CENTRAL INTELLIGENCE AGENCY
CiA HISTORICAL REVIEW PROGRAM RELEASE IN FULL
PERON AND THE ARGENTINE CONGRESSIONAL ELECTIONS
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PERON AND THE AROENTINE CONGRESSIONAL ELECTIONS
Congressional elec'lons scheduledarch will furnish thc first formal test of Argentine President Peron's political strength since his election ont stake arefeats in the lower house in which the administration nowwo-thirds majority. That this majority will not be decreased by the elections is highly probable. Unless unforeseen events, therefore, bringole lessto Peron than is expected. It may be assumed that Argentine policies of cooperation with the US will continue.
Peron's strength lies In his successful exploitation of laborthrough benefits conferred on tie workingthe one hand, and his ability concurrently to retain support of the army on the other. Army support is indispensable to Argentine Presidents, but lliere is no reason to think Peron will not retain it at least until after the elections The assurance of continued labor backing is less definite. In the past. Peron has brought about enormous benefits for labor, but in order to combat inflation and to insure the successlve-Year Plan on which he has slaked his political future, he has had lo oppose further labor gains while demanding greater laborThat this has lost him some labor support is inevitable, that the loss will have become significant by the time of thc elections is improbable.
Meanwhile, Peron's evident determination to curb labor's demands and stimulate productivity for the success of his Five-Year Plan of industrialization appears to be forcing him to cultivate the support of business and industry in what may prove toajor attemptolitical realignment. Should hewo-thirds majority, moreover, Peron might effect constitutional changes that would enable him lo enforce measures designed to control labor in the interest of greater productivity, and would look to increased business backing to compensate for probable loss of some labor support Cooperation ol the present regime with the US has resulted from Peron'sthat large quantities of industrial capital equipment which are indispensable to lhe success of the Five-Year Plan may be obtained from the US alone. Since thisis likely to persist and since thc strongest elements ol thc organized opposition to Peron (which have shown no disposition lo cooperate with lhe US) will be powerless lo resist Peron's majority, Argentina's recent collaboration in the Interest of Hemisphere Solidarity may be expected to continuearch.
. s oll which lime the report wasouncil .or coordination.
ThU paper has thc concurrence of the Intelligence orBanidations of the sXpartmenU orthe AmrSvy. and the Air Force. Thc dissent of Uie Internee Oreanizatior. ol theo( Slate is set lorth in Enclosure -'A."
PERON AND THE ARGENTINE CONGRESSIONAL ELECTIONS
Elections in Argentina are scheduled3 to chooseembers of the lower house of the national congress. Peron's regime is based on cooperation of the army and mass labor support. Continued military cooperation appears assured. Although labor has been disturbed both by Inflation and measures taken by theto promote labor productivity to combat inflation, it is estimated that the extent of labor disaffection will not preclude the returneronista majority of two-thirds. However. Peron's injunctions to labor to produce more and demand less, his reported Intention lo seek legislative authority to enable him to compel labor to comply with these injunctions and his recent overtures to business and industry indicate thatfor the successlul implementation of his Five-Year Plan of industrialization may be forcing him toundamental political realignment.
The redistribution of political power which culminated in thc election of Peron to the Presidency on6 so changed the foci of political strength that the forces operative in the coming elections cannot satisfactorily be analyzed in terms of contending political parties alone. With the necessary acquiescence of the army, Peron came to power on the support of masses of labor voters who had previously been virtually inarticulate in any political sense. This mass labor support, which has since been loosely consolidated in the Peronista Party, gaveolitical strength which so overshadowed the individual traditional parties as to make any one ot them relatively Insignificantontender with the present regime. Consequently, since the issue is primarily the continuation of Pcronismo, in the absence of any coalition move among the opposition parties, Ihc election results will in all probability be determined by the extent to which Peron has retained army cooperation and his mass labor support, or gained new strength to offset any lasses he may have sustained.
Peron's ability to combine mass labor supporte cooperation of thc army, which traditionally hasanction over any presidential aspirantotential threatoup d'etat, hasnique feature of his success.onsiderable exlent he has gained and retained thc support of these two disparate groups through the bestowal of large material benefits at the expense of the Otigarquia (wealthy landholders) and the middle class.
In the case of the army particularly, Peron has further advanced his own program as an expression of Argentine nationalism and successfully engaged in shrewd maneuver against powerful Nationalist elements bitterly opposed lo his policy of collaboration with the US. There appears to be little doubt that the mditary cooperation essential to Ihc continuity of his regime will be forthcoming at least through the March elections.
The extent of possible disaffection from Peron's previously overwhelming labor support is of crucial importance in estimating Peronista prospects for retentionwo-thirds majority. While present labor discontent may well resulteasurable amount of disaffection as registered at the polls in March, Peron retains, in general, the
mass support of thc working class which he gained by effecting substantial economic and social gains in its behalf He has employed skillful demagogy and ruthless manipulation of union* and their leaders to consolidate and exploit his labor support, but his contributions to Improvement in worker status include replacementeudal pattern of labor relations with an advanced legal code, social insurance, and minimum wages. These reforms were accomplishederiod of months as contrasted with the generations of bitter strife that have accompanied attainment of these ends in many other countries. In achieving this revolution, Pcron taught labor that the Federal Government is available for its Interests;esult, it hasonfident class and political consciousness The majority of workers regard the President as thcsymbolocial revolution which released them from the control of thclandholders and Industrialists and gave them their first concrete hope of economic betterment through political action
Thc disaffection from Peron's labor support arises both Irom the inflationaryand the President's measures to meet that situation. Although thc rise In prices has by no means been ar severe ln Argentina as in many other countries, and labor has in general gained economically in relation to other income groups, the fact remains that labor's real income Is no higher than before lhe war and il has become restive. Thc President has found himself compelled,ort of quid pro quo for his services to labor, to demand increased productivity of labor to combat the Inflation that he seeshreat to his Five-Year Plan of industrialization and even to thc stability of his government, and thus sincee has taken various measuresif partlyby preelection steps to win backhave dampened the enthusiasm of many among his labor following.
7 he reduced governmental influence In favor of labor In wageprevailed on the uowerful government-dominated CGT union to urge that strikes for wage increases be Initiated only under exceptional circumstances, and openlylabor for anecline in productivity, threatening toystem of fines and bonuses to force Increased production. On thc other hand,temporary measures recently taken toaximum labor vote in the coming elections include thc silencing of official criticism of labor for demanding and notas wellore tolerant attitude on thc part of the government toward demands for wage increases
The Nationalists and the Communists have both achieved limited success in their efforts to exploit current labor unrest. Nevertheless, on balance, it is estimated that labor disaffection will not prove sufficient to preclude the returnwo-thirds Peronista majority in the March elections, primarily because of Peron's remaining prestige with the working class and the apparent Inability of the opposition to putrogram or the leadership to challenge effectively his revolutionary program.
Significant for the future of the Argentine political scene Is the fact that the President is reportedlypecial effort towo-thirds majority in the next Congress in order that he may efTeel constitutional changes that will enable him to enforce measures designed to control labor in the interest of greater productivity
Further, in his determination to control inflation and stimulate production for the success of his Five-Year Plan, he has during the past few months made overtures to business and industrial elements to secure their cooperation and support It is believed that this effort to enlist business support has not progressed sufficiently to influence the March elections materially cither in alienating labor or gaining conservative backing, but It is considered indicativeignificant moveolitical realignment that may prove of major importance in Ihe future of Peronlsmo and political control in Argentina
An additional condition which Peron considers Indispensable to the success of his Five-Year Plan is the procurement of large quantities of industrial capital equipment from thc US. His conviction that the US Is the only adequate source of suchand his strong antipathy toward Communism account in very large measure for the remarkable degree of cooperation which he has offered thc US despite the resistance of all opposition groups of importance.
Since Peron has demonstrated and continues to seek collaboration with the US based on his conception of Argentine Interests and. further, since all significantgroups oppose such collaboration, it follows that his probable success Inwo-thirds majorityarch is favorable for the attainment of immediate US policy objectives In relaiion to Argentina
DISSENT OF THE INTELLIGENCE ORGANIZATION DEPARTMENT OF STATE
The intelligence organization of the Department ol Stale does not concur In subject Estimate
It is believed Ihat the estimate of the balance of power within thc Peronista Party itself, which Is not touched upon ins central totudy and cannoi be adequately forecast on the basis of present information.
Subject estimate Implies that the Peronista Party is pro-United States. In clear distinction to the opposition parties. It Is submitted thai to the degree with which the Congress supervises the Administration's dealings wiih the Unlled SlatesPeron has had to dercr lo lhe opinion of anti-United Slates groups within his own party In lhe past. The strength of anti-United Slates Peronlstas In the new Congress will likewise afleel execution of policy in the future. Thus the maintenancewo-thirds majority by the Peronista Party will not ipso Jactoevelopment "favorable for the altainment of immediate US policy objectives In relation toor "in lhe interest of hemispheric solidarity "
I'm MNnot State
of Staff to Oonmudn In Chief
Secretary ot Defense Secretary of lie Armyrr Ivj of tbe Nary
Secretary of tbe Air Faroe
Executive Secretary, National Security Council
Chairman, National Security Resoureea Board
("Ijlef ot Staff US Army
chief of Naval Operation*
Chief or Staff. US Air Force
Director of Plans and Operations, OenereJ Staff, I'B Army
Deputy CtiWf of Nival Operations (Operations) Director ol Plant aodS Air Force
Special Assistant to the Secretary of Slate. Research and InteU^ence Director of Intelligence, General Staff, OS Army rililel of Naval Intelligence director of IoteUjgenee, US Air Force secretary. Joint Chlefi ot Staff lecretary. Join: InteUleenee Group
eeretary, Slate-Army-Navy-Al; Force Coordinating CommitteeSecretary, Military UaUor. Committee to tbe Atomic Energy Cizunlialon Ireetor of Security and Intelligence. Atomic Energy Commission 'ilef,and DUUlbutton, OICD, Department ol StateOriginal document.