Created: 8/10/1962

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Current Intelligence Weekly Review

central intelligence agency OFFICE OF CURRENT INTELLIGENCE



leftist regime- of Prosldonl Goulart la making considerable headsay In Its drive totrong presidency, and Goulart appears Increasingly confident of bla political strength and military backlog. The recently appointed ministers of war, navy and air have all publicly endorsed the government's call for an early plebiscite on abolition of tha parliamentary system established last Septemberoturntrong presidency. Prime Minister Brochado da Rocha, who is expected within tbe next few days to ask congress to grant the early plebiscite, la acting as an agent of Goulart rr.ther thanefender of tlv parliamentary system to which ho owes his post.


[leaders ot tne two !es in congress have agreed firmly to reject granting the cabinet "amy but absolutely necessary powers" and not to countenance an early pleblaclte. However, the congrl bo overestimating their ability to withstand Goulart's maneuvers.

Certain armed forceseveral governorsatt'-Communist Carlos Lacerda of Guanabara, anda majority of the congress

remain strongly opposed to Goulart. While some of these loaders areto have beena possible ouster of Goulart, they apparently do notoordinated revolutionary plan.

Food shortages and serious inflation are causing considerabledissatisfaction, and thererowing tendency to blame the country'sproblems on theof the parliamentary system of government. of prime staples have occurred in major cities throughout the country but have been particularly acute in Rio de Janeiro, capital of Guanabara State.

have deliberately fostered the shortage thoro because of its hostility toGovernor Lacerda. eterioration of the free exchange rate for tho cruzeiro by someercent in recent weeks probably reflects not only arise In the cost ofwent upercent In the first six months of thebutertain amount of capital flight. afffffl

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