to provide for its changed status. 
A law of 5 December 1940 (No. 9977) fixes 
the yearly subsidies paid by the Government 
to aero clubs. 
: 
b. Regulation of Uruguayan Airlines. 
Since 1943, the DAC has gradually assumed 
more direct control of civil aviation activity 
within Uruguay. 
Because of the country’s 
small area, the concentration of population 
in one urban area, and its adequate railway 
network, there has been little incentive either 
in private or in governmental circles for the 
establishment of a more extensive air trans- 
port network. 
Present Uruguayan civil avi- 
ation policy appears to have the aim of pro- 
viding adequate air service by whatever means 
are 
most convenient. 
Repeated 
overtures 
have been made by the government to induce 
the privately owned Uruguayan scheduled 
carrier, CAUSA, which has had a record of 
successful operations on its short interna- 
tional routes, to merge with PLUNA, which 
for a long time has been considered an in- 
efficiently managed 
and poorly organized 
enterprise. 
Although CAUSA 
has consist- 
ently resisted such a merger, the DAC con- 
Ministry of National Defense | 
Directorate of Civil Aeronautics | 
Directorate of Military Aeronautics | 
Operations 
l 
| | Legal Affairs | | 
Administration | | PLUNA | 
ORE Tr-1850 
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SECRETARY 
| 
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| 
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| 
|
100. 
SBCRET 
tinues to subsidize CAUSA and to countenance 
its private ownership, 
in order to ensure 
continuation of its valuable services between 
Montevideo and Buenos Aires. 
Under the 
government’s reorganization plans, PLUNA 
is designated as the eventual instrument for 
the operation of all internal services and for 
routes to Rio de Janeiro, Santiago de Chile, 
and to Europe. 
Uruguay’s ability to compete 
with the many well-established international 
operators now flying these routes, however, has 
been challenged in Uruguayan aviation circles, 
and suggestions have been offered that such 
ambitious efforts be diverted toward improving 
and expanding service within the country. 
c. Regulation of Foreign Airlines. 
Uruguay encourages all international car- 
riers to make traffic stops at Montevideo. 
Since Uruguay has not yet ratified any of the 
bilateral air agreements it has initialed, for- 
eign airlines receive their operating conces- 
sions directly from the government through 
the DAC. 
d. Promotion of Other Aviation Activity. 
Airfields and facilities are being steadily 
improved by the government in order to at- 
tract more international traffic. 
Activities of the 32 aero clubs in Uruguay 
are aided by government subsidization of their 
pilot training programs. 
All but three or 
four clubs have at least one. light sport plane, 
and a large number are equipping their or- 
ganizations with ambulance planes in order 
to provide improved medical services for out- 
lying areas. 
| 
3. 
International Civil Aviation Policy. 
_@. Air Traffic Policy and Air Agreements. 
Uruguay apparently supports liberal prin- 
ciples of international air traffic, since it has 
placed no restrictions on the operations of 
international carriers and has initialed Ber- 
_ muda type air transport agreements with the 
US, the UK, and the Netherlands. 
Although 
the Uruguayan Congress has not formally rat- 
ified any of these bilateral agreements, for 
all practical purposes they are in effect. 
b. International Organizations. 
A major step toward Uruguayan member- 
_ ship in the ‘International Civil Aviation Or- 
ganization was taken in September 1949, 
when the Uruguayan Chamber of Deputies 
approved adherence to the Convention. 
Ap- 
proval by the Senate and signature by the 
President 
are expected to follow in short 
order. 
c. US Technical Assistance. 
Uruguay did not take advantage of an offer 
of a US technical assistance mission in 1947 
and the offer was withdrawn in 1948 because 
of pressing requirements elsewhere. 
4. 
Airlines. 
a. Uruguayan Scheduled Airlines. 
. 
CAUSA’s 
profitable 
international 
route 
from Montevideo to Buenos Aires has been 
operated without 
interruption 
since 
1938, 
but PLUNA’s domestic services, started in 
1936, have been much less dependabie and 
were interrupted 
for two years 
(1943-45) 
while PLUNA was being reorganized. 
In 1939, 
CAUSA concluded an agreement with the 
Argentine airline “Corporacion” for provision 
of equal capacity by the two airlines on the 
Buenos Aires-Montevideo 
route. 
ALFA 
as- 
sumed 
these 
joint operating 
rights when 
“Corporacion” was reorganized in 1947. 
(1) CAUSA (Compania Aeronautica Uru- 
guaya, S.A.). 
Routes: CAUSA operates two international 
routes to Buenos Aires, originating flights 
from both Montevideo and Colonia. 
The serv- 
ice from Montevideo is operated in conjunc- 
tion with the Argentine airline, ALFA, under 
a pooling arrangement. 
CAUSA’s service from Colonia offers sur- 
face transport connections 
to Montevideo. 
During the summer tourist season, CAUSA 
also operates a week-end service from Monte- 
video to the popular Uruguayan beach re- 
sort, Punta del Este. 
This connects with the 
Buenos Aires service. 
No other domestic serv- 
ices are operated by CAUSA. 
Equipment: 
2 Junkers JU-52/3m 
3 Short Sunderland 
Ownership: 100 percent private Uruguayan. 
(2) PLUNA (Primeras lineas Uruguayas de 
© 
Navegacion Aerea, SEM). 
Routes: PLUNA operates three domestic 
routes out of Montevideo, two of which serve » . 
* The 
are ni 
the pe 
crosses 
der, se) 
with 
Artiga: 
tional 
and Px 
Equi 
Own 
ment. - 
b. 
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coast r 
service 
and Ri 
Mon 
routes 
, HARRY 
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NSE CRE? 
101 
AIRLINES 
OF URUGUAY > 
( October, 1949 ) 
Unduplicated| 
Scheduled 
Route Miles* 
es per Week 
CAUSA 
154 
2,772 
| 100% Private 
PLUNA 
1,250 
15,660 
100% Gov. 
1,404 
18,432 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-1950 
the periphery of Uruguay. 
The third route 
crosses Uruguay directly to the Brazilian bor- 
| der, serving Rivera (where connection is made 
with 
the 
Brazilian 
airline 
VARIG) 
and 
Artigas. 
PLUNA also operates an interna- 
tional non-stop service between Montevideo 
and Porto Alegre, Brazil. 
Equipment: 5 DC-3 
Ownership: 100 percent Uruguayan Govern- 
ment. 
b. Foreign Scheduled Airlines. 
Pan American World Airways (PAA) is the 
only US carrier serving Uruguay. 
PAA’s east 
coast route to Buenos Aires includes non-stop 
service to Montevideo from both Porto Alegre 
and Rio de Janeiro. 
Montevideo is also on the Latin American 
routes of the following six European airlines, 
receiving service en route to Buenos Aires 
from various Brazilian cities. 
Airline 
Nationality 
Air France 
France 
Alitalia 
Italy 
BOAC (British Over- 
UK 
seas Airways Corpo- 
ration) 
KLM 
(Royal Dutch 
Netherlands 
Airlines) 
Iberia 
Spain 
SAS 
(Scandinavian 
Norway, Denmark, 
Airways System) 
Sweden 
Two Latin American airlines serve Monte- 
video: the Argentine carrier, ALFA, operates 
from Buenos Aires in conjunction with Uru- 
guay’s carrier, CAUSA; and a route from 
Pelotas and Porto Alegre, Brazil, is flown 
by the Brazilian carrier, VARIG. 
| HARRY 
TRUMAN 
papers of 
LIBRARY 
TRUMAN 
| 
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APPENDIX T 
VENEZUELA 
1. Government Organization for Civil Avia- 
tion. 
Civil aviation in Venezuela is the respon- 
| 
sibility of a Directorate 
of Transportation 
acting under the jurisdiction of the Minis- 
try of Communications. 
The Directorate of 
Transportation 
of six departments in 
the Ministry of Communications) performs 
its functions through: (1) a Division of Civil 
Aeronautics; (2) a Division of Railroads; and 
(3) a Division of Navigation. 
Most officials of the Ministry of Communi- 
cations are well informed on aviation mat- 
ters and have been urging reorganization 
measures to centralize the various civil avia- 
tion functions. 
A plan for the reorganization of the gov- 
ernment’s civil aviation functions was pre- 
pared by the Ministry of Communications, 
with the collaboration of the US Civil Avia- 
tion Mission, 
and has been 
accepted 
by 
: 
the present Military Junta. 
This reorgani- 
| 
zation was to have been put_into effect in 
July 1949, if funds were made available, but 
there is as yet no indication that the plan 
has been implemented. 
According 
to the 
proposal, 
(DAC) would be created at the level of the 
Directorate of Transportation and would as- 
sume the government’s civil aviation func- 
tions. 
The DAC would be composed of sec- 
tions for Airline Operations, Air Safety, Avia- 
tion Schools and Training, and Airports. 
The 
planned unification of all civil aviation func- 
tions within a single organization, however, 
received a setback in July 1949 when, over the 
objection of the Directorate of Transporta- 
tion, the government decreed that the func- 
tion of maintenance of airports would be the 
responsibility of a Directorate of Harbors and 
Airports under the jurisdiction of the Min- 
istry of Public Works. 
Governmental responsibility for the func- 
tion of civil aviation is presently organized as 
follows: 
Ministry of Communications 
_.| 
National Technical 
Aeronautics Council 
| 
Directorate of Transport | 
| 
Five Other Directorates | 
Division of 
| 
Division of 
Division of 
: 
Civil Aviation 
Railroads 
Navigation 
ORE Tr-2050 
| 
SECRET 
103 
a Directorate 
of Civil 
Aviation 
Papers 
RUMAN LIBRApy 
| PRESTp 
TRUMAN 
IDENT 
5 SEC 
| 
| 
| 
| 
| 
| 
|
— 
> 
104 
The proposed reorganization would establish the following relationships: 
| 
Ministry of Communications = 
National Technical 
Aeronautics Council 
[ 
| 
Directorate of 
Directorate of 
Five Other 
Civil Aviation 
Transport 
Directorates 
Airline 
Air 
Aviation Schools 
Airports 
Operations 
Safety 
and Training 
(Operation) 
In January 1946, a National Technical Aero- 
nautics Council was created as a dependency 
of the Ministry of Communications. 
This 
five-man council functions as an advisory 
agency on air communications, routes, and 
airports and is composed of representatives 
of the Ministries of War and Navy, Public 
Works, and Communications, as well as repre- 
- sentatives of LAV (the national airline) and 
of the National Council of Transportation 
Routes. 
In September 1947, a seven-man advisory 
commission was created to study and advise 
on. all matters pertaining to the relation- 
ship of Venezuela to the International Civil 
Aviation Organization (ICAO). 
In February 
1949, moreover, jurisdiction over the Vene- 
zuelan delegation to the ICAO was transferred 
from the Ministry of Foreign Affairs to the 
Ministry of Communications. 
The National Civil Aeronautics Inspection 
Board was reorganized in 1947 to improve its 
services. 
2. 
Domestic Civil Aviation Policy. _ 
a. Civil Aviation Legislation. 
With the assistance of a US Civil Aviation 
Mission, Venezuelan aviation laws have been 
revised along the lines of US legislation. 
A 
new Civil Aviation Law to replace the Law 
of 1944 was enacted by the Venezuela Con- 
ORE Tr-2150 
gress in 1948, but the Military Junta of Gov- 
ernment has not yet taken action on the 
law. 
Decree No. 58 of 22 May 1948 replaced a 
decree of 1947 as the basic law governing the 
administration of LAV. 
According to Article 
32 of the 1948 law, LAV is authorized to par- 
ticipate in the creation of a company for in- 
ternational operations, in which Venezuelan 
capital must retain majority stock control | 
and effective control of the organization. 
Foreign capital participation in all other 
Venezuelan airlines is also limited by law to 
49 percent, majority 
control 
to reside 
in 
Venezuelan nationals. 
. 
b. Regulation of Venezuelan Airlines. 
The separation of civil aeronautics from 
Air Force control after the 1945 revolution 
greatly improved the position of Venezuelan 
civil aviation, especially commercial opera- 
tions. 
With the exception of increased aid 
and promotion of LAV, no change in civil 
aviation policies appears to have resulted from 
_ the assumption of power by the Military Junta 
in November 1948. 
The proposed reorgani- 
zation of the Division of Civil Aeronautics 
would render it a larger and more autono- 
mous entity, with virtually complete control 
of all civil air affairs. 
The 
(1) the 
(2) the 
facilitie 
vate fly 
ment a 
generot 
ment a 
the ca 
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a 7.5 pi 
percent 
petitior 
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schedu 
carrier: 
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Since 
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US air 
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105 
- The objectives of the present Division are: 
(1). the expansion of the State airline LAV; 
(2) the construction and improvement of air 
facilities; and (3) the eucouragement of pri- 
vate flying. 
LAV is operated by the govern- 
“ment as an independent entity and receives 
generous financial assistance. 
The govern- 
ment also participates to a limited extent in 
the capital 
of the two other Venezuelan 
scheduled carriers. 
Through LAV, it holds 
a 7.5 percent interest in AVENSA, and a 12.2 
percent interest in TACA de Venezuela. Com- 
petition with the established carriers, espe- 
cially with LAV, is discouraged, as are non- 
scheduled operations. 
To date, only cargo 
carriers have been authorized to operate non- 
scheduled services within Venezuela. 
— 
c. Regulation of Foreign Airlines. 
? 
Since 
the inauguration 
of international 
services by LAV in 1946, the operations of for- 
eign airlines have been subject to closer sur- 
veillance 
by the Venezuelan 
Government. 
Although Venezuela favors the operation of 
US airlines into its territory and also en- 
courages non-scheduled flights to Venezuela 
from abroad, it is willing to grant permission 
for such services and flights only when they 
do not compete directly with LAV. 
More- 
over, Venezuela has asserted its right to ap- 
prove the tariffs of all foreign airlines stop- 
ping in Venezuelan territory. 
The privileges 
of cabotage enjoyed in Venezuela for many 
years by Pan American World Airways were 
terminated 15 October 1947. Venezuela’s only 
bilateral air agreement is with the US and that 
has not been ratified. 
Therefore, all foreign 
carriers operate to Venezuela on the basis of 
permits issued by the Directorate of Trans- 
port. 
| 
d. Promotion of Other Aviation Activity. 
It is Venezuelan policy to bring the con- 
struction and improvement of all aviation 
facilities under control of the government. 
In accordance with an extensive program 
planned early in 1948, substantial govern- 
‘ment appropriations have been expended for 
the gradual purchase of existing airfields and 
the improvement or construction of additional 
facilities. 
Perhaps the greatest obstacle to 
the progress of Venezuelan civil aviation has 
been the country’s lack of adequate airports, 
communications and meteorological facilities. 
Improvements have been made at all of the 
principal traffic centers within the past few 
years, however, as well as at most of the sec- 
ondary 
airports. 
Extensive 
improvements 
now in progress on the Caracas airport, La 
Carlota, will prevent use of that facility until 
at least the middle of 1950. 
In addition, 
studies are being made of the possibility of 
providing air service to other population cen- 
ters throughout the country. 
Plans for the unification of the existing pri- 
vate air communications systems were for- 
mulated during 1947 and a private company, 
Radio Aeronautico Venezolano, was formed 
for that purpose. 
Although most of the do- 
mestic and foreign airlines agreed to par- 
ticipate in the company, little actual progress 
has been made on unification of services. 
A 
comprehensive plan for a modern, govern- 
ment-controlled airways communication and 
navigation system has been prepared by the 
US Civil Aviation Mission for the considera- 
tion of the Ministry of Communications, and 
it is probable that this proposal will eventu- 
ally be adopted. 
The five Venezuelan flying clubs receive no 
direct subsidies from the government. 
They 
are all equipped with aircraft, however, and 
benefit indirectly from the training given at 
the 
government-operated 
school, 
“Miguel 
Rodriquez,” at Maracay, which offers training 
to both air and ground personnel. 
The 
Polytechnic 
Institute 
of Aviation, 
established at Caracas in 1948, offers Link 
trainer instrument flight training under gov- 
ernment auspices, as well as instruction in 
navigation, meteorology, aerodynamics, and 
radio, for pilots of the domestic airlines and 
private fliers. 
There is no production of airframes or air- 
craft engines in Venezuela. 
The country is 
one of the best markets in Latin America, 
however, for the sale of aviation equipment. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Motivated by a desire to protect its na- 
tional airline from undue foreign competition, 
Venezuela’s air policy toward foreign airlines 
tends to be restrictive. 
For example, Vene- 
zuela has opposed the recognition of Fifth 
Freedom air rights in a multilateral agree- 
> 
| HARRy 
RARy 
TRUMAy 
“DENT!'S spon Er 
ARY 
| 
| 
| 
i 
| 
H 
| 
|
106 
——SECRES. 
ment and also believes that air routes should 
be negotiated on a bilateral basis. 
Negotiation of a US-Venezuela bilateral air 
agreement, the only Venezuelan air agree- 
ment to date, was concluded on 
14 May 
1948. 
Continued Venezuelan failure to ratify 
this agreement, however, has required each 
country to grant temporary operating permits 
to the airlines of the other country. 
Vene- 
zuela’s LAV is currently seeking extension 
of its temporary operating permit or the grant 
of a permanent one by the US Civil Aero- 
nautics Board (CAB). 
On the other hand, 
Chicago and Southern Air Line (C&S) of the 
US holds a temporary Venezuelan permit of 
indefinite duration 
(presumably until rati- 
fication of the agreement): 
Although C&S 
has been certificated by the US.CAB to make 
traffic stops at Habana, its Venezuelan permit 
does not authorize the carriage-of traffic be- 
tween Habana and Caracas since such service 
would be in direct competition with LAV. 
b. International Organizations. 
Venezuela has taken an active part in the 
International 
Civil 
Aviation 
Organization 
(ICAO) since it adhered to the Chicago Con- 
vention in April 1947. 
LAV is a member of 
the International Air Transport Association 
(IATA). 
c. US Technical Assistance. 
In July 1948, at the request of the Vene- 
zuelan Government, a US Civil Aviation Mis- 
sion was assigned to Caracas to assist the Min- 
istry of Communications in planning its serv- 
ices related to commercial aviation. 
A com- 
munications specialist was added to the mis- 
sion later in the year. 
This mission collabo- 
rated with the Ministry of Communications 
in the preparation of a plan for reorganization 
of the civil aviation functions within the Vene- 
zuelan Government (see Section 1). 
In ad- 
dition, 
a number of LAV employees and offi- 
cials of the Ministry of Communications have 
taken advantage of Civil Aeronautics Admin- 
istration training courses in the US. 
4. 
Airlines. 
a. Venezuelan Scheduled Airlines. 
The three Venezuelan scheduled airlines 
have maintained a steady development since 
the end of the war. 
These carriers, LAV, 
AVENSA, and TACA de Venezuela, have ex- 
A 
tended their routes, acquired additional mod- 
ern equipment, and have substantially 
in- 
creased their passenger and freight traffic. 
Although LAV was authorized in 1948 to par- 
ticipate in the creation of a new international 
airline (see Section 2, a.), there seems to be 
little prospect of this plan being carried out 
in the near future. 
Military pilots are used in rotation for LAV 
operations because insufficient numbers of 
civilian pilots are available. 
Although LAV’s 
credit is good, several large goverriment ap- 
propriations have been necessary to cover its 
indebtedness and keep the line in operation. 
‘In the past, politics have figured heavily in 
the administration of LAV. Recently, how- 
ever, more efficient administration of the air- 
line has made some progress in eliminating its 
heavy operating losses. 
LAV has a fairly 
good safety record. 
Key personnel in AVENSA, the Pan Ameri- 
can World Airways (PAA) subsidiary which 
was established in 1943, were recruited from 
PAA. 
The staff is composed largely of Amer- 
icans, in spite of the fact that AVENSA’s 
franchise from the Venezuelan Government 
requires that its employees shall be exclusively 
Venezuelan 
nationals within 
its first four 
years of operation. 
US personnel have also played an impor- 
tant role in the operations of TACA de Vene- 
zuela. 
Although it was required by the 1945 
reorganization of TACA that 75 percent of 
its executive personnel and 50 percent of its 
operational personnel be Venezuelan, almost 
all pilots are North Americans, while co-pilots 
are mostly Venezuelan. 
' 
A small cargo line, Compania Rutas Aereas 
Nacionales, S.A. (RANSA), was authorized in 
May 1949 to add chartered passenger serv- 
ice and scheduled cargo service to its former 
non-scheduled 
cargo operations. 
This 
air- 
line operates a fleet of three C-47’s and three 
C-46’s. 
Two other small airlines, CAVE and 
SAVANA, have been authorized during 1949 
to operate non-scheduled cargo service within 
the country.* 
*In November 1949 Compania Anonima Viajes 
Expresos (CAVE), a Venezuelan non-scheduled pas- 
senger and freight airline, was authorized by the 
Venezuelan Ministry of Communications to conduct 
Rout 
domest 
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107 
(1) AVENSA (Aerovias Venezolanas, S.A.). 
Routes: AVENSA’s operations, which are 
domestic only, serve the principal cities of the 
populous northern and coastal regions of Ven- 
ezuela in a generally east-west direction from 
the border of British Guiana to the Colombian 
~ 
border. 
Routes are regularly operated from 
Guiria (opposite Trinidad), Maturin, and Ciu- 
dad Bolivar in the east to San Antonio in the 
far west of Venezuela, via the northern cities 
of Caracas,* Coro, and Maracaibo. 
Equipment: 
1 De-4 
14 DC-3 
2 C-47 (cargo only) 
2 Lockheed Electra 
1 North American AT-6 
1 Stinson Reliant 
international services to Europe. 
To implement this 
permit CAVE organized an international division, 
Aerovias Venezolanas Europa (AVE), and with two 
leased DC-4 aircraft commenced weekly service to 
Madrid, Paris, and Rome in mid-January 1950. 
In 
June 1950 AVE was operating two weekly flights. to 
Lisbon, one flight continuing to Rome, the other to 
Madrid and Paris. 
* All airlines serving Caracas use Maiquetia Air- 
port, near the coastal city of La Guaira. 
Ownership: 
55.45 percent private Venezuelan 
37.05 percent US (Pan American World 
Airways) 
7.50 percent Government of Venezuela 
(through the airline LAV, which 
is 
owned by the government). 
AVENSA was the first privately owned com- 
mercial airline to be established in Venezuela, 
receiving its operating permit from the gov- 
ernment in May 1943. 
(2) TACA de Venezuela (Linea Aerea TACA 
de Venezuela, C.A.). 
Routes: TACA’s principal domestic routes 
serve 
the same general 
area 
as those 
of 
AVENSA; ie., the populous northern coastal 
region of Venezuela. 
In addition to its pre- 
dominantly east-west routes 
in the north, 
TACA also operates from Caracas south to 
San Fernando in central Venezuela, and from 
Ciudad Bolivar south to Icabaru on the Bra- 
zilian border. 
TACA operates one interna- 
tional route to the capital of Colombia, Bo- 
gota, from Caracas and Maracaibo. 
AIRLINES OF VENEZUELA 
( October, 1949 ) 
Number 
Airline 
Unduplicated | Scheduled 
of Aircraft 
Ownership 
Route Miles* |Miles per Week (Various Types) 
55.45% Private 
AVENSA 
1,833 
62,279 
{ 
37.05% U.S. 
. 7,50% Gov. 
| 
42.8% Private 
TACA 
3,243 
61,955 
12.2% Gov. 
45.0% TACA 
LAV 
7,308 
84,774 
100% Gov. 
TOTAL 
12, 384 
209,008 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr- 2250 
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LAV 
> 
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i 
HARRY 
Papers of 
“LIBRARY 
| HARRY S. TRUMAN 
\ PRESIDENT'S SECRETARY FILE 
108 
Equipment: 19 DC-3 
Ownership: 
42:8 percent private Venezuelan 
12.2 percent Government of Venezuela 
(through; the airline LAV, which is 
owned 
the government) 
. 
45.0 percent’TACA Airways, S.A. 
(which is controlled by US interests) 
TACA de Venezuela was organized in Au- 
gust 1944 and commenced scheduled opera- 
tions in January 1945. 
(3) LAV (Lineas Aeropostal Venezolana). 
Routes: Domestic. 
The majority of LAV’s 
domestic routes lie in the populous Caribbean 
coastal region and extend to all principal 
cities in northern Venezuela, including Ca- 
racas, Coro, Maracaibo, Barquisimeto, Barce- 
lona, Maturin, and Ciudad Bolivar. Southern 
Venezuela receives LAV service over the fol- 
lowing routes: Barquisimeto to Guasdualito 
in the west, Caracas to Puerto Ayacucho in 
the center of the country, and Ciudad Bolivar 
to Santa Elena in the east. 
(The latter route 
extends across the Brazilian border to Boa 
Vista.) 
International. 
LAV’s principal 
interna- 
tional route links the country with Habana 
and New York. 
Other international services 
are. flown to neighboring countries: 
Aruba 
(N.W.I.), Trinidad (B.W.I.) and, as indicated 
above, Brazil 
(Boa Vista). 
Although LAV 
has an interline agreement. with LANSA, the 
Colombian airline, for joint Caracas-Bogota 
service, only the latter is actually operating 
over this route. 
Equipment: 
4 Lockheed Constellation 
2 Martin 202 
24 DC-3 
3 Lockheed Lodestar 
1 Stinson 
Ownership: 100 percent Venezuelan Gov- 
ernment. 
LAV is an autonomous government 
corporation. 
| 
LAV was organized by the Venezuelan Gov- 
ernment in 1933 to take over the operations 
of the Venezuelan branch of the French air- 
‘line, Compagnie Generale Aeropostale, which 
had gone bankrupt. 
b. Foreign Scheduled Airlines. 
Venezuela is served by two US-flag sched- 
uled airlines: Pan American World Airways 
Venezuela 
and 
Europe. 
Those 
SBCRES- 
(PAA), and Chicago and Southern Air Lines 
(C&S). 
PAA operates two routes from the 
US to Caracas via Curacao: one from New 
York and San Juan, and the other from Miami 
and Ciudad Trujillo (Dominican Republic). 
In addition, PAA operates an east-west serv- 
ice along the Caribbean coast of South Amer- 
ica from Trinidad to Panama. 
This route 
passes through four Venezuelan cities: Ma- 
‘turin, Barcelona, Caracas and Maracaibo, and 
makes connections in Panama and Trinidad 
for other points in Latin America. 
The sec- 
ond US operator, C&S, links the US and Vene- 
zuela over a Houston-New Orleans-Habana- 
Kingston-Caracas route. 
This profitable op- 
eration serves the two major petroleum-pro- 
ducing areas of the Western Hemisphere. 
Two US non-scheduled 
operators, more- 
over, have been granted Venezuelan authori- 
zation to perform scheduled services between 
carriers, 
Transocean 
and 
Trans-Caribbean, 
operate 
from Caracas to Rome, where connections via 
other airlines are made for Madrid, since 
direct flights have not been authorized by 
Spain. 
The Spanish airline, Iberia, inaugurated 
direct 
one-carrier 
service 
between 
Madrid 
and Caracas in the summer 
of 1949. 
An 
Italian carrier, LATI, also commenced serv- 
ice about the same time, linking Caracas and 
Rome via Sevilla. 
Service from Caracas to 
Lisbon and beyond is offered by KLM, the 
Royal Dutch Airline, which also operates nu- 
merous flights from Curacao 
(its West In- 
dies Division headquarters just off the Vene- 
zuelan coast) 
to Maracaibo, Caracas, and 
Barcelona en route to other points in the 
Latin American area and to Europe. 
British West Indian Airways also serves 
Venezuela in its Caribbean operations, origi- 
nating flights to Caracas from Trinidad and 
Barbados and continuing on to Curacao and 
Kingston, Jamaica. 
With respect to Latin American airlines, the 
Brazilian carrier, Aerovias Brasil, makes 4 
traffic stop at Caracas on its Rio de Janeiro 
Miami service, entering Venezuela from Port iJ 
: 
of Spain and continuing 
on 
to Ciudad 4 
Trujillo. 
woe 
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HARRY S. TRUMAN 
\ PRESIDENT'S 
FILE 
~ SECRET 
APPENDIX U 
AIRLINES OF BRITISH COLONIES AND PUERTO RICO 
Sabieaitnnl OF THE BRITISH COLONIES & PUERTO RICO 
(October, 1949) 
Number 
Airline 
| Unduplicated| 
Scheduled | 
aircraft | Ownership 
Route Miles* 
Miles 
perWeek Various Types) 
Trinidad 
BWIA 
| 
= 4,854 
$3,598 
J 
Brit. Govt. 
one 
BCA 
| 
1,126 
3,770 
{ 
CIA 
| 
"$27 
654 
{ Brit. 
Bahamas 
BAL 
752 
1,250 
Brit. Govt. 
Brit, Guiana 
BGA 
1,800 
2,179 
U.S. 
Puerto Rico 
CAA 
388 
12,051 
U.S. 
TOTAL 
9,621 
§6,022 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-2350 
1. 
British Colonies. 
Civil aviation affairs in the British colonies 
of Trinidad and Tobago, Jamaica, and the 
Bahamas are in each case supervised by a 
Department of Civil Aviation in the Colonial 
Government, although final responsibility for 
the determination of policy rests with the 
Ministry of Civil Aviation in the UK. 
a. Trinidad. 
This colony is the operational base for Brit- 
ish West Indian Airways, Ltd. (BWIA), which 
operates the most extensive network of any 
of the airlines incorporated within the Carib- 
bean area. 
There is no local air service on 
the island of Trinidad. 
BWIA was organized in 1940 by Mr. Lowell 
Yerex, the founder of the TACA System (see 
Panama, 
Section 
5). The 
company 
was 
owned entirely by Yerex until 1943, when it © 
was incorporated and shares were sold to the 
public. 
Yerex soon sold his 40 percent stock 
interest to TACA Airways, S.A., the non-oper- 
ating holding company for the TACA System, 
which in turn gradually sold all of this stock 
to British 
citizens. 
During 
1947, 
British 
Overseas Airways Corporation 
(BOAC), an 
entity of the British Government bought up 
all shares in BWIA. 
Routes: 
BWIA’s 
colonial 
routes connect 
Port-of-Spain, Trinidad, with all the impor- 
tant British possessions bordering the Carib- 
bean Sea and with British Guiana. 
Opera- 
tions also extend west to Kingston (Jamaica) 
and Belize (British Honduras). 
BWIA’s in- 
ternational routes extend from St. Kitts and 
Kingston to Ciudad Trujillo (Dominican Re- 
public), and from Port-of-Spain and Barbados 
to Caracas (Venezuela) and beyond to Curacao 
(Netherlands West Indies). 
From Curacao, 
BWIA provides direct connections to Kingston. 
Equipment: 
4 Lockheed Lodestar 
5 Vickers Viking 
Ownership: 
100 percent British Govern- 
ment. 
Trinidad is probably the principal air hub 
on the northern coast of South America. 
In 
109 
HARRY 
Ss 
‘ 
| 
| 
| 
| 
i 
‘ 
>
RY S, TRON 
Papers of 
- 
| 
S. 
~ 
| 
RESIDENT 
“SECRETARY 
sir 
110 
. 
addition to the extensive service provided by 
has not been formally authorized by the Brit- 
Nassau. 
BWIA to points in the Caribbean area, the 
ish Government to conduct scheduled service 
ated ov 
airlines of five countries connect Trinidad with 
on this route. 
In June 1949, the US Civil 
flies fro 
points in the US, Canada, and South America: 
Aeronautics Board granted CIA a permit for 
is the « 
Pan 
American 
World 
Airways 
(PAA). 
non-scheduled service between the Cayman 
services 
Trinidad is the eastern terminus for PAAserv- 
Islands and Tampa, Florida. 
Baha 
ice across the northern coast of South America, 
British Caribbean Airways, Ltd. (BCA). 
Rout. 
as well as the southern terminus of PAA’s 
Routes: 
islands 
Antilles routes. 
In addition, it is an impor- 
Kingston-Montego Bay 
group. 
tant traffic stop on PAA service from the US 
Kingston-Miami 
operate 
to the east coast of South America. 
Montego Bay-Nassau 
Beach. 
Trans-Canada Air Lines (TCA). 
Trinidad 
Equipment: 
throug] 
is the southern terminus of TCA’s routes from 
2 DC-3 
é 
Canada either via Bermuda, or via Nassau 
1 Lockheed Lodestar 
' 
Equi, 
(Bahamas) and Kingston (Jamaica). 
Ownership: 100 percent British Government 
Royal Dutch Airlines (KLM). 
KLM’s West 
(through BOAC) 
Indies service connects Trinidad with Curacao, 
Caribbean 
International 
Airways, Ltd. 
Barcelona 
(Venezuela), 
and 
Paramaribo 
(CIA). 
(Dutch Guiana). 
Routes: Kingston-Cayman Islands (sched- 
— 
Owne 
Aerovias Brasil. 
Trinidad is a traffic stop 
uled) 
(throu 
on Aerovias Brasil’s Rio de Janeiro-Miami serv- 
Kingston-Tampa (non-scheduled) 
In ac 
ice via Paramaribo, Caracas and Ciudad Tru- 
Equipment: 1 PBY 
are ser 
jillo. 
Ownership: 100 percent private British citi- 
Airway: 
Linea Aeropostal Venezolana (LAV). 
LAV _ zens. 
by Bri 
serves Trinidad on a route connecting with 
The following six international airlines serve 
(BOAC 
Maturin and other points in Venezuela. 
Jamaica: 
by Tra 
b. Jamaica. 
Pan American World Airways (PAA) pro- 
Canada 
_ This island is too small to support more 
vides direct or connecting service to Kingston 
by Brit 
than token air service within its territory. 
from most of the important traffic points in 
with M 
Two cities, Kingston and Montego Bay,areon 
the Caribbean area. 
In addition, Montego 
d. B 
international routes and, although a good 
Bay is served from Camaguey, Cuba. 
; 
road connects them (85 miles), there is suffi- 
Chicago & Southern Air Lines (C&S) serves 
Britis 
| 
cient travel between the cities to justify an 
Kingston on flights from New Orleans to 
only ail 
; 
air-shuttle service by British Caribbean Air- 
Caracas, and also operates from Houston to 
operate 
ways (BCA). 
Kingston via Habana. 
US citi 
Jamaica has been served on international 
Royal Dutch Airlines 
(KLM) operates to 
tions u 
routes since 1930, when PAA began service 
Kingston from Port-au-Prince, Haiti, and from 
agreem 
to the island. 
In addition to BCA, a second 
ryba (Netherlands West Indies). 
Guiana 
company, Caribbean International Airways 
British West Indian Airways (BWIA) offers 
: 
(CIA), bases its operations in Jamaica, al- 
qirect 
service 
from Ciudad 
Trujillo and 
subsidy 
| 
though the latter company is registered in) 
Qyracao, 
this sul 
Both are relatively new 
British 
Overseas 
Airways 
Corporation 
the ori 
: 
; 
g been organized in 1946, 
never a 
and CIA in 1948. 
A Jamaican family owned 
(OAC) provides Ringston with service from 
d 
Europe via Bermuda or Nassau en route to 
owns 
BCA until October 1949, when British Over- 
p 
Pep 
missior 
seas Airways Corporation (BOAC) purchased 
British 
the stock. 
BCA’s operations reportedly will 
Trans-Canada 
Air Lines 
(TCA) 
serves 
tndie 
: 
be merged with those of British West Indian 
ingston on its Canada-Trinidad route. 
* 
: 
Airways(BWIA). 
The main activity of CIA is 
c. Bahamas. 
Rout 
. 
charter flying. 
Although it has operated a 
Air transportation was introduced to this 
town t 
i 
weekly scheduled service between Kingston 
British colony by PAA in 1929 over a route 
the reg 
! 
and the Cayman Islands since 
June 1948, CIA __ serving the tourist traffic between Miami and 
towns | 
x 
-
HARRY’ S, 
TRUM 
/ Papers of 
| HARRY S. TRUMAN 
\ PRESIDENT 'S 
FILE 
i 
111 
the Brit- 
Nassau. 
Bahamas Airways (BAL) also oper- 
Charter operations, both within and outside 
i service 
ated over this route for a short time, but now’ _— British Guiana, are also an important activity 
cS Civil 
flies from Nassau to West Palm Beach. 
BAL 
of BGA. 
| 
rmit for 
is the only airline now operating scheduled 
Equipment: 
Cayman 
services within the Bahamas. 
2 DC-3 
| 
Bahamas Airways, Ltd. (BAL) 
2 Grumman Goose 
CA). 
Routes: BAL connects Nassau with the outer 
Ownership: 100 percent private US. 
| 
islands of the northern part of the Bahama 
British Guiana is served by Pan American 
group. 
Scheduled international flights are 
World Airways on its service from Port-of- 
; 
operated between Nassau and West Palm 
Spain to Paramaribo, Cayene and points in 
| 
Beach. 
Charter 
operations 
are conducted 
fBrazil. 
British West Indian Airways also 
throughout the Caribbean area. 
provides connections with Port-of-Spain, as 
| 
Equipment: 
well as Barbados. 
1 PBY 
nment 
2. 
Puerto Rico. 
Caribbean-Atlantic Airlines, Inc. (CAA) was 
Ltd. 
Seabee 
incorporated in Puerto Rico in 1939. 
Both 
P 
CAA and its former rival on the island, Aero- 
(sched- 
Ownership: 100 percent British Government 
yias Nacionales de Puerto Rico, Inc. (Aero- 
| 
(through BOAC). 
vias), applied to the US Civil Aeronautics 
| 
In addition to BAL’s flights, the Bahamas __ Board for operating permits in 1939 and 1940, 
| 
are served at Nassau by Pan American World 
respectively. 
The applications were consoli- 
sh citi- 
Airways (PAA) on a direct flight from Miami, 
dated by the Board and CAA was issued a cer- 
' 
by British 
Overseas 
Airways Corporation 
 tificate in 1942 to operate between certain 
+s serve 
(BOAC) en route from Bermuda to Habana, 
points in Puerto Rico, and also to St. Thomas 
by Trans-Canada Air Lines (TCA) on its 
and St. Croix in the Virgin Islands. 
Aerovias 
pro- 
Canada-Kingston-Port-of-Spain 
service, and 
was denied a certificate and went out of exist- 
zston | 
by British Caribbean Airways which connects 
ence shortly thereafter. 
CAA continues to 
vts in 
with Montego Bay, Jamaica. 
enjoy the distinction of being the sole US car- 
ntego 
— 
tions until 1939, when it signed a three-year 
Equipment: 3 DC-3 
ioe 
agreement with the Government of British 
Ownership: 100 percent private US citizens. 
Guiana to operate scheduled service tointerior 
(The company is at present controlled by three 
t fii 
points. 
In return, BGA received an annual 
members of the Trigo family who hold 65.9 
S ona 
subsidy. 
It is not known, however, whether 
percent of the capital.) 
this subsidy was continued after expiration of 
Two US carriers and one French airline 
ee 
the original contract. 
The government has 
serve San Juan, Puerto Rico. 
1 ?vom 
never attempted to replace BGA with a British- 
Pan American World Airways (PAA) con- 
kre to 
owned air service and has even refused per- 
nects San Juan directly with New York, Miami, 
mission for other airlines to operate within 
Ciudad Trujillo, Curacao, and Port-of-Spain. 
British Guiana. 
The Colonial Government 
In addition, San Juan is the northern terminus 
} 
_ 
took action in 1948 to reduce BGA rates. 
of PAA’s route through the Lesser Antilles. 
: 
Routes: Five routes radiate from George- 
Eastern Air Lines (EAL) also provides direct 
j this 
town to all sections of British Guiana except 
 Miami-San Juan service. 
1 ute 
the region north of that city. Most of the 
Air France serves San Juan from Guade- 
? 
and 
towns served are river ports in the interior. 
loupe and Martinique with PBY aircraft. 
d. British Guiana. 
British Guiana Airways, Ltd. (BGA), the 
only airline in this colony, has been owned and 
operated since 1934 by Major. A. J. Williams, a 
US citizen. 
BGA conducted charter opera- 
rier incorporated in the Carribean area. 
Routes: Caribbean-Atlantic connects the is- 
land of Puerto Rico with the Virgin Islands, 
and with the Dominican Republic. 
It also 
operates two short routes within Puerto Rico. 
4. 
5eTves 
no 
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In 
to 
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ESTIMATE? 
CARIBBEAN REPUBLICS 37°." 
ends. the intelligence organizations: of: the Departments 
Wie 
¥ 4.7% 
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CENTRAL INTELLIGENCE AGENCY 
Be 
1. This estimate was disseminated by 
the Central Intelligence Agency. “This copy 
is for the information and use of the recipient indicated on the front cover and of per- 
sons under his jurisdiction on a need to know basis. Additional essential dissemination . 
| 
may be authorized by the following officials within their respective departments: 
-. ‘. 
a. Special Assistant 
the 
for Intelligence, Sor 
Department of 
| b. Assistant Chief of Stam, 
‘tor the Department of the 
c. Director of Naval Intelligence, for the Department of the Navy 
d. Director of Intelligence, USAF, for the Department of the Air Force. 
ot 
. 
e. Deputy Director for Intelligence, Joint Staff, for the Joint Staff 
| 
mS a 
Director of Intelligence, ARC,:for. the Atomic Energy Commission 
st 
copy ‘may be retained: “or destroyed by burning irs. accordance with’ applic: 
cable security. regulations, or returned. to the Central Intelligence 
‘When an estimate is disseminated overseas, the oversens 
may. retain 
: 
it for @ period not in excess of one year.’ At the end of, this period, the estimate should 
either be destroyed, returned. to the forwarding agency; or permission should’ ba 
Department of Defense 
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THE CARIBBEAN 
REPUBLICS 
ThE PNORSM 
PROBLEM 
To estimate: the situation and probabie devclopraenis in the Caribbean republics 
(Cuba, Haiti, the Dominican Repubiic, C 
Guatemaia, £1 Salvador, Honduras, Nicaragua, 
Costa Rica, and Panama), with reference to their political stability and their rela- 
tions with one another and with the United States. 
CONCLU 
1. The generally prevailing characteris- 
tics of the Caribbean republics are social 
immobility, economic unuderdevelopmcnt, 
and political immaturity. 
‘he yast ma- 
jority of their hceterogencous population 
is illiterate, poverty-stricken, and socialy 
and politically inert. 
Traditionally, poi- 
tics have revolved around persons ratincr 
than public issues; the continued or siuit- 
ing favor of the army has been the de- 
cisive politicai factor; and rule by muu- 
tary “strong men” hasbeen normal. 
‘Tic 
constant struggle for power has creatcd a 
pattern of intrigue and conspiracy, often 
with international ramifications and im- 
plications, and of corresponding suspicion 
and repression. 
The transfer of political 
power is generally accomplisicd by revo- 
lution rather than by election, but reauy 
bloody civil conilicts are rare. 
2. During recent years the traditionai 
ruling elements have been faced by stcad- 
ily increasing demands ior social, eco- 
nomic, and political change, voiced by 
small but growing urban middle class eie- 
ments with increasing popular support. 
‘The pressure for change has not been uni- 
formthroughout the arca. In Guatemaia, 
it was such as to shatter the traditional 
order in the Revolution of 1944. 
It tas 
Aad 
spectacularly effective in Cuba, 
Costa ica, and Panama, but is only be- 
rimning to be felt in Maiti, El Salvador, 
anc sonduras. 
It has been effectively 
contained py strongly entrenched author- 
iCavian regimes in the Dominican Re- 
public and Nicaragua. 
J. “he pressure for change will continue 
to grow. 
For the time being, héwever, 
the elements resisting change are in the 
ascendant. 
Whether eventual change is 
orderly will depend in large measure on 
whether the existing regimes can bring 
taemsclves to promote social, economic, 
political progress, 
tually. certain an éventual violent explo- 
occur for many years. 
4, he overthrow of the Arbenz regime 
in Guatemala has removed the most im- 
Incciate and dangerous threat to stability 
and order in the region. 
Elsewhere, 
Communist potentialities have been held 
reasonably well in check, though the situ- 
ation is far from satisfactory in Cuba and 
rlonduras. 
The strength of Communism 
taroughout the region as measured by the 
number of Communists and sclf-con- 
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or whether, 
-thrqugh static fepression, they make 
In any case, no substantial im- ©) 
°: 
provement in basic conditions is likely to 
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scious Communist sympathizers is srnall. 
Nevertheless, there is a real danger, rrow- 
ing out of the confused and unchanneled 
character of the slowly rising pressure for 
reform, that Communists will be able (as 
they were in Guatemala) partially to in- 
filtrate or to influence economic froups, 
reform moveinents, 
reformist 
rogimes, 
and politically ambitious individuels or 
groups, and thus to acquire in particusr 
countries an influence wholly cispropor- 
tionate to either ‘their 
popular acceptance of 
Throughout the rogion the 
will continue to make the most of jpicnti- 
ful opportunities for agitation. 
b he ons on 
on 
9. The prospects for stability and orcer 
in Guatemala depend on whether theo new 
regime can and will adhere to the bicad 
objectives of the Revolution of 1944 waiie 
eliminating Communism. Any other pol- 
icy would be likely to precip.tate further 
internal conflict. 
6. The greatest present throat to stability 
and order in the region is the animosity 
of Presidents Somoza of Nicaragua and 
Perez Jimenez ef Venezuela toward the 
Figueres regime in Costa Rica. 
icucres’ 
recent more -concilistory attitude nas 
eased the situation somewhat, but ncither 
Somoza nor Perez Jimencz is likely to be- 
come reconciled to the continued exist- 
ence of the ligueres regime. 
7. The October election in Honduras may 
precipitate armed violence in some de- 
gree. 
The 
outcome 
is unpredictable. 
President Batista will make sure of win- 
ning the November election in Cuba. 
8. With the notable exception of Guate- 
mala under Arbenz, the Caribbean repub- 
lics have recognized that they must ac- 
commodate their policies to US security 
interests in the Caribbean area. 
Iu 
turn for their cooperation, however, they 
expect from the United States protection, 
“oiecration of their peculiar domestic po- 
Litical processes, and a generous attitude 
toward their economic problems. 
They 
rely upon the sympathy and support of 
other Latin American republics to safe- 
euard them against unacceptable US in- 
vericrence and domination. 
vu. in Caribbean and in other Latin Amer- 
ican opinion, the issue of social and po- 
” 
we reform versus traditional authori- 
‘arlanism is of greater immediate impor- 
“nee than the question of Communism 
or anti-Cominunism. The reformists con- 
tond that the United States has a moral 
ovligation to foster social and political 
ceveliopment in the area. 
On the other 
hand, the Caribbean “strong men” resent 
eny indication of US support for reform- 
ist revtimes as a betrayal of the “true 
friends” of the United States. 
Itisa pri- 
mary Coramunist objective to identify the 
United States as the chief support of Car- 
ibbcan dictatorship and the chief obstacle” 
- 
vo social and political progress. 
10. The armed forces of the Caribbean re- 
publics exist to defend their incumbent 
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mnments against internal subversion, 
fliibustering expeditions, and armed in- . 
tervention by antagonistic neighboring 
regimes. 
In Caribbean opinion, defense 
acainst any more formidable aggression 
is beyond the republics’ limited capabili- 
ties and sure to be provided by the United 
States in its own interest. Under the con- 
cept of hemisphere defense, however, and 
with requisite US assistance, most of the 
Caribbean republics will probably main- 
tain small units equipped and trained for 
modern combat and available to assist in 
on integrated defense of the Caribbean 
area. 
Ree 
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~BECRET 
l. STRATEGIC IMPORTANCE 
11. The strategic importance of the Caribbean 
republics is a function of thelr proximity to 
the United States and the Panama Canai, to 
the routes between them, and to the Se. ot 
ste 
air routes between the United States ana 
South America. 
It has long been a cardinal 
principle of US policy to ensure against a 
lodgment by any potentially hostile power 
anywhere within the Caribbean area. 
Von- 
versely, US access to military base sites in the 
republics in case of need is a maticr of Con- 
siderable 
strategic 
interest. 
‘tne only 
portant existing military bases in tlic ropuo- 
lics are the US installations la tac ranomas 
Canal Zone and at Guantanamo Day li Cuca. 
12. The armed forces of the Carivvean repub- 
lics exist primarily for the maintenance of in- 
ternal security and are not lm ail cases sully 
adequate even for that limited purpose. 
In 
the event of war, the repubiics could maine no 
contribution to hemisphere defense of imore 
than local significance. 
13. The Caribbean republics supply the Unlicd 
States with important quantivics of Cco.uce, 
Sugar, and bananas. 
They are nov on impor- 
tant source of industrial raw matericis, al- 
though small amounts of strategic mincrais 
are obtained from Cuba. 
14. The political cooperation of 
these nine 
small but sovereign states is of considcravic 
iraportance to the United States in promoting 
the concept of hemisphere csolicarity and in 
furthering its policies in the United Nations. 
“I. BASIC CONDITIONS AND TRENDS 
15. The Caribbean republics have noi deparicd 
greatly from the colonial pattern cf iiving: 
social 
immobility, 
economic 
undcrdeveiop- 
ment, and poiltical immaturity are their pre- 
vailing characteristics. 
The generally domin- 
. ant socio-political clement is the landed gentry 
dase adn combination with the military and, to a 
| varied extent, the Church. 
The vest majority 
- 
of the population is socially and politically 
inert, illiterate, and poverty-stricken. 
Sub- 
siantial segments of the population are vir- 
uoily untouched by Western civilization. 
In 
bocen’ years, however, a small but growing 
urbon middie class‘has assumed increasing 
importance in the economic and political life 
of the area. 
iG. ‘ne 21,000,000 inhabitants of the Carib- 
republics are of diverse racia] stocks and 
admixtures 
(cee Annex 1). 
The population 
$s preponderantly white in Costa Rica, negro 
in 
mulatto in Cuba and the Dominican 
ni spe Indian in Guatemala, and mestizo 
(m 
ma 2.00 
and 
white) 
clsewhcre. 
In 
cyvery cas 2, Lowever, the white element has 
romainod “poalally end politically dominant, 
excep xt ln Maiti, which is ruled by a largely 
elite. 
./. lost of the people of the area derive their 
Livelihood directly irom the soll. 
Agricultural 
mcthous are generally primitive, except in the 
production of export crops. 
These crops, ex- 
copting cofice, have been developed largely by 
foreign 
e@nterprise. 
Economic 
development 
has been retarded by lack of capital and of 
wecanical skill and by the inadequacy of trans- 
por tation and power facilities and of other 
Josic services. 
Foreign direct private invest- 
wet nts in the area are predominantly of US 
capita 
all major foreign cconomic 
pris 
40. 
political power has been 
sonopolized by upper class groups-related by 
blood, marriage, or economic interest: Even 
though some of the republics have a broad 
francluse, in none of them, except Costa Rica, 
is there the articulate popular participation 
required to give reality to democratic pro- 
cesses. 
Consequently politics have revolved 
around persons rather than public issues, the 
continued or shifting favor of the army has 
been the decisive political factor, and rule by 
military “strong men” has been normal. 
In 
an environment of such political immaturity, 
the constant struggle for power has created 
@ pattern of intrigue and conspiracy, often 
with international ramifications and implica- 
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. tered by the Revolution of 
tions, and of corresponding suspicion and re- 
pression. 
The transfer of real political power 
from one group to another is generally ac- 
complished by revolution rather than by elec- 
tion. 
Such revolutions are usually a matter 
of military pronunciamiento, with rainimal 
public disturbance. 
Really bloody civil con- 
flicts are rare. 
19. During the last thirty years the traditional 
ruling elements in the Caribbean repubilcs 
have been faced by steadily 
mands 
for social, 
economic, 
ana 
tical 
change. 
These demands coime, not tren the 
peasant masses, bul from urban ¢.emcnis: 
students and intelicctuals, busimcas end pro- 
fessional men, labor leaders, aid junior army 
Officers. 
These elements 
are motivatca 
oy 
their own 
frustrations 
end dissatisvacc 
and by a variety of foreign itilucnecs, Un, 
Mexican, and Argentine as weil as 
They have no common program, but ail desire 
recognition and a share in political power. 
In seeking to arouse mass support, they have 
tended to adopt extremist doctrines and acia- 
agogic tactics. 
20. Throughout the area, agitation apalast 
the traditional order of socict; y hes nad strong 
nationalistic overtones. 
I’requently this na- 
tionalistic sentiment has been directed as 
igainst 
the special privileges granted in former 
tlics 
to foreign economic enterprises. 
21. Pressure 
for and 
resistance y 
not been uniform throughout the orion. 
mm 
Guatemala the traditional order wos yor 
1044. 
In Cuba, 
Costa Rica, and Panama pressures fur change 
have been effective to a considerabie degree. 
Such pressures are only beginning vo Be icit 
in ©] Salvador, Honduras, and iaiti. 
They 
have been efiectively containcd by strongly 
entrenched authorsitarian regimes in Wica- 
ragua and the Dominican Republic. 
lil, THE EXISTING POLITICAL REGIMES 
22. Cuba is ruled by a military “strong man,” 
Fulgencio Batista, who emerged from obscur!l- 
ty as leader of the Sergeants’ Revolt” in 1938, 
when he gaincdl control of the Cuban Army. 
After making and breaking severai presidents 
. 
in succession, Batista himself assumed the 
presidency in 1940. 
He found it expedient to 
retire quietly at the end of his term in 1944. 
in 1952 he again presented himself as a@ can- 
didate, but then. forestalled the cloction by 
celzing powerinanArmycoup. 
He proceeded 
to suspend the Congress, to dissolve the exist- 
ing political parties, and to promulgate a new 
constitution by decree. 
General elections un- 
der a revised electoral law, repeatedly pro- 
tnised, have been repeatedly postponed. They 
are now ccheduled for November 1954, with 
Datista an announced candidate. 
23. The stability of the Batista regime de- 
pends upon the continued support of the 
fuvay, which seems 
assured. 
In addition, 
Datista has some popular following, primarily 
mmong lower class elements. 
He is sccking 
to broaden his political support by an exten- 
sive public works program and by middiec-of- 
tnc-road policies calculated to appeal to con- 
eervative 
opinion. 
He operates 
politically 
turough a coalition of four parties, of which 
two are new groups organized by personal ad- 
herents and two are small old-line rightist 
Groups led by opportunist politiclans. 
24. Although the Batista regime is generally 
unpopular, political opposition to it is disor- 
nized and ineffectual. 
The only registered 
opposition party, that icd by ex-President 
Crau, has recently shown that it has consider- 
able popular support, despite its lack 
of a poal- 
tive program, but all efforts to forn$ a united 
front oF the many opposition elements have 
failed. 
Because of personal rivalrics, fear of 
repression, and a widespread belief that the 
election will be rigged, it is unlikely that an 
effective political opposition can be developed. 
2S. There is another opposition in exile, com- 
posed of members of the Prio administration 
and other politicians ousted by Batista in 
052. 
It also is disorganized and ineffective. 
‘here can be no doubt that some of the exiles 
are plotting a countercoup, but it is unlikely 
that such an attempt could succeed. 
Never- 
theless, constant rumors of an impending 
coup have an unsettling effect in Cuba and 
have kept the Cuban armed forces in a cuasi- 
alert status for over two years. 
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26. Haiti is ruled by another military “strong 
man,” Paul Magloire, formerly comrnandant 
of the palace guard, who ousted his predcces- 
sor by coup in 1950. 
He acted with the sup- 
port of the predominantly mulatio elie, who 
could not tolerate the former president’s at- 
tempt to arouse the black masses ii Support 
of his own ambition to serve an uncor nist 
bu- 
tional second term. Magloire was subscguent- 
ly elected by popular vote and ruies as a con 
stitutional president. He seems to have S 
beats 
a nice balance in courting pop ulai 
Wirile 
keeping the populace under irra control. Dy 
legislation providing for his continued control 
of the armed forces after the expiration af Tals 
term as president, 
“arloire nas Ait 
Cre 
ranged to retain real power lideinitc.y 
27. The Dominican Repubiic ic ruled fe the 
most durable “strong man” of tle Caroboan, 
Generalissimo Dr. Rafael Leonidas Zrujiulo, 
“Benefactor of the Fatherland.” 
ie secured 
command 
the Dominican artmod 
fore 
shortly after the withdrawal of the US: mili- 
tary occupation in 1924 and has been in cliice 
tive control of the country ever Since. 
le ce- 
cupied the presidency himself during 1loQuU- 
1938 and 1942-1952, and now maintains his 
brother, Hector, ia that office. 
‘The Domini- 
can Repubic is a one-party — and is ndmin- 
istered, in substantial effect, 
as the private 
estate of the Trujillo family. 
28. Guatemala is under thc provic 
isional ¢ ave 
ernment of a military junta headed b Cortes 
Castillo Armas, leader of the J 
4) 
Jutionary attack on the Arbenz rcs eime, but ime 
cluding Elfego Monzon, representative of the 
regular armed forces. 
As a folicwor of i’ran- 
cisco Arana, Castillo participated in the Itcvo- 
lution of 1944 and held several responsible 
Army positions under the Arevalo adiministra- 
tion, but broke with the regime when Arana 
was assassinated in furtherance of Arbeng’ 
political ambitions. 
Monzon remained in the 
Army and held the post of Minister without 
Portfolio under Arbenz, but gained a repuia- 
tion as.an outspoken critic of the Cormmunistic 
tendencies of the regime. 
Although both are— 
hostile to Communism, Castillo and 
manifestly represent different factions, and 
circumstances may make them personal rivals. 
lor the short term at least, the stability and 
effectiveness of the new regime will depend 
on their ability to cooperate in the national 
anterest. 
. 
In the longer view, 
~:ccess of the new 
regime In Guatemala will ac pend on its ability 
aiminate Communism without repudiating 
She objectives and achievements of the Revo- 
iution of 1944. 
The overthrow of Arbenz has 
been heiled with enthusiasm in Guatemala 
City, which was always strongly anti-Com- 
munist in sentiment, but the urban reformist 
cleaments there would not welcome an attempt 
to re-cstablish the traditional social and po- 
litical order. 
In the countryside, there are 
oth reactionaries who would like to undo the 
)..volution of 1244 in the name cf anti-Com- 
raunism and aroused agrarian workers who 
icar that the Castillo regime will deprive them 
of their recent gains. A constructive and en- 
during solution of Guatemala’s political prob- 
lems thus requires great skill] and discrimina- 
tion on the part of the new government. 
59. The President of El Salvador is Oscar 
Osorio. 
In 1948, as a junior army officer, he 
tod a coup which overthrew his dictatorial pre- 
cecessor and established a liberal and pro- 
eressive, but not radical, regime. 
He was 
clected constitutional president in 1850, for a 
cin-ysar term. 
Ol. 
President of Honduras 
Dr. Juan 
Manuel Galvez, a lawyer put iM office by 
. 
‘burcio Carias, the erstwhile “strong man” of 
— 
that country. 
Carias gained control of Hon- 
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Guras in 1923, when he led the Conservatives 
to victory over the Liberals in a civil war. 
For a time his position was precarious, but his 
cemonstrated 
ruthlessness 
eventually 
dis- 
couraged opposition. 
He occupied the presi- 
dency himself from 1933 to 1949, when he 
voluntarily retired in favor of Dr. Galvez. 
The Galvez administration, however, has dis- 
pleased him: Galvez presumed to act as presi- 
dent in fact and to permit an unprecedented 
degree of liberalization in Honduras. 
Carias 
has therefore presented himself as a candidate 
for re-election in October 1954. 
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(1944-1948), 
was 
dictatorial. 
32. The prospective election of 1954 has cre- 
ated a situation of mounting tensions and 
involves a possibility of civil war. 
A three- 
party contest is in progress among the Na- 
cionalistas 
(Supporters 
of Carias), the Re- 
formistas (supporters of Galvez, whose candi- 
date is Abraham Williams), and the Liberals 
(whose candidate is Dr. Rarnon Viilleda 
rales). 
. The political situation is fluid, how- 
ever. 
The fact that no one party can count 
o: being able by itself to win and secure power 
favors the formation of parity combi: ration. 
any one of which could prodably be a 
victory. 
An alliance between the Nacionai- 
istas and the Liberals is not wy. - a in 
assure 
Ou 
to hoid the balance of power. 
Ii the } Reform- 
istas should combine with the Nacional'stcs, 
the resultant regime probably would be Sccure 
against Liberal opposition, even in the untito- 
ly event that such opposition should oe armcd. 
A Reformista alliance with the Liberals woulu 
eliminate Carias politically. 
Carias, 
tempted to resort to arms in order to foresiaii 
such an eventuality. 
He right also be tempt- 
ed to do so even after such an alliance nad 
been effected, but his chances of success in 
such circumstances would be smalicr. 
such attempt Carias would have the support 
of a considerabie number of private arme 
personal followers and probably also of at. 
least a portion of the nationai ariay. 
33. The “strong man” of Nicaragua is Ancs- 
tasio Gomoza, who was icit in command oc 
the Nicararuan armed forces on the with- | 
drawal of the US military occupation in i042 
and has been in effective control of the coun- 
try ever since. 
Somoza has occupied the 
presidency himself since 1936, exccpt tor a 
brief interval (1947-1850) during which he 
nevertheless retained control of the arimcd 
forces. 
34. In contrast to its neighbors, Costa Rica 
has a long tradition of orderly democratic 
government. 
However, the regime of ?rcsi- 
dent Rafael Caideron Guardia 
(1940-1944) 
and his handpicked successor, Teodoro Picado 
This regime 
was closely associated with President Somoza 
of Nicaragua, but, paradoxicaliy, Picado was 
also dependent on the political support of a 
apidy developing Communist movement in 
Costa Rica. 
In 1948 the regime attempted to 
nullify the election of Otilio Ulate, a conserv- 
ative. 
It was promptly overthrown by a re- 
volt ied by Jose Figueres, a wealthy planter. 
Figueres headed 
a provisional government 
which held power for eighteen months before 
fnally permitting Ulate to take office. 
In 
1953, on 
the completion 
of Ulate’s 
term, 
eres was duly elected constitutional presi- 
Gent. 
oo. Figueres is the somewhat erratic leader 
of the young reformists in Costa Rica and a 
man of rather advanced socialistic ideas, but 
oc and his administration are definitely anti- 
Communist, 
The Figuercs regime is faced by 
vm Laternel conservative opposition led by ex- 
President Ulate and an opposition in exile 
uclncipally composed of elements expelled in 
and 
ied 
by ex-President 
Calderon 
Guardia. 
‘he latter is the more dangerous 
inasmuch as it can count on the powerful 
Gui apport of Presidents Somoza of Nicaragua 
ond Perez Jimenez of Venezucla. 
OG. The President of Panama ts Jose Remon, 
formerly Commandant of the National Police 
(the only armed force), who was duly elected 
ln 1652 for a four-year term. 
Remon is a 
ocli-made man and is responsive to reformist 
pressures, but, as a former police chief, he is 
also conscious of the requirements for order 
ond security. 
assured, 
iV. COMMUNIST STRENGTH AND INFLUENCE 
o7. Communist political partics are illegal in 
all the Caribbean republics, but Coinmunist 
activities are carried on clandestinely and by 
a variety of front organizations. 
Total Com- 
inunist party membership in these countries 
is estimated to be about 35,000, of whom some 
25,000 are in Cuba. 
Communist strength in 
‘Suatemala was estimated to be about 4,000 
before the anti-Communist revolution in June 
i854. 
The Communist parties elsewhere are 
numerically negligible. 
Except in the special 
case of Guatemala, and perhaps Honduras, 
Communist party membership has generally 
Internal 
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declined during the past year, ana it will now 
almost certainly decline in Guaternala also. 
The Communists have not penetrated 
the 
Caribbean armed forces to any appreciable 
extent. 
However, the experience in Guagie- 
mala indicates the extent to which a Comrau- 
nist-dominated 
regime 
can 
neutralize 
the 
usual role of the Army. 
38. Throughout 
the area 
the Communists 
exert an influence far out of pro sortion to 
their limited numerical strength throu?! 
a the 
skill with which they have identifica them 
selves 
with 
progressive 
and 
sti 
movements. 
Thus the rising non-Cominuilst 
demand for social, economic, and political 
change has been cxpicitcd to 
Con 
nist purposes: 
to discredit anti-Communs. 
governments and to convert povuior 
factions 
into antagonism 
toward 
the 
Communist efforts to these ends have hoon 
greatly facilitated by the 
ue mili 
tary interventions in the Cariboca nr 
by the susceptibility of the intcliicentcia to 
Marxist cliches, and by the ease with which 
the eStablished Cconormic pattern could be 
characterizec as “feudal” and “colomial.” 
blics 
39. Guatemala is, of course, the pric O22 
ple of the successful application of this Com- 
munist technique. 
There, through personal 
influence with President Arbenz, a small but 
zealous group of Communists was able to gain 
control of the implementation of the eoctal 
reforms promised by the Revolui'on of 1944. 
The potential opposition was 
fre mented, 
The traditional ruling elements, 14m led ¢ 
rontr 
end senior army ofiicers, had been disercdite: + 
Anti-Communist urban 
reformist 
clements 
were themselves antazonistic toward “fcudal” 
landholders 
and foreign corporations and 
were therefore unwilling to mele common 
cause with therm against the Communists. 
Arbenz’ contre\ of the Army neutralized its 
anti-Communist tendencies and protected the 
regime 
against 
counter-revolutionary 
at- 
tempts. 
Under Arbenz’ patronage, the Com- 
munists were able to infiltrate and dominate 
other political parties and to bogin building 
up a mass following of their own through 
their control of labor organizations and of 
agrarian reform. 
Given a Uthe more time, 
they might have made their position secure 
against any interna) opposition through the 
development of an armed workers’ and peas- 
ants’ militia. 
40. Possession of a secure base in Guatemala 
creatly 
enhanced 
Communist 
capabilities 
throughout the Caribbean area. 
The exarn- 
pic of Guatemala was in itself infectious. 
Guatemalan propaganda against “feudalism” 
rad “colonialism” appealed to the prejudices 
of a wide audience. 
Guatemala afforded not 
only a safe refuge for Communist fugitives 
‘rom other countries, but alsc e@ base for in- 
Yermmational 
conspiratorial 
action. 
Commu- 
subversive activity based on Guatemala 
wos apparent in the strike of Honduran plan- 
‘ation workers. 
That technique was capabie 
of further cexteasion. 
4). The Guatemalan anti-Communist revolu- 
tion of June 1954 has deprived the Commu- 
misis of the advantages which they derived 
from the patronage and protection of Preai- 
Gent Arbens, but the ensuing situation has 
subject to Communist exploitation. 
Sor example, the revolution itself will con- 
{inue to be represented in Communist propa- 
ronda os a US intervention in behalf of the 
United Fruit Company, an effective line with 
a Caribbean audience predisposed to bolieve 
the worst of the United States, the United 
vruit Company, and Caribbean “reaction- 
aries.” 
The Communists may also have a 
capebiulty to create disturbances ‘in Guate- 
through gucirilla action 
bands 
of aerarian workers. 
42. Since the Communist reverse 
Guate- 
mola, the Popular Socialist Party in Cuba 
PSP), the largest Communist party in the 
Carbbean, is also the most influential 
The 
PSP has support in student, youth, and 
women’s groups and among intellectuals, but 
its main following Hes in the trade unions, 
especiaily in transportation, sugar mill, and 
tobacco workers’ unions. 
43. Tae PSP's effectiveness has been reduced 
by the anti-Communist 
measures 
of the 
Batista government, which have outlawed the 
party as such, suppressed its key publications, 
declared Communists ineligible to hold public 
end union offices, and restricted travel to 
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Soviet Bloc countries. 
The PSP has also been 
hindered by its failure to form a united front 
with other opposition groups, and wv dissen- 
sion within its own ranks. 
Nevertheless, the 
Communist leadership in Cuba remains united 
end 
militant, 
and 
individual 
Coinmunists 
have been successful 
in penetrating 
other 
political parties, labor unions, and the bu- 
reaucracy, particularly the Ministry of Lo or. 
They have had conspicuous success in the 
two pro-Batista parties. 
‘Danis success is al- 
tributable in part to the fact that tne infu- 
ential non-Communist Cuban Labor Confec- 
eration has consistently belitticd tie imapor- 
tance of the relatively small pro-batis‘a cie- 
ments in organized labor, with the rosult tist 
the pro-Batista pariics have Surmca to the 
Communists as a means of acquiring infussce 
among the workers. 
44. The attitude of President Batista himock 
toward 
the Cuban Comimunisis 
has been 
equivocal. 
He has cooperated with thent in 
the past, as have his politie¢&d opponents. 
sic 
now takes an anti-Communist line in iitersa- 
tionel affairs and has outlawed the PoP, but 
he has also professed to belicve tha. Comimu- 
nism is not an important factor in domestic 
affairs and that in any case it can be ready 
controlied. 
45. Elsewhere in the area the development of 
Communist potentialities has beon inela well 
in check. 
In El Salvador in 1032 & Conunu- 
nist-inspired peasant uprising was ruthiccly 
suppressed. 
Since then the only cerious Com- 
munist threat has been 
of 
from 
Guatemala. 
The development of a Commu- 
nist threat in Costa Rica was irustrated py 
the anti-Communist revolution of 1043. Presi- 
dent Remon has sharply curtaiicd the once 
extensive Communist influence in Panamia, 
The surprisingly well organized strike of pian- 
tation workers in northern Honduras was in- 
dicative of Communist underground activity, 
but the anti-Communisi revolution in Guate- 
mala has deprived the Honduran movement of 
valuable 
outside 
support. 
No 
eappreciable 
Communist threat Ras developed in Nicara- 
gua, Haiti, or the Dominican Republic. 
46. Caribbean Communist international con- 
tacts are maintained through tae Commu- 
nist-controlled Latin American Confederation 
of Labor (CTAL), with headquarters at Mex- 
ico City, and through the travel of party 
ieaders and selected sympathizers to Soviet 
Bioc countries and to Communist-sponsored 
international conferences. 
‘There has been a 
nmearked increase in such travel since 1950, the 
expense belng borne for the most part by the 
USSR. 
V. THE ARMED FORCES 
“T. The armed forces of the Caribbean repub- 
ics exist to defend their incumbent govern- 
ments against internal subversion, filibuster- 
ing expeditions from abroad, and the possibili- 
ty of armed 
intervention by antagonistic 
meighboring regimes. 
In Caribbean opinion, 
aefcnse against any more formidable aggres- 
c.on is both beyond the republicé#* limited capa- 
wUutics and sure to be provided by the United 
States in its own interest. 
Under the con- 
cept of hemisphere defense, however, and with 
requisite provision of US assistance, most of 
wne Caribbean republics will probably main- 
tain small units equipped and trained for 
raodern corabat and favailable to assist in an 
integrated defense of the Caribbean area. 
“3. The ground forces of the Caribbean re- 
publics (see Annex TZ) consist of both army 
units and militarized police. 
That distinction 
is generally without real significance. 
Both 
army and police forces are normally dispersed 
jm small units, except for gpancentrations af 
both et the capital cities. 
Such-concentra- 
tions of army strength generally -amount to 
icss than the numerical equivalent of one US 
infantry battalion. 
The ground forces of 
Haiti, the Dominican Republic, and Nicaragua 
were originally organized as constabularies 
during US military occupation and retain 
that essential character, despite changes in 
nomenclature. 
Costa Rica realistically de- 
scribes its only armed force as the Civil Guard. 
Panama has recently redesignated its Na- 
tional Police as the National Guard, the term 
also used by Nicaragua. 
The Cuban Army 
(20,000 men) is the only one worthy of con- 
sideration @s-an army. 
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49. Air forces are maintained by all the Car!b- 
bean republics except Costa Rica and Panama 
(see Annex IT), but the Dominican and Cubon 
air forces are the only ones with avprecia!e 
strength in men, pilots, and aircraft. 
The 
others are minor auxiliary units with fow 
qualified pilots and generally obsolete cquip- 
ment. 
However, the effect achieved by Cas- 
tillo Armas’ minute air force {s liely to in- 
tensify Caribbean interest in air capabilitics. 
50. Such Caribbean navies as exist nre eccen- 
tially coast guards. 
Cuba and the Dominican 
Republic have an additional special interest 
in maintaining naval capabilities for defense 
against filibusters. 
Their navies mre the only 
ones worthy of consideration (see Ammex I). 
51. At present the armed forces of Cuba, the 
Dominican Republic, Guatemala, El] Salvacor, 
and Nicaragua are capable of maintninin” in- 
ternal security and defending against raics. 
Those of Haiti, Honduras, Costa Rica, ond 
Panama 
are capable only of suppressing 
minor civil disturbances. 
In ®& major erncr- 
gency most of the Caribbean republics would 
expect to augment their armed forces with 
hastily assembled volunteers. 
52. The United States maintains army mi:- 
sions in all the Caribbean republics excent 
Haiti and the Dominican Republic, air force 
missions in all except the Dominican Renub- 
lic, Costa Rica, and Panama, and navy mis- 
sions in Cuba and Haiti. 
In addition, Cub: 
the Dominican Republic, Nicaragua, and E's: 
duras have entered into military assiclonce 
agreements with the United States 
similar agreement is under negotiation with 
E] Salvador. 
Under these agreements, Cubs 
and the Dominican Republic have underta'rten 
to contribute nava) and air units to hemi- 
sphere defens 
Nicaragua 
and Fiondures 
have undertaken to furnish one infantry bat- 
talion each for the same purpose, and the 
same commitment is being sought from ©! 
Salvador. 
VI. GENERAL ECONOMIC CONDITIONS 
53. The nine Caribbean republics are similar 
in economic structure, though they vary wide- 
ly in rate of economic growth and capacity 
for development. 
With the exception of Pan- 
, and a 
ama, which depends substantially on com- 
mercia] activities, their economies ere based 
| on 
ogriculture, 
which 
provides 
y all of their food requirements and the 
bill: ‘of their exports. 
Industrial output ts 
ecniined largely to processed foodstufis and 
nondurable consumers’ goods. 
Except in the 
production of export crops, agricultural meth- 
ols are technologically backward. The indus- 
tric! plant, geared to limited national mar- 
j:ets, is in general small and poorly equipped. 
Basic service industries are insufficiently de- 
veloped to permit large scale and sustained 
ecenomic dev 
The area’s low eco- 
nomic canobility ts indicated by the low level 
of per eapit a national income, which ranges 
from £206 !n Cuba to £40 in Haiti and ts gen- 
erally below $100 (see Annex I). 
"4. Inasmuch as the aren'’s requirements for 
ecpital goods and for a very large proportion 
of consumers’ goods must be procured from 
abroad, foreira trade ts vital to the national 
economics and they are vulnerable to fluctu- 
ations in the terms of trade. 
The principal 
export cormmedities 
are coffee, sugar, and 
bananas (see Annex IZ). 
The United States 
is the principal market and source of supply 
for each of the nine republics. 
55. After an interval of readjustment in the 
immediate postwar years, the economfe posi- 
tion of most of the Caribbean republics has 
eenerally improved. 
A sustained rise in the 
prices of theu export commedities has notably 
mproved their terms of trade and stimulated 
enomic 
growth. 
The 
coffee pfoducing 
apenas are currently enjoying a special ed- 
vantace in this respect. 
On the other hand, 
Cuber 
cdvercely aifected since 1952 by declining de- 
mand and prices for their sugar. 
The most 
difficult economic situation is that of Panama, 
the economy of which fs largely dependent on 
the level of US activity in the Cana! Zone. 
Panama’s rendjustment to the cessation of 
US wartime operations in the Zone has been 
prolonged and painful. 
56. Throughout the area, production of food- 
stuffs and raw materials for local consump- 
tion has on the whole kept pace with popula- 
tion growth. 
Most countries have also made 
. and the Dominican FRepublic have been 
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progress in expanding the industrial cectors 
of their economies through increased produc- 
tion of consumers’ goods and construction 
materials, 
However, the relatively slow de- 
velopment of basic services has been an {m- 
portant limitation on economic growth. 
57. Desire 
for economic 
development 
hos 
stimulated government study of economic po- 
tential and the preparation of development 
programs. 
The governments of Cubna, Haiti, 
Guatemala, Nicaragua 
sand Costa Rica have 
been active in this respect. 
However, the im- 
plementation of such programs is hindered by 
lack of readily available capital resources and 
of technica! skills. 
58. In recent years, foreign private [mvcst- 
ment capital has generally been unwillinr to 
enter the area on a Jarge scale, partly for lack 
of confidence in political stability, partly 
alco 
in view of the narrow limitations of lcca! mar- 
kets. 
Foreign investmeat has continued *%o 
expand, however, in those flelds in which such 
investment was already large, notably in the 
banana and electric power industries. 
More- 
over, several republics (Cuba, Haiti, El Sal- 
vador, Nicaragua, and Panams) have been 
able to obtain modest financial assistance 
from the Export-Import Bank or the Interns- 
tional Bank for Reconstruction and Develop- 
ment. 
Vil. INTERNAL POLICIES AFFECTING 15 
PRIVATE INTERESTS 
69. Caribbean dissatisfaction with a “colo 
nial” economic status finds expression in cn- 
tagonism toward the large US corporsctions 
operating in the ares, particularly toward 
those which enjoy special privileges granted 
in former times. 
The Communists exploit 
this dissatisfaction for their own purposes, 
but the sentiment is real and general. 
Vari- 
Ous pressures have been brought to bear to 
compel such interests to relinquish their spe- 
cial privileges and to pay higher wages and 
taxes, 
60. Aggregate US direct private investments 
are greatest in Cuba and Panama, on a lesser 
scale in the Dominican Republic, Guatemala, 
Honduras, and Costa Rica, and relatively 
Slight in Haiti, E] Salvador, and Nicaragua 
we 2 
(roe Annex III). 
‘They consist chiefly of plan- 
tations and public utilities (transportation, 
telecommunications, 
and 
electric 
power). 
The largest sinvle US interest in the area is 
the United Fruit Company, which operates in 
al! of the Caribbean republics except Tiaitl, 
but mainly in Guatemale, Honduras, Cocta 
Rica, and Panama, 
It is the principal target 
of Caribbenn economic nationalism and of 
Communist agitation. 
61. The United Fruit Company, parent com- 
pony to some sixty operating subsidiaries, has 
total assets estimated at $580,000,000. 
Its 
primary business is the production of a major 
part of the world's marketable supply of 
benancs, but {t- incidentally produces abaca, 
hardwootls, palm of!, and sugar as well. 
Its Jancholdines in the Caribbean republics, 
Jamaicn, Colombia, and Ecuador amount to 
rome 3,000,000 acres, and it provi“es employ- 
ment for come 00,090 nersons in those coun- 
tries. 
In addition to its plantations, it oper- 
ates 1,500 miles of railways, several ports, a 
feet of €5 ships, and extensive telecommuni- 
entions facilities. 
‘These services, provided for 
iis own convenience, are riso of vital impor- 
tance to the economies of Guatemala, Hon- 
cures, Costa Rica, and Panama, as ere also 
the company’s payments to governments, pri- 
vate firms, and wage earners in those coun- 
tries. 
At the same time, the company pro- 
vides for {ts employees housing, commissaries, 
schools, hosnitals, social services, and recrea- 
“ional facilities that, would otherwise not be 
avatinble to them. 
- 
62. The United Frult Company has miade and 
is making a most important contribution to 
the economic development of Centra] America, 
but there is in those countries a strong sense 
that, out of its profits, it coula contribute 
more. 
The 
Company’s 
over-all 
financial 
streneth and its dominant position in several 
national economies are regarded as a threat 
to national sovereignty. 
This sense of an im- 
plicit threat is strengthened by the recollec- 
tion of former times when the Company 
bought up venal politicians to facilitate the 
negotiation of favorable concessions and was 
commonly understood to have also procured 
revolutions whenever its interests would be 
furthered thereby. 
Nationalistic opinion dis- 
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counts the benefits extended by the Company 
to its employees as grudzing 
resnponces to 
pressure exerted by governments ond labor 
organizations. 
In any 
ice Company's 
paternalism is itself offensive to arucnt na- 
tionalism. 
For example, in Costa Rica, which 
has long taken pride in its schoc!s, the Coin- 
pany’s separate school system has 
beon an 
affront to the national dignity. 
63. The United Fruit Company encountered 
its worst difficulties in Guatemala unticr the 
Arbenz regime. Whatever the merits of Gnate- 
malan domestic legislation, the laws were un- 
doubtedly applied with extreme pene 
toward the Company. 
Im acdition to on 
stant harassment in Inbor courts with 
to wages and working conditions, 1! sutiored 
the expropriation of a large proportion cf tts 
landholdings without regord for ifs operaving 
requirements and without adequate compen- 
sation. 
64. In contrast to its Guntemnion expsrience, 
the Company has been able to negotia 
ste with 
Costa Rica a revision of the terms 
of fs con- 
tract which may serve 
a mod 
for read- 
justments 
elsewhere. 
The 
conceded to Costa Rica the right to take over 
the schools, hospitals, end diepencarics how 
operated by it, and has accepted an incrorce 
in its taxes up to 30 percent of the met proit 
of all its operations In that country. 
65. US-owned sugar companies 
the Dominican Republic have also experiences 
discriminatory pressures by the Do 
ras nice n 
Government, but this seems to be 
private extortion rather than of publ ic ‘ 
olicy. 
Vill. INTRAREGIONAL RELATIONSHI°S 
66. The relationships of the Caribbean repub- 
lics with one another ore conditioned In pert 
by their historical origins and associ: ations. 
Haiti is singular, as a former French colony 
and a Negro state. 
It was the first to achicve 
independence, in 1803, but for generations was 
ostracized as a menace to the peace and socic! 
order of the region. The Dominican Republic, 
which considers itself a white community in 
contrast to Haiti, was annexed by Haiti, 1922- 
1844, and for another thirty years was subject 
to renented 
attempts to reconquer ft. 
Dominican 
relations 
remain 
iittered by this history and by color prejudice. 
Con tral A 
which bocame an independent federal -ctat 
fm 2024. The Federation dissolved tn 12535, tat 
moons attempts have been made to rovive 
t, the latest effort in this direction belr7 the 
eponization 
of Central 
American 
Gtates 
ECA). Meanwhile the succezsor republics 
have freely tnterferca tn one nnother’s afvates. 
Cuba remained a Spanish colony until 1073; 
Panama, a part of Calombia until 1033. 
67. The conspiratorial and revolutionary poli- 
Of the Caribbean normally extend 
mationa! 
Yor over a eentury 
bas been customary for the lending adherents 
07 a regime overthrown by revolution to tatze 
refuce in a cympatheitc nelshboring country, 
there to plot counter-revolution with the cuf- 
gorance, ond perhaps the active support, of the 
host government. 
Conversely, the socurity of 
& given regime fs seen to depend tn large part 
om the existence of friendly governments fn 
meirhboring countrics, a consideration which 
moy lead to the fomenting of revciution 
order to forestall revolution at 
‘hus o successful revolution in one 
courriry is Mcely to lead to revolutionary at- 
tempts {In others eas well as to international 
counterrevolutionary conspiracy. 
C3. This tendency has been accentuated by 
Lie increasing tension between traditionalist 
c 
snd 
re cormist 
wre 
c‘iomments involving most, but not all, of the 
Caribbean republica. 
These alignments are 
commonly described as the “democracies” ver- 
eus the “dictatorships,” but these terms are 
mot precisely descriptive in all cases. Actually, 
orlherence to one eroup or another has been 
“5 much 2 matter of expedience as of ideologrt- 
nl considerations. 
The initial alignment de- 
parser from a conspiratorial combination of 
Dominican and Nicaraguan exiles, with Cu- 
ben, Guatemalan, and Venezuelan coopera- 
tion and encouragement, to overthrow the 
Trujillo regime in the Dominican Republic 
and then the Somoza regime in Nicaragua. 
This origina! conspiracy was frustrated in 1947 
merice was a cingle Bpanich 
elements 
the Caribbeon, 
Winch has resulted in shifting intérnational 
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by the belated decision of the Cuban Govern- 
ment to prevent the use of its territory as 2 
base of operations against Trujillo, but the 
filibustering organization which had been 
formed, the “Caribbean Legion,” gave impor- 
tant military support to Ficueres in his 1940 
revolution against a Costa Rican rezime that 
was paradoxically affiliated with Someza as 
well as with the Communists. 
In 1049 re- 
newed plots, counterplots, and complaints led 
to an intervention by the Organizetion of 
American States which resulted in the dis- 
solution of the “Caribbean Legion.” 
69, The revolutionary overthrow of the “dem- 
ocratic” regimes in Venezucia 
(1948) and 
Cuba (1952) brought about the realisnment 
of those countries. 
Inasmuch ns the me re- 
gime in Guatemala is beholden to Comor., 
Costa Rica is now isolated as the !ast prose- 
lytizing “democracy.” 
Since 1948 Costa Rica 
has been a refuge for “democratic” 
caxcies, 
most notably Romulo Betancourt, the former 
president of Venezuela, 
There can be n 
doubt that exiles in Costa Rica have conspiro* 
against both Somoza and the Perez Jimoncz 
regime in Venezuela; the Costa Ricen Govern- 
ment was at least culpably nerlizent with 
respect to the recent plot to assassinate Somo- 
za. 
Recently, in the face of a threatened rev- 
olutionary attempt by Calderon Guardia with 
Nicaraguan and Venezuelan support, Tipueres 
has adopted a more correct nttifude and Vo- 
tancourt and other exiles have left Costa Pica. 
Nevertheless, ‘it is an open secret that both 
Somoza and Perez Jimenez are out fo get 
f 
Figueres, with the cordial good wiahes “6 
Trujillo and Batista. 
70. In Caribbean and in genera! Latin Amer'i- 
can opinion, this issue of “democracy” versus 
“dictatorship” 
— that ig, of social and pecliti- 
ca] change versus traditional authoritarian- 
ism 
— is a matter of far greater importance 
than the question of Communism or anti- 
Communism. 
The point is fllustrafed 
by 
Somoza's former support of the Communist- 
infiltrated 
Picado 
administration 
against 
Figueres and the “Caribbean Legion.” 
Fig- 
ueres’ anti-Communist record and the fact 
that he has made his peace with the United 
Fruit Company will not stay the hands of 
| 
Eomoza 
and 
Perez Jimenez 
egainst him. 
Perez 
Jimenez hes mede it plain that, from his 
roint of view, the elimination of Figueres fs a 
matter of more urgent importance than was 
the elimination of Arbenz. 
%. RELATIONS WITH THE UNITED STATES 
71. With the notable exception of Guatemala 
under Arbenz, the governments of the Carib- 
bean republics have recognized that, in view 
of the strategic importance of the Caribbean 
fo the United States and of the overwhelming 
preponcerance of US economic and military 
power in the area, they must accommodate 
their policies to US security interests, if only 
es 2 matter of practical expediency. 
How- 
ever, popular susnicions of US motives meke 
1% nececsary for governments to avold the ap- 
pearance of subservience to the US, and somse- 
wheat limits the ability of governments to co- 
oncrate with the US. 
Moreover, in return for 
their cooneration, governments of the aren ex- 
nect from the United States protection, tolera- 
tion of their peculiar domestic politics! pro- 
cesses, and a grenerpus attitude toward their 
economic nroblems. 
They strongly support 
the Organization of American States and the 
United Nations, in part as a means of chtain- 
ing a voice in international affairs out of pro- 
pers on to thelr meager strength, but also as 
m 
means of invoking general Latin American 
tne 
if meed be, as a safeguard against 
US domination, 
72, AN the Caribbean republics except Guate- 
meta have ratified 
the Rio Treaty 
all are 
‘snosed to cooperate with the United States 
{In hernisphere defense.! 
In the OAS and the 
UN, ab except Guatemala under Arbenz have 
consistently supported the United States on 
basic issues with the Soviet Bloc. 
On certain 
other issues. involving “colonialism” and un- 
derdeveloped areas their record has been vari- 
able, as has that of the Latin American states 
‘On 25 March 1954 Guatemala withdrew the tn- 
strument of ratification of the Rio Treaty which 
had been previously deposited with a reservation 
unaceeptable to various signatory states. 
The 
_ 
reservation 
concerned 
Belize, with respect to 
which Guatemala maintained that it might as- 
cert “its rights ..*. by any means !t may deem 
most advisable.” 
CLINI. 
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wavs 
generally. 
All except Guatemala (under Ar- 
benz) supported the US-sponsored anti-Com- 
munist resolution adopted by the Caracas 
Conference. At the same time all except Cosia 
Rica (which was absent) took occasion to em- 
phasize their opposition to coionialism and 
their sense that the United Siates had dis- 
criminated against Latin America in matters 
of financial assistance and trade. 
73. The conflict between “democracy” and 
“dictatorship” in the Caribbean confronts the 
United States with a dilemma, for both sides 
feel entitled to active US support. 
“ise “cic- 
tators” present themselves as guaran ors ci 
stability and order and o? cooperation Wain 
the United States. 
The reformusts, by Gciuu- 
tion, are an unsettling influence, but they con- 
tend that the United Siates, as @ progressive 
democracy dominant in the areca, ha. 
Obligation to foster cocial and political Ge- 
velopment, and they attribute any deiial of 
positive support to the sinister imfuecnce of 
the “dictators” and the United Pruit Company 
on US policy. 
Conversely, the “cictators” re- 
sent any indication of US support for reforin- 
ist regimes as a@ betrayal of tie “true friends” 
of the United States. 
It is a primary | 
Corn- 
munist objective to identify the United Otates 
as the chief support of the Caribbean c.cta- 
38 moral 
- tors and the chief obstacie to social and po.ti- 
cal progress in the erca. 
14. US relations with Panama constitute a 
special problem because c? US control of the 
Canal Zone in the heart of the Nepubiic and 
because of the importance to the Panamanian 
‘ economy of dollar earnings from the Zone. 
In these special circumstances, Panamanian 
governments have to strike a nice balance be- 
tween popular sensitivity regarding the na- 
tional sovereignty and dignity and & real 
necessity to maintain cooperative relations 
with the United States. 
Panamanians have 
long resented discrimination against them in 
the administration of the Zone, particularly 
On a racial basis, and the commercial com- 
petition of installations in the Zone estab- 
lished for the benefit of US personnel. 
These 
resentments have been intensificd by tine de- 
pression of the Panamanian econoiry result- 
ing from the postwar curtailment of US activi- 
ty in the Zone. President Remon has deprived 
his political opponents of this issus by com- 
seat himself to secure a substantial in- 
se in the annuity paid by the United 
States for use of the Canal Zone, and also to 
cocure the climination of US commerical com- 
ere and of wage differentials in the Zone. 
*crhaps purposefully, Remon 
thereby put 
him 
self in such a position that a failure to ob- 
tain cubtantial satisfaction would be detri- 
imental te the stability of his administration, 
on tne calculation that the United States 
\ould not be willing to see his regime weak- 
cacd. 
The matter is still under negotiation. 
%. MELATIONS WITH THE SOVIET BLOC 
‘Ss. Tne Caribbean republics have virtually no 
rciations with the Sovict Bloc other than the 
connections maintained by local Communist 
warties 
(see paragraph 
46). 
Since Cuba 
covered diplomatic relations in 1952, no Bloc 
country has had direct diplomatic representa- 
tion in any of the republics, not even in Guate- 
mala under Arbenz. 
The Czech minister resi- 
cemt in Mexico is also accredited to Guate- 
malo. 
The Polish minister in Mexico has 
presented his credentials in, and they are be- 
Meved to have been accepted by, Panama, 
Costa Rica, Honduras, Nicaragua, and HaitL 
loc trade representatives, mostly Czech, have 
visited the area from time to time, but Carib- 
bean commercial relations with the Bloc are 
ad 
x. ATTITUDES OF OTHER LATIN 
AMERICAN STATES 
75. Recognizing US predominance in the Car- 
ibbean area and remembering US military 
and political interventions in various Carib- 
bean countries, the other Latin American 
States tend to keep a close watch on US rela- 
tions with the Caribbean republics as a test 
of US good faith in the implementation of the 
Good Neighbor Policy. 
Their sensitivity on 
the issue of intervention was amply demon- 
strated with respect to the Caracas anti-Com- 
munist resolution and in public and congres- 
sional reaction to the June 1954 revolution in 
Guatemala. From their point of view, a ques- 
tion of US intervention in the internal affairs 
a. 
- 
? 
| 
| 
| 
| 
| 
| 
ae 
Bee 
| 
|
| 
| | 
of a Caribbean republic isa matteroffar more 
basic conditions is likely to occur for many 
} ke 
urgent importance than that of an indirect 
years. 
20. The overthrow of the Arbenz regime has 
a 
YS 
77. The other 
Latin 
American 
repubilcs, 
femoved the most immediate and dangerous 
a 
themselves addicted to economic nationalism, 
threat to stability and order in the region, 
Bie 
are predisposed to sympathize with economic 
8 in Guatemala and throughout the Carib- 
aa 
nationalism in the Caribbean republics and 
un, the Communists will continue to make 
oe 
to support them in their relations with such 
th: 
Ke ro3t of plentiful opportunities for agita- — 
an entity as the United Fruit Company. 
tion. 
| | b" 
78. In matters relating to the issue of “do- 
1. The prospects for stability and order in 
| 
mocracy” versus “dictatorslup” in the Carmb- 
Guatemala depend, immediately, on continued 
bean, the sympathies of the other 
£ CT- 
cooperation beween Castillo and Mongon, and 
| 
ican republics tend to vary in accorcance 
With 
wiltima ‘aly, on whether the new regime can 
| 
their own character. 
Venezucia is alrc 
nd will adhere to the broad objectives of the 
active participant 
in the Caribbsan oligmncat, 
icvolution af 1244 while rooting cut Oom- 
: 
but Colombia stands aloo! fromm it 
oT 
and normalizing Guatemala’s rela- 
| 
§ 
countries, Such as Peru, in which the 
¢!ens with the rest of the American communi- 
| 
tional order still prevails naturally sympathize 
Any other policy would be likely to lead 
with the traditional] ruling elements in the 
eo further internal conflict. 
ribbean. 
x 
hand, Uruzuay, os 
professed charapion of democracy in Laiim 
= * 
America, is 
order in the region is the animoalty of 
, 4s predisposed to take the opposing 
4 P 
Jin 
“ws 
Fl 
position. 
Mexico, which has had its own soe 
©0020 and 
Perez 
Jimenez 
toward 
Figueres. 
‘iguercs’ recent more conciliatory attitude has 
cial revolution, but is now interested in pre- 
hat, but neith 
i 
serving. stability and order, is disposed to 
Me 
apd 
atnl 
pafaren 
nor Perce Jimenez is likely to become 
ympathize with Caribbean cocial re: OFiii, bus 
sclled to the 
tin od existence af the 
| 
to work to avert political and armed coniict, 
Brazil also favors conciliation. 
wigueres regime. 
63. Election pericds are critical times in all 
PROBABLE FUTURE DEVELO? 
‘he Caribbean republics, Presidential elec- 
| 
19. The pressure for social, economic, and p> 
tions are now scheduled to be held in Hon- 
¥ 
Utical change in the Caribbcan 
dures eng Cuba during 1054, in El Golvedor 
| 
to grow. 
For the time being, 
panama during 1956, and in Faitt, the 
elements resisting change are in the acconc- 
Be 
4) 
Dominican Republic, Nicaragua, and Costa 
: 
ry 
ant. 
Whether eventual change is crderiy will 
= 
denend fn} 
during 1057. 
None is scheduled Sor 1955. 
epen 
arge measure on wincthor the cxlst- 
in 
ing regimes can bring therzelves to promote 
r election in Honduras may pre- 
| 
i. 
h 
social, economic, and political progress, o* 
cipitate armed violence in some degree. 
The 
whether, through static repression, they raake 
cannot be predicted. 
President Batista 
virtually certain an eventual violent explosion. 
will make sure of winning the November eloc- 
| 
In any case, no substantial improvement 
tion in Cuba. 
| 
= 
i 
Ne 
, 
|| 
| 
| 
| 
| 
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| 
ANNEX | 
A. POPULATION AND RACIAL COMPOSITION (1952) 
Tots] 
; 
Percent 
Population 
Mixed 
Indian 
Negro 
Cuba 
§,7£9,090 
Haiti 
8.2.00,090 
Dominican Republic 
2,230,090 
and 
» 
a 
e3 
Guatemala 
2,900,000 
$1 
€5 
El Salvador 
4,083,090 
Honduras 
213,000 
Costa Rica 
629,050 
Panama 
£41,000 
a5 
i 
*Census definitions of racial classification vary from country to country. 
In 
many 
countries clarsifcetion os “white” is or much a matter of social position 
as of ancestry. 
This appoars to be cspecialiy the case in Cuba. 
| 
B. LITERACY AND 
CAPITA NATIONAL MICOME 
Literacy 
Per Capita Income 
| 
(poreent) 
(1949: collars) 
Cuba 
C5 
Haiti 
Dominican Republic 
Guatemaia 
Fl Galvador 
C9 
Hionduras 
Nicaragua 
* 
| 
‘ 
‘ 
‘ 
‘ 
‘ 
rrr 
a 
eS 
rT 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
)
a 
ARMED PORES 
A. PERSONNEL STRENGTHS 
Cround 
Cuba 
23,500 
Riaitl 
6,600 
Dominican Repubiic 
13,195 
Guatemala 
Salvador 
Tionduras 
Wicararua 
Costa Rica 
3,290 
Panama 
$053 
*Includes both Army nrovund forces 
ar 
*Numbers of rated pilots in paronticals. 
B. ROLITARY (including Naval) AIcRArFT 
Trainers 
Pombers 
Transports 
& Misc. 
257 (76) 
23 (14) 
(193) 
1535 (46) 
(13) 
(wa 
“oa 
115 (26) 
sand nilltarized police. 
Cuda 
liaiti 
Dominican Republic 
Ci 
Guatemaia 
iv 
Salvador 
Honduras 
D 
- Nicaragua 
C. COMBATANT NAVAL 
Destroyers 
Frigates 
(PD) 
Cuba 
Dominican Republic 
G2 
Submarine Small Bud. 
Escorts 
Chasers 
Chasers 
(PCE) 
(PC) 
(OC) 
—_— 
ae 
| 
| 
| 
| 
| 
ANNEX i 
| 
6,776 
nerligibdle 
| 
3,509 
meglgible 
ncogligible 
none 
| 
none 
| 
| 
| 
| 
| 
<9 
€3 
| 
ere? © 
?
rr 
kk 
@ 
ot 
“ 
ANNEX 
& 
: 
PRINCIPAL EXPORTS AN PYRCTNT OF TOTAL EXPORTS 
Dominican Republic 
El Salvador 
Fonduras 
Costa Rica 
Panama 
. 
OF 12% (millions of dollars) 
Cuba 
202.7 
THilities 
Flaiti 
92.2 
£3 
Dominican Republic 
203.7 
73.1 
Guatemala 
473.0 
23.9 
Calvador 
acoligible 
2.8 
Wonduras 
Nicaragua 
Costa Rica 
; 
Panama 
323.0 
20. 
CB 
0.9 
29.8 
132.5 
| 
~ 
° 
-~ * 
| 
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I 
| 
= 
: 
t 
+ 
| 
| 
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| 
| 
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| 
| 
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| 
a 
| 
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|
VNOVUEVSIN 
svun 
A 
A 
am 
J 
\ 
wer 
mace 
cs 
ce» 
ok 
; 
> 
> 
> 
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= 
S/ 
on 
| 
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Be 
Be 
Be 
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| 
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as 
=> 
| 
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| 
a= \ 
15 RAR 1951 
MEMORANDUM FOR: 
Mr. McGeorge’ Bundy. 
, 
Executive Office Building 
| 
Listed below are some examples of use of air power in varigns 
Jatin American countrics by revolutionary forces against governments _ 
) 
in power, 
They have been pulled together rather hurricdly 30 that the 
details are somewhat akimpy, 
Moreover, we crnnot voich for the fact 
| 
that the list is cornplete, 
1934 ov 17153 ‘The first known example which was a case of use by the 
rebels during the Mexican Revolution of an aircraft from which was thrown 
omy.» 
dynamite on a Mexican gunboat in the harbor of Guayrnas in Sonora, 
1924: One airplane was used tactically by rebel forces of Carias 
in the succesaful overthrow of the Governrnent of Honduras, 
1948; Rebel forces in Costa Rica used 2 DC-3 to bumba 
military fort 
outside of San Jose, 
1949: 
Col, Aranya used aircraft from which bombs were dropped by 
hand in 
Gyatemslan uprising. 
| 
f 
hombing action as well 2s some DC-3's for some supply drops in connection 
with the rebellion against President Arbenz, 
(Perhaps a quentionable example, ) 
1955: a, Rebel navy officers in Argentina used air power to bomb the 
CaerRosada in Buenos Aires in an 
te upset the Government, 
b, 
Rebel cirforce officers in Feavil stole three aircraft from the 
Air Force planning to use them in rilitucy action apainst the 733950" 
Declassified by 
date 
) 
| 
|. 
| 
| 
| 
| 
| 
|
The plin aborted when the Géberiensis forces re-captured the planes and 
rebel forces, 
| 
| 
| 
1958: 
The overthrow of Perez JimeneZin Venesuela hogan with the use 
of airpower by rebels including straffing and bombing, 
| 
19593 Castro hijacked plenes in the U,S, for uce in carrying pecsonnel 
1960: a, (Unconfirmed reports allege that Castro sirlifted vcbel 
' 
forces from Cuha to Costa Rica for a subsequent move against Nicaragua,) 
b, (Reliable information reports 2 promise from Che Guevera 
to Chester Lacayo, Nicaraguan rebel leader, of military air support 
once Nicaraguan rebels controlled an Area inside of Nicaragua,) 
c 
Rebel air force officers used air power in Salvador to 
demonstrate a show of stecngth on the prrt of the rebels, 
d, A nuoaber of privately operated rebel aircraft were used in Cuba 
to drop 
ON 
crops, 
| 
1961; 
Diaz Lanz 
chief of the Cuban air force used a Be25 
| 
rircraft, ovned by him to fly from the U,S, and strafe a militia in the 
Escanbray, 
Tracy Barnes 
- 
_ 
| 
| 
— 
|
SUPPLEMENT 
LATIN AMERICA, POTENTIAL FOR TROUBLE 
| 
| 
Recent events have called attention 
to Argentina and 
; 
Guatemala, but the potential for strife and Commnnist gains 
: 
Ps 
} 
pervades other Latin American countries. 
| 
dts 
March Colombian congressional elections have not been reported, 
the danger persists that leftist or losing elements will 
attempt to foment disturbances after the elections, 
Early 
and unofficial returns indicate that the moderate Liberal 
and 
Conse:'vative elements, 
who form the present governing roalition, 
are winning majorities in their respective parties, 
thus 
suggesting that election 
of their presidential Candidate 
in 
May should be assured. 
| 
| 
| 
Although serious disorders 
in connection with 
the 1% 
| 
Many Brazilian military and pollitival 
leaders are ¢-on.erned 
) 
by the threat implied by the return of former President Quadros. 
| 
He has mide it clear that he has not vhanged his sympathetic 
| 
attitude toward Castro and that he intends 
to re-enter politics, 
Should 
he obtain a significant following in the October congress- 
| 
ional and state elections, he would again become a force in 
Brazilian politics, 
At long last, the President of Chile has apparently become 
aware of the threat of increased Communist activity in his 
country, 
Some cabinet changes may be announced soon,partly 
to 
meet this threat more effectively. 
| 
Violence on 14 March between Peruvian Communists and 
leftist, but anti-Communist, Apristas ‘supporters of APRA, 
the 
| 
Popular "american Revolutionary 
Allianee) may be repeated 
frequently before the presidential elections scheduled for 19 
June. 
Communists and their sympathisers probably will do all 
they can to prevent an Aprista victory while instigating as 
much trouble as possible. 
Recently, 
they have been attempting 
to generate anti-US demonstrations in connection with the 
problem of Indian squatters, some of whom are on land owned by 
| 
US interests. 
) 
Paraguay's Communist-dominated exile organization 
is said 
: 
to be about to attempt an invasion. 
This move reportedly has 
; 
greater resources than previous attempts, but the military and 
| 
: 
government are alerted and should be able to thwart any su-h 
move, 
= 
} 
| 
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‘ 
‘ 
‘ 
| 
| 
‘ 
‘ 
|