Created: 9/7/1962

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Intelligence Weekly Review

central intelligence agency OFFICE OF CURRENT INTEIUGENCE

Current intelligence weekly review


Ministerresigned on 3protested thatrestrictingby foreignunconstitutional andfuture Investments.attributed tbe fallvalue of the cruzeiro

e resignationgrowing divergence from the policies of President Goulart and tho rest of the cabinet, to the growing political turbulence, and to the finance minister's estimate of the difficulties in trying to combat Brazil's Increasingly serious internal and uxtornal financial situation.

Goulart, bent ontrong presidency, contends that congressional leaders have agreedompromise formula under which Congress willlo Brasilia betweenndeptember and take action to facilitate aon whether the country should return from parliamentary government to the presidential system. There la some questionuorum can bo obtained in Brasilia during theforctober.

Leadingommunist Carlos Lacerda. publisher and state governor, doubts In any event that Congress will take the action Goulart wants.

mmmmmmmmmmaj serious TTsoraersduring the month and thatesult tbe cabinet will fall In Be has charged that

Goulart at that point will close Congress, call off the congressional elections, and direct the armed forces toorder.

If Goulart does not have his way with Congress, heinimum probably compound tbe existing tensions bylabor disorders, bis brother-in-law, pro-Communist Governor Leonel Brlzola, has called on studoots, workcrn. and the armed forces to "force" Congress to set tho plebiscitectober, tho date of the congressional elections. Brlzola violently attacked Lacerda and demanded tbe recall of the US and Brazilian ambassadors and the closing of the US Embassy.

harder for him to control than the present one, his Brazilian Labor party stands to make some gains even though it la given do chance ofajority. The President bas, however, given indications that he would like to close down the present Congress before tbe end of its tenure-

The gxecutlve Commission of the Brazilian Communist party



u to discuss plans for Communist action In the event of "trouble" during tbeSeptember session of Congress when Iteport that Brazilian right-wing elements were planning tooup in that period. Tbe commission decided to publish the report and to send party assets new contingency plans for counteraction. One PCB




lng Military officers laa coup in September to close the Congress.

Since tbe last working session of Congress inGoulart has reinforced his personal control In key areas of tho armed forces.the powerful Cosnunlat-lnfluenced sergeants'which he recently addressed.

on onugusteftist ultranatlonalist commander of the Important Second Army Is widely regarded as prealdential pressure oa Congress to coaply with bis demands.

Tho armed forces leaders have ono faction which isto back Goulart under most circumstances.econd. Including Generalourth Army and many navy and air forcewhich Is stronglyto hla. enter group, headed by Minister of tar General Nelson de molo andmoat of thes reluctant to take actiontha constitution or embroil the armed forces in politics, but would intervene toorder if thebecame chaotic. In any such crista this center group might support Goulart*aof full presidential powerseans of stopping shortull military takeover.


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