OPERATIONAL - PSYCH INTELLIGENCE REPORT, 10-16 MAY 1954

Created: 5/18/1954

OCR scan of the original document, errors are possible

SB0RRTf3AT LINCOLN

Chief of Station,Chief, WMf);

Psych Intelligence4 Referencei HDLA-40

periodurbulent one again marked by increasing tension In enemy circles and increasing boldneaa on the part of the opposition. However, the event of greatest signIfleance was undoubtedly the arrival in Puerto Barrioa of the ship Alfhem carrying arms purchased by tho government. Should these arms successfully reach their destination, the psychological Isrpaot on pro-government forces and particularly on the Army, whloh is believed to be wavering In Ita loyalty, would bedifficult to oounter-act. On the other hand, should sabotage action auoceed, lt la believed that the effect on opposition forcea would be extreawsly favorable.

Target country, and particularly ita capital, felt increasing uneasiness during period. Labor unrest grew, and strikes, both against government agencies and private companies, were spreading, The man ln the street was rapidly becoming convinced thatwill soonut whether lt will take the formovement against the governmentommunist ooup here,lined with others elsewhere In Central America,atter of much speculation.

R3TIWATE OF THE KNEW SITUATION

government activity brought on by fear and climaxed by the arrival of arms ordered abroad took place during roportlng period. While pro-government parties were ln chaotic condition with the RN on the verge of dissolution and discontent wi th PAR le ader-ahlpwidoapreiad in the provinces and labor disturbance* prevalent, the government made an effort to retain Army support byetter calling for government overthrow, datedpril, allegedly lent to theembers of the Council of national Defense by anparty aa yet ln the organising atage. This attempt at rallying (Tfloers to the present regime or forcing then toaa not believed to have accomplished Ita purpose and was viewedlumsy effort on the part of the government whichack of confidence in Army support.

SBC!: I1 PBSUCCESS 3YBAT

' success wjat

forcoa alao put down further unrest in Chlqulmula and arrested someersons in Eoculntla on charges of being anti-agrarian since thoy refused to accept parcels of land meted out under the Agrarian Hefor^ Law*

MtBHZ was allegedly aiding In the formationNationalist" party of which he la to bo tie head. He reportedly was planning to have himself re-elected to the Presidency although the present Guatemalan Constitution prohibitseasure.

B OP THP FRIEHPLIT SITUATION

Bolder action by opposition elements waa noted duringperiod among both organized groups and individuals of anti-government sentiments, and until the end of the week when news of tho arms-bearing ship reached the city, morale washigh.

Manuel MOHAN, arrested and carrlod to the capital for

j involvement" activities, returned to hiB home In Retalhulou,heero's welcome

Jorge Adan Serrano, opposition Deputy, announced privately that he was ready toew opposition movement. He said the new movement ahould be lod by men ready to sacrificefor their country and should be ready to participate In the forthcoming elections.

following the seizure of' copies of El Heboldo by the police, two members of the anti-Communist studentponsoring the publication appeared at the Guardla Judioial seeking an explanation. Contrary to former practice, the polloe released the newspapers but rofuaod to state whether they would pormit further issuos to appoar.

The initial excltoroent created by the appearance of thoradio diminished somewhat but interest in both It and" campaign has been kept alive. eport that the radio wasovernment trick was given little credence.

Reportsorthcoming Invasion from Honduras spread throughout opposition circles earlye wee'* despite news of the general strike in that country, and opposition hooos were high.

Clara'>oagey

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