192. Memorandum From the Director of Intelligence and Research (Cumming) to the Secretary of State1
SUBJECT
- Intelligence Note: Prospects for Argentine President Frondizi
Despite continuing reports of military ferment, President Frondizi has apparently survived his latest political crisis thanks to the support of moderate military leaders against extremist plotting in the armed forces. The crisis reflects the conditional nature of armed forces support for Frondizi and their perennial suspicion of Peronist influence in the regime. Last week’s publication of an alleged pre-electoral pact between Frondizi and Peron, in fact, helped to precipitate military demands for new concessions and guarantees. The Cabinet resignation of June 22 gives Frondizi a free hand to make the changes required to [Page 583] maintain military backing.2 Such changes as may be made are not expected to alter the regime’s basic policies on economic stabilization, but Frondizi may perhaps be obliged to take firmer action to discipline government associates suspected of being soft on Peronism.
With the help of loans from the IMF, Export-Import Bank and private U.S. banks the administration in January 1959 embarked upon an austerity program which offers good long-range prospects. Since January, however, there has been a 50% rise in living costs and business interests have also been adversely affected. Determined to control wages in order to prevent a more serious inflation, the government has ruled with military aid under a state of siege since November 1958, and has arrested labor leaders and otherwise disciplined labor. Labor support of Frondizi policies has also been seriously weakened by the government’s manipulation of the trade union movement and its failure to implement wage increases already decreed. Recent provincial elections evidence Frondizi’s loss of popular support resulting from the austerity program.
It is unlikely that Frondizi will be able to regain his lost labor support in the near future without making economic concessions that will threaten the stabilization program. He consequently will remain dependent upon the military for his survival, and upon the strength of such moderate military officers as Secretary of War Hector Solanas Pacheco and Secretary of the Navy Estévez. In Frondizi’s favor is the fact that various plotting groups in the armed forces do not appear to be able to get together to coordinate their actions.
- Source: Department of State, ARA/EST Files: Lot 61 D 385, Internal Political Affairs May–June 1959. Confidential. Drafted by Elizabeth H. Hyman and John T. Dreyfuss of the Bureau of Intelligence and Research.↩
- On June 23, the Embassy in Buenos Aires reported that Cabinet, Bank Presidents, and Presidential Secretaries had all submitted their resignations in order to give President Frondizi a free hand to reorganize the government. (Telegram 2066; ibid., Central Files, 735.00/6–2359)↩