The ITT Memos
INTER-OFFICE MEMORANDUM ITT WASHINGTON OF F ICE 1707 L STREET, N.W. WASHINGTON, D.C. 20036 DATE: September 14, 1970 TO: Mr. W.R. Merriam FROM: J.D. Neal SUBJECT: Chile-White House; State...
...equipment to Russian!?- 15 - U.S...
...2. The view among another sector that U.S...
...the program is under review...
...Jerez stated bluntly that Mercurio and A. Edwards were committing suicide with their attitude...
...He estimates the amount to be $30,000,000...
...In his hands, Chile's future seems plain...
...Kissinger's officer and talked with "Pete" Vaky, who is the State Department's Latin American adviser to Kissinger...
...Ptclrk...
...Geneen's concern is not one of "after the barn door has been locked," but that all along we have feared the Allende victory and have been trying unsuccessfully to get other American companies aroused over the fate of their investments, and join us in pre-election efforts...
...The chance of a coup diminishes with each passing day, but some civilian and military personnel continue to look toward former Brigadier General Roberto Viaux to lead a military action against lame duck President Eduardo Frei before November 4, putting the armed forces in power and thus preventing Allende from taking office...
...Merriam-This should be tightly held...
...Gerrity FROM: H. Hendrix, R. Berrellez SUBJECT: Chile W.R...
...We see, on balance, at this time no reason for anyone to be optimistic...
...military establishment...
...Ambassador Korry wished to know whether Mr...
...This is respectfully submitted...
...Although Viaux has some following after his abortive rebellion a few months ago, it is doubted if he commands strength enough now to carry it off alone...
...Today I had lunch with our contact at the McLean agency, and I summarize for you the results of our conversation...
...We are convinced the present moment is a most expedient time to reappraise and strengthen U.S...
...This will involve about 50 families for a period of a month to six weeks, maybe two months...
...These are expected to serve as cadres for "committees" in defense of the new regime in the same manner that General Alberto Bayo organized "Committees for the Defense of the Cuban Revolution" in 1959...
...He added: "If reactionary violence comes, we will respond with revolutionary violence...
...3 as Chile's President (until 1976) without incident...
...FROM: W.R...
...Neal SUBJECT: Chile The excellent Chile report of September 17 to Mr...
...Far more likely is the comment of a Chilean citizen: "El Mercurio is like a candle in a bottle...
...In many respects he bears a strong resumblance to Peter Jones, which I guess accounted for their former close personal relationship...
...Freedom is dying in Chile and what it means to Latin America, and to us-to free men everywhere-is not pleasant to contemplate...
...5. UIrge the key European press, through our contacts there, to get the story of what disaster could fall on Chile if Allende & Co...
...Matte did not mention money or any other needs...
...HE REPORTED THAT PRESSURE IS BUILDING ON THE SCENE...
...President Eduardo Frei wants to stop Allende and has said so to intimates...
...government), are manuevering-now rather efficiently-to cap- ture the congressional vote and set the stage for a new national election...
...The Ambassador intimated he plans a hard line with Allende in respect to complying with obligations...
...Tuesday, a retired army major, Arturo Marshall, was arrested and described as a leader of a right-wing terrorist group...
...In order to fortiy their hold, the communists will have to start tampering with the con- gress, the trade unions and the military...
...3. Assist in support of a "family relocation" center in Mendoza or Baires for wives and children of key persons involved in the fight...
...To follow up on the vote last weekend, which ordered the hierarchy of the Christian Democrats to work out the wording of a constitutional amendment which Allende would subscribe to and which would limit him in some of his far-out ideas, various small committees of three have been appointed...
...He has referred to it in recent public statements...
...This revolt collapsed quickly...
...It also is obvious from Allende's pronouncements that existing businesses and fin- ancial links with the U.S...
...4. Most alarming of these signs is the presence in Santiago of Cuban political police personnel, trained in Moscow, and headed by Luis Fernandez Ona, described as one of their best agents...
...J. The military has contingency plans ready for whatever scope operation is necessary, Matte said...
...Korry agreed with me that it was good to have Herrera out of the bank and that he should be replaced by someone who will tighten the bank's administration...
...As part of the persuasion to delay, Viaux was given oral assurances he would receive material assistance and support from the U.S...
...He reportedly made it clear to all visitors that he intended to move as rapidly as possible with his industrial nationalization plans, legally with the aid of a Congress he will be able to control...
...Awaiting Senate floor action is an Inter-American Bank appropriation amounting to $2.9 billion...
...They continued the hearing by saying the liberal U.S...
...Student militants have taken over all the non-leftist newspapers in Bolivia and are running them by Marxist cooperatives...
...He seems to have little or no regard for Tomic and believes his secret deal to support Allende in a congressional run-off has hurt him...
...Thus, some degree of bloodshed seems inevitable...
...Merriam: Thank you very much for your letter of October 23 and the enclosed paper on United States policy toward Latin America...
...We are not hopeful and believe the best pressures must come from other Latin American countries...
...However, because of our weak policy in the Hemisphere during the past two years, we cannot count on such immediate and effective action...
...On that basis it is said that a Marxist has for the first time anywhere been freely elected in a democracy...
...PERSONAL & CONFIne...
...There's an active black market with the escudo moving at a 29 to 1.00 U.S...
...11 w I(ahintmn P.ut...
...A likely immediate target is Allende himself...
...Another comment by State is that the failure of the Chileans, themselves, to react strongly against Allende is making it difficult for outsiders like the U.S...
...Following is our idea of a white paper to be presented to Assistant Secretary Meyer...
...He feels Allende will quickly need equipment for the military...
...McCone FROM: W.R...
...8. It was almost inevitable that because of his Kennedy back- ground Korry would hit it off well with the Christian Democrats and Frei...
...would be strangled...
...This may well turn out to be the Achilles heel for the Allende crowd...
...I've not had a chance to verify this personally...
...don't rock the boat...
...If so, do you think there is any possibility of trying to get them stirred up...
...representatives in the international banks to vote against or abstain from voting on Chilean loans...
...John A. McCone 612 Flower Street Los Angeles, California 90017 Dear John: Attached is a summary of the situation we discussed at length last week...
...This obviously poses a serious threat to the national security of the U.S.-Sol Lino- witz, Senator Church and others of the same thought notwith- standing-and several Latin American nations...
...Chuck" said he could understand Mr...
...UJp until I left they were under orders not to move anything out of Chile...
...In recent days, however, police and army squads have been picking up extreme right-wing terrorists...
...INTER-OFF ICE MEMORANDUM ITT WASHINGTON OFFICE 1707 L STREET, N.W...
...In mid-morning, General Carlos Prat, chief of staff, was named interim commander in chief...
...The editorial is in The Washington Post of Sept...
...He received about 36 per cent of the vote and thus the election was thrown into the Congress...
...GERRITY, ITTW CC: F.J...
...Merriam t l t. At Ned Gerrity's suggestion I am attaching a summafrf4Ireport which we recently received from our people in Latin America...
...There's only a thin tendril of hope of an upset based on a sharp and unlikely switch in voting sentiments among the Christian Democrats who hold the balance of power in the run-off...
...This is a complaint heard throughout Latin America in our embassies...
...3. Although its chances of success are slender, a roadblock to Allende's assumption of power through an economic collapse should not be dismissed...
...This is based on information from various sources, including the personal observations of Hal Hendrix and Bob Berrellez of my staff who were recently on the scene...
...Repeated calls to firms such as GM, Ford, and banks in California and New York have drawn no offers of help...
...It is assumed in Santiago that Chiltelco probably would fall in item No...
...I told Mr...
...The company management is ignoring the workers demands...
...But so far he has not won any pledges of support from officers who command troops...
...I admitted we understand the difficulty of the U.S...
...A more realistic hope among those who want to block Allende is that a swiftly deteriorating economy (bank runs, factory bank- ruptcies...
...Business conditions are worsening steadily throughout Chile, unemployment is rising, and the flight of capital is continuing...
...During the last two and one-half years at State, as for his great personal charm, elegance and wit on social occasions, he ranks very high as the weakest Assistant Secretary in recent times-at least during my 22 years of association with the area...
...The next two weeks will be decisive in this respect...
...pressure points with Allende include our source of development fund, market for Chile's products, our world prestige, etc...
...taxpayers can- not, and U.S...
...His party propaganda paints him a man of the masses, but his tastes are refined and capitalistic: he owns a beautiful summer beach home, a yacht, and a full wardrobe of stylish suits...
...Thus, when the Bay of Pigs invasion came in April, 1961, the committees were ready to finger-an imprison-anyone suspected of disloyalty...
...The State Department says it is swamped with rumors and facts...
...Gregorio had come from Santiago and his message to Hobbing from Alessandri was-keep cool, don't rock the boat, we are making progress...
...Geneen's recent visit with him...
...Actually, he was busy on the dismantling of a U.S...
...5. Allende does not have the large personal following that President Frei once enjoyed and thus has no real power base from which to move independently as he hopes...
...Geneen had any ideas about U.S...
...We can expect some swift and ruthless seizures...
...Assistant Secretary of State Meyer leaves tomorrow for a week in Haiti and Santo Domingo (while Santiago burns...
...7. Some Chilean business men have suggested we try to deal in - 12 - some manner with Allende, in an effort to rescue at least a portion of our investment instead of losing it all...
...This is the first heartening thing I have heard because with few exceptions, Nixon has paid very little attention to Latin America...
...Meyer has not done a good job...
...Tomic already has pledged his support to Allende...
...Thus, organized labor-mostly Communist controlled-is pressuring now for wage and benefit improvements through wildcat strikes...
...It also is significant that in spite of all the gossip and specul- ation about Viaux, no action has been taken against him...
...However, he suggests that we be very discreet in handling Broe...
...Salvador Allende from a highly reliable but confidential source...
...And El Mercurio, usually appearing in 64-page editions in the springtime season, is now printing 10to 20-page editions...
...Gerrity from Hal Hendrix and R. Berrellez is in such depth there is little to add with reference to my call at the State Department on September 16...
...At the outset it was obvious to me that Korry was (and still is) one of the die-hard New Frontier types from the Kennedy ad- ministration...
...7. Originally a Kennedy appointee (he had made his mark as a correspondent in Europe), Korry also impressed Nixon who promised him a job if he ever became president...
...loan policy is justified because they were putting the money in there to fight Marxism...
...Felipe Herrera The Ambassador said he had a long talk with Herrera when he was in Santiago recently...
...As part of the overall action, we should ask our friends in Congress to warn the Administration that continued mistreatment of UJ.S...
...Take administrative measures if necessary...
...Three years ago Allende told an American observer: "The I nited States is in trouble, everywhere...
...Attached is an in-depth report...
...It must be noted that friends of Viaux subsequently reported Viaux was inclined to be a bit skeptical about only oral assurances...
...These workers are demanding 51 percent increase in wages and benefits and have ignored Allende's appeals to return to work...
...Unemployment is rising rapidly, especially in the construction sector...
...One of the shots reportedly struck him in the neck...
...2. COMPANIES SHOULD DRAG THEIR FEET IN SENDING MONEY, IN MAKING DELIVERIES, IN SHIPPING SPARE PARTS, ETC...
...As far as we can determine, Prat will display the same loyalty to Frei as Schneider did in the past...
...He was and is an extremely clever writer and phrase-maker...
...Allende has already moved to take over communications-the press, radio, TV-in Chile-in emulation of his friend Fidel Castro, of the Chinese Reds, and of the so-called proletarian dictatorships everywhere...
...Then, he turned right around and told the military chiefs that he was totally against a coup...
...ITT has given serious consideration to circumstances now facing Hemisphere development...
...Merriam, as well as with Mr...
...He said he could understand Mr...
...Freedom is already dying in Chile...
...They agree he must be stopped...
...The position will have to be taken soon because on the November inauguration of Allende, President Nixon must send a message of congratulation or the world will know of the rebuff...
...policy...
...20036 DATE: September 21, 1970 TO: Mr...
...There were rumors that air line flights were cancelled, but Berrellez says that all international carriers are operating...
...Aid Stopped Ambassador Korry said he has reduced the amount of U.S...
...Geneen for his interest and that he will pass all of this on to Mr...
...This action against IJ.S...
...For instance: he told some of his Ministers he would be quite willing to be removed by a military coup...
...E.J.Gerrity: Believe this is more than perfunctory...
...The Ambassador became a hard liner (economic reprisals, etc., against Chile) after Allende registered a plurality in the Sept...
...The government, as you know, now owns 51 percent of Anaconda...
...ITT LATIN AMERICA INC...
...The following passages are from an undated memo which is otherwise the same as this one-NACLA) The State Department says one factor which has paved the way for Allende is the failure of President Frei to take a strong position against Dr...
...The conclusions from the session were: The leader we thought was missing is right there in the saddle (Frei), but he won't move unless he is provided with a constitutional threat...
...An extreme rightist faction launched a series of terrorist acts Sunday, September 27 (bombings mostly), in what appeared to be an amateurish attempt to provoke the Castroite-Marxist sector into a violent backlash that would produce the conditions conducive to a military intervention...
...This would be a form of extreme provocation since it would hint at the makings of a coup...
...THE IDEA PRESENTED, AND WITH WHICH I DO NOT NECESSARILY AGREE, IS TO APPLY ECONOMIC PRESSURE...
...We have recommended, apart from direct assistance, the following: 1. We and other U.S...
...AREA HEADQUARTERS BUENOS AIRES-ARGENTINA DATE: November 13, 1970 TO: H. Hendrix FROM: R. Berrillez SUBJECT: Ed Korry 1. There are deep doubts among diplomats and U.S...
...and his own camp...
...According to my source, we must continue to keep the pressure on business...
...It was subsequently learned that Frei saw and-9approved the text of the announcement before it was released to the public...
...GENEEN FROM: E.J...
...Why can't the fight be continued now that the battle is in the homestretch and the enemy is more clearly identifiable...
...In retrospect Meyer may, of course, be the victim of the new Latin area strait jacket called the "low profile of the U.S...
...Russia With respect to Russia, Korry discounts the part the Russians have played in Allende's election...
...The attached clippings, together with an editorial from the Washington Post of yesterday, and Ralph Dungan's stupid piece this morning of the Post, should serve as background...
...Perkins and Mr...
...I said if we won't furnish that then the Russians will...
...Finally, we must continue to appraise our total position in Latin America-and this should be an assigned chore for a definite group...
...They say that "Washington must do nothing in terms of economic or politicalreprisal that will force him to turn toward the extreme left...
...The Ambassador thinks not...
...2. Korry estranged himself from the State Department over the Chilean issue and was dealing directly with Nixon on policy and strategy...
...Thus ended the interview...
...BILL MERRIAM REVIEWED THE ACTIONS BEING TAKEN TODAY WITH THE MAN YOU INTRODUCED TO HIM SOME MONTHS AGO...
...However, there are a few points of interest...
...In one of his most revealing press interviews, President Allende told Julio Scherer, a highly respected Mexican journalist (Excelsior of Mexico City) last Nov...
...Things are brewing on the Chile matterand will be back to you later on that subject...
...Meyer and Mr...
...Gerrity, Jr...
...State Department-Asst...
...Viaux has considerable popular following in the lower ranks of the armed forces and some support among officers...
...WASH I NGTON, D.C...
...I could not determine the results of this confrontation or its basic purpose...
...I WAS TOLD THAT OF ALL THE COM- PANIES INVOLVED OURS ALONE HAD BEEN RESPONSIVE AND UNDERSTOOD THE PROBLEM...
...Guilfoyle and Mr...
...We inferred from this that Frei will not act on this unless he in confronted with a severe national crisis...
...Apparently no one at any of the plants checked into the credentials of the group to determine if it was an authentic delegation or merely a self-appointed team trying to impress (and possibly even intimidate) management and employes...
...Our Havana files are not available, but a flashback to the year 1959 brings memories of highly similar remarks by Castro when, like Allende, he was impressing almost everyone within earshot of his moderate political views while his brother Raul and Che Guevara worked quietly behind the scenes for the mousetrap job that followed...
...once he was certain he had at least 25 of the party's votes in his pocket to assure his election...
...We have had problems with Argentina, but never formally with its Ambassadors...
...The message gave him maximum authority to do all possible-short of Dominican Republic-type action-to keep Allende from tak- ing power...
...Allende has paid three extended visits to Red China, has sent his wife and daughter there as well, and has arranged China visits for Chilean newsmen...
...Meyer's public statements in Latin America all seem to be flavored with apology, which certainly doesn't reflect U.S...
...It will not be necessary for him to initiate new legislation because he will already have sufficient authorization to carry out most of his socialistic program...
...I would appreciate your comments...
...The message also carried a personal endorsement of Allende, thus virtually assuring that Alessandri's backers will throw their votes to Allende in a show of national unity...
...We cannot verify that he was actually touting him, but at least two months before the voting he reportedly told friends Tomic would win...
...9. His successor, General Carlos Prats, is described as a poli- tical moderate, a professional wholl brook no outside tampering with the armed forces...
...It did not indicate what the session would deal with...
...5. Looming ominously over the successful application of the "Alessandri Formula" is the threat of an explosion of violence and civil war if Allende loses the congressional vote...
...policy in Latin America...
...The assassination attempt occurred as the general was leaving his home to go to his office...
...This would absolve him from any involvement in a coup that would, in turn, upset Allende...
...This is in direct contrast to what Broe recommended...
...Corps of Engineers...
...We know that the army has been assured full material and financial assis- tance by the U.S...
...20036 DATE: October 7, 1970 TO: Mr...
...WE CAN CONTACT KEY COMPANIES FOR THEIR REACTIONS AND MAKE SUGGESTIONS IN THE HOPE THAT THEY MIGHT COOPERATE...
...Previously, he was a Sears Roebuck executive in Latin America...
...Everyone agrees the job will have to be done on a coordinated basis...
...There are about 20 people that the Matte and Edwards groups were supporting and we should make certain they are revived...
...1. A grim development that may greatly strengthen Allende's and the Communist position was the assassination of Gen...
...Also, there is a much larger amount for which Chile has been given letters of credit, but he didn't say how much...
...He is still very, very pessimistic about defeating Allende when the congressional vote takes place on October 24...
...However, the armed forces leadership and Frei prefer a constitutional way out (i.e., congressional election of Alessandri) that doesn't preclude violence-spontaneous or provoked...
...GERRITY ENDOFMESSAGE -W%%FwAAL- 11 - PERSONAL & CONFIDENTIAL DATE: September 23, 1970 TO: Mr...
...Berrellez, Mr...
...The thinking is that if the Schneider shooting was not really the pre- lude to the coup, it was a skillful maneuver to eliminate from the top the one man who would have permitted Allende to infiltrate and neutralize the military.- 20 - PERSONAL & CONFIDENTIAL INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: October 29, 1970 TO: Mr...
...And we can expect the same kind of repression of the human spirit which the doctrinaire Marxist always imposes-a repression sometimes cynically enforced with raw power plays, sometimes with bumbling bureaucratic idealism...
...Also, we have heard rumors of moves by the Chilean military...
...it was Meyer's mission to restore the company's presence...
...He certainly has not fought for his area or his section in the manner of some of his predecessors, notably Tom Mann, Henry Holland, or even Jack Vaughn in his short sit in the slippery Assistant Secretary chair...
...No Communist government of an important nation, once installed, has ever been thrown out...
...There is little reason to believe their mood has changed...
...Korry that Mr...
...4. Bring what pressure we can on IJSIS in Washington to instruct the Santiago USIS to start moving the Mercurio editorials around Latin America and into Europe...
...Sears had been knocked out of business during the 1948 Bogota riots, and, in ef- fect...
...Meanwhile, Allende and his representatives have been ardently romancing the armed forces at various levels and have continued to infiltrate the lower ranks...
...Efforts are also continuing to provoke the extreme left in a violent reaction that would produce the climate requiring military intervention...
...He says Prewett column exaggerated...
...Merriam In a conversation with Ned this morning, he feels it's about time to move on getting someone to do something about Chile on the floor of the House and-or Senate...
...Thus, it is easy to understand why there is a problem in getting the military to take action...
...By the same token, last week when an emissary of Allende called at his office to pay respects and say that the "Allende government.vanted to have good relations with the Ambassador and the United States," Korry responded only that he had been "so busy with consulate affairs helping to get visas for Chileans wanting to leave the country that he had not had time to think of the future...
...c) If Chile finds itself isolated and blockaded as did Cuba, "there then is no alternative but armed insurrection...
...The Technical University students announced plans to stage street demonstrations this afternoon in support of "institutionality...
...Vrm- l ' A I % I AA I I I -ur r I lI...
...Some believe that if Allende turns them down, the P.D.C...
...There were no other guests except the local Sheraton management executives and B. Holmes...
...Although he was close to Frei, Korry apparently did not get along at all with Foreign Minister Gabriel Valdez...
...that their pay will be increased, etc...
...Purpose of the post-midnight session was to blackmail Mercurio into stopping its anti-Communist campaign...
...Geneen FROM: E.J...
...The Communist Party forms a part of the lUnidad Popular coalition...
...His only message is that everyone should keep the pressure on because Allende should not take office with "complete support" and also for the weakening we might accomplish after he does take office-"there is always a chance something might happen later...
...Kissinger Mr...
...Hard Line The Ambassador said that if Allende starts to expropriate American businesses, the U.S...
...They are the only remaining outspoken anti-Communist voice in Chile and under severe pressure, espec- ially in Santiago...
...Without help from Washington, Allende will be forced to turn to the communists and Moscow...
...A parley of his highly inflated ego and a chance to occupy the presidency six more years may provide the necessary starch for his decision...
...Gerrity, Jr...
...Geneen would be at the Cape or in Maine, but that maybe he could call the Ambassador early next week...
...He plannnd to expropriate the newspapers and destroy what they stand for...
...Since the Chilean elections much of the world press has been expressing fond hopes that Chile will develop its "own brand" of Communism, somehow more democratic and benign, with guaranteed freedoms and minimal disruption of business, social, and cultural life...
...For one thing, he is not in robust health...
...Also, the Bank of America had agreed to close its doors in Santiago but each day keeps postponing the inevitable...
...All roads leading out of Santiago have been blocked...
...4. "Maintain good relations with the military until you've had time to consolidate your popular support...
...4 elections while State chose to play it indifferently...
...Neal SUBJECT: Chile-A Questionable U.S...
...The State Department says one factor which has paved the way for Allende is the failure of President Frei to take a strong position against Dr...
...They are pressing hard on all fronts to consolidate his slim September 4 election plurality into a solid victory in the congressional vote...
...In the years 1964-1967 we gave Chile $658.4 million for AID projects...
...Thus, future announcements of deals and arrangements with Allende should not be surprising...
...Cash is in short supply...
...3. Two unspecified "attractive" interests...
...He said "this is a Chile problem" and they have done a good job in "screwing-up their own dessert...
...advisers believe the army and national police have the capability...
...aid "already in the pipe-line" as much as possible...
...8. Ambassador Korry, before getting a go-signal from Foggy Bottom...
...news media and became a sort of male Martha Mitchell in off-the-record briefings...
...Frei did just that...
...pE.RS0tL & coNFDENIIAL (We did not receive the first page of this document-NA CLA) Mr...
...B. Alessandri did publicly announce his plans to resign if elected last week...
...6. Thus the communists can and probably will take the mea- sures necessary to shape Allende to their liking...
...Every care should be exercised to insure that we are not-repeat notidentified openly with any anti-Allende move...
...He lacks Cas- tro's charisma and in a crunch could not-as Fidel can-bring the crowds out into the street for massive demonstrations of sup- port...
...20036 DATE: September 30, 1970 TO: Mr...
...He was rushed to a hospital and underwent immediate surgery...
...PERSONAL & CONFIDENTIAL THE WHITE HOUSE WASHINGTON November 9, 1970 Dear Mr...
...I repeated to him the same run-down I gave "Pete" Vaky...
...His contacts with the press are extremely limited as a result...
...In the meantime, Allende continues to hold meetings with small groups of Army, Navy and Air Force people promising them, personally, that he will see to it that they are promoted...
...C. Frei and'his party (at least that wing that he commands) have a deep interest in this for two reasons: it would block the assumption of power by a Marxist and also give the Christian Democrats a new chance to regain power, this time backed by the Alessandri camp...
...If we want two-of-a-kind in the house, that's probably what we would get...
...He has never let up on Frei, to the point of telling him to "put his pants on...
...GERRITY PERSONAL & CONFIDENTIAl...
...The capital is in a bad state of depression, the general public seemingly resigned to the fact that Allende has won and that the next order of business is to determine how to survive and live with a Marxist government...
...Allende to Proceed Slowly The Ambassador believes Allende, upon taking office, will proceed cautiously and slowly...
...He has suffered a heart attack, and two minor strokes that left the right side of his face partly paralyzed...
...He also has a habit, I learned, of saying one thing to one person and a different story to his next visitor...
...won only a bit more than one- third of the total national vote, it is strongly believed that in a two-man race and "democracy vs...
...It will be staffed by a skeleton force of 225 employees...
...Emissaries pointed out to him that if he moved prematurely and lost, his defeat would be tantamount to a "Bay of Pigs in Chile...
...The State Department and AID admitted in public congressional hearings that, "Chile is a country of major U.S...
...About 50 newsmen, including a handful of visiting foreign correspondents, were invited for a walk-through tour of the hotel and treated to a cocktail party afterward...
...7. Fernandez Ona arrived ostensibly on a romantic mission...
...Beatriz is said to have been the bearer of an alleged special message from Fidel Castro urging Allende to (a) keep copper in the dollar market (b) don't fall into the Soviet clutches, and ad infinitum...
...Worldcom and Chiltelco, the spokesman said, suffered from the same malady: poor administration and outdated equipment...
...3. Since Allende and the U.P...
...3. "Direct all copper sales to the dollar market...
...wth about 14 years residence in Bogota, Colombia, where he performed as an outstanding merchandiser in the Sears Roebuck joint effort program in Latin America...
...He has only secondary or tertiary relations with the President, for example, who from the beginning has relied on his National Security Council team, Henry Kissinger, and Latin American specialist Viron Vaky for top guidance on the Latin area...
...Vaky said there has been "lots of thinking" about the Chile situation and that it is a "real tough one" for the U.S...
...The lack of strong political activity on the part of Chile has hampered outsiders like the U.S...
...It is interesting to note that the persons appointed to serve on these committees are very favorable to Allende although technically Christian Democrats...
...Diplomats could not escape seeing the press barrage...
...In real life he doesn't look nearly so young and attractive as in those recent photographs appearing in The New York Times and the world press...
...Geneen is willing to come to Washington to discuss ITT's interest and that we are prepared to assist financially in sums up to seven figures...
...All of us went over in great detail possible repercussions in Chile if and when it becomes known that we are pushing the State Deaprtment along certain lines...
...Vaky to tell Mr...
...Allende obviously must be aware of this sort of plotting since his Unidad Popular has penetrated nearly everything in Chile...
...For the past several years the State Department has been predicting an upsurge of Marxism in Chile, and foresaw the culmination of the threat in the September, 1970, election...
...INTERNATIONAL TE LE PHO~ B TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: October 22, 1970 TO: E.J...
...The elimination of General Rene Schneider from a key command post (chief of the armed forces) makes Allende and the com- munists even more vulnerable than before...
...5. A group of respected political and business leaders called on Frei Sunday to call his attention to these lapses...
...5. A weekly newspaper, PEC, recently published a detailed account of the clandestine movement of the leftwing extrements in Chile...
...This would, in effect, neutralize the Armed Forces which so far have displayed nothing but passivity amid the approaching storm...
...I feel fairly certain from some of his past comments that he is trolling for a position with ITT when he gets bounced by State...
...taxpayers' funds to international banks...
...The Communist virus will certainly not be confined to Chile...
...We will be advised what help we can contribute as present activities develop between now and early October...
...I did not know Korry until he showed up in Chile and I was working for Scripps- Howard...
...I also believe it would be better for us if he returned to Sears Roebuck...
...He has not clearly defined a manner of compensation in his plans to nationalize the basic mining, banking, communications, both national and foreign, enterprises in Chile...
...The United States has poured money into Chile since 1964, when the relatively moderate Eduardo Frei won the election despite financial assistance from Havana for Allende...
...Whatever it was, it was clear he did not need to attend to it personally and the snub was all too apparent...
...As one good friend, who has worked closely with him, put it to me recently, "Korry is a man that not even the management of the IJ.S...
...For example, 1. "Try to persuade your skilled technicians to stay in Chile...
...President Frei and other government officials are standing by at the hospital...
...REALISTICALLY I DO NOT SEE HOW WE CAN INDUCE OTHERS INVOLVED TO FOLLOW THE PLAN SUGGESTED...
...4. However, if Washington just sits there and does nothing to thwart Allende, it will be inviting a sharper turn toward leftist nationalism-which translates into more danger for foreign investments-among other Latin American counries...
...Meyer and Crimmons jointly led the effort to make certain that the U.S...
...Jack and I feel that perhaps it will be more effective if HSG were to talk to Meyer over the telephone- 19 - rather than deliver a white paper to Meyer's desk...
...BILL'S CONTACT SUGGESTED THAT ALL POSSIBLE PRESSURES BE EXERTED...
...Gerrity Here is our report on the Chilean situation and what we have accomplished over the weekend...
...MERRIAM- 23 - pEIRSOt- & CO4iNDENIIL INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: November 18, 1970 TO: Keith Perkins FROM: Hal Hendrix SUBJECT: Ed Korry After your inquiry about Ed Korry in Chile, I asked Bob Ber- reliez to put down his current observations on him since Bob has been spending a lot of time lately in Santiago...
...Geneen's deep concern about the Chile situation, not only from the standpoint of our heavy investment, but also because of the threat to the entire Hemisphere...
...Asked if this would not eventually lead to the disappearance of Congress as an effective legislative body, Allende said emphatically "Never would we make Congress disappear...
...Broe, Jack Guilfoyle was advised of the following by Enno Hobbing of C.L.A.: Hobbing was visited yesterday by Gregorio Amunategui, who is anAlessandri representative...
...he is concerned that he may become, as the Brazilians have put it, the Kerensky of Latin America...
...I gathered from a recent column and from some of his comments that he had a copy of one of our earlier memos (Hendrix-Berrellez) on Chile...
...Sincerely, E. Gernty The withdrawal yesterday in Santiago of Jorge Alessandri from the Congressional run-off election for President of Chile marked the final step in the collapse of political resistance to the election of Salvador Allende...
...This program has been discussed with Mr...
...The Ambassador said that regardless of Allende's many faults and idealistic beliefs, he is known to be a man of his word...
...That the people were the Congress of Cuba, that until the subversives were liquidated and the climate of terror imposed on Cuba from inside and outside was lifted, there would have to be special "precautions" imposed on the citizenry for the defense of the revolution, that counter-revolutionary violence would be met with implacable revolutionary violence...
...Three vehicles blocked the path of his car, and machinegun fire came from one...
...Meyer said he would keep me informed and trusts we will advise his office of pertinent news...
...The Ambassador said he had difficulty in convincing Washington the need to "cut-off" every possible assistance to Chile, but he insisted because he needs this as a bargaining point...
...His sudden departure from the scene was attributed unofficially to a meeting of four other admirals with Allende, with the reported consent of Ad- miral Porta...
...4. WE SHOULD WITHDRAW ALL TECHNICAL HELP AND SHOULD NOT PROMISE ANY TECHNICAL ASSISTANCE IN THE FUTURE...
...probably wishing to offer Chilean bonds...
...He said other companies with Chilean investments should do the same...
...And his usefulness in a business capacity is this same area now becomes, I believe, questionable...
...He also will apparently inherit considerable labor strife and has indicated he will take a hard line with union unrest and demands for increased wages...
...The transition would be much more rapid than Cuba's because of the long-standing organization of the Chile Communist Party...
...this time did nothing with respect to the Chilean election...
...2. Evidence that the ploy is working in Chile can be found among Allende's conservative opposition, the very people who were once urging Washington to take firmer action to stop Allende now believe they can co-exist with him...
...Intellectually he has an upper middle-class background...
...Geneen would be in New York this weekend at which time he would try to see him...
...Allende this week has had a series of meetings with Chilean business leaders, seeking pledges of support...
...It is far worse than he first thought, according to some visitors, and it is said Allende is now giving this problem an "agonizing reappraisal...
...Such inconsistencies are fodder for the editorial pages...
...stepped up its AID program in an attempt to help Chile remain democratic...
...8. No hope should be pegged to conditions the Christian Democrats are demanding from Allende in exchange for their support in the Congressional vote...
...Whatever resistance starch there was left in many anti-Allende groups was throughly (sic) dissipated by the Christian Democratic National leadership decision October 5 to support Allende in Congressional balloting...
...Dunleavy, Mr...
...5. A LIST OF COMPANIES WAS PROVIDED AND IT WAS SUGGESTED THAT WE APPROACH THEM AS INDICATED...
...But, added Matte, Frei is reluctant to do it without some reason to justify it in the eyes of the public...
...Among those arrested in the Schneider killing was General Roberto Viaux, a retired officer who gained national prominence and a measure of lower-rank following last year when he led an abortive pay-hike rebellion against the Frei government...
...Korry was in Washington last week for consultations and was supposed to return to Santiago during the past week-end...
...Military Equipment Ambassador Korry says there is no leverage as regards aid, because Chile will not seek it right away...
...Vaky we are aware of Ambassador Korry's position re Alessandri being certified and then resigning in order for Frei to run again...
...and lack of any Nixon policy...
...strength...
...The Sum-Up: 1. The view by Chilean conservatives, now trying to make deals with Allende, that U.S...
...Personally, he feels Allende is going to pay his bills in order to maintain Chile's international prestige...
...Mitchell mentioned Mr...
...Aibel, Mr...
...It is foolish to believe that he will give democracy another chance in six years...
...Should the Christian Democrats make demands of Allende, such as not to change the form of the government, meddle with the military, etc., the State Department said Allende will agree but will not live up to his promises...
...It would have a definite psychological effect on the congressional voters who may be undecided about whom they'll vote for in the runoff...
...To help strengthen his position, efforts are being made this week to turn this weekend's observance of Chile Independence Day into a pro-Frei demonstration...
...Gerrity FROM: Hal Hendrix SUBJECT: Chile Bob Berrellez called this morning from Santaigo to report that shortly after 0800 this date an attempt was made on the life of General Rene Schneider, Army commander-in-chief in Chile...
...Only El Mercurio and Radio Cooperative Vitalicia hold out against his threats and intimidation, and once he is running the country their fate is sealed...
...There is no, repeat no, solid news showing even a chance that Aliende 6an be stopped...
...WALLACE, ITTNY (NO OTHER DISTRIBUITION (sic) OF THIS MEMO SHOULD BE MADE) THE HENDRIXAND BERRELLEZMEMO WHICH WE DISCUSSED LAST FRIDAY HAS BEEN CONFIRMED...
...Jerez added that the other Edwards interests in Chile could be affected more or less by the attitude taken by the papers in the weeks ahead...
...But the result is the same...
...He thought that over for a while and finally said he thought that would help...
...There are definite reservations about the air force and navy...
...Keeping them alive and publishing between now and October 24 is of extreme importance...
...The Russians don't want another Tito on their hands...
...As stated in the beginning, I consider Meyer one of the weakest yet in the long string of Assistant Secretaries...
...Allende...
...We were well aware of the need to help the Christian Democratic candidate and keep a Havana-wired Marxist candidate out...
...b) Describing the flight of investment capital as part of a "climate of terror," imposed on Chile, he said its continuation would force a limitation of individual guarantees under the Constitution...
...He offered to keep us informed...
...But he has turned into a pugnacious Communist while retaining a degree of both worldliness and provincialism...
...As a matter of fact, there is no longer a respectable "democratic left" in Latin America-men, for example, like Betancourt, former president of Venezuela, who managed to stand up to the 5-year campaign of arson, subversion, and murder personally directed by Castro against Venezuela...
...Viaux was summarily dismissed from the Army but overnight his actions made him a hero to a large group of active and retired officers and enlisted personnel...
...Many have agreed to support Allende after hearing his promises to give the Army a greater role in developing the country's infrastructure, much like the work of a U.S...
...so it is quite certain he will carry out his campaign promises...
...General Schneider, fatally wounded in an assassination last week, has been des- cribed as favorable to Allende...
...The rift between Ambassador Ed Korry and his superior at the State Department has reached the point where he deals now directly with the White House and does not always share his input and instructions with State...
...I have read it carefully and I have passed it to those members of my staff who deal with Latin American matters...
...Brittenham, Mr...
...WASH I NGTON, D.C...
...The wave of the future is Marxist-Lenninism...
...Merriam FROM: E.J...
...2. The anti-Communist elements, with Alessandri's supporters in the forefront and Frei in the wings (both prodded by the U.S...
...GUILFOYLE, ITTNY E.R...
...From: Robert Berrellez - ITT LA - B.A...
...They feel he could be stopped if Frei would stand firm for his country and quit trying to play the part of Hamlet, wishing to go down in history as the great democrat...
...As you have read in news stories, Chile's economy is sagging badly...
...This mornings's El Siglo, the Communist party daily in Santiago, said the caputre of the Major revealed a plot to kill Allende...
...6. This version, supplemented by information from other sources, indicates the visitors have taken up residence in homes and apartments in Santiago, suggesting a lengthy stay...
...A Communist Party congress was held in Santiago early this week...
...WE DISCUSSED THE SITUA- TION IN DETAIL AND HE MADE SUGGESTIONS BASED ON RECOMMENDATIONS FROM OUR REPRESENTATIVE ON THE SCENE AND ANALYSIS IN WASHINGTON...
...businessmen in Chile that Ambassador Ed Korry, a Nixon political appointee, will survive under the Salvador Allende administration...
...Once believable, the message's authenticity becomes more questionable when viewed in the light of what has been going on quietly underfoot...
...Because of this, Korry's diplomatic career certainly seems at an end...
...He also on numerous occasions has exercised bad judgement in dealing with the press that covers Latin America...
...The Commander of the Navy, Admiral Fernando Porta, was put on temporary leave of absence...
...Merriam SUBJECT: Chile Our man reports nothing new and "picture is not rosy...
...The meaning of this was not explained in the announcements, but it interpreted as a warning to the military to stay in their quarters and mind their own business...
...At least not without the acquiesence of the Communists and the leftist bloc that put him in power...
...We are planning, together with some of the other members of IEPA , to approach Senators Scott and Mansfield to see if they will just "forget" to take up the bill...
...I told Mr...
...Frei has not rallied the Christian Democrats as is believed possible...
...Geneen's suggestions about Chile on Friday, September 11, I took the following action over the weekend: White House-Kissinger's Office Late Friday afternoon I telephoned Mr...
...Henry A. Kissinger Assistant to the President The White House Dear Dr...
...The State Department's opinion seemed to be: "It is unthinkable that Chile will go Communist...
...The assumption is that by confronting Frei, the group hoped to press him into a definitive move in the one desired direction...
...WASH I NGTON, D.C...
...Observers speculate that the attempt is (1) revenge against Schneider for his refusal to support plans for a military coup against Frei to block Allende from taking office, or (2) an attempt to arouse violent reaction among the extreme left...
...THE VISITOR ADDED THAT MONEY WAS NOT A PROBLEM...
...Korry's official excuse: he had to attend to the dispatch of food parcels to Easter Island...
...He assures me that the President has taken at this time (better late than never, I guess) a long, hard look at the situation and is prepared to move after the fact...
...I, personally, feel that we don't have much to lose one way or the other, unless, of course, our so-called "pressures" come back to haunt us in other Latin American counties...
...Knowing this, the I .S...
...Whatever the trappings, there is unlikely ever to be another truly free election in Chile...
...Instead, I look for the silent pressure (?) which will call for a drying-up of aid and instructions to U.S...
...Korry, who had been ticketed for dismissal after the last presidential elections, took up Nixon on his promise and got the Santiago post...
...One retired officer pointed out that all Allende has to do as President is to pick his time to promote a loyal Major or Colonel to General rank and all those officers above his appointee would automatically be retired out of command...
...It is a fact that word passed to Viaux from Washington to hold back last week...
...This appropriation has passed the House, has been reported out of the Senate Foreign Relations Committee, and supposedly will be taken up after the recess...
...Granted, there is the traditional State timidity within the careerist system for this particular attribute of Meyer's administration, but he has failed to encourage either creative or independent thought...
...so there is no lack of information there either...
...The job was too professional for ordinary civilians-excluding those trained in Russia and Cuba...
...and others for a later maneuver...
...I am grateful for your taking the time to give them to me...
...I ADVISED THE VISITOR THAT WE WOULD DO EVERYTHING POSSIBLE TO HELP BUT I POINTED OUT IN DETAIL THE PROBLEMS WE WOULD HAVE WITH THE SUGGESTIONS HE HAD MADE...
...Given the atmosphere in Chile today, the prospect of a new election is looking more and more attractive as the future looks more and more bleak...
...The meeting allegedly was arranged to pledge the Navy's support to Allende...
...We can do the latter, of course, but the telephone call would be the important thing...
...A significant straw in the wind was noted this week while in Chile...
...The statement was issued with Frei's blessings...
...This is important because it is plain that events will cause the investment community and our shareholders to scrutinize our activities in Latin America closely...
...2. We help with getting some propagandists working again on radio and television...
...Here are some pertinent sidelights on Dr...
...is making are covered by the Constitution, to which Allende will pay lip service for a while until he is firmly in the saddle and has consolidated all the elements necessary to convert Chile into a thoroughly Communist, self-perpetuating state...
...This was probably an oblique allusion to swiftly spreading apprehensions in some worker sections that Allende plans to do away with the trade union movement, a la Castro...
...If that is so, freedom is in danger, everywhere...
...Some anti-Allende spokesmen who show this resignation speak of starting to work toward winning a "second round...
...Following are some significant points as we see the Chile sit- uation on this date, plus some comment on various factors and a few basic recommendations: I. Allende and the Marxist-Socialist coalition (Unidad Pop- ular) are acting like he is the elected President...
...He said the Chileans themselves are becoming quite concerned...
...This means nationalization of everything which he thinks should fit into his Marxist scheme...
...El Siglo, the communist newspaper, was less generous...
...HE WAS THE SAME MAN YOU MET WITH MERRIAM SOME WEEKS AGO...
...W-MIL 46- 16 While Chile was bubbling with rumors last week, it is completely the opposite this week...
...My personal view is that we should do nothing to encourage or help the Allende team...
...2. The Mercurio newspaper chain...
...7. President Frei has stated privately to his closest associates, to Alessandri and to a State Department visitor last weekend in Vina del Mar that the country cannot be allowed to go Communist and that Allende must be prevented from taking office...
...When these visits are carried out, we should demand that .S...
...I will call you later to discuss HSG's reaction to my telex in some detail...
...By the same token, Meyer has suffered-as has his area department within State-because of other pressing administration priorities around the world, and surely in the U.S...
...In this atmosphere, many Chileans have turned to thinking about what they can now do to survive economically and politically under Marxist rule...
...If Chiltelco declares profits of "thirty million dollars," he said, it simply means that the profits are much higher...
...realized the danger of Marxism in Chile: so fought it with grants and loans, but did not have the extra forethought to follow its intuition by taking a more active part during the pre-election period to assure the defeat of Allende...
...This means that the far left is aware of and taking every precaution to neutralize provocation...
...Clearly, Viaux was gearing up to launch a move next week...
...DUNLEAVY-INTEL BRUSSELS GUI LFOYLE-ITTHQNY MERRIAM-ITT WASHINGTON SUBSEQUENT TO YOUR CALL YESTERDAY I HEARD FROM WASHINGTON AND A REPRES- ENTATIVE CALLED ON ME THIS MORNING...
...clearly put his head on the block with his extremely strong messages to State...
...The degree of this assistance will be known better around October 1. We have pledged our support if needed...
...An official communique stated that General Schneider's condition was "delicate...
...The CD national committee is slated to meet early next month and it is expected Frei will regain leadership control...
...I will call you as soon as I return, around 4:00 or 4:30 p.m...
...DUNLEAVY, ITT EUROPE J.W...
...Kissinger, Mr...
...He admires Red China and relies on Fidel Castro for advice...
...About 5000 workers already have been laid off in Santiago construction as projects are being shut down...
...So far he has been able to keep these elements controlled...
...Allende also is becoming increasingly irritated with labor unions, most of which are under control of the Communist Party...
...HE INDICATED THAT CERTAIN STEPS WERE BEING TAKEN BUT THAT HE WAS LOOKING FOR ADDITIONAL HELP AIMED AT INDUCING ECONOMIC COLLAPSE...
...Published statements last week showed the "revolutionary left" is still agitating in schools and universities urging "vigilance committees" to prepare now for any move by the moderates to thwart a total socialization of the country...
...IF PRESSURE WERE APPLIED THEY WOULD HAVE TO SHUT THEIR DOORS, THEREBY CREATING STRONGER PRESSURE...
...This is a tactic not uncommon in Latin America...
...The Popular Unity front that put Allende in power had organized highly effective security units (commandos) that apparently had infiltrated the police...
...Also, the CIJT, the national Chilean labor confederation (dominated by the Communist Party), announced that it would go into an emergency session at 5:00 p.m...
...Once elected by Congress, Alessandri would re- sign, thus carrying out a pre-election pledge that he would do so unless he received a plurality or majority of the votes in the regular balloting...
...The defeated Christian Democratic candidate, Radomiro Tomic, is still backing Allende and can take a sizable segment of the P.D.C...
...Time is swiftly eroding the military capacity to move against the Allende coalition, even in defense of the Constitution, if such a moral issue arises...
...We could prepare state- ments from them which would get a message to the other Latin American counties that Chile's action is affecting them too, albeit indirectly...
...It is estimated that over-all layoffs will affect about 30,000 in Greater Santiagp by the end of this month...
...The next group of take-overs would be slated for about one year later...
...reprisals will force Allende into the leftwing extremist camp and that this will trigger a popular and military reaction against his government has little merit...
...THE SUGGESTIONS FOLLOW: 1. BANKS SHOULD NOT RENEW CREDITS OR SHOULD DELAY IN DOING SO...
...Best wishes...
...He said he understood our concern, but thought we had covered the water front...
...Korry has said he considers the armed forces a "bunch of toy soldiers...
...We should offer an additional action plan which would involve reduction of American diplomatic representation in such South American capitals as Santiago, Lima, La Paz, Quito, etc...
...You can spit in their face in the street," Matte said, "and theyll say thank you...
...The distinct impression, however, was he might have felt this would have to be done with consummate skill and tact so as not to offend Chilean national dignity, (Korry's new mandate may serve this purpose...
...THIS REPORT IS BEING DELIVERED TO YOU BY MR...
...Rumors that he would trigger a coup on October 9 or October 10 were rampant in Chile and spilled over into Buenos Aires, Argentina...
...Details: i. Chances of thwarting Allende's assumption of power now are pegged mainly to an economic collapse which is being en-couraged by some sectors in the business and political community and by President Frei himself...
...What initially appeared to be a professional job handled from within the Army turned out to be a poorly organized and bungled kidnap attempt in which at least two ex-military figures are directly involved...
...Thus, the quick assumption in Santiago is that right-wing terrorists are responsible...
...6. As a result of all this inertia, an aura of defeat has enveloped important and influential sectors of the community, some business men who seemed all gung-ho about stopping Allende are now talking in terms of trying to make deals with him...
...news media almost always has been hostile toward our diplomats, with or without reason...
...But Meyer clearly has been ineffective in the bureaucratic inSystem Confidential Telex-Urgent-November 6, 1970-LA-4439- K DATE: November 6, 1970 TO: H. Hendrix-ITTHQNY FROM: R. Berrellez-ITTLABA SUBJECT: Chileans I. Salvador Allende was inaugurated last Nov...
...will touch off a wave of violence, resulting in a military coup...
...Evidently Herrera's letter of congratulation to Allende was a mistake because Herrera told Korry that Allende told Herrera he was not acceptable as a cabinet member...
...policy toward Allende's government he hoped this would be relayed to the White House immediately...
...I attach a paper containing our estimations plus specific refer- ences to the Chilean situation...
...He also, to give him due credit, started to manuever with the CD, the Radical and National parties and other Chileans-without State authorization-immediately after the election results were known...
...It was believed that the killing of Schneider was a prelude to the coup...
...government or ITT could keep in harness if he didn't like the fit of the harness...
...Look' 1 Just Happened to Colme Across the Original Missing Memo...
...This would morally justify an armed forces intervention for an indefinite period...
...The Senate president (a Christian Democrat) would assume presidential power and a new election would be called for 60 days ahead...
...Alessandri's announcement had the effect of alerting the Marxists and Allende that a powerful last-ditch effort was afoot to block them and it also probably may have partially checked a PDC congressional vote swing toward Allende...
...He has kidney trouble...
...John Fisher, the new Director of Andean and Pacific Affairs, said Ambassador Korry is fully convinced that if Alende becomes President there will be no half measures-the country will be communist controlled...
...Allende's chief concern in this area is with the Anaconda Copper Company workers at the huge Chuquicamata mine in northern Chile...
...6. Is the Chilean military capable of coping with nationwide violence or a civil war...
...Such hopes are far from the actual prospects...
...Contrary to the general expectation, the military did not move against Allende over the weekend...
...President Nixon, one year ago, in his speech before the Inter- American Press Association said, "We will not encourage pri- vate investment where it is not wanted, or where local political conditions face it with unwarranted risks...
...4. For the recent campaign the CD leadership was put in the hands of Radomiro Tomic, who has a deep-grained hatred for Frei and the U.S...
...The wave of the future is Marxist-Lenninism...
...Prat does not like Viaux personally...
...Geneen's concern over ITTs Chile investment...
...He said the head of Kennecott Copper has been in to report he feels they have lost their big mining area "El Teniente...
...The foregoing means the U.S...
...Allende, the UP and the Castroite Revolutionary Movement of the Left (MIR) have made it clear they intend to fight for total victory...
...He also said the spokesman pointed out Standard Electric would not be nationalized because its production was essential to future telephone system expansion...
...But Meyer's Latin American experience was limited to the north coast of South America and Mexico...
...It is even questionable that they have the capacity to handle the kind of massive nationwide reaction the far left can mount: general strikes, urban guerrilla warfare...
...9. The anti-Allende effort more than likely will require some outside financial support...
...All this would be corrected in the future, the spokesman stressed, and "cheaper telephone service would be made availabe to all, not just a privileged few...
...The CUT, national labor confederation, was placed in charge of mapping expropriation plans...
...INFORMATION WE RECEIVED TODAY FROM OTHER SOURCES INDICATES THAT THERE IS A GROWING ECONOMIC CRISIS IN ANY CASE...
...This I also doubt...
...Allende has also promised various officers that he will not change the military organizational structure...
...It used the vilest language possible (likening him, for instance, to excrement) in describing his character: "gross, petulant, flat- ulent, aggressive, brute etc...
...These three items would be acted upon quickly...
...I told Mr...
...I will bring you up to date on that in the near future...
...Now the unthinkable is on us, but we seem to be shrugging our shoulders and moaning, "We are powerless because the people of Chile elected Allende legally...
...Policy re Allende The Ambassador said there are several alternatives of action, the main ones being to provoke Allende and cause a rupture in our relations with Chile, thus, lose all without a try...
...Irwin of State, with certain other persons to be determined and, ultimately, with Secretary Rogers and the President...
...As soon as expropriations take place, and providing adequate compensation is not forthcoming, he believes that all sources of American monetary help, either through aid or through the lending agencies here in Washington, will be cut off...
...Chilean Communism is going to look a great deal like Chinese and Cuban Communism...
...GM and Ford, for example, say that they have too much inventory on hand in Chile to take any chances and that they keep hoping that everything will work out all right...
...We had heard previously from the lower level at the State Department that Hickenlooper would not be evoked...
...This is expected to trigger a run on banks and the closure of some factories, resulting in more unemployment...
...It would become apparent, for instance, that there is no confidence among the business community in Allende's future policies and that the over-all health of the nation is at stake...
...He changed later on when it became apparent the contest would be between Alessandri and Allende...
...Gerrity SUBJECT: Charles Meyer fighting for attention at State, and, therefore, in the Nixon administration...
...Hendrix is now back in New York and Berrellez has returned to Buenos Aires...
...Others have given up and are getting ready to leave the country...
...There are even indications now that a significant number of Alessandri votes will swing to Allende...
...Wallace, of our Department, and they are aware of the details.- 17 ?tEt*50't1 ca~\Eb October 21, 1970 Mr...
...The information we are receiving from Hendrix and Berrellez is up-to-date, factual and concise as any coming out of Chile...
...installation on the island...
...But he wants to do it constitutionally-That is, either through a Congressional vote upset or an internal crisis requiring military intervention...
...I told him I had already spoken to the White House and State Department.-8INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: September 17, 1970 TO: E.J...
...In a message to his supporters in the right-wing National Party, Alessandri stated he did not wish them to vote for him in the balloting Saturday...
...By this plan, following Alessandri's election by Congress, he would resign as he has announced...
...But he still refuses to take the reins in his hand without "moral" reasons, Matte said...
...Today El Mercurio is isolated, and nobody knows how long it can hold out...
...3. Korry also blew his composure with the U.S...
...says, "This is a Chilean matter, thus, we must not interfere...
...He has pledges of support from several, but unfortunately not from any key troop commanders, at least to our knowledge...
...He loved unwisely and too well...
...dollars: 1961 132.8 1962 169.5 1963 83.7 1964 127.4 1965 130.9 1966 107.7 1967 284.6 1968 99.8 1,136.4 The 1969 estimation was over 100 million as, no doubt, fiscal year 1970 was the same or more...
...Neal SUBJECT: Chile-Conversation with Ambassador Korry This morning, I called on the' U.S...
...Gerrity SUBJECT: Chile On Saturday, Salvador Allende, a Marxist, was elected president of Chile...
...22, 1970, and Ralph Dungan 's article is in The Washington Post of Sept...
...communism" showdown, Frei would get most of the Christian Democrate vote-since this would put the party back in power-and all the rightest (sic) vote that supported Alessandri...
...The source of this information is Korry himself...
...Ambassador Korry believes the U.S...
...3. Allende has made a most compelling pitch for moderation and national unity...
...I was rather surprised to learn that in this man's opinion the Nixon Administration will take a very, very hard line when and if Allende is elected...
...We are developing a followup program as suggested during our discussions...
...That candle is freedom-in Chile today, in the rest of Latin America tomorrow-if Allende stays in power.- 21 - pERSObL & COtH4DEKI L DATE: November 2, 1970 TO: Keith Perkins FROM: Hal Hendrix SUBJECT: Chile - C. Bartlet FYI, Charlie Bartlett of Sun-Times Syndicate called Friday and we talked for over an hour about Chile and the general situation in Latin America, plus the attitude of the U.S...
...9. Collaborating with the Cubans are Chilean leftist extremists, the self-styled "revolutionary left" that vigorously opposeduntil Castro intervened to quiet them-the "peaceful" quest for power by the Communists and more moderate Socialists...
...in Chile...
...These are immediate suggestions and there will be others between now and October 24 as pressure mounts on Frei and the Christian Democrats...
...This will invite some serious troubles for the communists...
...He said State is watching the situation as closely as possible and awaiting the Octover 24 date when the Chilean Congress decides the winner...
...and Argentina in trying to help defeat Allende...
...His current comments are attached...
...20036 DATE: October 22, 1970 TO: Mr...
...Since election day it is running about 10 to 15 per cent of its normal advertising...
...American-owned mines will almost certainly be nationalized under the new government of General Torres...
...He seems to think he can insist that Allende restrict himself to internal democratic procedures rather than be the tool of Castro and Russia...
...Rogers was there...
...Marc h 27...
...He feels any complaints or ideas should be made now rather than after October 24...
...PIESONAL & CONFIDENTIAL INTER-OFFICE MEMORANDUM ITT WASHINGTON OFFICE 1707 L STREET, N.W...
...Dan plans to hold a meeting of his Latin American Committee early next week to see what other pressures we can drum up to make the State Department stiffen its attitude...
...position but we hope the White House, State, etc., will take a neutral position, or not discourage, in the event Chile or others attempt to save the situation...
...It was also suggested that we try to determine if any large European companies are in the same position we are in Chile and other Latin American counties...
...The surface odds and foreign news media appear to indicate that Salvador Allende will be inaugurated as President Nov- ember 4, but there is now a strong possibility that he will not make it...
...He failed to see through Frei's duplicity until too late in the ball game...
...Along the lines of the H-B report, State said the AllendeCommunist forces moved very quickly to take over all possible media...
...The pre-election rate was 20-21 to $1.00...
...I was in hopes of finding Secretary Rogers and especially Under Secretary of State U. Alexis Johnson who is a close friend of the Ambassador's, but they did not attend...
...The CUT in controlled by the Communist Party...
...It will give light for a while, and then will be smothered, leaving only a little black smoke...
...GERRITY DATE: SEPT 29, 1970 CC F.J...
...Since the September 4 election, the Russian Embassy staff in Santiago added twenty new staffers...
...will take...
...This universally respected newspaper symbolizes a 150-year tradition of Chilean freedom of the press...
...That Alessandri would take this action was evident last week in Santiago...
...Gerrity FROM: Hal Hendrix SUBJECT: Charles Meyer Per your request for a personal viewpoint sketch of Charles Meyer, following are some of my thoughts: Meyer came aboard at the Department of State as Assistant Secretary for Inter-American Affairs in March, 1968...
...The second alternative seems to be the one the U.S...
...In summary, there is little indication now of any remaining resistance to Allende in Chile-apart from the forementioned long-shot military action...
...In that role he performed well...
...Allende...
...He fell in love, a purposely muted public version alleges, with Beatriz Allende, daughter of the President, while she visited in Havana...
...We are disposed to anything...
...The press quickly picked it up...
...In spite of the forementioned, there remains in Chile a faint whisper of hope-or wishful thinking-that a military coup will be staged to prevent Allende from assuming the presidency...
...The Mercurio chain is hitting at Allende and the Communist party with effect...
...One retired general, Viaux, is all gung-ho about moving immediately, reason or not, but Matte said Schneider has threatened to have Viaux shot if he moves unilaterally...
...in Latin America," which when applied to Chile today could be a salient reason why the United States failed even to head off in 1970 that which it so successfully and energetically aided Chileans to avoid in 1964-the emergence of a Marxist president...
...IrViIVUJIAIILJUtMi ITT WASHINGTON OFFICE 1707 L STREET, N.W...
...Attached is a memorandum describing briefly Allende's background, indicating his thinking...
...There are some Chileans who speak of planning now for a "second round" against Allende, but they also admit that the odds for a second round are rather slim...
...D. Matte said the armed forces are agreed on the extreme danger to democracy that Allende's assumption of power involves...
...He added referring to Korry: "What nature does not endow, diplomacy does not lend...
...According to informants monitoring the party congress, the priority schedule has been put in the hands of man named Bertini and roughly looks like this: "Look...
...Physically, Allende is short, red-faced, curly-haired, and tough-talking...
...PERSONAL & CONFIDENTIAL THIS IS ITT WASHINGTON 22 SEPT 1970 CRYPTEL- 240 PLEASE FORWARD FOLLOWING MESSAGE TO ITT EUROPE BRUSSELS TO: MR...
...One newspaper "Las Iltimas Noticias" quoted Valdez as saying: "With no other Ambassador have I had more problems than with this Mister Korry...
...Hoffman said he has several American Express tour groups booked into the hotel in the coming months, which will keep it afloat...
...It will make no difference that Allende is coming to power as the first Communist head of state ever democratically elected...
...We should also consider communication with the press and with members of Congress as the situation develops...
...There is no doubt among trained professional observers with experience in the U.S., Europe and Latin America that if Allende and the UP take power, Chile will be transformed quickly into a harsh and tightly-controlled Communist state, like Cuba or Czechoslovakia today...
...However, now that its program failed to prevent Allende from winning the election, the U.S...
...This has been started...
...INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: October 30, 1970 TO: E.J...
...Worse, it has been established beyond any doubt that he has been double-dealing to preserve his own stature and image as the champion of Latin American democracy...
...This policy has either changed or the lower echelon does not know of the change...
...The big push has begun in Chile to assure a congressional vic- tory for Jorge Alessandri on October 24, as part of what has been dubbed the "Alessandri Formula" to prevent Chile from be- coming a Communist state...
...ITT does not wish to go where it is not wanted, but we, too, have President Nixon's "strong belief that properly motivated private enterprise has a vital role to play in social as well as economic development...
...2. Despite the pessimism, efforts are continuing to move Frei and-or the military to act to stop Allende...
...I nder Frei, a program of economic reform was instituted, involving even a move toward gradual nationalization of some industries, but gradual nationalization of any kind is almost certainly out the window now...
...Publicly, however, he is keeping out of the battle up to this point while feeling steadily increasing pressure from the U.S...
...and Argentina to move in and try to stop Allende openly or covertly.- 13 - A TELEGRAPH CORPORATION"' w 1 L INTERNATIONAL HEADQUARTERS DATE: September 30, 1970 TO: Messrs...
...Main feature of this obser- vance will be a military parade by about 25,000 troops assembled in Santiago...
...TV, radio, etc...
...Allende took a firm, hard-line with the P.D.C...
...There was no announcement on what was discussed...
...Several labor unions are pressing for tremendous wage increases before November 4, feeling it may be a long dry spell for raises under Marxist rule...
...Kissinger...
...The paper in Santiago is in financial trouble...
...25 report...
...Whether it will develop into any military action remains to be seen, but at this stage it seems doubtful with General Prat now in command...
...try to be so pious and sanctimonious in September and October of 1970 when over the past few years it has been pouring the taxpayers' money into Chile, admittedly to defeat Marxism...
...The team spokesman (not identified by name) also said both the telephone company and Worldcom would be nationalized with the process beginning the day Allende takes over, November 5. In response to questions, he said he did not know how long the process would require...
...Merriam, Neal, Ryan FROM: E.J...
...This could be on the basis of leaving each post in the hands of a Charge d'Affaires...
...oRSONAI INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION INTERNATIONAL HEADQUARTERS DATE: October 16, 1970 TO: E.J...
...In Argentina the new Minister o Economics is a leftist economist, Aldo Ferrer...
...He is also known as a heavy drinker, and of course this aggravates his physical problems...
...The countries themselves are unable to furnish necessary development funds, the U.S...
...on business and his family now is in Baires) but if he came back and the paper refused to change "he could be hanged in the Plaza de Armas" after Allende takes power...
...I explained that S95 million of our holdings are covered by investment guarantees, as are those of other American corporations, but that we are reluctant to see the American taxpayers cover such losses...
...Shortly before noon, Allende met with Frei at the Casa Moneda (presidential palace...
...23, 1970- NACLA) PERSONAL & CONFIDENTIAl THIS IS ITTHQNY 5:30PM DST-JD TO: MR...
...I cannot stand or accept this diplomat...
...General Manager Fernando Hoffman opened the San Cristobal for business Thursday morning, October 15, with no fanfare...
...Late this afternoon we can discuss this, as I will be out of the: office in Leesburg most of the afternoon, and Jack Neal has some pressing personal business to take care of after lunch...
...It was felt that he was not adequately prepared, his timing was off, and he should "cool it" for a later, unspecified date...
...Wir"I' S -- 14 - DAT A Q. r^.-~* TO: Mr...
...H. Frei, said Matte, is highly worried about the damage to his stature in the hemisphere...
...is said to favor Allende...
...The Cubans and other Iron Curtain "tourists" and delegates to an industrial fair now underway in Santiago, arrived within hours of the September 4 voting which gave Allende a plurality in the voting...
...pERSOleL & CONIFDENH11l DATE: November 4, 1970 TO: Mr...
...3.) 4. Following the early expropriations, a commission would be named to study which interests should be taken over...
...He scolded some (Joe Novitsky of the NYK Times was one) for emphasizing what he considered the "wrong leads" in reports...
...Geneen -2- October 20, 1970 With a member of the board of directors, we propose that the outlined program above be implemented with: Dr...
...In such a con- test, Frei is considered to be an easy winner...
...I fear the Department of State will convince the White House to again circumvent the Hickenlooper Amendment-as it has done in Peru, Bolivia, and Ecuador...
...Allende will promise anything at this stage...
...5. Here is a bit of his background for whatever future use it may serve: 6. A former newsman, Korry has been described variously as imaginative, fearless, sharp and even brilliant by some of his closest associates...
...2: (a) He will use the plebiscite (constitutionally correct) wherever necessary to go around Congress if needed reforms were blocked by legislative action...
...For instance, Castro said that elections were not necessary...
...F. A plan suggested to Frei, said Matte, calls for the creation of a military cabinet...
...Merriam SUBJECT: Chile I have just met with Dr...
...But he has given no pledges about personnel changes...
...We are to get a copy...
...State Department...
...Allende now controls two of the three TV stations in Santiago and has launched an intensive radio campaign...
...This wouldn't reduce the coverage of developments in each of the countires, but it would be a diplomatic slap...
...I ran into Attorney General Mitchell...
...It ignores a fact, however, that whether or not he likes it, Allende will be forced far to the left eventually regardless of what policy Washington adopts...
...2. The pressures resulting from economic chaos could force a major segment of the Christian Democratic party to reconsider their stand in relation to Allende in the Congressional run-off vote...
...Too, he believes it would take to long to convert the Chilean Army from U.S...
...so we chatted with her...
...PERSONAL & CONFIDrAj 4 L INTER-OFF ICE MEMORA' ITT WASHINGTON OFFICE 1707 L STREET, N.W...
...But it was apparent from Matte's exposition that there is little hope for this...
...Attorney General I went to a wedding reception at the Korean Embassy late Saturday...
...The prevailing sentiment among the P.D.C...
...There was one committee to each block in every key urban community...
...will insist on immediate and just compensation in dollars...
...Gerrity Yesterday, subsequent to my visit from Mr...
...At every public appearance during the two-day inauguration festivities, he was a living, breathing image of political moderation, a perfect vehicle that Moscow will now thoroughly exploit to give their brand of communism a touch of bourgeoise respectability they hope will make it palatable--and even desirable-in other Latin American countries...
...I told him of Mr...
...firms in Chile pump some advertising into Mercurio...
...FINALLY, BOB BERRELLEZ HAS JUST SENT A RE- PORT WHICH IS PESSIMISTIC AS TO THE OUTCOME NEXT WEEK...
...All America Cables would disappear, the spokesman said, because it operates illegally...
...These measures are already applicable in Chile: All the country needs to do is send a certain man an internal revenue notice that his tax filings are under study and that he may not leave the country until he has been cleared...
...economic and political reprisals will force Allende farther to the left is a correct assessment...
...This "cut-off" will be denied by State, who will say, as it has in the past, "there has been no shut down of aid to Chile...
...The hotel looks great...
...so decided to mention Chile just in case the subject reached him in a cabinet meeting or otherwise...
...The army was put on alert and ordered to remain in barracks...
...7. The general consensus is that the election of Allende by congress pulled the plug from the under the enemic Chilean economy...
...BARR OF THE TECHNICAL DE- PARTMENT WHO IS LEAVING FOR BRUSSELS THIS EVENING...
...The Congressional run-off vote is scheduled October 24...
...Allende has already expressed a desire to re-negotiate this figure...
...In one impromptu speech early this week he noted that Chile "was now swarming with C.I.A...
...Strategy is co-ordinated by the USSR...
...Kissinger: As a result of recent events in Latin America, foreign private enterprise in that area is now facing its most serious exposure...
...8. A main deterrent to this remains the armed forces...
...With him and his deputy, John Crimmons, the general theme has been don't make any waves...
...Dictated today by telephone from Buenos Aires to New York) Subject: Chileans Capsuled situation: It appears almost certain that Marxist Salvador Allende will be confirmed by the Congress as Chile's next President...
...His efforts have paid off...
...It had gone down to 26.50 to $1.00 on Friday...
...The second would be to try to live with Allende-not appease him-take a firm line, but attempt to negotiate at every turn...
...even the labor unions see a disadvantage in Allende...
...Why should the U.S...
...It speaks for itself...
...The Anaconda strike and one against the Chile Telephone Company last week are examples...
...But runs on the banks have stopped and the escudo has settled back down to around 25 on the black market...
...Chile's Communist party, a part of the UP coalition, is directing the pressure...
...The bombings failed to arouse anything outside of swift police action which resulted in the arrest of some of the bombers...
...G. The armed forces boss, Rene Schneider, is fully aware of the danger of Allende moving in...
...In compensation, perhaps, he dresses elegantly and modishly...
...Dan, Tim Stanley, and Jack Neal on the above subject...
...This time we kept our nose, financial and otherwise, out of Chile's presidential election...
...Opinion is divided on this in Santiago...
...Schmidt FROM: W.R...
...Now there is general resignation that Allende will win easily in Congress, and most likely will be inaugurated November 4. Except among the Allende supporters, a cloud of depression and worry has settled over Santiago and there is no outward sign of any organized opposition...
...The Sum-lip: I. A Congressional defeat for Allende seems unlikely at this point...
...2. "Don't act too revolutionary or you'll give the counter-revolutionaries the pretext to upset your economy...
...Practically no progress has been made in trying to get American business to cooperate in some way so as to bring on economic chaos...
...He has had hepatitis twice, and it left him with chronic liver problems...
...They will have a close squeeze meeting this end-of-the-month pay roll...
...Because the Chile situation is so interrelated to our overall position in Latin America, and therefore of such importance to our stockholders, I believe that you would want to meet in Washington with the highest officials to personally express our deep concern with developments that have such serious impact...
...We will continue to monitor the situation...
...Merriam After you read me Mr...
...20036 DATE: October 15, 1970 TO: M4...
...But he will not budge an inch without Frei's okay...
...He did not attain a majority for election when his countrymen balloted last month...
...His top advisers reported that he was very bitter now towards President Frei, feeling that Frei had double-crossed him in the post-election plans to win the Congressional election away from Allende...
...In the event U.S...
...Allende is continuing almost daily meetings with business, industrial and military leaders to explain his programs and seek support...
...His clout with Secretary Rogers is about as potent...
...At a meeting with Arturo Matte at his residence Sunday (Sept- ember 13), he seemed in a more relaxed frame of mind than on the last visit and he made these points: A. The "Alessandri Formula" through which the way would be opened for new elections had the government's and Frei's per- sonal approval...
...Beatriz herself received subversion and guerrilla training in Cuba...
...For this reason, Korry's usefulness as a diplomat in Latin America has been destroyed...
...I toldFisher we had spoken to the White House and to his boss, Assistant Secretary Meyer, and that we are ready to see anyone or do anything possible...
...But, as one of his associates has remarked, he became blindly enamoured of Frei and his political evaluation suffered accordingly...
...Most of the press came away either angry or unim- pressed with Korry...
...Allende this week sent one of his top lieutenants, Alberto Jerez, mentioned as his choice for foreign minister, to see A. Edwards chief representative in Santiago...
...A key figure in this possibility is former Brigadier General Roberto Viaux, who last October led an insurrection by mem- bers of the First Artillery Regiment in a demand for more pay and improved working conditions...
...private capital will bring about a cutoff of the .S...
...With best regards, (signed) Henry A. Kissinger Mr...
...Ambassador to Chile, Edward M. Korry, who is in Washington on consultation...
...But the government is printing.more money...
...3. Having just recently given Tito a personal presidential bles- sing, Washington will certainly arouse liberals everywhere if it turns its back on Allende...
...Last week the Finance Minister issued a pessimistic report on the national economy, placing the blame on the results of the September 4 election...
...Furthermore, many of the conditions the P.D.C...
...I Undercover efforts are being made to bring about the bankruptcy of one or two of the major savings and loans associations...
...mining companies are taken, payment might be arranged in ore...
...Less emphatically, he said that at least during the initial phase of the program salaries and other social benefits would be frozen...
...At the same time, a subtle but firm enough pressure must be brought to bear on Frei so that hell respond...
...Three years ago, Allende said: "The United States is in trouble, everywhere...
...He said Allende had no intention of trying to fool Edwards...
...Prat said thie team spokesman did not mention the ITT hotel properties...
...PERSNAL & CONFIDENTIAL INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION WASHINGTON OFFICE 1707 L STREET N.W., WASHINGTON, D.C...
...3. It's certain that Allende is on to this scheme...
...I can personally vouch for his courage in a crunch: the gutsy final effort to block Allende, so unusual in our diplomats...
...This, we are told by the most authoritative sources, was the far right's last effort to provoke the far left in this particular manner...
...They feel he could be stopped if Frei would stand firm for his country and quit trying to play the part of Hamlet, wishing to go down in history as the great democrat...
...Gerrity FROM: H. Hendrix (dictated by phone from San Juan) SUBJECT: Chile UJnless there is a move by dissident Chilean military elements by this time next mid-week, the consensus in Santiago is that Sal- vador Allende will win the October 24 Congressional run-off easily and be inaugurated as President November 4. The chance of a military coup is slim but it contniues to exist-at least to this date...
...The latter is considered unlikely because of the rigid discipline managed by the Communist Party...
...State has little or no faith in the Chilean military's willingness or ability to take control...
...A few weeks ago, the State Department estimated the outstanding loan total in Chile would be in the area of a billion dollars...
...They will act only if it is in the framework of the constitution...
...In all fairness, however, we should point out that much of the U.S...
...E. A constitutional solution, for instance, could result from massive internal disorders, strikes, urban and rural warfare...
...I suggest you get together with Bernie Goodrich to decide what can be prepared...
...Allende's sister, Beatriz, went to Cuba in September...
...I 11...
...How- ever, the Commander of the Army, General Rene Schneider, still shows no open indication of supporting Viaux...
...win this country...
...Viaux, a conservative strongly opposed to Allende and around whom coup elements appeared to be rallying after the Sept...
...20036 CABLE ADDRESS-INTELCO-WASHINGTON October 23, 1970 Dr...
...bue to lack of space, we are not including the clippings...
...The lecture at Standard Electric was taped by Dan Gillen...
...FROM: W.R...
...4. From Embassy friends we've learned Korry is fully aware of his position and has put out a few probes into the business community to sample future opportunities...
...Our company knows the peoples of the Americas deserve a better way of life and we believe we have a substantial interest in diminishing their problems...
...Attorney General TO: Mr...
...This is said to be Korry's most glaring fault as our envoy in Chile...
...At this writing, we have been told that Allende's representatives have asked for a meeting with Sheraton representatives to discuss Allende's future policies regarding the hotels...
...Although it reads as an objective and realistic evaluation of economic conditions, the statement aroused the Allende camp which severely criticized it as provocative...
...Late Tuesday night (September 15) Ambassador Edward Korry finally received a message from State Department giving him the green light to move in the name of President Nixon...
...Apart from this, I might add my personal view...
...He has convinced many military officers that he won't disturb the military structure...
...The account has been termed "highly accurate" by authoritative sources, persons in a position to know...
...Party discipline and control thus far is extraordinary...
...Approaches continue to be made to select members of the Armed Forces in an attempt to have them lead some sort of uprising-no success to date...
...It is certain that Foreign Minister Valdez made his per- sonal views on Korry clear to the diplomatic colony...
...I said Mr...
...The word among Korry's colleagues is that Charles Meyer and his deputy, John Crimmons, are determined to get Korry out of Chile-and out of the Department, if possible...
...The Mercurio newspapers are another key factor...
...assistance emphasis because of its important political role in the Hemisphere...
...Meanwhile, Viaux has been conferring with high-ranking and junior officers about taking some action to prevent Allende from becoming President...
...A vast expansion program also would be undertaken...
...Arturo Prat at Worldcom made notes, the gist of which follows: Gillen says his workers were told there were no plans to take over the factory, but that the government would have a bigger say in future policy and that government and workers would also have representation on the Board of Directors...
...U.S...
...Allende's supporters have intimidated the entire press and broadcasting media serving the country's 9 million citizens...
...Thus forewarned, we should hope the Nixon Administration will be prepared to move quickly to exert pressure on Allende...
...Only one newspaper, El Mercurio, and one radio station have held out against being cowed or coerced into support of Allende...
...Never know for displaying guts in a crunch, he is faced with a dilemma of not wanting to be charged with either turning Chile over to Communist rule or contributing to a possi- ble civil war...
...GUILFOYLE RECEIVED A CALL THIS AFTERNOON FROM A REPRESENTATIVE OF THE KEY CANDIDATE ASKING US TO DO NOTHING TO ROCK THE BOAT BECAUSE FORCES ARE AT WORK TO SOLVE THE PROBLEM...
...On Monday, he warned publicly that he would bring the nation to civil war if he was not voted into power...
...Latin policy-or lack of it...
...No one apparently asked if this meant that a nationalized factory's output would be inadequate for expansion purposes...
...He agrees with me that Broe's suggestions are not workable...
...Allende is following Castro's advice, and we seem to be letting it happen...
...Don't really know what tack he will take at this point, but presume it will be anti-Allende and anti-administration with respect to U.S...
...The above total includes both AID loans and grants...
...Following are the figures for economic assistance to Chile between 1960 and 1968 in millions of U.S...
...PERSONL & TO: Hal Hendrix, ITTHQNY FROM: R. Berrellez, ITTLABA-CHILTELCO l DATE: October 22, 1970 (sent by traveler) SUBJECT: Chile A group of workers identifying itself as a "Policy Orientation Committee" of the Popular IJnity Front (Allende's) visited Standard Electric, Chiltelco, and ICO (World Com) the past week to conduct lectures on communications policy in the new government...
...She carried back a portfolio of sage tips for Allende from her recent visit...
...The Chilean military will not move unilaterally to prevent Allende from taking office...
...General Schneider was gravely wounded by shots fired by occupants of a car described as a white-grey Falcon...
...He also is brash, at times quite arrogant...
...And it would be altogether believable were it not for a few grim undercover signs that clearly indicate the leftwing extremists (Castroites, Maoists) have already moved in to consolidate power bases from which democracy will be slowly but thoroughly strangled long before Allende's six-year tern is up...
...Key press party Wednesday evening...in Cristobal hotel...
...Korry said if Mr...
...I DISCUSSED THE SUGGESTIONS WITH GUILFOYLE...
...A key factor here is economics...
...representatives of international banks take a strong stand against any loan to countries expropriating American companies or discriminating against foreign private capital...
...PERSONAL & CONFIDENTIAL TO: Hal Hendrix, ITT HQ NY FROM: Robert Berrellez- ITT LA BA- CHILTELCO DATE: October 25, 1970 (sent by traveler) SUBJECT: Chileans 1. Marxist Salvador Allende has been elected to the Chilean presidency by the congress and the first step toward the total communization of this country has been taken...
...Yesterday, authorities arrested a retired police Major, Jose- 18 - Cabrera, and found a small arsenal in his home...
...Incidentally, Bernie leaves on Saturday for Europe so you will have to work fast on that end of it...
...Allende will inherit an economy in critical condition...
...Feedback from some of these sessions indicates that Allenle has become gravely concerned about the sick state of the Chilean economy...
...The military has shown no disposition to act in the clutch...
...It is very helpful to have your thoughts and recommendations, and we shall certainly take them into account...
...If it turns out that some toplevel military chiefs are involved, even indirectly, with Viaux, this will give Allende the - 22 - moral and political authority to purge the Armed Forces command and move his men into strategic military positions...
...vote with him...
...Well-informed Chileans and some U.S...
...New York-September 29, 1970 To: Hal Hendrix - ITT HDQS - N.Y...
...Geneen's concern and appreciated his offer to assist...
...He said the papers was (sic) "inciting sedition and if this continued we cannot control the MIR, which wants to burn the plant...
...Such an election would most likely match President Eduardo Frei, then eligible to run again, against Allende...
...Men of Allende's own party, the Popular Union Committee, have visited Havana regularly for briefings and money-in dollars from the Russians...
...private concerns will quickly bring Allende face to face with U.S...
...Prat supported Schneider in his attitude toward General Roberto Viaux, who had attempted to spark a military coup earlier...
...He has made it clear he plans to proceed as soon as possible with nationalization of industries that would allegedly benefit Chile, using legal means and providing compensation-without being specific...
...will not vote for him...
...More important, massive unemployment and unrest might produce enough violence to force the military to move...
...He asserted the Popular Unity Front does not wish to do away with unions since they represent the workers and the government is of the workers...
...Secretary Meyer Early Saturday morning I telephoned Assistant Secretary of State for Latin American Affairs, Charles (Chuck) A. Meyer, at his office...
...Frei has not rallied the Christian Democrats as is believed possible...
...More than 5,000 of these workers have been on strike since October and may well still be on strike November, giving him a colossal headache with his inauguration...
...But he is remaining in the Washington and New York area for a short time...
...HE CONTACTED A COUPLE OF COMPANIES WHO SAID THEY HAD BEEN GIVEN ADVICE WHICH IS DIRECTLY CONTRARY TO THE SUGGESTIONS I RECEIVED...
...Allende heightened these fears when he made it known he would break the backs of the "labor aristocracy" in Chilethe mine workers...
...Numerically the extreme left may be small, but it has been proven in post-war Europe and more recently in Cuba that a militant, disciplined minority can quickly and effectively neutralize and overpower a majority...
...Meantime, the Russians are busy helping shore up Allende's defenses...
...He also said Edwards could return to the country (he is in the U.S...
...4. All past evaluations of Frei's weaknesses in a crisis are being confirmed...
...He did not attend a farewell cocktail party for the diplomatic colony arranged by Valdez...
...A widespread belief is that the Schneider plot was handled from within the army...
...Since he formerly worked for UPI, which S-H still owns, we had no problem in establishing a good working relationship...
...Apparently he is planning several columns on the subject in the days ahead...
...I. Could he be persuaded, Matte was asked, by assurances of the fullest support from Washington...
...El Mercurio newspaper is about the only source fighting Allende...
...agents...
...Since then, groups of the Radical and National parties that have been wavering have jumped on the Allende bandwagon...
...He is a great name and place-dropper...
...The main conspirators, said El Siglo, were the CIA and General Lanusse of Argentina...
...For the time being, only 2 of its 7 floors will be open for guests...
...Once the Christian Democrats swung to Allende at their national convention October 5, hope of stopping Allende and his Marxist-Socialist Unidad Popular evaporated quickly and the gloom took hold firmly...
...At the end when it was mentioned we were, as always, ready to contribute with what was necessary, he said we would be advised...
...Within two years the process would be complete...
...9. It is no secret that Korry was highly impressed with Christian Democrat Radomiro Tomic's chances of winning the last elections...
...There has been an enormous lack of imagination prevalent in the Latin section of State under Meyer's direction, with very few exceptions...
...PERSONAL & CONFIDENTIAL INTER-OFF ICE MEMORAN DUM ITT WASHINGTON OFFICE 1707 L STRE ET, N.W...
...He is known to have consistently blocked coup efforts by more determined general officers...
...The Marxists will not be provoked...
...His first guests, a group of about 75 on an American Express tour, were expected to arrive in the hotel during Thursday...
...Hendrix, Mr...
...The success of this maneuver rests in large measure on the reaction of the extreme and violent (Castroite-Marxist) left in Allende's camp...
...At Worldcom, according to Prat's notes, singular emphasis was made on the fact Allende would create a government of the workers...
...That threat must be provided one way or another through provocation...
...IT IS CLEAR THAT THE STRATEGY OUTLINED IN THE HENDRIX MEMORANDUM IS THE BEST COURSE TO BE FOLLOWED...
...GENEEN-INTEL BRUSSELS FROM: E.J...
...Like Jones, he has a habit of using people to his advantage until they are of no use to him...
...Korry alienated Chilean friends, antagonized his Chilean critics and embarrassed many Americans with his petu- lance in the final days of the Frei government...
...Rene Schneider, head of the Armed Forces until he was gunned down in late October (see Oct...
...rate on Monday, September 28...
...I think you will find it most interesting...
...Everyone foresees an Allende victory in Congress unless some last minute miracle takes place...
...9. It is obvious from his latest remarks, however, that Allende feels something is in the wind to deprive him of the Presidency in the Congressional vote...
...In his private conclusions, Prat observes that the pitch was made to put the workers at ease, all of them including those who might not have voted for Allende...
...The assailants escaped and there was no immediate indication who was involved...
...4 election, has a lawyer who has indicated more Army brass may be involved...
...2. In view of important recent developments, a major question is what immediate steps the communists will take to consolidate their beachhead...
...3. SAVINGS AND LOANS COMPANIES THERE ARE IN TROUBLE...
...Already leftist elements in other countries of the hemisphere are getting bolder...
...Tomic Korry feels the loss of the election by Tomic started him on a downward plunge from which he will not return politically...
...Vaky said to thank Mr...
...Although a Marxist and an admirer of Castro, Allende sees himself a a iWestern hemisphere Tito who will forge his own utopian version of socialism: at once palatable both to Washing- ton and Moscow...
...172 014%r~ Nc~awwdlr- 10 - I. Copper companies...
...private enterprise can provide only that part which a proper climate affords...
...among topics discussed was expropriation...
...Its interior decor is in very good taste and done exceptionally well...
...Both believe Allende will start early and systematically attack foreign private enterprise...
...Policy The unfortunately heavy probability that Allende will take office in November is well known to the State Department and Embassy Santiago...
...8. Fernandez Ona's mission is said to be concerned mainly with the shoring up of security for the governing coalition against a military coup or subversion from any other quarter...
...Yet, when the election of Allende became a near certainty, former OAS Ambassador Sol Linowitz said: "I think the best course for the U.S is not to rock the boat, respect the decision of the Chilean people, and hope that out of this will come a mature system, with democratic rights preserved...
Vol. 6 • April 1972 • No. 4
