CHILE: THE UNITED STATES PROPPING UP THE JUNTA
Farnsworth, Elizabeth & Boyer, Roger & Felice, Bill
MIGUEL ENRIQUEZ- PRESENTE NACLA dedicates this issue to Compafiero Miguel Enriquez, Secretary General of the Movement of the Revolutionary Left (MIR), who died in combat on October 5, 1974. The...
...As part of the Administration's lobbying efforts, it arranged for two "foreign policy experts," Dr...
...interests...
...business community its full endorsement of the new regime...
...WEAPONS FY 1974 Iran...
...is helping in the latter task...
...He had been one of the main directors of U.S...
...Alvaro Puga, another Santiago-based junta spokesman, worked closely with the CIA as a key leader in the 1970-1973 anti-UP propaganda campaign...
...As this Report went to press (early October), the outcome of this battle was unclear...
...Aside from major acts like the destruction of part of the port of Valparaiso and the flooding of the mines at Lota, the workers under the direction of the clandestine political parties are carrying out small acts of sabotage on a day to day basis...
...2.1 17,623,000 Saudi Arabia...
...he learned of them from a Senate aide...
...Allende would not even con- sider the idea.33 In January 1974, a U.S...
...One former economics professor at the school is former U.S...
...August 3, 1974, p. 30...
...Johns Manville Co...
...Moreover, five Japanese steel producers - NKK, Kawasaki, Nippon Steel, Sumitomo and Kobe - signed preliminary agreement to purchase 32.5 million tons of iron pellets between July 1978 and December 1985...
...Although similarities exist between Chile now and the nineteenth century enclave economies of Latin America, the analogy must not be carried too far...
...6 To oversee the rescue operation, David H. Popper became ambassador to Chile, replacing Nathaniel Davis (who took the post of Director General of the Foreign Service in Washington - a reward for his work in Chile...
...He helped organize the February 4th meeting with Saez and Leniz...
...By the end of last month, I hadn't any money to pay Friday's wages, so I asked for credit from a bank...
...The money supply increased by 416 percent in the last 12 months...
...To contain this growing consciousness, the military after September 11 murdered thousands of workers, outlawed the central labor confederation, and imposed new labor laws that lengthened the work day, denied the right to strike, and did away with much of the protective legislation won in previous struggles...
...Made a $500,000 investment in a Chilean finance bank...
...So I did, and I received a visit from a Colonel...
...The company began in 1912 when a prospector, grubstaked by Henry Mudd's grandfather, discovered an old mine on Cyprus abandoned by the Romans in 300 A.D...
...7. Christian Science Monitor, April 13, 1970...
...As the table below shows, Chile has ordered $68,194,000 worth of arms from the United States since July 1973...
...Hernan Uribe, La Opinion, Buenos Aires, September 11, 1974...
...NACLA, The U.S...
...and Frederico Mujica...
...public...
...The government's goal is to reach a maximum tariff of 60 percent by the beginning of 1977 (prior to March, tariffs averaged about 500 percent...
...To do this, the State has become an instrument of terror unparalleled in the history of the republic...
...More than this, the junta and U.S...
...Granma, Havana, September 22, 1974, p. 9. 19...
...cit., p. 19...
...The rural Counterrevolution is attempting to return the peasantry to their former dependent status...
...Less than a week before Enriquez' death, General Carlos Prats was killed in Argentina...
...Latin American Economic Report, August 23, 1974...
...Won a $1.5 million bid to construct a liquefied natural gas plant...
...Under Allende U.S...
...Buckley claimed such an unprecedented agreement would permit the Peruvians to launch military actions against their traditional rival to the south, Chile...
...Quote from interview at Leslie, Weinert & Co., Inc...
...One of Nixon's economic advisors, William J. Fellner, also worked at the American Enterprise Institute as a "resident scholar...
...and in 1972, $5.9 million...
...The ex-Patron, the old landowner, is now the middle man-paying the peasants low produce prices, and reaping the benefits from the high urban food prices...
...Before the arrival of the sets, officials heralded the TV agreement as an experiment in how to lower prices and stimulate more efficient national production through tariff revisions...
...3, Comit6 Chileno de Solidaridad, Havana, August 1974...
...Responding to these pressures, the junta is now calling for a revision of the ANCOM treaty...
...Private banks, the financial nerve centers of the business world took the lead in the private sector's rescue mission...
...Exploration office in Santiago...
...While gouging a Third World country with its corporate hand, the U.S...
...For more write LAWG, Box 6300, Station A, Toronto, Ontario, Canada, M5W 1P7...
...Espousing the sanctity of private property and free enterprise, the plan limits the role of the state to providing guarantees for effective competition...
...Overriding the junta's program is "the decentralization of economic policy...
...Owns 30% of stock...
...He also later resigned from SOFOFA, to be replaced by Raul Sahli who is closely tied to the bourgeoisie...
...cit., p. 28...
...They talked of communitarianism instead of communism, but people without perception believed that they were both equal within democracy...
...Requests for information by Chile solidarity groups based in Canada are rejected out of hand...
...hard-line to UP Chile now lobbied for a rescue operation for junta-ruled Chile...
...For a complete discussion of import substitution see: "Chile's Dependence on $$," Facing the Blockade, reprinted in New Chile, NACLA, 1973...
...Much of the information for this section comes from sources inside the Eximbank as well as interviews in private banks in New York and San Francisco...
...The rescue operation went into high gear throughout the first months of 1974...
...Saenz saw the situation correctly...
...These figures were given to us in interviews at the IMF...
...Though the liberal state had served the bourgeoisie's purpose in the past, it no longer did so...
...The 200 companies include virtually every line of business - from fishing, poultry, textiles, and glass to tires and television industries...
...4, 1973...
...is chairman...
...According to Chilean Embassy figures, CMCP exported goods valued at $15 million between January and March 1974, more than CMCP's total exports for 1972 and 1973...
...For more on the U.S...
...To it must be added the innumerable private meetings between representatives of Chilean and U.S...
...Post 1970 figures come from IDB Annual Report, 1971 and U.S...
...3 2 Even Business Week (August 3, 1974) received a cold shoulder, and noted that "Falconbridge will not discuss the talks...
...Carmen Castillo, who is eight months pregnant, was seriously wounded in the battle and was taken prisoner...
...and (3) the corporate-fascist model...
...Chile has received no economic (i.e., non-military) loans from the Agency for International Development (A.I.D...
...1 Fernando Leniz, Minister of the Economy In July 1973, two months before the coup, the United States Embassy in Santiago sponsored a seminar on Chilean development problems...
...The junta argues that the drastic rise is necessary because the "purchasing power of the community is higher than the supply of goods and services...
...To charge interest will undoubtedly bankrupt many small farmers, already deprived of CORA support and credit...
...newspapers have been forced to run more critical stories...
...Latin America Economic Report, London, July 5, 1974...
...By investing now, corporations and banks in effect are putting down seed capital...
...Its activities are deliberate, not haphazard...
...The decisions lowering the tariff barriers forced medium and small industries within Chile to compete with imported products...
...4. Ibid...
...The Allende government "was not friendly" to the United States, he said...
...William F..Buckley has long ties to the CIA, reaching back to his OSS experience in World War II...
...147,796,000 China (Taiwan...
...economic dealings, the bank moved slowly in granting loans to post-coup Chile...
...Agriculture Secretary Earl L. Butz told everybody the name of the game when he announced that the United States authorized the credits in the interest of "national security...
...Representing the first move by a foreign bank into the local Chilean capital market, the motives for Citibank's action originated across the Andes...
...3 However, the present economic slump in Brazil may limit its "sub-imperial" designs...
...Diccionario Biografico de Chile, 1968-1970, Santiago, Chile, Decima Cuarta Edition, p. 282...
...public safety advisors" have helped set up political intelligence divisions in other countries...
...Foreign cash reserves stood at less than $3 million...
...the "friends" cultivated throughout the Frei and Allende years now ruled Chile...
...U.S...
...they can no longer justify the continuing repression, nor can they overlook the increasing evidence of U.S...
...Ricardo Claro, the economic adviser to the Chilean foreign ministry, spoke to 120 people representing 80 different corporations in an effort to draw new foreign investment to Chile...
...This would be nothing new for the United States...
...Retook control of shares of Sheraton Hotel subsidiary in Chile...
...The agreement simply assured that the Peruvian government could dispose of private air facilities in case of conflict or natural disaster.36 The October 7, 1974, story in U.S...
...in fact, by the end of the Frei period, the economy had lapsed into stagnation, and unemployment had increased...
...Ideological control and blatant repression of the working class are not sufficient to completely reintegrate Chile into the capitalist system...
...and Hector Melo and Israel Yost, "Funding the Empire: Part II, the Multinational Strategy, NACLA Newsletter, May-June, 1970...
...I have argued, at least tentatively, the advantages to be gained by distributing aid primarily on the basis of the recipient nation's attitudes toward our foreign policy objectives...
...17 Julian Hayes, a consultant for the Council who worked for Anaconda in Chile until it was expropriated, also aids the junta's cause at the Council...
...When the Popular Unity government assumed office in 1970, Ferrer personally sent someone to Chile to file bi-weekly reports with the Council on conditions in Chile...
...The Japanese are making a strong bid to corner the Chilean iron and steel market...
...undertook a massive program of economic aid to Guatemala...
...Business Week, in a special report on Chile, summed up the prevailing attitude of the financial community when it stated that "venturing into Chile takes a certain amount of corporate courage...
...Resumed control of Cobre Cerrillos, a copper fabricating industry...
...40.9 85.8 95.3 136.3 - TOTAL Multilateral 91.0 16.5 43.5 64.9 52.5 85.8 95.3 247.2 - * Figures for fiscal year from June of previous year to June of year indicated...
...The CIA and the Chilean dictatorship are following old patterns in their attempt to eliminate the Chilean Resistance...
...private investors...
...The bourgeoisie used Saenz to broaden their anti-Allende coalition...
...The Cuban exiles mentioned by the Embassy spokesman as special "friends" have interesting connections themselves...
...Forced to deal in a fairly open political system, the bourgeoisie also had to accede to the State taking on welfare functions and the initiation of agrarian reform...
...2 3 Proceeds obtained from the sale of the treasury notes issued by Adelantos y Creditos Ltd...
...34 (July 13-19...
...7 This philosophy and program of the Chilean bourgeoisie has three basic roots: (1) the pre-Keynesian ideal of free-market capitalism (commonly referred to as the "Chicago School...
...Wants to purchase a tire plant being auctioned off by CORFO...
...His job is especially crucial, as opposition to the junta in Europe has led to a virtual boycott in some countries of aid and trade to Chile (see Part V...
...Next, it moved to "normalize" relationships with nationalized foreign companies like Anaconda and Kennecott...
...The story leaked on to the front pages on September 8 with the news that CIA Director William E. Colby admitted to the House Armed Services Special Subcommittee on Intelligence that the United States had spent some $11 million on covert activities designed (1) to keep Allende out of office...
...The latter report contains an in-depth analysis of the U.S...
...3 The Chilean venture of Cyprus Mines is also of interest from two other angles...
...Of the 168 firms that are members of Business International, only 55 (all U.S...
...Her life is in danger, and an international campaign has begun to pressure the junta to release her...
...The free trade philosophy implies that individual countries export what they produce efficiently, and import what they make inefficiently...
...In 1951-52, he worked in Mexico for the Agency under E. Howard Hunt, on "tangential special projects...
...Besides the two loans already granted, the IDB is considering at least two other large loans: for a liquid gas project and for a Chilean Development Bank...
...and states that foreign capitalists cannot invest in transportation, insurance, banking, or public services...
...plays a strong role (see box on p 23 ).15...
...A lobby is organized...
...The government air-freighted from the United States 3,000 RCA remote control television sets, in time for the Chile-West Germany World Cup match on June 14...
...Designed to attract investments to Chile, the conference proved a dismal failure for the junta...
...President Velasco tries to avoid the situation...
...and it is attempting to computerize and rationalize intelligence data...
...One of a long line of exile plans (most with CIA sponsorship), the "Torriente plan" called for a unification of all Cuban exile groups (in and out of Cuba) in a new effort to retake Cuba.' Manolo Reyes, another of the junta's Cuban-exile "friends," is an anti-Castro journalist working out of Miami and was one of Nixon's key supporters among Cuban exiles there...
...The term "petit bourgeoisie," which is used later on, refers to a disparate group of people ranging from small shopkeepers and well-paid government employees to medium sized industrialists and landowners...
...As stated by former economics advisor Orlando Saenz: "You need to create some realistic relationship between prices and costs...
...Planning a $55 million joint venture to develop iron ore deposits...
...Although the gap between rich and poor has widened in Brazil during the past decade, for the rich - the multinational corporations and the Brazilian bourgeoisie - the opening of the country to international competition and foreign capital proved extremely lucrative...
...In the Central Market one finds people with five or ten cans of peaches or mixed vegetables, hawking them to the passerby...
...Adolfo Yankelevich, the junta's press attache in New York...
...policy towards the junta...
...40, Havana, September 1-14, 1974...
...9. Industria, Boletin de la Sociedad de Fomento Fabril...
...Why has the ChileanAmerican investment community encountered only limited success in its efforts to stimulate new foreign investment...
...Having played an important role in erecting the economic blockade which led to the overthrow of Allende, U.S...
...In the 25 years before 1970, the Eximbank supplied Chile with $600 million in direct credits and had guaranteed private bank credits to Chile against the commercial and political risks of nonpayment...
...San Francisco Chronicle...
...Director William Colby testified to the House Armed Services Special Subcommittee on Intelligence that the Agency had authorized $1 million for "destabilization" activities in August 1973, one month before the coup...
...Hernan Uribe, La Opinion, September 11, 1974...
...Though he was a member of the Panel of Experts of the Alliance for Progress (the "nine wise men"), Saez often attacked the reformist rhetoric of the Alliance: Unfortunately, the Alliance, in its efforts to point out the path for the Latin American countries to follow, has used terms such as "planning," "structural reforms," "revolution," etc...
...This loan is to be paid off at harvest time...
...TOTAL U.S...
...Internationally, the efforts to reincorporate Chile into the capitalist fold come at an extremely difficult moment...
...In fact, recent covert activities in post-coup Chile...
...The two men clearly in charge of the economic Counterrevolution, Fernando Leniz, Minister of the Economy, and Raul Saez, Economic Coordinator, fall into this category...
...See also Business Latin America, September 4, 1974, p. 288...
...5. James A. Noone, "Materials Report/Shortages, Oil Price Hike Provide Impetus to Look at Prices," National Journal, May 18, 1974, p. 745...
...6. Le Monde, December 1, 1973...
...Repossessed its Chilean auto plant subsidiary...
...the CIA contributed by developing a special political intelligence police force, in the form of the Committee of National Defense against Communism...
...Such efforts have already paid off...
...As one reporter sees the scenario: Chile could provoke the war by promising Bolivia "an outlet to the sea...
...embassy estimated 13 percent unemployment at the end of January 1974, and most observers feel that unemploy- ment reached 20 percent at the end of May 1974...
...involvement in the coup.* But there are important media people who still make a point of "apologizing" for the junta and justifying U.S...
...the junta's redistribution plans serve the rich...
...The truth is that the real interests of U.S...
...5 The generosity of the banking community with the junta amazed even some representatives of the U.S...
...workers councils were abolished...
...The junta has already created severe divisions within the common market, and whether or not it succeeds in revising Decision 24, the junta will permit foreign capital to enter Chile on terms that violate the spirit, if not the letter, of the treaty establishing ANCOM...
...But he's like a machine without any human feelings...
...3 2 U.S...
...The hesitancy of foreign investors stems from two unsettling factors - the worldwide crisis facing capitalism and conditions specific to Chile...
...policy makers were concerned, Chile joined the long list of countries in a state of permanent counterinsurgency and thus in continual need of U.S...
...Chilean subsidiary...
...This means that 45,000 more workers will soon be on the streets...
...1 9 El Mercurio on May 12 indicated how the imports into the country are changing...
...Though not necessarily explicit in the writings of the proponents of this philosophy, the measures depend on repression of the working class...
...Finally, the U.S...
...Since his entrance into the State Department in 1945 he has served in such posts as Officer in Charge of U.N...
...As before, those in control of the U.S...
...3 8 Aided by Bolivia, Brazil (and secretly by the United States), Chile would try to defeat the Velasco government, leading to its demise and the installation of a right-wing government...
...This included the funds owed Chile's creditors, so a renegotiation which included lenient repayment terms amounted to a loan from the creditors...
...It is too early to discover the guiding thread that unites the disparate elements in the Lobby...
...As part of its appeal to foreign capital, the junta issued a new foreign investment law in mid-July, 1974...
...Fiscal responsibility is praised as the way to bring stability to the Chilean economy...
...out of the silence your voices will rise in the mighty shout of freedom when the hopes of the peoples flame into hymns of joy...
...Bolivia has sought an outlet to the sea since losing it to Chile in the War of the Pacific (1879-1884...
...Under the agreement, approximately $60 million would be paid to the United States over 4 years, starting with a $16 million payment on December 28, 1973...
...Then, in two to three years, it could stabilize itself indefinitely and even achieve relative economic success...
...The junta's first experience with this new import policy backfired...
...In the first quarter of 1974, Chile's total exports rose 126 percent to $113 million and further gains should be registered in the second quarter...
...Envious of the power and wealth of the class above them, many members of the petit bourgeoisie strive to improve their position, or that of their children, within the capitalist framework...
...The petit bourgeoisie is attempting to maintain its influence in the banking sector of the economy...
...Congress, Kissinger and Ford are resorting to every bureaucratic and legislative trick available to try to pry loose the needed funds...
...Military Apparatus, 1972, pp...
...7. The United States and the Multilateral Development Banks, op...
...While here, they met with23 AFL-CIO Inter-American Affairs Director, Andrew eration, formerly active in support of AIFLD programs, McLellan, who has travelled to Chile three times since the voted an international boycott of Chilean transport on coup...
...FENSA and MADEMSA, both producers of durable goods (such as refrigerators, washing machines, stoves, etc...
...During the 1960's, the multinational corporations raced around the globe searching for new investment opportunities...
...With the reduction of subsidized food programs and the withdrawal of free social services, such as medical clinics, more and more of the unemployed face malnutrition...
...In their efforts to reintegrate Chile into the capitalist world, they are joined by Chileans throughout the power centers of the United States - people like Benjamin Mira in the Inter-American Development Bank...
...Factories were occupied by the military after the coup, and those which had been nationalized were returned to their previous owners...
...9. Inter-American Development Bank News Release, March 30, 1974...
...See "U.S...
...For more on the Eximbank, see "Exports for Empire," NACLA's Latin American and Empire Report, September 1974...
...Hernandez, op...
...ECONOMIA Fernando I.niz Fernando Lniz Jorge Cauas HACIENDA Jorge Cauas8 These terms have been used in a distorted form by the enemies of democracy, in such a way that in the minds of our peoples, the objectives of the Alliance for Progress appear to be identical with the objectives of the enemies of civilization and liberty...
...Raul Sahli, President of SOFOFA purchasing power...
...The owners of production can now concentrate on profits, rather than worrying about costly workers' needs and benefits...
...corporations...
...The United States had hinged its bilateral debt negotiations on repayment of the copper companies, which the UP refused to do...
...This section of the Report explains what this model looks like, where it got its inspiration, and the effects of the economic Counterrevolution...
...A long-time intelligence operative, Hinton helped orchestrate the antiUP "invisible blockade" from his position as deputy Director of the Council on International Policy...
...In the disregard for distribution of wealth, and in the tremendous emphasis on exports and on foreign investment, the junta's program borrows heavily from the Brazilian model...
...Furthermore, in 1964 when the Brazilian military opened the country to the vicissitudes of world competition, the economy was much better prepared to adjust without collapsing...
...September 18 and 19 in solidarity with the anti-junta Nevertheless the junta apologists have not been very protest carried out all over the world during that month...
...At present the views of these groups are expressed by a "junta lobby" which includes the following sorts of spokespeople: (a) Friends in the press and academic world...
...Boletin Informativo, Comite Chileno de Solidaridad Con la Resistencia Antifascista, Havana, Cuba, No...
...Advisors," NACLA Newsletter, July, 1972...
...if the Chilean economy can be fully revived and a "Brazilian miracle" induced, then these early investments will prove exceptionally profitable...
...and those companies in which the workers simply took control (and the state either did not act or acted belatedly...
...investments in Latin America...
...Like South Korea, South Vietnam, Greece (until recently), Brazil, Guatemala and others, Chile became one of the many countries where the U.S...
...Another international bank, the First National City Bank (Citibank) moved back into Chile, but for reasons of self-preservation rather than speculation...
...workers' wages remain under rigid government controls, with both strikes and collective bargaining prohibited...
...The first installment of the U.S...
...Junta apologists are justifying large military sales to Chile by claiming that Peru, armed with Soviet-made weapons, might attack Chile's northern border, presumably to retake Arica, which Peru lost to Chile in the 19th Century.27 The argument is a classic case of doubletalk, but under its umbrella, Chile is buying more and more U.S.-made weapons (see below, "Big Guns for Chile...
...law prohibits resale of military equipment to a third country, but France and other countries have often done this in the past...
...government trusts and will support the Chilean junta...
...Information in this section is from El Mercurio and sources in Chile...
...None of them announced new investment plans for the country...
...he also taught at the Catholic University of Chile, the most reactionary and conservative campus in Chile...
...government's endorsement of the Frei government, U.S...
...After engineering the overthrow of President Jacobo Arbenz, the United States had to become "the guarantor of the Counterrevolution," and to oversee the attempt to make Guatemala a "showcase for democracy...
...While food imports have dropped, the junta proceeds to bring in machinery and toys for the rich...
...then produce a consumer durables and intermediary goods industry (such as chemicals for rayon, needed in the production of textiles...
...U.S...
...Thus a "Junta Lobby"grew up to whitewash the junta and push for aid and investments...
...The members of the bourgeoisie sit on the boards of directors of the largest enterprises...
...Thus, the junta abolished Parliament and banned or placed in recess all of the Chilean political parties...
...ruling class...
...Immediately after the coup, the junta turned over to the private sector the State's majority shareholdings in the Central Bank of Chile...
...This would violate a treaty between Chile and Peru and might bring on war...
...A step in this direction occurred when ENAP awarded a three year $25 million contract to the Diamond M Drilling Company to drill exploratory wells in the Magellan straits...
...Conscious of the growing criticism of the use of the Eximbank as a "big stick" in U.S...
...Though some faces around him had changed, the basic policy did not...
...Interview with high official at Manufacturers Hanover Trust...
...and most recently, Assistant Secretary of State for International Organization Affairs...
...For more on this, see "The Food for Peace Arsenal," NACLA Newsletter, May-June 1971, p. 5. The Food for Peace figures are from U.S...
...No less than five of his former pupils now hold senior advisory posts in the junta's administration...
...With the intensified repression the struggle has entered a new phase, but in no way has the left been defeated...
...Exports of raw materials and some manufactured items rose sharply, while industrial production boomed...
...Once this was accomplished, the multinational corporations moved to extract from Chile only those resources of special interest to them, given the international crisis confronting capitalism...
...Boletin Informativo, Vol...
...firms...
...3 1 In Chile, Falconbridge is hoping to invest $300 million...
...3, 1974...
...On February 7, the Bank announced a $5.25 million loan to cover the foreign exchange costs of carrying out preinvestment studies...
...All these groups and individuals - as well as others the Embassy spokesman mentioned - are right-wing groups who have worked closely throughout the years with Richard M. Nixon...
...But even the inflow of capital resulting from aid and investments could not "save" the Chilean economy...
...16 per year for non-profit institutions ($30 for two years...
...The Wall Street Journal published articles by Everett Martin that lauded the change in government and covered up the atrocities committed by the junta...
...New York Times, September 27, 1974...
...Chile needed money, and the United States moved quickly to get the money (and food) flowing...
...credit blockade and their part in the current rescue operation...
...The effort calls for new tactics, new operations, even some new operatives...
...counterinsurgency operations from Greece to Indonesia, and Chile was to be no exception...
...The visible arms of the lobby are all the means of communication and propaganda in American society...
...The founders of the new bank are looking to agencies such as AID, the World Bank and the Inter-American Development Bank to provide a large part of the $55 million which will form the bank's operating capital...
...The possibility of a successful "Chile model" (including the nationalization of natural resources) under Allende was especially threatening to U.S...
...A loan of such magnitude indicates that the U.S...
...op...
...The covert apparatus" 3 9 - built up throughout the Frei years and perfected in the UP years - now has the crucial task of aiding from inside Chile the Junta's repression of the Left and thus helping the bourgeoisie in its effort to reintegrate the economy into the U.S...
...After the coup, the reintegration of Chile into the capitalist fold became the immediate imperative facing the bourgeoisie...
...it is hard to analyze exactly which groups predominate in it, but it is clear that the extreme anti-communist right wing, with its traditionally close ties to the C.I.A...
...San Francisco Chronicle, October ,71974...
...On this trip, 120 meetings took place between Huerta's delegation and representatives of U.S...
...The U.S...
...In arguments reminiscent of the "Guatemala Lobby's" lowest moments, Ashbrook even argued that Allende had been a drug-user, and that the UP government had paid for their Soviet weapons with proceeds from selling drugs...
...then in spite of the profound economic crisis facing our country and its international isolation, the junta will be able to assure enormous profits for national capitalists and attract foreign capitalists through servile guarantees...
...Established in 1969 by five countries - Colombia, Chile, Peru, Bolivia and Ecuador - the members' goal is to eliminate all tariff barriers between them by 1985...
...They took no chances however...
...The junta's press spokesman, Alvaro Puga, described a corporate state in the following way: "representation is through natural organizations and then through channels to the top...
...Henry Kissinger, speaking of Chile, June 27, 1970 Now, as before, U.S...
...The junta never released a public list of all of the foreign companies that returned to Chile...
...El Mercurio, May 18, 1974...
...Resumed general management functions of General INSA...
...These figures do not appear on the chart, as the program operates with money generated by fees charged on old loans...
...The Amalgamated Union of Engineering Workers and other labor unions made their militant opposition to trade with the junta concrete by refusing to repair the motors of Hawker-Hunter jets which had been sabotaged by the Chilean Resistance...
...An analysis of the figures given out by the junta reveals that inflation for the first 10 months of their rule has been about 1,752 percent...
...and if he joins the junta, I can just hear him before long telling the generals that they're stupid...
...Financed by industrial and individual contributors, the ASC includes on its National Strategy Committee three former Chairmen of the Joint Chiefs-of-Staff, corporate executives, and right-wing academicians...
...6. Sedwitz was paraphrased in Chile, Summary of Recent Events (Washington, D.C.: Embassy of Chile), February-March, 1974, p. 5. See also Organization of American States, CIAP, "El esfuerzo interno y las necesidades de financiamento externo para el dessarrollo de Chile," February 5. 1974 (OAE/Ser...
...There is no need for a "parallel government" sitting in the U.S...
...Around June, 1974, the company set up an office in Santiago and moved a large mining exploration team into Chile...
...It can then use the escudos for "development projects," or - in special situations - for buying arms...
...By 1970, virtually all of Chile's leading financial groups and families possessed links of one form or another with international capital...
...Hernandez, op...
...The junta's program has meant the destruction and liquidation of many small and medium enterprises by the conglomerates...
...4 The crucial nature of foreign capital in the junta's programs was stressed again in July in a statement by Jose Piners (who helped draft the junta's foreign investment decree): "We need new capital as an indispensable complement to national investment...
...3 Competition, of course, plays a vital role...
...And from there they kept going up: bread went from 134 escudos in April to 240 escudos a kilo in May (a 79 percent rise...
...Ercilla, September 4-10, 1974, pp...
...and (3) defense against imperialist political, military and economic control of Chile...
...turning agrarian reform into a vehicle for the restoration of private property, caused the removal of three different vice-presidents of CORA in the last 11 months...
...According to Interamerican Committee of the Alliance for Progress (CIAP) and International Monetary Fund (IMF) studies, for the junta to complete its plans, it must receive a total of $1 billion in foreign capital in the next year...
...They do so because the payout, when they succeed is swift and large...
...9. Washington Post, September 12, 1974...
...El Mercurio, June 25, 1974...
...Boletin Informativo, Vol...
...Chile paid cash as down payment for most of the arms, but even such direct sales must be approved by the Pentagon...
...And so the imperatives of empire dictate continued U.S...
...As a secret leader of the neo-fascist Patria y Libertad and as President of SOFOFA, Saenz rallied the middle sector against Allende...
...The new Chilean foreign investment law issued last week offers numerous safeguards to companies willing to give Chile another try after the Allende debacle...
...103-135...
...Embassy in Santiago in April reported that an official there was frustrated because the State Department had not been able to pressure the Bank into approving some important loans...
...434,926,000 W. Germany...
...corporations which are designed to renew the flow of capital and to stabilize Chilean capitalism...
...The Export-import BankOne of the key factors in the anti-UP credit blockade was the hard line taken by the U.S...
...foreign investment - for the development of new mines (see Section IV...
...5. Business Week, Aug...
...AIFLD (American Institute for Free Labor Development) operatives and their Chilean trainees made sure Marxist labor unions were outlawed and began to build a new, more "cooperative" labor movement...
...74-82...
...We recognize that the responsibility for the death of Enriquez falls as much upon the shoulders of U.S...
...4. Miami Herald, November 26, 1973...
...The framework for the overall rescue operation had been perfected throughout the Allende years: policy makers who had orchestrated the credit blockade of UP Chile now organized the credit boom...
...In addition, the spokesman recognized the "full cooperation of dozens of Cuban exiles," including Jose Elias de la Torriente, Manolo Reyes, and Lilian Ghiberga...
...In an interview, Ferrer said he saw "Cuba happening all over again" when Allende took over.'" Jack E. Wyant, a Council officer has developed a special interest in aiding repressive regimes...
...Construction workers that can no longer find work are leaving Chile...
...intelligence reports" that Peru had bought Soviet tanks and artillery and that Chile sought tanks and jet fighters21 from the United States to offset Peru's purchases.34 Throughout 1974, Chilean newspapers ran stories charging Soviet intervention in Peru and building up public opinion against President Velasco's government...
...From the conservative economic philosophy of the "Chicago School," the junta draws its insistence on the return of nationalized properties to former owners, the elimination of price controls and subsidies for basic consumer items, and the reopening of the country to foreign investment...
...In Argentina, the Peron government, anxious to sell large quantities of wheat and agricultural produce, moved to correct the junta's poor credit rating by pressuring the Citibank branch in Buenos Aires to help the junta...
...continued infiltration of leftist political parties, now underground;* and supporting groups within Chile which further U.S...
...Although Chile now produces preconcentrates rather than pellets, the Japanese firm of Mitsubishi has signed a preliminary $50 million credit agreement for construction of a pellet plant in Chile...
...bilateral aid bill will not pass if the junta does not at least change its image...
...involvement in Chile's repressive apparatus.4 Pacifying the Workers For Chile to get a good credit rating from international bankers, the workers' movement must be repressed...
...Boletin Informativo, Comite Chileno de Solidaridad con la Resistencia Antifascista, No...
...58,739,000 Source: Pentagon Figures in the L.A...
...To negotiate with the copper companies, the junta has appointed Julio Photo by Paul Cantor Philippi, who negotiated the "Chileanization" agreements between the Frei government and Anaconda and Kennecott...
...on October 6, the day after Enriquez' murder: The responsibility for the death of Compafiero Miguel Enriquez, and for the deaths of other thousands of Chileans, does not fall solely on General Pinochet and his fellow executioners inside Chile...
...The total PL-480 budget for all of Latin America in 1975 calls for $50 million in Title I aid...
...The spectacular rise in the number of bankruptcies is also resulting in a constant swelling of the unemployed...
...Much of this will be provided by the international lending agencies and Chile's creditors, through the renegotiation of Chile's debt (see Section III...
...1 0 The third major figure making economic policy is Jorge Cauas, the Finance Minister...
...3,794,369,000 Israel...
...On October 3, J. Walter Thompson released a mysterious statement saying that the deal was off...
...Further, they know that now they must help prove that the pro-U.S...
...Further, according to the U.S...
...Finally, private investors were called on to provide at least $100 million in investments...
...Each A-37B plane costs $300,000.29 Aside from these specific purchases, it is difficult to confirm exactly what weapons the junta purchased over the past year and from whom...
...Within Chile, workers are not fooled by their Pro-junta forces within AIFLD and the Chilean labor brand of "yellow unionism" (sindicalismo amarillo...
...This effort was undertaken in the context of an economy which could not by any stretch of the imagination be called "credit worthy...
...These people were increasingly seen at the embassy in 1972 and 1973...
...and last establish a capital goods industry (the machinery to make the machines...
...Frederico Willoughby, for example, one of the junta's chief Santiago spokesmen, studied at the University of Texas in 1961 and was made an "honorary citizen" of the state of Texas...
...James R. Schlesinger, "Strategic Leverage from Aid and Trade," in National Security (New York: Frederick A. Praeger, 1963...
...Beginning one of the largest divestiture programs in recent history, the junta announced in June that it would sell 150 enterprises to the public...
...ITn IIII CMF 'a are proceeding over the formation of a binational enterprise which would refine and manufacture Chilean copper in Brazil...
...The Mudd family and Union oil form part of a powerful financial group based in Los Angeles...
...In the aftermath of the coup, Colby said, funds authorized but not committed were spent...
...The United States contributes 40 percent of its ordinary capital and over /4 of the "concessional" resources for the Fund for Special Operations...
...10017), 1974, pp...
...PART IV...
...Pinochet himself listened to Harberger's speech...
...4 After this trip, the credit flow began in earnest...
...involvement in setting up political intelligence units in foreign countries, see "Uruguay Police Agent Exposes U.S...
...imperialism are in line with the junta's current policies If there were no real threat of resistance in Chile, the U.S...
...Washington Post, April 2, 1974...
...creditors (the Paris Club...
...imperial designs...
...Letters or telegrams should be sent immediately to the Chilean Embassy, 1736 Massachusetts Ave...
...To defuse the threat of rural guerrilla resistance, the junta has given to peasants a minimal amount of land...
...As we shall see, the United States is fighting a losing battle...
...Callaway's visit to Santiago and other Latin American capitals was considered part of the Pentagon Campaign for arms sales in Latin America...
...The American Institute for Free Labor Development (AIFLD), with its close ties to the C.I.A...
...CHILE'S OPEN VEINS Historically, Chile has always appealed to one group of investors - the foreign mining interests...
...At the same time, in order to present a good image to the world, the junta needs labor spokesmen and the facade of a labor movement to hide the repression of the workers...
...The story of Chile's military buildup surfaced in the newspapers on October 7, 1974...
...Enjoying close ties with the Stillman-Rockefellers who operate through the First National City Bank, the Schroders are also well experienced in working with fascist...
...Thus far, the petit bourgeoisie has prevented the junta from further denationalization of the banks...
...According to the New York Times...
...Some officials argued that Popper was tactically correct in urging the junta to restrain itself, since the U.S...
...Otherwise, taking October 1971 to October 1972 as a base (before the most vigorous economic sabotage by the right), no sector of industrial production has increased since the coup...
...their elected represen- tatives, whether leftist or not, face interrogation sessions in the junta's torture chambers, which leaves most of them dead...
...Harry W. Shlaudeman, as deputy assistant Secretary of State for Inter-American Affairs, became the key State Department apologist for U.S.-Chile policy...
...2 0 No direct loans were authorized to Chile after May 7, 1970, and no supplier credits were approved after June 19, 1971...
...Sources within Chile report that the junta is stocking up on helicopters, small arms, and even tanks...
...But the task of attracting foreign investors is especially difficult at this moment in world history...
...economic and strategic interests...
...For the first seven months of 1974, imports equalled $1.4 billion compared with the total for 1972 of $941 million...
...Overseas Loans and Grants and Assistance From International Organizations, July 1, 1945-June 30...
...supersonic jet fighters and ground attack planes also included the allegation that Chile sought the weaponry "because of concern that Peru may eventually go to war against Chile...
...Thus the U.S...
...Resumed control of a ball bearing plant, Armco Chile S.A.I...
...see also Hernandez, op...
...participation in Chile's Counterrevolution called for more subtlety than in Guatemala...
...The economic model they follow is full of contradictions...
...Then as now, the most important factors in Chilean development remain rooted in34 the country itself...
...Workers salaries do not keep up with the inflation rate...
...12, 1973...
...since the alternative might encourage anti-U.S...
...Workers competing within the factory will be awarded for outstanding effort and labor discipline, and special importance is attached to the role of the consumer in exercizing choice, which will heighten the competition between industries, factories, and workers...
...Though both IDB loans appear innocuous enough, they are actually political and economic tools of considerable impact...
...The London Financial Times reports that a common dish in the shantytowns surrounding the capital is "pantrucas" - a simple mixture of flour and water...
...Further, he was one of the main exponents of the "Allende was an incompetent" sub-theme, having written an article on the topic for the New York Times (June 16, 1974...
...2. Society for the Prevention of World War H, Business as Usual...
...In this way the junta returned companies that had been "illegally" taken over by the UP...
...I Flu, Utirln U 1- -. u tflr j t l , W- LurL LUuI...
...This ultimately leads to a greater concentration of wealth by the larger firms...
...Why is it so important to "reintegrate" Chile into the U.S...
...For more on DINA, see Boletin Informativo, op...
...Aside from United States and Japanese investors, Brazilian business interests also display an interest in Chile's mineral wealth...
...exports...
...9-10...
...Buckley's stories provoked charges and counter-charges in Peru's and Chile's newspapers...
...Within Chile the junta's base of support continues to erode...
...A.I.D...
...He charged that the Peruvian government signed an agreement with the Soviet airline, Aeroflot, whereby Aeroflot agreed that Peru could make use of its facilities in an international conflict or a natural disaster...
...9. "Dow Picks Up the Pieces in Chile," by Herbert E. Meyers, Fortune, April, 1974...
...3 In the world of the 70s, the United States has to fight for economic survival...
...First as press attache to the U.S...
...In December 1973, the U.S...
...Aid from outside the country may buoy up the junta and help attract foreign investment, but it cannot erase the past: Chile's workers know what bourgeois rule means for them, and they will not be fooled by any "rescue operation" from abroad...
...But while accepting the fait accompli of the Soviet Union, China,or even Cuba, the United States could not sustain further losses - especially in its own back yard...
...We trust that the progressive and revolutionary people of the United States will express their repudiation of those criminals and their backers and that, in solidarity with our struggle, they will make their impact felt...
...The part that is taken away from them is the part that is necessary to eliminate the excess of money that exerts pressure on prices and makes them rise...
...capital into Latin America...
...The United States had blocked the same $75.3 million request two years ago...
...But even if all its aid and loan requests are met, and even if foreign capital floods the country, the Chilean people will fight back to regain from the Chilean bourgeoisie and the imperialists what is rightfully theirs - Chile...
...In other words, the job of the C.I.A., and * C.I.A...
...The military's share of the national budget is being increased from below 10 percent under Allende to around 45 percent...
...Entering into production in 1972, Falconbridge's Dominican holdings represent the largest nickel mining and smelting operations in Latin America...
...Lloyds & Bolsa International Bank Mitsubishi Falconbridge Cyprus Mines Corporation Diamond M Drilling Company Mitsubishi...
...Rockefeller, the Attica assassin, the multinational corporations who are the ultimate instigators and profiteers of the bloodshed in Chile, and Mr...
...I explained that I had no money to pay wages, to which he replied: "Well, tell them to sell the television sets their precious Allende gave them...
...Department of Commerce, Bureau of International Commerce, Foreign Economic Trends and Their Implications for the U.S...
...This assessment, combined with the very large loan approved in August, may indicate that the IMF is exchanging loans to Chile, which the U.S...
...In addition, the IMF grants loans to help nations with great fluctuations in their balance of payments...
...The junta hopes foreign capital will play the crucial and dominant role, from the financial and technological point of view, in the expansion of the most dynamic sectors of the export-oriented economy: mining, industry, and agriculture...
...support for the junta...
...Thus, a source inside the Fund said in June that the Fund believes that the junta is "completely incapable of managing the economy," and that the junta's policies favor only the upper classes...
...it conducts mass round-ups of suspects...
...4 1 We have not positively identified their newer colleagues working under embassy cover...
...According to Fortune, "Dow thinks Chile is a more secure base than even before: if the military leaders relinquish power at all, they are unlikely to give it to any political faction not kindly disposed toward private enterprise...
...Repossessed a controlling bloc of shares in Cemento Bio Bio...
...business leaders began to assist them...
...Buckley, for example, recently claimed in his column that Peru aimed to make war on Chile...
...Miami Herald, August 6, 1974...
...Counterrevolutionary Apparatus: The Chilean Offensive, op...
...In June, for example, Eduardo Rios led a delegation to the 59th Conference of the International Labor Organization in Geneva, where Rios was unable to stop delegates from recognizing the CUT as the true representative of the Chilean working class...
...2 3 The military aid request itself - $21.3 million - also represents a large increase over authorizations for previous years (around $15 million for FY 1963 and $11.5 million for 1974).24 Further, A.I.D...
...importers are merely charged a "consumption tax" on them...
...Kissinger, in effect, became a Chilean desk officer...
...In Chile the word usually refers to an association of owners, or a professional association...
...The poor must be made to understand this...
...NEW OR PROJECTED INVESTMENTS Projected $300 million investment to exploit copper mine at El Abra...
...On March 30, the IDB announced a $22 million loan to Chile's Banco del Estado to help finance an "agricultural recovery plan designed to overcome present food shortages...
...And if that does not satisfy them, let me know - we'll shoot a few and you'll see how they obey...
...Chile was one of the first nations to receive a loan under this new IMF program...
...Total 12.0 53.9 34.6 17.2 1.5 1.0 0.8 0.6 26.4 Loans 9.2 51.0 31.9 14.3 0 0 0 0 25.0 Grants 2.8 2.9 2.7 2.9 1.5 1.0 0.8 0.6 1.4 "* P.L...
...Under Allende these State functions expanded and were re-directed to serve the interests of the poor and working class...
...Henry Kissinger who coordinates and leads the imperialist offensive against the peoples of Latin America who fight for liberation and socialism...
...clearly, though, it originates deep in the right-wing, and it winds around and through many people with CIA connections...
...Generally these measures have the effect of discouraging socially progressive programs...
...6 The junta is trying to channel political energies into a corporate-state structure, with representation based on organizations that can be controlled from above rather than in popular based political parties or unions...
...In January 1974, the Santiago bakers' association came out against the abolition of price controls on bread...
...The cost of cigarettes in June went up 115 percent...
...The pro-government Sociedad de Fomento Fabril (SOFOFA) predicts 500,000 jobless out of a total work force of three million by next year...
...The workers' struggle to create a socialist society had severely crippled the economic, social and ideological power of the bourgeoisie...
...Nothing now remains of this empty propaganda...
...Overseas Loans and Grants and Assistance from International Organizations: Obligations and Loan Authorizations, July 1, 1945-June 30, 1970, Chart, p. 39, reprinted in New Chile (NACLA, 1973), p. 48...
...He was the former chairman and manager of the Edwardsowned El Mercurio, Santiago's leading right wing daily...
...backers is the growth of resistance consciousness and actions within Chile...
...He is also a former Director of AID in Chile (1969-1971...
...there would be an economic Counterrevolution Naturally these decisions pleased leaders in the United States, who had groomed Chile's elites in the hopes they would move in such a direction...
...After the coup, the metropolitan centers acted quickly to bolster the junta and to reintegrate Chile into the capitalist fold...
...The IMF, the IDB, and the World Bank said they would provide loans...
...It also ordered 200 armored personnel carriers from the General Motors subsidiary in Argentina...
...these programs, as well as those aimed at the military, built a framework over the years for current U.S...
...They have the resources to survive the present slump caused by the abruptness of the economic Counterrevolution...
...By December and January, in Washington and Santiago, the outlines of this "Mini-Marshall Plan" sharpened...
...If the dictatorship is able to maintain "public order," to super-exploit the working class...
...it will go on our fight will go on in the land, in the factories, in the farms, in the streets the fight will go on, and then...
...today, faced with a liquidity crisis and global uncertainty, only mining will be a really attractive investment...
...Called the United Development Bank (Banco Unido de Fomento), ADELA purchased 10 percent of its voting stock with $500,000, while the Deutsche Sudamerikanische Bank invested another $250,000...
...extreme policies...
...The guarantee program ended in late 1971...
...The junta is counting on the international community to bail it out...
...and Western Europe...
...These investments are capitalintensive, require few Chilean workers, and contribute very little to the growth of the other sectors of the economy...
...The liberal democracy of the past, with its welfare-capitalism, its half-hearted nationalizations, its "import substitution" industrialization 2 - these would have to go...
...policy there, including Everett G. Martin of the Wall Street Journal...
...This sector also gained the most in the past from the import substitution policies of previous governments...
...2 5 No longer an expendable anachronism, the landed aristocracy is reasserting its privileges, and is a major beneficiary of the Counterrevolution...
...More generals are on active duty in Chile than in the United States.40 Under the banner of "free enterprise," inflation is allowed to run at a percentage point and a half a day...
...On grounds of legal technicalities, over 1,200 of these grants (that were supposedly "irrevocably" given to the people who worked the land) have been returned to their previous owners...
...He made sure that policy was made in the way he and the president wanted it...
...And movement are fighting a losing battle...
...N.W., Washington, D.C...
...Brazil sold commodities ranging from coffee and cotton to sugar cane, while in 1974 over 80 percent of Chile's export revenue will come from one export - copper...
...They hope through merger to compete with international capital and foreign imports...
...They hoped that the imported sets would cost 30 percent less than the national product...
...foreign investors...
...direct investments in Chile plummeted from $1 billion to approximately $100 million, as the UP and Chile's workers bought out, intervened, or took over most U.S...
...Embassy intelligence operatives turned over their files on the Chilean and foreign Left to the junta's military intelligence service (SIM), since its files had been partially destroyed in the coup...
...A.I.D., U.S...
...Walter Heitmann, the Ambassador in Washington - who were nurtured by Alliance for Progress programs, who studied in the United States and worked (Mira and Yankelovich) for U.S...
...and in August, a special loan of about $41.5 million (41,470,000 SDR's) to "assist [Chile] in meeting the impact on its balance of payments of increases in the costs of petroleum and petroleum products...
...To be consistent with its overall policy of less state control, the junta is trying to return the banks nationalized by Allende to the private sector...
...29 (June 8-14...
...The IMF's loans to Chile have not prevented it from criticizing the junta's economic programs...
...In this way, they hope to make Chile a model (like Brazil) for the raw materials producers of the world...
...In addition to the loans already granted, World Bank executives are currently discussing a large loan to a Development Bank authorized by the junta and destined to form part of a future Chilean capital market.'14 The International Monetary Fund While not a lending bank in the same sense as the IDB and the World Bank, the International Monetary Fund (IMF) has played an important role in the Chilean counterrevolution...
...Since the coup, the IDB has granted the junta two sizeable loans with several others in the planning stages...
...23-24...
...Later in an interview with El Mercurio, Harberger pronounced the junta's economic program a success: "I am really surprised that the country has been able to overcome so great an economic chaos in so short a time and at relatively little cost . . ." Harberger and others like him who taught at the Catholic University in the '50s and '60s appealed to a group of Chilean economists and engineers who needed an ideology for their conservative political beliefs...
...C.I.A...
...press - in its coverage of the Chile coup - "legitimated incipient fascism...
...newspapers revealing that Chile had purchased U.S...
...fabrication of paper down 12.7 percent...
...What accounts for this situation...
...His willingness to join the junta's government could signal the entrance of other Christian Democratic technocrats...
...Time, Nov...
...This Senate vote was attached to a broad resolution needed to extend beyond September 30 the spending authority for foreign aid programs for which regular money bills had not yet been passed on October 2. The resolution then went to a House-Senate Conference Committee, where conferees killed the Senate bans on weapons for both Turkey and Chile...
...and to help promote (through infrastructure projects and the like) the interests of U.S...
...This is very small considering CORA expropriated 125 farms a month in 1972 and that there are 55,000 families in the reformed sector...
...and its repression of Chile's working class...
...Operation Rescue repeats many of the mistakes of the 1960's when the U.S...
...perhaps through AIFLD - funded this trip...
...12-19...
...The creation of a uniform exchange rate (i.e...
...The Unidad Popular expanded construction and public works programs to provide the needed jobs for these people...
...The intelligence forces of the Chilean dictatorship which tracked down and killed Enriquez had been trained, funded and supplied by the government of the United States...
...2. By the late 1960s import substitution had failed the Chilean bourgeoisie...
...As the junta later pointed out through the censored editorial pages of El Mercurio (June 8, 1974), monetary reform begins through limiting the purchasing power of the community: Monetary reform consists in expropriating a part of the money in the possession of enterprises and persons...
...These expenditures paid for the purchase of a radio station for $25,000, and the provision of $9,000 to finance a trip by junta spokesmen to other Latin American cities to "reassure" them about the military takeover...
...With this announcement the junta broke totally with the model of development proposed by the reformist Christian Democrats who had reserved for the State a fundamental role in the country's economic growth...
...Agency for International Development, Program Presentation to Congress, FY 1975, p. 34...
...As an example of this, on September 24, 1973, an editorial in the San Francisco Chronicle debunked the "so-called" North American Congress on Latin America's accusations about CIA involvement in the coup...
...The Big Lie As mentioned above, the junta and its U.S...
...The right-wingers in the military demanded more and more arms in case of war with Peru...
...Headed by Henry T. Mudd of Los Angeles, Cyprus Mines has developed a knack for making huge profits in the midst of social strife...
...the military...
...beverage industries down 19.7 percent...
...Thus, the government no longer maintains control over prices and is "denationalizing" hundreds of state-owned businesses, including some which belonged to the State before 1970...
...Suddenly It's Maniana in Latin America," by Richard Armstrong, Fortune, August, 1974, p. 216...
...With the junta installed, the companies hoped for better treatment...
...Over 84 percent of Chilean export earnings from January to May 1974 came from the sale of copper ($878.8 million out of $1,042.0 million...
...They get on the buses and try to sell 20 buttons or five bandaids for 100 escudos, a plastic documents holder for 200, and even glossy pictures for 200 escudos...
...In the 1950's and 1960's, the large profits generated by the mine enabled the company to expand its activities around the world, from a silver-lead-zinc mine in the Yukon territory in Canada, to iron ore mines in Australia and Peru.28 Thus, Cyprus Mines Corporation comes to Chile well adept at profiting from social strife...
...El Mercurio...
...Worst of all, it had led directly to the victory of the Unidad Popular and the near Revolution of 1972-73...
...First, they face in Chile an organized Resistance that aims to wage war against the junta and its U.S...
...Luis Villena Arellano (graduate of Front Royal School...
...For more on the "Guatemala Lobby," see Susanne Jonas, op...
...Further, the situation changes rapidly, and it is often months before exact amounts are clarified...
...The junta began this process in January by announcing that all an original owner had to do to regain his company was to assume the debts accumulated from the Allende years...
...Still rich in copper sulfur ore, the mine proved to be a bonanza for the Mudd family...
...foreign policy structure are working with certain sectors of Chilean society to further U.S...
...Returning to Chile after the coup, Cauas first served in his old position as vice-president of the Central Bank before his appointment as Finance Minister in July 1974.12 Other economic advisors include Jaime Guzmfn, a Catholic University Professor, and member of the terrorist group "Patria y Libertad...
...Capitalism will thereby by reinvigorated by denationalization and privatization of sectors previously held by the state...
...General Motors, Volkswagen, DuPont, and a host of other multinational corporations will build large integrated industrial plants in Brazil, knowing that the internal market will absorb a large percentage of their output...
...The ASC's propaganda work for the junta (mainly justifying the junta's cause in its newsletter and in radio shows) reflects the intense interest of certain right-wing (mainly western) business groups in economic opportunities in Chile specifically and Latin America generally...
...aid situation is especially confusing, since Congress is currently discussing and changing the amounts requested for FY 1975.16 $760 million through a renegotiation of its debt...
...The economic and political foundations of the Counterrevolution may be fatally flawed, but through terror and repression it hopes to keep the Resistance from growing into a full scale revolutionary war...
...Extended large commercial credits to the junta...
...He often acted as Frei's intermediary for dealing with foreign businessmen, making numerous trips to the U.S...
...In response, the junta threatened to suspend copper shipments to the United Kingdom and is trying to buy used Hawker Hunters from the Royal Air Force of Lebanon...
...Business Latin America, July 31, 1974...
...Clearly, the coup in Chile and the recent appointment of hard-line ambassadors to Mexico (Joseph Jova) and Argentina (Robert C. Hill) represent one approach...
...The recent appointment of William D. Rogers as assistant secretary of state for inter-American affairs should also be seen in this light...
...Within Chile, this policy complements the needs of the group that has been restored to its old position of economic preeminence - the Chilean bourgeoisie.* Though the military proceeded to restore industries and lands to old, wealthy families such as the Edwards, the Yarurs, the Mattes and the Larrains, the bourgeoisie as a group faced tremendous problems in recreating a society that would once again respond to its exploitative interests...
...This is not to say the Chilean elites - military and civilian - who took over in Santiago are mere puppets who blindly follow orders from Washington or New York...
...4. Ibid...
...The oldest worker in the factory now automatically succeeds to "leadership" positions in the powerless unions...
...it is probable that more and more covert operations take place under "deep cover," because of the job involved - i.e., rounding up leftist leaders and assassinating them when necessary...
...Under the auspices of the Chilean gremios, or business associations (which played a key role in the overthrow of Allende), a bank is being formed in Chile which will provide long term loans for industrial and agricultural investment projects...
...Foreign businessmen remit higher profits abroad, and according to the U.N...
...In exchange for a cancellation of debts to Union Oil totalling $6.5 million, Diamond M granted Union Oil a large bloc of shares in the company...
...Other corporate ghosts of the past soon followed in Crown Cork's and Dow's footsteps, including General Motors, Phelps Dodge, Textron, General Electric, and the General Tire and Rubber Company...
...AID, U.S...
...The junta's press spokesman Alvaro Puga stated their case this way: "Before Allende the Christian Democrats paved the road for the Marxists because they began to talk of a dialogue with the Marxists...
...4. Richard Armstrong, "Suddenly its Maniana in Latin America," Fortune, August 1974, p. 140...
...New York), pp...
...In fact in some areas there has been a distinct decrease...
...Thus, U.S...
...When Raul Saez and Fernando Leniz came to the United States in late January and early February to present the junta's case for bilateral and multilateral financial assistance, the Council of the Americas provided them with a forum for meeting U.S...
...IT'S ONLY A PROBLEM OF MENTALITY...
...In addition to the need for direct investment by foreign companies, the junta also seeks loans from the United States' AID Program and from international lending agencies...
...5. For more on this point, see Foreign Affairs Division, Congressional Research Service, Library of Congress, The United States and the Multilateral Development Banks, prepared for the House Committee on Foreign Affairs, Washington, D.C.: GPO, March 1974...
...One source suggests that about 33 foreign companies returned after the coup...
...An "enclave economy," in which foreign investors create pockets of mining prosperity from which they suck out the country's mineral wealth while the rest of the economy stagnates, is already forming in Chile...
...5. "Chile: An Uphill Struggle to Revive Business," Business Week, November 17, 1973...
...s The Allende government never asked for a "standby loan" but did receive the following loans under its "compensatory drawing rights" (to offset the low export price of copper): in 1971, $42.9 million...
...At the same time, the junta's supporters in the United States tried to defuse the tremendous criticism leveled against U.S.Chile policy by the American public and certain Senators and Congresspeople...
...and No...
...The present minimum wage of 37,000 escudos a month (around $37.00) doesn't keep up with the rising prices...
...Ibid...
...pro-junta operations will be revealed...
...However, U.S...
...Noticias, National Foreign Trade Council (New York), July 10, 1974...
...In Chile, Operation Rescue is designed partly to mitigate the effects of the enclave economy...
...For February meeting, see statement released by the Council of the Americas, February 4, 1974...
...clearly, it will only back large infrastructure projects in Latin America which benefit regimes that are open to U.S...
...Under the agrarian reform law, 5600 farms were expropriated and given to workers, tenants, or peasants...
...9 At the same time, it hired the J. Walter Thompson advertising agency's subsidiary Dialog to do its public relations work...
...THE ECONOMIC COUNTERREVOLUTION 1. Bartolome Hernandez, El modelo economico de la Junta militar chilena, Documento no...
...Chile has seven and one-half years before it need begin repaying the loan, which was extended from the Fund for Special Operations for a term of thirty years at an interest rate of 2 percent per year...
...5 The junta continues to subsidize certain items that are still imported in large quantities (for example, one million tons of wheat in 1974...
...In the end, they voted forapproval or abstained, rather than take a stand on a losing issue.17 In April 1974, the IDB awarded Chile the largest IDB loan ever granted to Chile, a $75.3 million credit (at 8 percent per year) for construction of a hydroelectric plant in Antuco, 315 miles south of Santiago...
...3 8 The devastating effect of inflation can best be understood by looking at the cost of living - the price of basic goods...
...In fact, there have been three recent examples of attempts to organize such groups: representatives of 7 bauxiteproducing nations met in Guinea in March 1974 to form a producer group...
...2. U.S...
...Retook control of an intervened subsidiary called Electromat S.A...
...Nevertheless, Corrigan is clearly working in some capacity for the junta, even now...
...With their Chilean class allies in prominent positions, U.S...
...The work of progressive people around the world to keep back the aid hamstrings the junta while aiding the Resistance inside Chile...
...The job of revolutionaries and workers is to develop a stronger and stronger resistance that can deprive the dictatorship of their "public order" and stop them from succeeding in the super-exploitation of the worker...
...How successful will they be...
...From various Resistance sources including reprints in Boletin Informativo, op...
...However, there are contradictions facing U.S...
...The underdeveloped countries must obtain foreign capital on just terms in order to be able to take off economically...
...A.I.D...
...Another mining company experienced at operating in unsettled social conditions is also moving into Chile...
...8. This partial list of returned companies was gleaned from various newspapers from October to December, 1973...
...He drafted the generals' first decrees declaring the UP government "illegitimate," and then joined the commission charged with drawing up a new constitution for a corporate state...
...corporate community and the Chilean bourgeoisie...
...Popper will (a) coordinate the aid from the United States and the multilateral agencies, and (b) try to get Western European countries to grant credits to the junta...
...There is mourning in the MIR, but the MIR is not beaten...
...The workers and unemployed also suffer the most from the rampaging inflation, which is now totally out of control...
...In 1960-61, he received a U.S...
...From September 1973 to August 1974, inflation reached an official rate of 637.2 percent...
...Treasury Department renegotiated Chile's foreign debt on lenient terms, shortly after the junta agreed in principle to pay compensation to the companies...
...The tariff and import policies follow the broader strategy of reintegrating Chile into the capitalist world...
...4 In recent months, though, major U.S...
...Business Latin America, July 3, 1974: 22...
...Saez quoted in Que Pasa...
...He fell in combat, at the front of his organization, struggling for the unity of the forces of the left, for the defeat of the fascist tyranny and for the ideals of socialism...
...3 7 In this dispute, foreign capitalists are the only ones that can emerge as victors...
...Perhaps Guatemala after 1954 provided the blueprint for what happened in Chile in 1973-74...
...See also the interchange between him and Elizabeth Farnsworth in Foreign Policy, Fall, 1974...
...Latin American Economic Report, London, July 5, 1974, pp...
...This is especially crucial given the growing awareness of U.S...
...218,612,000 Spain...
...intelligence operatives work covertly in Chile to further U.S...
...Some day those who perpetrate the injustices and inflict the pain upon the Chilean people will face the consequences of their actions...
...government in cutting off Export-Import Bank (Eximbank) loans, guarantees, and insurance for Chile...
...During July and August, 1974, 6,000 units of housing under construction were halted, putting 9,000 wage-earners out of work...
...In the broad multinational strategy, Chile and other small Latin American economies are to produce mineral and agricultural surpluses, while heavy industrialization occurs only in countries like Argentina, Brazil and Mexico...
...On September 26, the U.S...
...Manufacturers Hanover Trust, which had been the largest single lender to Chile in 1970, led the way with a $20 million credit to the Central Bank of Chile...
...In the junta, in the ministries, in the media - everywhere the counterrevolutionary leaders were ideologically and objectively linked to the United States...
...Aside from the activievents show that even some trade union groupings tradi- ties described above, the C.I.A.'s propaganda activities on tinally closest to AIFLD can not stomach the junta's behalf of Chile's ruling class must be investigated further...
...One of the partners in Nixon's Los Angeles law firm, Henry Duque, sat on the National Strategy Committee of the ASC...
...By "illegally" the junta meant those companies in which the State intervened (because of pressure from the workers or to break up a monopoly, etc...
...The junta distorts the true rate of inflation by (1) using the black market price of goods before the coup and (2) eliminating certain basic staples from the nexus of prices...
...Although not having signed a formal contract with the junta, one Cyprus Mines official said in a telephone interview that "the only reason we are there is to fully exploit and develop anything we uncover...
...milk from 60 to 120 escudos a litre (a 100 percent rise...
...Historically, the bourgeoisie has always looked to foreign investors for assistance, especially in developing the mining and industrial sectors...
...ii33 V. THE FATAL FLAWS In Chile, the U.S...
...Finally, the peasants are not benefiting from the increase in food prices...
...and (2) once he was elected, to get rid of him...
...interests were progressively eliminated, as Bethlehem Steel was forced out and the Eximbank broke off its loan agreements with CAP...
...This list is not complete...
...Under Allende, the parties of the Popular Unity coalition had used the Chilean political system to further the interests of the workers and to threaten the privileged position of the upper class...
...bilateral aid, especially military aid, still plays an important role in U.S...
...and foreign economic interests...
...Thus, the needs and the imperatives guiding U.S...
...High stakes are involved in the divestiture of these companies, whose stock in most cases was owned by CORFO, the state development agency...
...For more36 on the December 1973 agreement, see Noticias, Weekly Digest of the Hemisphere Reports, National Foreign Trade Council, December 26, 1973...
...For more information on U.S...
...Noticias, Buenos Aires, May 18, 1974...
...investor in Chile...
...But although the junta is on the defensive internationally and losing support internally, the Chilean military and the bourgeoisie still maintain control of the state apparatus and all of the power which that implies...
...s13 In this depressed economy, the unskilled laborers, the rural migrants, and the shantytown squatters suffer the most...
...2 s Ever since the FY 1975 figures were announced, opponents of the junta battled to cut down or completely eliminate some of the programs, especially the military provisions...
...government, in an effort to buoy up Frei's so-called "Revolution in Liberty," gave more aid per capita to Chile than to any other country except Vietnam...
...97401...
...6. New York Times, August 17, 1970, p. 21...
...Saenz saw what effects the plan to open the door to foreign capital would have on the medium and small bourgeoisie...
...What are these interests...
...imperial system...
...cit., p. 48...
...and western European banks closed their doors to Chile, thereby cutting off much of the finance and trade that fed the bourgeoisie and capitalism in Chile...
...Another source added...
...Perhaps to help insure that copper-producing nations do not unite, Kissinger recently made Deane Hinton Ambassador to Zaire...
...See also, New York Times, November 12, 1973...
...Until that problem is solved, the question of Chile's credit-worthiness, which was attacked by the international banking community during the Allende regime, remains unanswered...
...4 7 Further, according to the Chilean Embassy in Washington, D.C., the State Department and the AFL-CIO arranged and funded a recent trip to the United States for "several Chilean labor leaders...
...Embassy until his transfer to Washington in June 1973.' Behind these men and others who worked with them, the business interests which had pushed for the U.S...
...The Peasants Soon after the coup, the junta promised peasants living in the agrarian reform sector legal titles to their lands...
...3 For the previous year (Sept...
...25 per year for profit-making and government organizations ($48 for two years...
...The Exim decision was a kingpin in the blockade, since it signaled to banks and governments around the world that Chile had been placed "beyond the pale...
...Both men urged Congress to approve the aid bill...
...The American Security Council (ASC), set up in 1955 to run security checks on prospective employees for member industries, is a key lobby and forum for what Newsweek magazine once called "the military Right" (December 4, 1961...
...is On February 23, Chile reached a basic agreement with its main creditors on renegotiating payments due to them in 1973 and 1974...
...But the junta is falling back on old solutions - i.e...
...By July the total reached 200...
...but these few are powerful...
...interests will be dealt with, as always, harshly...
...Prices One of the junta's first economic moves involved a radical change in Chile's pricing policies...
...and overseas training in "various professional areas for the three armed services...
...Air Products...
...The junta put off making economic decisions until mid-October when Saez returned from Venezuela...
...1 4 General Gustavo Leigh makes the point explicit: "The only thing we offer is work, work, work...
...Although forced to accept the irreversibility of expropriation, these companies, led by Kennecott, waged economic warfare against Chile when Allende declared that excessive profits would be subtracted from any compensation payments...
...The economic Counterrevolution is intent upon destroy- ing the organizations and leaders of the working class...
...RETURNING COMPANIES* Repossessed two plants worth $30 million...
...Over 10,000 of them have emigrated to Argentina...
...And today, the junta encounters problems in obtaining international assistance that the Frei government never faced...
...8 Whatever Happened to Dialog...
...According to sources who spoke recently with members of the U.S...
...furniture and accessories down 14...
...A clear example of this upper stratum of the industrial and financial bourgeoisie taking advantage of the Counterrevolution is the Edwards family...
...Figures are for Calendar year...
...By any standards, the amounts - especially from the Inter-American Development Bank - proved significant...
...Price controls were removed under the belief that the "laws of supply and demand" would level them at their true value...
...policy objectives...
...For more on AIFLD, see New Chile, op...
...Latin America in particular supplies the United States with many key minerals, as well as providing the third largest market in the world (after Canada and the European Common Market) for U.S...
...1 Overseeing the covert activities, as well as the U.S.sponsored credit blockade of Chile, was Henry Kissinger, then assistant to the president for National Security Affairs and head of the "Forty Committee" which is supposed to regulate the CIA's covert operations...
...All these men serve under the nominal direction of Admiral Jose Tiribio Merino Castro, the junta's formal spokesman on economic policy...
...2) threats to political stability were leftist in origin, justifying the repression...
...2. Seymour M. Hersh, "Kissinger Called Chile Strategist," New York Times, September 15, 1974...
...Meanwhile, the U.S...
...1 Presently, Cauas is a member of the American Economics Association...
...In fact, according to this report, the military even pro- posed attacking Peru, claiming that "surprise" would be an important tactic to utilize...
...These groups are defined by a person's special interests, his social organizations and his work...
...7. Chile: Informativo Internacional, Buenos Aires, date n.a...
...In February 1974, some representatives of campesino organizations were allowed to meet briefly with Secretary of Interior General Oscar Bonilla...
...government is the main support of a repressive government...
...Ambassador to Chile, served as ambassador to Cyprus from 1969 to 1973...
...Also, Arnold Harberger, professor of economics at the U. of Chicago, praises the junta's economic policies, as explained in Part II...
...After a similar stoppage on a Santiago subway construction site, a dozen more workers were executed...
...We urge all NACLA readers to express their solidarity with the Chilean people by joining in the struggle to free Carmen Castillo...
...Anxious to appease Peron and to stave off threatened nationalization of its Argentine branch, Citibank sent technicians to Chile to set up the finance company...
...In contrast, as mentioned earlier, over 1,200 farms have been returned to their previous owners, mostly by the military bypassing CORA...
...while the civilian economists, with their ties to the U.S...
...Two beneficiaries of the trips, Riordan Roett and Ernest Lefever, asked the Congress to overlook the "mistakes" made by the junta and grant speedy aid to Chile...
...But more important, the administration needs to show the private community that it can call the shots in terms of aid to Chile, that private investors can count on executive and congressional backing for their "faith" in the junta...
...Hot Spot That Produces Plenty of Cold Cash," Business Week, October 10, 1964, p. 102...
...The MIR militants sustained the fight against the security divisions of the four branches of the armed forces for over two hours...
...Two-thirds of the agrarian reform land (roughly 3,500 farms) was expropriated under Allende, a qumber that closely corresponds to the number of expropriations being challenged by former owners (3,000...
...3 7 To finance this inflation, the junta has pursued the expansionary monetary policies for which it criticized Allende...
...PART II...
...Prior to12 1970, with the banks concentrated in the hands of the bourgeoisie, credit was consistently denied the petit bourgeoisie...
...2) As a leader among Latin American nations, and as an important producer of raw materials (mainly copper), Chile receives special attention from U.S...
...The only companies remaining are those with lower production costs and those which can import raw materials in large quantities...
...The junta has taken a number of actions to lure foreign capital from the metropolitan centers...
...Second-class postage paid at New York, NY.4 economic growth...
...In Fortune Magazine a recent survey of foreign capital in Latin America explained why the southern hemisphere's mineral reserves lure foreign investors despite the possibility of expropriation: "Remarkable as it may seem to other businessmen, taking those lumps and coming back for more is part of the game for oil and mining men...
...The Counterrevolution not only restores to the industrial and financial bourgeoisie their old factories and industries, but in addition, wipes out the workers' material gains from fifty years of class struggle...
...NACLA, Yanqui Dollar, 1971...
...The middle commander levels and the lower officials have received salary increases, and conscripts have a minimum salary set, plus direct access to credit...
...Edgardo Enriquez, Miguel's brother and a MIR militant since its inception, issued the following statement after the death of his brother: My brother's death in combat, which has increased his political stature, is a message to the struggle and an example which will live on...
...Business Latin America (Dec...
...Chemico Deutsche Sudamerikanishce Bank Nippon Mining Co...
...This decision was arrived at when said authorities [of Chile] after consideration of the overall plans presented by the firm, decided that their realization was not feasible at the time...
...Later he worked in Chile as an economist for the Kennecott Corporation and taught economics at both the University of Chile and the Catholic University of Chile...
...and to justify this aid, a "Guatemala lobby" appeared...
...In the past, when low harvests would occur, the loan would not be paid off and the bank would merely keep a running account...
...Although the death of Enriquez is a cruel blow, the long, difficult struggle in Chile has just begun...
...coordinator of the Alliance for Progress and former deputy assistant administrator of AID, Rogers is a "Kennedy liberal" who supported the termination of the AID-sponsored Public Safety Program, which once funded the training of Latin American police officers...
...Henry T. Mudd sits on the board of directors of Union Oil, while Cyprus Mines and Union Oil also operate a subsidiary together called the Pima Mining Co...
...Encouraged by the U.S...
...13 In March the bank made "amendments" to former loans, which provided $1.6 million to the junta for a highway project and $6.7 million for a power project...
...The American Security Council has helped and been helped by Richard Nixon...
...5 So far, Kissinger and other policy makers have used both the "hard" and "soft" approach in dealing with the Latin American nations in this time of increased U.S...
...9 percent...
...counterrevolutionary operations while in the U.S...
...Confronted with the acceleration of the repression, NACLA reaffirms our support and solidarity with the United Chilean Resistance.3 THE NEEDS OF THE EMPIRE The U.S...
...foreign investors do not miss such a message...
...In addition to helping "pacify" workers inside Chile, CNT leaders travel around the world trying to whitewash the junta...
...Conscious of the critical role of foreign capital, after the coup the bourgeoisie realized that it must reopen the flow of capital from abroad if it were to survive and flourish...
...The Agricultural Bourgeoisie To bring about the "capitalist modernization of agriculture," the junta is returning land to former owners, in the belief that this will increase production...
...To do this, the junta is paying at least $300 million to the copper companies...
...Sources inside Chile report that U.S...
...After a work stoppage in the port of San Antonio, the protesting longshoremen watched their five elected union leaders shot...
...One U.S...
...Tad Szulc, Master Spy: the Strange Career of E. Howard Hunt (New York: Viking Press, 1974), p. 66...
...government, under the direction of Secretary of State Kissinger, wasted no time in helping launch the various rescue operations Chile's bourgeoisie needed...
...8. El Mercurio, July 14, 1974 (International Edition, July 15-21...
...And at a time when Third World nations are forming cartels to charge the United States dearly for its raw materials, the Chilean bourgeoisie is pleading with multinational corporations to open up new investments in its mineral-laden country...
...Our relations with them will become more important to us out of self-interest, quite apart from history or sentiment...
...companies...
...For the United States, either scenario would accomplish the necessary end: the overthrow of one of the few remaining governments with even the pretense of serving its people's needs...
...In early 1974, when the junta sought foreign loans for CAP, the Japanese responded first with a $40 million credit for equipment purchases...
...33-38...
...And President Ford - a militarist and an anti-communist like his predecessor - could be counted on to back the operation all the way...
...The banks hope that this argument will defuse the criticism of their obvious involvement in the U.S...
...Industrial and Financial Bourgeoisie The members of this sector of the bourgeoisie have historically remained flexible with their capital so that they could respond to changing conditions...
...ambassador to Brazil, and then as the representative of the Council of the Americas in Sao Paulo, Wyant worked closely with the CIA in Brazil...
...corporations entered Chilean industry in increasing numbers...
...Much of the glamor of the "social economy of the marketplace" stems from the relative success it enjoys in Brazil...
...For example, the Chilean beer industry, owned by the family, produces only for internal consumption...
...Such investments will ultimately serve to deepen Chile's dependency on imperialism...
...This sale, financed by the Commodity Credit Corporation, was the largest credit sale to Chile made up to that time under the USDA program...
...BEHIND THE SCENES Some Preliminary Observations on U.S...
...Only foreign industrial investment...
...AID TO THE JUNTA (Amounts Requested for FY 1975) Amount $20 million $ 1.35 million $37 million Description Loan to finance agricultural imports Grant technical assistance for the agricultural sector (training and studies) PL-480 (Title I and Title II), principally for wheat and corn $ 0.8 million Grant military assistance for U.S...
...2 1 The reopening of full Exim lending to Chile will help the junta not only because Exim loans are given on good terms (especially considering the current high interest rates in the regular capital market), but also because Exim guarantees and insurance will encourage private banks to grant more credits at better terms to the junta...
...and from U.S...
...and (3) the military intervened only after the situation became unbearable, somewhat against its will...
...Other agents operate through "deep cover" jobs - in corporations, in the media, in unions and in other positions from which they can gather information and influence events.40 Some of the operatives working out of the embassy in the pre-coup period have been moved to positions in Washington, D.C...
...In the United States, Kissinger was still calling the shots...
...Paul N. Rosenstein-Rodan, head of Boston University's Center of Latin American Development Studies, has been especially helpful...
...As the Left Revolutionary Movement (MIR) pointed out in an underground declaration from Santiago, "the military dictatorship was born in an unfavorable period...
...see also NICH, Chile Newsletter, available from Box 800, Berkeley, Ca...
...The junta uses the State of Siege to justify higher salaries for the military, so that as a whole military men do not feel the bite of inflation...
...According to the Chilean Embassy spokesman, the third member of the "Cuban connection," Lilian Ghiberga, is actually an "American widow of a Cuban who represents Latin American dissidents at the State Department...
...2 6 Diamond M may be setting the stage for a move by a better-known30 corporation - the Union Oil Company of California...
...According to one report, Allende revealed shortly before the coup that "one of the main elements in the anti- government blackmail used by the military was an alleged problem with Peru...
...in 1970, $7.6 million...
...There, foreign investors hauled out the raw materials and the agricultural produce, while the standard of living and the per capita food consumption of the population plummeted...
...2) an end to economic policies which favor only the very rich and foreign investors...
...The Presidency of Chile's largest bank, Banco de Chile, went to Manual Vinagre, a prominent member of the bourgeoisie...
...One textile producer with a monopoly on a particular fabric has raised prices to 40 times what it was before he reassumed control of the company.' 6 In April the junta announced its decision to return even those enterprises which the State had legally purchased...
...Few old owners wanted to do this due to the size of the debts and the lack of consumer9 THE WORST OF IT IS THAT NEITHER THE BUSINESSMAN NOR THE CONSUMER HAVE ADAPTED THEMSELVES TO THE NEW REALITY...
...1973), inflation was around 300 percent, which means that officially under the junta the inflation rate has more than doubled...
...Most important, the renegotiation told the private business community that Chile was again a member in good standing of the capitalist world...
...Because of the way AID presents its programs, exact figures are difficult...
...MAJOR CUSTOMERS FOR U.S...
...4. Washington Post, October 28, 1973...
...Foreign capitalists are playing an astute game in this regional dispute...
...The junta can pay that loan off over many years...
...Senate, Senate Foreign Relations Committee, Report on the Foreign Assistance ACt of 1974, p. 23...
...Chile is a country of approximately 10 million inhabitants, while Brazil contains 100 million people...
...As described above, the United States has greatly cut back on its bilateral aid program in favor of the multilateral banks...
...The foreign investors' demands are clear - alter the conditions imposed by the Andean Pact, or else foreign businessmen will hold back on new investments...
...Santiago Embassy, tfhe Eximbank recently approved in principle a $40 million loan for a copper and electrical expansion project at Las Ventanas...
...The more than two hundred major corporations belonging to the Council account for over 80 percent of U.S...
...Of the original group identified previously by NACLA, John B. Tipton...
...3 3 Passage of Law 208 provided additional insecurity for the peasants...
...and Frederick D. Purdy remain in Santiago...
...Many of these men worked in the government of Jorge Alessandri...
...3. Metals Week, November 28, 1973...
...Any protest is dealt with ruthlessly by the military and its new secret police (DINA...
...Walter J. Sedwitz, CIAP's Director, gave away more than he knew when he endorsed the plan saying that countries such as Indonesia, Brazil and others which have found themselves in similar situations have received the cooperation of the international financial community...
...and so he is overthrown by more bellicose officers...
...each needs the other as they attempt to stem the tide of class warfare and revolution.6 II...
...Repossessed a Chilean subsidiary called the American Screw (Chile) Co...
...This economic program demands a new political structure, since the philosophy would not survive if the old one (i.e., free elections and active political parties) re-emerged...
...As a specialist in "international organizations," Popper is well qualified for the job...
...In the late 1960's after the U.S...
...After providing the junta with a quick dose of short term commercial credits for trade purposes, the foreign capitalists are acting cautiously in making new investments...
...Washington Post, December 22, 1973...
...Worried about growing public criticism of its operations under repressive regimes, Falconbridge refuses to discuss its Chilean activities with anyone...
...Import duties have been reduced by between 10 and 20 percent...
...Confronted with reluctant owners, the junta was forced to offer shares of the enterprises on the market and even had to advertise them in El Mercurio...
...In May 1974, the junta returned to11 their former owners the forty huge agro-industry complexes which had become state farms under Allende.2 The confusing nature of the junta's agriculture policy, i.e...
...BLOOD MONEY U.S...
...Anti-aid forces included some strong senators (like Kennedy, Abourezk, and Church...
...Saenz, not a member of the bourgeoisie, had been used by them to stir up trouble for Allende...
...Further, many precedents existed for such a rescue operation...
...Joe Minerals and former head of W. R. Grace's Latin American operations put it in Fortune magazine: The U.S...
...Since then, the petit bourgeoisie has fought the junta's private banking policies, fearing a restriction of credit once the bourgeoisie regains control...
...and Canadian banks...
...recently revealed to a reporter that junta-ruled Chile counted the following among its most loyal friends in the United States: the American Security Council and the American Enterprise Institute...
...A recent study on the multilateral development banks prepared for the House Committee on Foreign Affairs leaves no doubt that the United States controls the IDB and the other multilateral Development Banks, when it states, For the most part the banks have channeled funds to countries in which the United States has strategic and diplomatic interests and have refrained from lending to countries with which the United States has investment disputes...
...Argentine/Chilean venture for $15 million to remodel oil refinery...
...The Renegotiation of the Foreign Debt The renegotiation of Chile's foreign debt also represented a form of aid to the junta...
...He personally chaired - for maybe as long as 10 or 12 weeks - a working staff group dealing with economic sanctions," one source told New York Times Reporter Seymour Hersh...
...in mid-June, 1974, one well-informed banking source estimated that short term lines of credit to Chile hover around $150 million, well below the $250-300 million that prevailed in 1970...
...Thus Union Oil, which is connected with the drilling activities of the Diamond M company, is also linked with the venture of Cyprus Mines...
...pilots in Vietnam...
...Thus, a source who visited the U.S...
...20036...
...THE JUNTA'S MAJOR BANKING CREDITORS Junta's largest short term commercial creditor - $75 million in June 1974...
...Thus, in meetings in Mexico and Atlanta, Kissinger and the Latin American foreign ministers have met to discuss such thorny issues as the Panama Canal and Cuba...
...The junta's "democracy" has no room for "communitarianists" or their economic policies...
...in the first days of October it sent letters to the Chilean embassy in Washington and to the junta's Minister of Foreign Relations inquiring about its intervened subsidiaries in Chile.' At the same time, Dow sent a technical team to Chile to assess the state of its two Chilean plants and to prepare for its eventual return...
...There is going to be a period of most severe belt-tightening...
...Actually, the so-called "multilateral" banks are controlled by the United States, which uses them to further two basic U.S...
...aid strategy for the past several years...
...To overcome the reluctance of international capital, the bourgeoisie must provide exceptionally attractive terms for foreign investors...
...Though our 'gorilas' [the junta] do not understand it themselves, their government was an international miscarriage...
...for the most part the plan agreed to during the CIAP meetings was adhered to...
...interests dominated the scene through Eximbank financing of the Chilean Steel Company (CAP) and through Bethlehem Steel's iron ore mining...
...In the late 60s a series of special reports, leading up to the Peterson Commission Report in the spring of 1970, recommended that the United States pass more of its foreign assistance to underdeveloped countries through the multilateral banks (like the World Bank and the Inter-American Development Bank - IDB) in order to defuse the criticism that U.S...
...CLASS ALLIES AT WORK Over the decades, close ties have been forged between certain members of the U.S...
...Few senators or representatives took the junta's case to their colleagues in Congress...
...Boletin Informativo, No...
...Chile Monitor, London, March 1974...
...Made lo