CHILE: THE UNITED STATES PROPPING UP THE JUNTA
Boyer, Roger & Felice, Bill & Farnsworth, Elizabeth
MIGUEL ENRIQUEZ- PRESENTE NACLA dedicates this issue to Compafiero Miguel Enriquez, Secretary General of the Movement of the Revolutionary Left (MIR), who died in combat on October 5, 1974. The...
...But in Chile the corporations face a far different situation with an internal market one-tenth as large...
...480 8.0 33.1 34.8 7.6 6.3 5.9 2.5 2.4 37.0 Title I (sales) 0 25.9 29.6 0 0 0 0 n.a...
...We need to do this to attract investment...
...In addition he has long worked closely with U.S...
...In Fortune Magazine a recent survey of foreign capital in Latin America explained why the southern hemisphere's mineral reserves lure foreign investors despite the possibility of expropriation: "Remarkable as it may seem to other businessmen, taking those lumps and coming back for more is part of the game for oil and mining men...
...Brazil sold commodities ranging from coffee and cotton to sugar cane, while in 1974 over 80 percent of Chile's export revenue will come from one export - copper...
...Some day those who perpetrate the injustices and inflict the pain upon the Chilean people will face the consequences of their actions...
...12-19...
...2 1 The reopening of full Exim lending to Chile will help the junta not only because Exim loans are given on good terms (especially considering the current high interest rates in the regular capital market), but also because Exim guarantees and insurance will encourage private banks to grant more credits at better terms to the junta...
...17 In addition to helping Chile out with quick capital, the IMF played a key role in getting the rescue operation rolling...
...The Agricultural Bourgeoisie To bring about the "capitalist modernization of agriculture," the junta is returning land to former owners, in the belief that this will increase production...
...Counter-Revolutionary Apparatus: The Chilean Offensive," NACLA Report, July-August, 1974...
...Considered tough and pragmatic, one acquaintance of Saez said of him before his appointment to the government: "He is very smart...
...To oust Allende the bourgeoisie had built alliances with the middle sectors and their party, the Christian Democrats...
...Though the liberal state had served the bourgeoisie's purpose in the past, it no longer did so...
...Normal unemployment at any one time has been 60,000...
...Like Vietnam it seems destined to play a central role at this point in history for the following reasons, among others: (1) The coup in Chile, and the current rescue operation, should be seen as part of the post-Vietnam "imperialist counter-offensive," where the United States tried to make up for economic and political losses incurred during the long Vietnam War...
...This procedure contributes to an effective alliance between the military and the private agricultural sector...
...0 According to interviews in the Bank, the United States, in pressing for the loan, met opposition from Mexico, Peru, Venezuela, Colombia, and Canada, all of whom opposed the junta's repressive policies...
...The Mudd family and Union oil form part of a powerful financial group based in Los Angeles...
...According to the document, the most "natural" form of ownership, is with the individual, not with groups...
...He's the kind of man who would insult the Pope...
...2 3 Proceeds obtained from the sale of the treasury notes issued by Adelantos y Creditos Ltd...
...8. The $316 million figure is from IDB, Chile, Resumen de la Estrategia del Banco para el Periodo 1974-1976...
...When Raul Saez and Fernando Leniz came to the United States in late January and early February to present the junta's case for bilateral and multilateral financial assistance, the Council of the Americas provided them with a forum for meeting U.S...
...Further, they know that now they must help prove that the pro-U.S...
...public...
...4 After this trip, the credit flow began in earnest...
...and most recently, Assistant Secretary of State for International Organization Affairs...
...218,612,000 Spain...
...Tad Szulc, Master Spy: the Strange Career of E. Howard Hunt (New York: Viking Press, 1974), p. 66...
...supersonic jet fighters and ground attack planes also included the allegation that Chile sought the weaponry "because of concern that Peru may eventually go to war against Chile...
...Chilean affiliate issued $11.2 million in bonds for the junta...
...and at least $150 million in private U.S...
...We recognize that the responsibility for the death of Enriquez falls as much upon the shoulders of U.S...
...In September, 1974, the junta announced it had hired Henry Gardner, a retired Anaconda vice-president for public relations, as an official lobbyist...
...continued infiltration of leftist political parties, now underground;* and supporting groups within Chile which further U.S...
...Japan is also purchasing more of Chile's iron ore: about $60 million worth this year...
...Under Frei, Cauas served as Vice-President of the Central Bank, but after Allende's election, he (like Saez) left Chile, and through his connections with the international finance community, set up and directed a studies department at the World Bank...
...High priority is to be given in these studies to preparation of projects in sectors such as mining, metallurgy and manufacturing, nutrition and fisheries, transportation and water planning...
...Representing the first move by a foreign bank into the local Chilean capital market, the motives for Citibank's action originated across the Andes...
...To negotiate with the copper companies, the junta has appointed Julio Photo by Paul Cantor Philippi, who negotiated the "Chileanization" agreements between the Frei government and Anaconda and Kennecott...
...interests...
...3 The rise in prices is supposed to effectively limit the communities' purchasing power...
...3. James Petras, in "The Future of Revolution in the Third World," Liberation, May 1973, helped clarify our thoughts on this point...
...However, U.S...
...Hernan Uribe, La Opinion, Buenos Aires, September 11, 1974...
...Although similarities exist between Chile now and the nineteenth century enclave economies of Latin America, the analogy must not be carried too far...
...Another international bank, the First National City Bank (Citibank) moved back into Chile, but for reasons of self-preservation rather than speculation...
...Latin America in particular supplies the United States with many key minerals, as well as providing the third largest market in the world (after Canada and the European Common Market) for U.S...
...Largest U.S...
...and 1973, $95.3 million.' 6 The loans were attributed to certain well-placed officials in the IMF bureaucracy who were sympathetic to the UP, and to the strong European influence in the Fund as a whole...
...U.S...
...What could be better than a new "Chile model" based on laissez-faire capitalism...
...Now, members of the Chilean-American business community on both continents are acting to rejuvenate capitalism...
...The "new dialogue" or "good partner" policy represents the soft-gloved approach, the recognition that the United States will have to give on some points that don't really matter in order to win on ones that do...
...Anaconda, Kennecott, and the Cerro de Pasco corporations had been taken over under Allende with the support of even the conservative political parties...
...Thomas Balogh, a British economist, once wrote that the Fund fulfills the role of the "colonial administration...
...The ASC's propaganda work for the junta (mainly justifying the junta's cause in its newsletter and in radio shows) reflects the intense interest of certain right-wing (mainly western) business groups in economic opportunities in Chile specifically and Latin America generally...
...San Francisco Chronicle...
...needs...
...With the junta installed, the companies hoped for better treatment...
...All three of these men at the Council serve the interests of the Chilean-American business community by organizing forums for junta representatives and encouraging U.S...
...To do this, the junta is paying at least $300 million to the copper companies...
...His willingness to join the junta's government could signal the entrance of other Christian Democratic technocrats...
...perhaps through AIFLD - funded this trip...
...52 million in new bilateral U.S...
...2 3 The military aid request itself - $21.3 million - also represents a large increase over authorizations for previous years (around $15 million for FY 1963 and $11.5 million for 1974).24 Further, A.I.D...
...cit., p. 48...
...s13 In this depressed economy, the unskilled laborers, the rural migrants, and the shantytown squatters suffer the most...
...As part of the contract, the company is demanding from the junta "strict guarantees on profitability and recoupment of capital...
...AID TO THE JUNTA (Amounts Requested for FY 1975) Amount $20 million $ 1.35 million $37 million Description Loan to finance agricultural imports Grant technical assistance for the agricultural sector (training and studies) PL-480 (Title I and Title II), principally for wheat and corn $ 0.8 million Grant military assistance for U.S...
...credit blockade and their part in the current rescue operation...
...Senate, Senate Foreign Relations Committee, Report on the Foreign Assistance ACt of 1974, p. 23...
...Their goal at this time is to form the widest possible anti-fascist front to struggle for (1) the reestablishment of basic human and political rights...
...Headed by David Rockefeller, the Council calls itself the "chief spokesman for U.S...
...Information on these men gathered from corporate archives in Chile, and from Diccionario biografico de Chile, 1968-1970, (Santiago, Empresa Periodistica Chile, 1970...
...Otherwise, taking October 1971 to October 1972 as a base (before the most vigorous economic sabotage by the right), no sector of industrial production has increased since the coup...
...Launched a small copper mining project with a Chilean firm...
...Around June, 1974, the company set up an office in Santiago and moved a large mining exploration team into Chile...
...The Bank of America soon joined in the rush by forming another banking syndicate to aid the junta...
...A 30 percent across-tne-board wage increase granted at the end of April was wiped out by the end of June by inflation...
...There have also been mass firings of agricultural wage laborers, leaving thousands of rural workers migrant and landless...
...Shortly after this conversation, though, the Bank stopped "dragging its feet" (as the Embassy spokesman put it) and reopened its short and medium term guarantee and insurance program...
...Besides the two loans already granted, the IDB is considering at least two other large loans: for a liquid gas project and for a Chilean Development Bank...
...In this way the junta returned companies that had been "illegally" taken over by the UP...
...But, to let these essential imported items find their "market" level, no price ceiling is set on them either...
...Telephone interview with official at Cyprus Mines Corporation...
...3 In the world of the 70s, the United States has to fight for economic survival...
...As Raul Saez stated before the Interamerican Committee of the Alliance for Progress: "Abstracting from the political situation, it is technically and socially recommendable to decree a law putting an end to the process of agrarian reform...
...31, June 22-28, 1974...
...They are distinguishable from the bourgeoisie in that their activities are usually limited to one sector of the economy, and they have few contacts with foreign capital...
...Minister of the Mines Arturo Yovane put it this way: "We must once and for all put an end to this myth that foreign investment is an act of imperialism...
...ruling class with its governmental hand puts a token portion of the economic surplus back into the victimized country through relief programs and infrastructure projects...
...beverage industries down 19.7 percent...
...According to Interamerican Committee of the Alliance for Progress (CIAP) and International Monetary Fund (IMF) studies, for the junta to complete its plans, it must receive a total of $1 billion in foreign capital in the next year...
...12, 1973), a weekly publication for businessmen, noted: The Bankers' quick response to the junta's plea for "a little Marshall Plan" is something of a mystery...
...European firm which retook control of Vidrio Lirquen, a glass factory...
...During the Popular Unity government, the workers and peasants became increasingly aware that the principal enemy stand* By "Chilean bourgeoisie" is meant the group of Chileans that holds large investments spanning across the industrial, financial, agricultural, commercial, and mining sectors of the economy...
...workers councils were abolished...
...See Part III), the Council organized an informal reception for Saez and Leniz -to speak to business leaders from the area...
...Military Apparatus, 1972, pp...
...1 Presently, Cauas is a member of the American Economics Association...
...interests...
...9. Inter-American Development Bank News Release, March 30, 1974...
...The part that is taken away from them is the part that is necessary to eliminate the excess of money that exerts pressure on prices and makes them rise...
...The Exim decision was a kingpin in the blockade, since it signaled to banks and governments around the world that Chile had been placed "beyond the pale...
...Alvaro Catalan, "La Penetracion imperialist en el movimiento sindical chileno," Boletin Informativo, Documento No...
...Chile: A Wobbly Economy Needs Foreign Help," Business Week...
...For more on the "Guatemala Lobby," see Susanne Jonas, op...
...Industrial and Financial Bourgeoisie The members of this sector of the bourgeoisie have historically remained flexible with their capital so that they could respond to changing conditions...
...1970 (see table from it reprinted in New Chile, op...
...Just as guilty as those who pulled the trigger are Mr...
...In the past, PL-480 has provided just this sort of hidden military and economic assistance...
...delegates favor, in return for U.S...
...Recently, the junta announced that even this old symbol of Chilean nationalism may join the list of firms for sale to the private sector...
...Embassy until his transfer to Washington in June 1973.' Behind these men and others who worked with them, the business interests which had pushed for the U.S...
...turning agrarian reform into a vehicle for the restoration of private property, caused the removal of three different vice-presidents of CORA in the last 11 months...
...Business Latin America, July 3, 1974: 22...
...Next, it moved to "normalize" relationships with nationalized foreign companies like Anaconda and Kennecott...
...Finally, private investors were called on to provide at least $100 million in investments...
...97401...
...Won a contract for constructing a $40 million smelter...
...U.S...
...A recent study on the multilateral development banks prepared for the House Committee on Foreign Affairs leaves no doubt that the United States controls the IDB and the other multilateral Development Banks, when it states, For the most part the banks have channeled funds to countries in which the United States has strategic and diplomatic interests and have refrained from lending to countries with which the United States has investment disputes...
...6 Credit worthiness was not at issue now that a capitalist regime was in power...
...Resumed general management functions of General INSA...
...One other group of foreign investors is also delighted with the junta - the expropriated copper companies...
...AIFLD played, a key role in the counterrevolutionary activities of the Chilean Right during the UP years, mainly by helping build and fund the anti-UP "gremio" movement.45 Many of the same AIFLD-supported leaders and groups which formed the bulwark of the civilian counterrevolutionary movement in 1971-73 now lead the juntabacked Central Nacional de Trabajadores (CNT), formed in January 1974 to replace the 22-year-old Central Unica de Trabajadores (CUT), which was outlawed immediately after the coup, as were nearly all Chile's unions...
...587,698,000 Greece...
...3. Though the wheat deal was not announced until October 5, the purchase was actually made, "subject to the availability of U.S...
...Decision 24 of the treaty establishing ANCOM places a ceiling of 14 percent on annual profits for foreign enterprises...
...The 200 companies include virtually every line of business - from fishing, poultry, textiles, and glass to tires and television industries...
...Certain luxury goods are no longer banned...
...In 1970, the bourgeoisie made Saenz president of SOFOFA, Chile's national association of manufacturers, which marked the first time in a century that the SOFOFA president did not come from the ranks of the upper bourgeoisie...
...Only in October 1973 and January 1974 have slight monthly increases in industrial production been registered...
...At a CIAP meeting in Washington, D.C., held in early February, the multilateral banks, junta representatives (including Fernando Leniz and Raul Saez), observers from the State and Treasury Departments, and Chile's major creditors got together to discuss the junta's "recovery program" and plan the aid effort...
...AID, U.S...
...2 " Nevertheless, there should be no illusions that the State Department or any leaders of the Ford Administration really care whether or not the junta murders and tortures thousands of Chilean leftists...
...The junta has taken a number of actions to lure foreign capital from the metropolitan centers...
...Granma, Havana, September 22, 1974, p. 9. 19...
...Upon arrival in Santiago, Harberger stated: "I think it is important for this country to learn from the Brazilian lesson with the goal of applying it and improving it in Chile...
...To be consistent with its overall policy of less state control, the junta is trying to return the banks nationalized by Allende to the private sector...
...if the Chilean economy can be fully revived and a "Brazilian miracle" induced, then these early investments will prove exceptionally profitable...
...1 4 General Gustavo Leigh makes the point explicit: "The only thing we offer is work, work, work...
...Aside from major acts like the destruction of part of the port of Valparaiso and the flooding of the mines at Lota, the workers under the direction of the clandestine political parties are carrying out small acts of sabotage on a day to day basis...
...Finally, the peasants are not benefiting from the increase in food prices...
...and states that foreign capitalists cannot invest in transportation, insurance, banking, or public services...
...In the future the bourgeoisie will reinforce their monopolistic positions and will join with foreign capital in further investment opportunities...
...creditors (the Paris Club...
...bilateral aid, especially military aid, still plays an important role in U.S...
...The Falconbridge corporation, which runs a $195 million mining investment in the Dominican Republic, recently offered to develop the huge copper reserves at El Abra in Chile...
...Later in an interview with El Mercurio, Harberger pronounced the junta's economic program a success: "I am really surprised that the country has been able to overcome so great an economic chaos in so short a time and at relatively little cost . . ." Harberger and others like him who taught at the Catholic University in the '50s and '60s appealed to a group of Chilean economists and engineers who needed an ideology for their conservative political beliefs...
...3. Metals Week, November 28, 1973...
...the threemember panel which selected Martin contained Henry Raymont, a privately affluent correspondent for a Brazilian newspaper, O Mundo, and Eduardo Schijman, a correspondent for El Mercurio in New York who works for the Chilean Trade Corporation.1 4 The defense of the junta has forced right-wing correspondents for the interAmerican business community to bestow awards upon each other...
...Instead the RCA sets ended up costing 43 percent more (partly because of the air freight costs).2 The fact that the government would spend dollars on this luxury item for an experiment in economics, and then have the whole thing backfire, indicates their poor economic sense...
...Chile needed money, and the United States moved quickly to get the money (and food) flowing...
...Further, State used an argument which is quickly becoming central to the "Junta20 Lobby" (see box, below) - the "War with Peru" argument...
...law prohibits resale of military equipment to a third country, but France and other countries have often done this in the past...
...Founded in 1962 to undermine Marxist-oriented unions and promote "safe," pro-U.S...
...Their smaller rivals are less fortunate...
...Ercilla, Santiago, July 17, 1974...
...After the coup, it was only a matter of time before the Junta's policies would force him out...
...Henry Kissinger who coordinates and leads the imperialist offensive against the peoples of Latin America who fight for liberation and socialism...
...With a worldwide recession - or perhaps even a depression - setting in, the junta faces problems that the Brazilian military never encountered...
...Foreign capitalists are playing an astute game in this regional dispute...
...9 The loan looks like a simple act of humanitarian aid, but, in fact, it has been surrounded by controversy from the beginning...
...Because of the way AID presents its programs, exact figures are difficult...
...Melo and Yost, "Funding the Empire, Part II," op...
...The covert apparatus" 3 9 - built up throughout the Frei years and perfected in the UP years - now has the crucial task of aiding from inside Chile the Junta's repression of the Left and thus helping the bourgeoisie in its effort to reintegrate the economy into the U.S...
...On grounds of legal technicalities, over 1,200 of these grants (that were supposedly "irrevocably" given to the people who worked the land) have been returned to their previous owners...
...In the 25 years before 1970, the Eximbank supplied Chile with $600 million in direct credits and had guaranteed private bank credits to Chile against the commercial and political risks of nonpayment...
...2 8 The Military The nouveaux riches of the Counterrevolution is the officer corps of the Chilean military...
...Then as now, the most important factors in Chilean development remain rooted in34 the country itself...
...Sybron/Argentina British Smelter Construction & Selection Trust Dow Chemical Company General Tire & Rubber Co...
...The junta has already created severe divisions within the common market, and whether or not it succeeds in revising Decision 24, the junta will permit foreign capital to enter Chile on terms that violate the spirit, if not the letter, of the treaty establishing ANCOM...
...in addition see the table in New Chile, p. 48...
...Citibank bought up half the notes itself, while the remainder were picked up by private investors in small lots...
...On September 10, 1974, the Council of the Americas sponsored another meeting for a junta spokesman...
...And today, the junta encounters problems in obtaining international assistance that the Frei government never faced...
...Further, the junta began a three year "reform" of Chile's formerly protective tariff system, eliminating prior import deposits and import quotas...
...Enjoying close ties with the Stillman-Rockefellers who operate through the First National City Bank, the Schroders are also well experienced in working with fascist...
...and Brazilian police and military officers are "advising" the DINA...
...According to one report, Allende revealed shortly before the coup that "one of the main elements in the anti- government blackmail used by the military was an alleged problem with Peru...
...Although Chile now produces preconcentrates rather than pellets, the Japanese firm of Mitsubishi has signed a preliminary $50 million credit agreement for construction of a pellet plant in Chile...
...In line with this, the junta's economists have been pushing exports and urging investment in the export sector of the economy...
...The December renegotiation was particularly significant, because the United States refused - as part of its credit blockade - to make the same agreement with the Allende government, in spite of the fact that the general terms for the agreement were laid down in early 1972 at meetings of Chile's major18 The emphasis which we have placed upon the paraphernalia of democracy, on income equality, on welfare programs seems to me to be misleading...
...He had been one of the main directors of U.S...
...12, 1973...
...In return, the country is required to undertake certain IMF-approved measures to solve its financial problems...
...The U.S...
...The bankers knew that the survival of this government depended partly on their swift action...
...Although Nixon is gone, the economic and political power of the group remains intact...
...For more on AIFLD, see New Chile, op...
...This announcement was made before the junta decided in late June that state personnel would be cut by 20 percent - another 100,000 jobs - by the end of 1 9 7 5 ." Together this puts official unemployment by 1975 at 20 percent - 600,000 jobless...
...Though our 'gorilas' [the junta] do not understand it themselves, their government was an international miscarriage...
...The Chilean bourgeoisie itself must receive nourishment from abroad, from the flow of foreign capital...
...The junta argues that this is an anti-monopolistic policy, since it forces national monopolies to compete with goods from foreign countries...
...This would be nothing new for the United States...
...Other leaders of the CNT with close ties to AIFLD include Manuel Rodriguez (attended AIFLD school in Virginia, October 1973...
...Made a $500,000 investment in a Chilean finance bank...
...Although forced to accept the irreversibility of expropriation, these companies, led by Kennecott, waged economic warfare against Chile when Allende declared that excessive profits would be subtracted from any compensation payments...
...corporations which are designed to renew the flow of capital and to stabilize Chilean capitalism...
...The job of revolutionaries and workers is to develop a stronger and stronger resistance that can deprive the dictatorship of their "public order" and stop them from succeeding in the super-exploitation of the worker...
...public safety advisors" have helped set up political intelligence divisions in other countries...
...WEAPONS FY 1974 Iran...
...According to sources who spoke recently with members of the U.S...
...For one thing the military cried out that the economy was on the brink of bankruptcy when it took over...
...and in 1972, $5.9 million...
...While gouging a Third World country with its corporate hand, the U.S...
...Within Chile, this policy complements the needs of the group that has been restored to its old position of economic preeminence - the Chilean bourgeoisie.* Though the military proceeded to restore industries and lands to old, wealthy families such as the Edwards, the Yarurs, the Mattes and the Larrains, the bourgeoisie as a group faced tremendous problems in recreating a society that would once again respond to its exploitative interests...
...The Council of the Americas declared that "investors do not invest to go out of business" while ADELA labeled the code a "serious disincentive" to future foreign investment.34 In spite of these protests, ANCOM proceeded with its program of regional integration, and received added strength from the entrance of Venezuela...
...and (2) once he was elected, to get rid of him...
...The Peruvians explained that the Aeroflot agreement was exactly the same as agreements signed between Peru and other airlines operating there, including LAN-Chile and Braniff...
...The work of progressive people around the world to keep back the aid hamstrings the junta while aiding the Resistance inside Chile...
...4 3 Since that time, the junta has organized the Direccion de Intelligencia Nacional (DINA) to coordinate the intelligence branches of the Army, Navy, Air Force and Carabineros...
...financial community, conduct the economic Counterrevolution...
...The junta has raised electricity rates 1,100 percent, which pleases the capitalist mentality of Bank planners...
...A long-time intelligence operative, Hinton helped orchestrate the antiUP "invisible blockade" from his position as deputy Director of the Council on International Policy...
...Chile has seven and one-half years before it need begin repaying the loan, which was extended from the Fund for Special Operations for a term of thirty years at an interest rate of 2 percent per year...
...The junta's press spokesman, Alvaro Puga, described a corporate state in the following way: "representation is through natural organizations and then through channels to the top...
...They dutifully put forth an outline of a capitalist cure for Chile's economic problems...
...Although the death of Enriquez is a cruel blow, the long, difficult struggle in Chile has just begun...
...Many of our sources - whether in banks or government - wish to remain anonymous...
...3,794,369,000 Israel...
...Much of the information for this section comes from sources inside the Eximbank as well as interviews in private banks in New York and San Francisco...
...Due to the UP's*rsocialist policies on the one hand, and the U.S...
...and Alvaro Catalan, "El Movimiento sindical chileno a un aio de la junta, ibid., September 1, 1974, pp...
...corporate elites...
...4 7 Further, according to the Chilean Embassy in Washington, D.C., the State Department and the AFL-CIO arranged and funded a recent trip to the United States for "several Chilean labor leaders...
...Ercilla, September 4-10, 1974, pp...
...In Chile, Operation Rescue is designed partly to mitigate the effects of the enclave economy...
...Argentine/Chilean venture for $15 million to remodel oil refinery...
...3 3 Passage of Law 208 provided additional insecurity for the peasants...
...The IMF, the IDB, and the World Bank said they would provide loans...
...recently revealed to a reporter that junta-ruled Chile counted the following among its most loyal friends in the United States: the American Security Council and the American Enterprise Institute...
...Sources within Chile report that the junta is stocking up on helicopters, small arms, and even tanks...
...2 6 The decision on whether to return the land is made most often by the military officer in charge of the province, while CORA, the agrarian reform agency, is in most cases ignored...
...To do this, the United States provided money and training for the Guatemalan military and police...
...4. Ibid...
...Construction workers are particularly hard hit...
...Ibid...
...they are also closely linked to foreign capitalists through "joint ventures," and through financial agreements affecting international trade and investments...
...Director of the Office of Atlantic Political and Military Affairs ('62-'65...
...Chile is now more attractive in the eyes of the world capitalist community...
...workers' wages remain under rigid government controls, with both strikes and collective bargaining prohibited...
...El Tiempo, July 12, 1970...
...Other agents operate through "deep cover" jobs - in corporations, in the media, in unions and in other positions from which they can gather information and influence events.40 Some of the operatives working out of the embassy in the pre-coup period have been moved to positions in Washington, D.C...
...To defuse the threat of rural guerrilla resistance, the junta has given to peasants a minimal amount of land...
...In its quest for foreign capital, the Chilean-American business community can count on help from the Council of the Americas...
...Santiago Embassy calling the shots as occurred in Guatemala...
...Joe Minerals and former head of W. R. Grace's Latin American operations put it in Fortune magazine: The U.S...
...6. New York Times, August 17, 1970, p. 21...
...The ex-Patron, the old landowner, is now the middle man-paying the peasants low produce prices, and reaping the benefits from the high urban food prices...
...5, 1974, p. 12...
...need for their raw materials...
...By 1970, virtually all of Chile's leading financial groups and families possessed links of one form or another with international capital...
...As always, many agents continue to operate under an "embassy cover," which means that they hold nominal foreign service jobs such as "political officer," or "consular officer...
...In the late 60s a series of special reports, leading up to the Peterson Commission Report in the spring of 1970, recommended that the United States pass more of its foreign assistance to underdeveloped countries through the multilateral banks (like the World Bank and the Inter-American Development Bank - IDB) in order to defuse the criticism that U.S...
...One of Nixon's economic advisors, William J. Fellner, also worked at the American Enterprise Institute as a "resident scholar...
...The Workers The measures of the economic Counterrevolution have had the greatest repercussions on the industrial workers...
...2 s Ever since the FY 1975 figures were announced, opponents of the junta battled to cut down or completely eliminate some of the programs, especially the military provisions...
...Planning a $55 million joint venture to develop iron ore deposits...
...Confronted with reluctant owners, the junta was forced to offer shares of the enterprises on the market and even had to advertise them in El Mercurio...
...Price controls were removed under the belief that the "laws of supply and demand" would level them at their true value...
...In May all public transport fares doubled overnight...
...Overriding the junta's program is "the decentralization of economic policy...
...The story actually reaches back into pre-coup days...
...Conclusion The primary role of the State within the economic Counterrevolution is to repress the desires and dreams of the workers and poor of Chile...
...The American Security Council has helped and been helped by Richard Nixon...
...James R. Schlesinger, "Strategic Leverage from Aid and Trade," in National Security (New York: Frederick A. Praeger, 1963...
...From interview at Manufacturers Hanover Trust...
...One investment banker stated succinctly: "Chile is pretty well screwed because of the tremendous liquidity squeeze...
...After engineering the overthrow of President Jacobo Arbenz, the United States had to become "the guarantor of the Counterrevolution," and to oversee the attempt to make Guatemala a "showcase for democracy...
...counterinsurgency operations from Greece to Indonesia, and Chile was to be no exception...
...For the first seven months of 1974, imports equalled $1.4 billion compared with the total for 1972 of $941 million...
...ruling class and the Chilean bourgeoisie form two sides of the same coin...
...Further, the situation changes rapidly, and it is often months before exact amounts are clarified...
...Denationalization The other aim of unfreezing prices is to encourage the private sector to re-assume control of the state-owned companies...
...Although based in Canada, Falconbridge in fact is controlled by a Houston financial group headed by the Keck family of Superior Oil...
...Thus, the International Transport Fed- In the next year, as in the last, U.S...
...Thus Union Oil, which is connected with the drilling activities of the Diamond M company, is also linked with the venture of Cyprus Mines...
...is On February 23, Chile reached a basic agreement with its main creditors on renegotiating payments due to them in 1973 and 1974...
...7. Information from correspondence retrieved from a wastebasket at the Chilean embassy in Washington, D.C...
...Perhaps to help insure that copper-producing nations do not unite, Kissinger recently made Deane Hinton Ambassador to Zaire...
...The U.S...
...The situation is so desperate for the majority of Chileans, that the State must resort to censorship, political prisoners, secret police - i.e., authoritarian rule - to maintain control...
...The cost of cigarettes in June went up 115 percent...
...Boletin Informativo, Comite Chileno de Solidaridad Con la Resistencia Antifascista, Havana, Cuba, No...
...5. James A. Noone, "Materials Report/Shortages, Oil Price Hike Provide Impetus to Look at Prices," National Journal, May 18, 1974, p. 745...
...As this Report went to press (early October), the outcome of this battle was unclear...
...Edgardo Enriquez, Miguel's brother and a MIR militant since its inception, issued the following statement after the death of his brother: My brother's death in combat, which has increased his political stature, is a message to the struggle and an example which will live on...
...In response, the junta threatened to suspend copper shipments to the United Kingdom and is trying to buy used Hawker Hunters from the Royal Air Force of Lebanon...
...2.1 17,623,000 Saudi Arabia...
...It also ordered 200 armored personnel carriers from the General Motors subsidiary in Argentina...
...Worst of all, it had led directly to the victory of the Unidad Popular and the near Revolution of 1972-73...
...Phelps Dodge Corporation Crown Cork & Seal Company General Motors IT&T Arthur G. McKee & Co...
...The junta put off making economic decisions until mid-October when Saez returned from Venezuela...
...4. Richard Armstrong, "Suddenly its Maniana in Latin America," Fortune, August 1974, p. 140...
...s The Allende government never asked for a "standby loan" but did receive the following loans under its "compensatory drawing rights" (to offset the low export price of copper): in 1971, $42.9 million...
...At the same time, in order to present a good image to the world, the junta needs labor spokesmen and the facade of a labor movement to hide the repression of the workers...
...Figures are for Calendar year...
...Today, October 1974, unemployment surpasses 25 percent...
...After 1967, he became Chief of Public Relations and Government Affairs for the Ford Motor Co...
...The agreement simply assured that the Peruvian government could dispose of private air facilities in case of conflict or natural disaster.36 The October 7, 1974, story in U.S...
...Few old owners wanted to do this due to the size of the debts and the lack of consumer9 THE WORST OF IT IS THAT NEITHER THE BUSINESSMAN NOR THE CONSUMER HAVE ADAPTED THEMSELVES TO THE NEW REALITY...
...The American Security Council (ASC), set up in 1955 to run security checks on prospective employees for member industries, is a key lobby and forum for what Newsweek magazine once called "the military Right" (December 4, 1961...
...operates the Tejas Verdes torture center...
...September 18 and 19 in solidarity with the anti-junta Nevertheless the junta apologists have not been very protest carried out all over the world during that month...
...Thus, the IDB claimed that it could not grant the UP the $75.3 million loan because of the UP policy of keeping electricity rates for the public low...
...And if that does not satisfy them, let me know - we'll shoot a few and you'll see how they obey...
...counterrevolutionary operations while in the U.S...
...newspapers have been forced to run more critical stories...
...In New York, the junta appointed Adolfo Yankelevich as press attache, who in the 1950's and 1960's worked with McCann-Erickson and the Kennecott corporation...
...For biographies of CIA agents active in Chile in 1970-1973, see NACLA's October 1973 Report, and ibid...
...In addition to the need for direct investment by foreign companies, the junta also seeks loans from the United States' AID Program and from international lending agencies...
...Perhaps Guatemala after 1954 provided the blueprint for what happened in Chile in 1973-74...
...31.0 16.5 31.9 45.6 11.6 0 0 97.3 - ** World Bank 60.0 0 11.6 19.3 0 0 0 13.6 - ** I.M.F...
...3 U.S...
...private investors...
...Julio Philippi, the junta's negotiator with the copper companies, states: "We are trying to repair certain injustices by paying for the expropriations...
...They hope through merger to compete with international capital and foreign imports...
...covert and military assistance, the junta is frantically building the most repressive apparatus known in Latin American history...
...The middle commander levels and the lower officials have received salary increases, and conscripts have a minimum salary set, plus direct access to credit...
...advertising firm, McCann Erickson...
...This is very small considering CORA expropriated 125 farms a month in 1972 and that there are 55,000 families in the reformed sector...
...the equivalent of around * It is difficult to get exact, up-to-date figures on current loans, credits, and investments going into Chile...
...backers is the growth of resistance consciousness and actions within Chile...
...Under the provisions of PL-480 (which were laid down in the Agricultural Trade Development Assistance Act of 1954 and in subsequent legislation), the United States loans Chile the money on good terms to buy the food from the United States...
...In addition, powerful Cuban exiles, some with long-time CIA ties help push the junta's cause, as does the junta's official lobbyist, Henry Gardner...
...and from U.S...
...Ernest Lefever and Riordan Roett join Rosenstein-Rodan in pushing more aid for the junta (see Section III...
...counterrevolutionary apparatus...
...1st Semestre, 1974, p. 38...
...Gremio in Spanish means guild or trade union...
...Wants to purchase a tire plant being auctioned off by CORFO...
...3 9 With prices at such high levels, the unemployed go hungry and workers are forced on a diet of beans and bread...
...I explained that I had no money to pay wages, to which he replied: "Well, tell them to sell the television sets their precious Allende gave them...
...corporate leaders...
...mining company - the Cyprus Mines Corporation - is especially excited about investment prospects in Chile...
...High stakes are involved in the divestiture of these companies, whose stock in most cases was owned by CORFO, the state development agency...
...By the end of last month, I hadn't any money to pay Friday's wages, so I asked for credit from a bank...
...In the first quarter of 1974, Chile's total exports rose 126 percent to $113 million and further gains should be registered in the second quarter...
...some vociferous congressmen (Fraser and Harrington in particular...
...the junta's redistribution plans serve the rich...
...Called the United Development Bank (Banco Unido de Fomento), ADELA purchased 10 percent of its voting stock with $500,000, while the Deutsche Sudamerikanische Bank invested another $250,000...
...Extended to the Chilean power agency (ENAP), the loan will help finance the 300,000-kw hydroelectric plant as well as help underwrite preliminary design of another plant on the Maule River...
...mainly private interests wishing to return to their lucrative investments in Chile (or make new ones) and U.S...
...The free trade philosophy implies that individual countries export what they produce efficiently, and import what they make inefficiently...
...Repossessed a controlling bloc of shares in Cristalerias de Chile Resumed control of a Chilean subsidiary, INDURA Took control of a 10% bloc of shares it held in Pizarreno...
...Cockburn, Alexander, "Press Clips," The Village Voice, Sept...
...INVESTING IN THE JUNTA 1. El Mecurio, September 29, 1973...
...According to Chilean Embassy figures, CMCP exported goods valued at $15 million between January and March 1974, more than CMCP's total exports for 1972 and 1973...
...Thus, a source who visited the U.S...
...82-86...
...clothing down 16 percent...
...and William F. Buckley, both in his syndicated column and in his television show, Firing Line...
...This sale, financed by the Commodity Credit Corporation, was the largest credit sale to Chile made up to that time under the USDA program...
...Ever since the 1940's, when Chile successfully resisted the efforts of Standard Oil of New Jersey to take control of the country's newly discovered petroleum fields, the oil deposits and the refineries have been under the control of a state firm, ENAP...
...So I did, and I received a visit from a Colonel...
...In fact, according to this report, the military even pro- posed attacking Peru, claiming that "surprise" would be an important tactic to utilize...
...and seven banana-producing nations recently formed an organization to seek higher prices for bananas...
...Manufacturers Hanover Trust, which had been the largest single lender to Chile in 1970, led the way with a $20 million credit to the Central Bank of Chile...
...2 6 The right-wing American Enterprise Institute actually funded Lefever's and Roett's trip to Santiago (see Lobby Box on p. 23 ). The State Department itself sent packets to every Senator defending the military aid request...
...Overseas Loans and Grants and Assistance From International Organizations, July 1, 1945-June 30...
...This decision was arrived at when said authorities [of Chile] after consideration of the overall plans presented by the firm, decided that their realization was not feasible at the time...
...88,264,000 S. Korea...
...By any standards, the amounts - especially from the Inter-American Development Bank - proved significant...
...By July the total reached 200...
...To help pacify the country, policy-makers pushed increased arms sales and oversaw covert operations aimed at repressing the Left...
...Business Week, in a special report on Chile, summed up the prevailing attitude of the financial community when it stated that "venturing into Chile takes a certain amount of corporate courage...
...Why is it so important to "reintegrate" Chile into the U.S...
...the military...
...Jose de la Torriente, who was murdered in Miami in July 1974 (not before he managed a visit to Chile), created a stir in 1970 with a new plan "for the liberation of Cuba...
...In other words, the job of the C.I.A., and * C.I.A...
...Thus far, the petit bourgeoisie has prevented the junta from further denationalization of the banks...
...3. Translation of "Declaration" from Chile Monitor, London, April, 1974...
...Returning to Chile after the coup, Cauas first served in his old position as vice-president of the Central Bank before his appointment as Finance Minister in July 1974.12 Other economic advisors include Jaime Guzmfn, a Catholic University Professor, and member of the terrorist group "Patria y Libertad...
...have announced intentions to merge...
...Second-class postage paid at New York, NY.4 economic growth...
...But Pinochet, Cauas and Leniz, along with hundreds of other leaders of the Counterrevolution do represent a community of people who fit perfectly in the role of carrying out U.S...
...Daniel N. Arzac, Jr...
...In fact in some areas there has been a distinct decrease...
...A.I.D...
...Wall Street Journal, Oct...
...However, under Allende U.S...
...The Chilean bourgeosie knows that its future may well depend on the rise and fall of the price of copper...
...see also NICH, Chile Newsletter, available from Box 800, Berkeley, Ca...
...The decisions lowering the tariff barriers forced medium and small industries within Chile to compete with imported products...
...9. "Dow Picks Up the Pieces in Chile," by Herbert E. Meyers, Fortune, April, 1974...
...capital into Latin America...
...Another mining company experienced at operating in unsettled social conditions is also moving into Chile...
...Only extreme right-wingers like John Ashbrook and John R. Rarick repeatedly voice the themes enumerated above...
...The campaign climaxed on October 19 with the announcement (from a UPI wire story) that Washington would act as the "nerve center" for a Mini-Marshall Plan for Chile...
...The United States had blocked the same $75.3 million request two years ago...
...7. The United States and the Multilateral Development Banks, op...
...a $40 million loan from the Export-Import Bank...
...out of the silence your voices will rise in the mighty shout of freedom when the hopes of the peoples flame into hymns of joy...
...Though corporations forcibly expelled by the Popular Unity government returned to their old factories, they have not undertaken any sizable new investment projects in Chilean industry...
...2 Thus, the Schroder bank came to Chile adept at dealing with repressive regimes...
...Before Allende, the bourgeoisie used the State to maintain order, to provide such services as communications, to construct huge infrastructure projects like steel mills or hydroelectric plants, and to subsidize prices...
...At the same time, the foreign corporations, by playing upon the junta's quest for capital, are using Chile to undermine the Andean Common Market...
...And third, the plan on which the Chilean "model" is to be based, is unworkable, as we shall see below...
...Conscious of the international anti-junta feeling, many banks and corporations simply will not talk about their Chile operations...
...If PL-480 loans are included, the amount ($63.35 million) is greater than that requested for any other Latin American country...
...Calling the Shots To institute the economic program the junta has called upon the services of a group of U.S.-trained economists, whose devotion to the principles of laissez-faire capitalism has brought them the nickname "los Chicago boys" in the Chilean media...
...The Allende government "was not friendly" to the United States, he said...
...Most important, the renegotiation told the private business community that Chile was again a member in good standing of the capitalist world...
...Local industries are to compete with the international market...
...In the 1930's, the Schroder bank acted as the agent for German bond script in the United States, and during the war, the Schroders maintained "consultations" with business interests in Germany...
...sources revealed in September 1974 that C.I.A...
...For February meeting, see statement released by the Council of the Americas, February 4, 1974...
...The banks hope that this argument will defuse the criticism of their obvious involvement in the U.S...
...The State Department mounted an intensive lobbying campaign to push aid for Chile...
...This effort was undertaken in the context of an economy which could not by any stretch of the imagination be called "credit worthy...
...Ricardo Claro, the economic adviser to the Chilean foreign ministry, spoke to 120 people representing 80 different corporations in an effort to draw new foreign investment to Chile...
...It will be important to have access...
...Some sources say as many as 30 international corporations returned to repossess companies that the workers and/or the UP intervened without paying compensation.32 I TANK WE CAN FpV r"ROAK0...
...Requests for information by Chile solidarity groups based in Canada are rejected out of hand...
...Chemico Deutsche Sudamerikanishce Bank Nippon Mining Co...
...It is too early to discover the guiding thread that unites the disparate elements in the Lobby...
...Conditions may be unfavorable, but for capitalists it is an axiom that high risks can provide potentially high returns...
...pilots in Vietnam...
...Within Chile, workers are not fooled by their Pro-junta forces within AIFLD and the Chilean labor brand of "yellow unionism" (sindicalismo amarillo...
...Repossessed shares in its Chilean subsidiary, Chiprodal...
...and workers' social security funds were turned over to the private sector for investment...
...Thus, every item had the approval of top U.S...
...Congress, Kissinger and Ford are resorting to every bureaucratic and legislative trick available to try to pry loose the needed funds...
...One corporation, the Crown Cork and Seal Company, rushed back to Chile even before Pinochet extended his formal invitation...
...Though divisions persist within the Left, even underground, there is basic agreement that resistance to the junta may imply fighting a people's war to build a socialist country...
...it is hard to analyze exactly which groups predominate in it, but it is clear that the extreme anti-communist right wing, with its traditionally close ties to the C.I.A...
...A loan of such magnitude indicates that the U.S...
...This sector also gained the most in the past from the import substitution policies of previous governments...
...Although nothing definite is known about his relations to Cyprus Mines, one can only wonder what role Popper has played in getting his old Cyprus associates into Chile...
...4 The crucial nature of foreign capital in the junta's programs was stressed again in July in a statement by Jose Piners (who helped draft the junta's foreign investment decree): "We need new capital as an indispensable complement to national investment...
...As a conquering army of occupation, "the houses and possessions of the dead and imprisoned [are] for the officers and the smaller loot of money and consumer durables from searches and arrests [are] for the ranks...
...PART IHI - OPERATION RESCUE 1. For biographies of key CIA people in the U.S...
...Leniz has ruled out a strong price control program and is thinking of ending food subsidies all together and turning the importation of food over to private enterprise...
...This loan is to be paid off at harvest time...
...1 0 Corrigan was in Santiago when the statement was announced, but an executive of the ad agency told us in a telephone interview that "Corrigan is no longer employed by us...
...With this announcement the junta broke totally with the model of development proposed by the reformist Christian Democrats who had reserved for the State a fundamental role in the country's economic growth...
...Moreover, the renegotiation of Chile's onerous past foreign debt, now estimated to total $4 billion, has yet to take place...
...There is mourning in the MIR, but the MIR is not beaten...
...Under the junta, Chile has become the soft underbelly of the Andean Common Market...
...The bourgeoisie realized this, and moved quickly to crush the very institutions which it had created decades ago...
...Hernandez, op...
...policy makers...
...Washington Post, June 2, 1974...
...Reopened its Chilean construction company called Briones-McKee...
...but these few are powerful...
...The American Institute for Free Labor Development (AIFLD), with its close ties to the C.I.A...
...decrees that all Andean-based foreign corporations that trade in the common market must sell 51 percent of their stock to local investors within ten to twenty years...
...2. Seymour M. Hersh, "Kissinger Called Chile Strategist," New York Times, September 15, 1974...
...With the exception of some oil sheikdoms, Brazil now has the world's most unequal distribution of income...
...Less than a week before Enriquez' death, General Carlos Prats was killed in Argentina...
...The Counterrevolution not only restores to the industrial and financial bourgeoisie their old factories and industries, but in addition, wipes out the workers' material gains from fifty years of class struggle...
...The junta's press spokesman Alvaro Puga stated their case this way: "Before Allende the Christian Democrats paved the road for the Marxists because they began to talk of a dialogue with the Marxists...
...Miami Herald, March 22, 1974...
...Finally, the U.S...
...Washington Post, April 2, 1974...
...At the Council of the Americas in New York now, he deals with Chilean matters...
...Early foreign investment patterns reveal that Chile may draw on the nineteenth century for more than its philosophy of laissez faire...
...Organized shortly after World War II, the IMF was designed as a kind of international authority which would both set a standard of conduct in international monetary affairs and help to regulate them by assisting countries to achieve balance in their international payments...
...foreign investors do not miss such a message...
...Covert Operations I don't see why we have to stand by and watch a country go Communist due to the irresponsibility of its own people...
...The 60-year-old Saez had exiled himself during the Allende years, and in Venezuela he ran an engineering and consulting firm...
...Business Latin America, July 31, 1974...
...434,926,000 W. Germany...
...For a complete discussion of import substitution see: "Chile's Dependence on $$," Facing the Blockade, reprinted in New Chile, NACLA, 1973...
...Noticias, National Foreign Trade Council (New York), July 10, 1974...
...semi-fascist Chilean regime "works," that the junta can sell out its country 's resources and still promote I. THE IMPERATIVES NACLA'S LATIN AMERICA & EMPIRE REPORT Vol...
...As the CIAP Report pointed out, Chile needed an immediate $1 billion in external financial assistance...
...each needs the other as they attempt to stem the tide of class warfare and revolution.6 II...
...he learned of them from a Senate aide...
...Press Release, World Bank, February 7, 1974...
...See also the interchange between him and Elizabeth Farnsworth in Foreign Policy, Fall, 1974...
...What are the flaws in this counterrevolutionary strategy...
...The guarantee program ended in late 1971...
...The visible arms of the lobby are all the means of communication and propaganda in American society...
...See Part IV for more on this...
...today, faced with a liquidity crisis and global uncertainty, only mining will be a really attractive investment...
...Due to the economic deterioration, the reign of terror, and the destruction of political freedoms, the Christian Democrats and the petit bourgeoisie are forced into opposition...
...but the basic apparatus has changed little since 1970...
...A minimal investment figure of $100 million is being discussed...
...In their efforts to reintegrate Chile into the capitalist world, they are joined by Chileans throughout the power centers of the United States - people like Benjamin Mira in the Inter-American Development Bank...
...An anticipo is a loan from the Banco del Estado (sometimes via CORA) to finance operating costs...
...Thus, certain underground parties, especially the MIR, are forming Resistance Committees and striving to form a Revolutionary Army to lead the military struggle...
...This would violate a treaty between Chile and Peru and might bring on war...
...The economics department of the University of Chicago, infamous for its advocacy of unfettered, pre-Keynesian capitalism, has served as a training school for bright, elite economics students from countries around the world...
...19 Business International, an organization that gathers information for corporations on business conditions around the world, held a meeting in Santiago in mid-1974...
...Aid from outside the country may buoy up the junta and help attract foreign investment, but it cannot erase the past: Chile's workers know what bourgeois rule means for them, and they will not be fooled by any "rescue operation" from abroad...
...Negotiations with Kennecott are still in progress...
...State argued that it needed military aid as leverage to pressure the junta to let up on its repression, claiming that such pressure had already made a difference...
...In the broad multinational strategy, Chile and other small Latin American economies are to produce mineral and agricultural surpluses, while heavy industrialization occurs only in countries like Argentina, Brazil and Mexico...
...Prior to12 1970, with the banks concentrated in the hands of the bourgeoisie, credit was consistently denied the petit bourgeoisie...
...Corporate executives in the United States and Western Europe may wish their class allies in Chile success in their efforts to revive capitalism, but the world trade and financial crisis facing the multinational corporations forces them to be extremely cautious in selecting new investments...
...The junta distorts the true rate of inflation by (1) using the black market price of goods before the coup and (2) eliminating certain basic staples from the nexus of prices...
...Bilateral Aid Chile's needs of the next few years will require substantial and sustained flows of external assistance...
...Embassy during the Allende years, see NACLA's Latin American and Empire Report, October, 1973, and July-August, 1974...
...Other measures designed to force the peasants off their land are the restriction of credit, and the charging of interest for the anticipo, which had functioned as the laborers' daily wage...
...effective...
...General Augusto Pinochet, in an important speech in October 1973, stated: "True nationalism consists not in rejecting foreign investment, but in subjecting it to terms which guarantee as the prime necessity benefit for Chile...
...intelligence operatives work covertly in Chile to further U.S...
...The rural Counterrevolution is attempting to return the peasantry to their former dependent status...
...Part of an article reprinted from Worldview, March 1974...
...and (c) organizations of industrialists and bankers with Latin American investments (for the latter, see Part IV, below...
...Chile Monitor, London, March 1974...
...SOURCES: For the most part, pre-1970 figures come from U.S...
...While suffering a loss to Japanese interests in the iron mines, U.S...
...and to help promote (through infrastructure projects and the like) the interests of U.S...
...29, op...
...Surplus is to be generated off the backs of the wage earner, who must bear the burden of the austerity programs...
...And the Resistance continues to expand its activities on a broad front...
...See also Business Latin America, September 4, 1974, p. 288...
...Chronicle, August 19, 1974, and the upcoming book to be published in England by James Agee...
...Saenz, not a member of the bourgeoisie, had been used by them to stir up trouble for Allende...
...This means that 45,000 more workers will soon be on the streets...
...To provide a new political philosophy, the junta draws on the corporatist (fascist) philosophy used elsewhere to save capitalism at moments of crisis (specifically in Germany and Italy...
...These figures do not appear on the chart, as the program operates with money generated by fees charged on old loans...
...A source close to the bank said the loan was "rammed through" by the United States, bypassing the usual technical review of the loan application, a shortcut the United States has opposed in the past...
...On this trip, 120 meetings took place between Huerta's delegation and representatives of U.S...
...newspapers picked uip and publicized key themes developed by junta apologists to rationalize the coup and justify the repression, including the following: (1) economic and social dislocation brought about the coup...
...Some officials argued that Popper was tactically correct in urging the junta to restrain itself, since the U.S...
...Another scenario might be: Chile manages to make significant sections of Peru's military hierarchy believe it intends to make war...
...For the United States, either scenario would accomplish the necessary end: the overthrow of one of the few remaining governments with even the pretense of serving its people's needs...
...extreme policies...
...The Presidency of Chile's largest bank, Banco de Chile, went to Manual Vinagre, a prominent member of the bourgeoisie...
...I was told credit was suspended, but that I could ask for advice from the Ministry of Economic Affairs...
...As MIR stated in a communique to the people of the U.S...
...These groups are defined by a person's special interests, his social organizations and his work...
...Through international business conferences, attendance at elite schools, joint business ventures, and special training conferences such as those sponsored under the Alliance for Progress, members of the financial and corporate elites of both countries became aware of their common interests and of the need for upper class solidarity between them...
...These questions will be explored below...
...ii33 V. THE FATAL FLAWS In Chile, the U.S...
...As the Left Revolutionary Movement (MIR) pointed out in an underground declaration from Santiago, "the military dictatorship was born in an unfavorable period...
...importers are merely charged a "consumption tax" on them...
...But, in addition to the beer industry, the Edwards have a great deal of money outside the country, and own Chilean industries which are able to export...
...In reality, the new import laws have increased monopolization, because the medium and small size industries cannot compete and are either being merged with larger companies or going bankrupt...
...in the first days of October it sent letters to the Chilean embassy in Washington and to the junta's Minister of Foreign Relations inquiring about its intervened subsidiaries in Chile.' At the same time, Dow sent a technical team to Chile to assess the state of its two Chilean plants and to prepare for its eventual return...
...and it is attempting to computerize and rationalize intelligence data...
...He is currently Godfather to three of Hunt's children, and was named the executor of Dorothy Hunt's estate after her death in a plane crash in 1952...
...Embassy intelligence operatives turned over their files on the Chilean and foreign Left to the junta's military intelligence service (SIM), since its files had been partially destroyed in the coup...
...14, 1974...
...Photo by Ernest R. Manewal14 III...
...As the junta later pointed out through the censored editorial pages of El Mercurio (June 8, 1974), monetary reform begins through limiting the purchasing power of the community: Monetary reform consists in expropriating a part of the money in the possession of enterprises and persons...
...The poor must be made to understand this...
...is helping in the latter task...
...81,424,000 Chile...
...NACLA, The U.S...
...Though not necessarily explicit in the writings of the proponents of this philosophy, the measures depend on repression of the working class...
...Immediately after the coup, the bourgeoisie continued their alliance with the petit bourgeoisie and appointed Orlando Saenz as top economic advisor to the Foreign Ministry...
...ADELA, a large multinational investment bank with U.S...
...and western European banks closed their doors to Chile, thereby cutting off much of the finance and trade that fed the bourgeoisie and capitalism in Chile...
...16 per year for non-profit institutions ($30 for two years...
...For more on the U.S...
...In addition, the IMF grants loans to help nations with great fluctuations in their balance of payments...
...The junta can pay that loan off over many years...
...Peru and Bolivia, in a joint communique, stated brusquely that the Chilean law conceded special privileges to foreign capital which "com/2 r promise the juridical structure of the Andean group...
...U.S...
...But now they are more than willing to face the vicissitudes of the world market because they know they can survive, while their smaller competitors cannot...
...Under the agreement, approximately $60 million would be paid to the United States over 4 years, starting with a $16 million payment on December 28, 1973...
...Workers competing within the factory will be awarded for outstanding effort and labor discipline, and special importance is attached to the role of the consumer in exercizing choice, which will heighten the competition between industries, factories, and workers...
...7 Thus, it is not surprising that the IDB - which had granted Chile $316 million between 1960-70 - played a key role in the anti-UP credit blockade...
...And movement are fighting a losing battle...
...based) sent representatives to Chile...
...Chile's total foreign debt is around $4 billion dollars...
...For example, Eduardo Rios, the president of the CNT, also presides over COMACH, the Maritime Union, which historically was a major recipient of AIFLD funds, and was one of the only unions to work closely with AIFLD...
...for the mass market), registered the largest drop in production.31 The junta's refusal to stop price rises has caused such a contraction of demand that small shopkeepers can no longer sell their products...
...By "illegally" the junta meant those companies in which the State intervened (because of pressure from the workers or to break up a monopoly, etc...
...Hernandez, op...
...Sources: ODEPLAN, BANCO CENTRAL, SOFOFA, and El Mercurio...
...fabrication of paper down 12.7 percent...
...ANCOM adopted a particularly strong code regulating foreign capital...
...35.0 Title II (Grants) 8.0 7.2 5.2 7.6 6.3 5.9 2.5 2.4 2.0 "* U.S.D.A...
...economic and strategic interests...
...This story is looking increasingly like a coordinated campaign to (a) defend and push Chile's arms buildup...
...Latin America Economic Report, London, July 5, 1974...
...In arguments reminiscent of the "Guatemala Lobby's" lowest moments, Ashbrook even argued that Allende had been a drug-user, and that the UP government had paid for their Soviet weapons with proceeds from selling drugs...
...Bonilla provided no such assurance...
...Since the coup, the IDB has granted the junta two sizeable loans with several others in the planning stages...
...it conducts mass round-ups of suspects...
...Thus the U.S...
...and (3) defense against imperialist political, military and economic control of Chile...
...Ricardo Claro, the economic adviser to the foreign ministry, served on the boards of directors of a number of Chile's largest industries, several of which contained large doses of foreign capital.12 These ties between Chileans in government positions and U.S...
...The military hopes to create a military caste, isolated from the economic problems facing the rest of the nation...
...assistance (the wheat and corn deals) with he possibility of another $60-80 million...
...the right to strike and collective bargaining were taken away...
...For more on the Eximbank, see "Exports for Empire," NACLA's Latin American and Empire Report, September 1974...
...These investments are capitalintensive, require few Chilean workers, and contribute very little to the growth of the other sectors of the economy...
...Like South Korea, South Vietnam, Greece (until recently), Brazil, Guatemala and others, Chile became one of the many countries where the U.S...
...newspapers revealing that Chile had purchased U.S...
...54-64...
...and its repression of Chile's working class...
...Henry T. Mudd sits on the board of directors of Union Oil, while Cyprus Mines and Union Oil also operate a subsidiary together called the Pima Mining Co...
...Wall Street Journal, June 3, 1974...
...The more than two hundred major corporations belonging to the Council account for over 80 percent of U.S...
...Meanwhile, the U.S...
...Latin America Economic Report, London, June 28, 1974...
...Local unions have lost their power...
...Ideological control and blatant repression of the working class are not sufficient to completely reintegrate Chile into the capitalist system...
...In fact, recent covert activities in post-coup Chile...
...The rescue operation went into high gear throughout the first months of 1974...
...the national and regional union confederations of the Central Unica de Trabajadores (CUT) (with over one million members) was outlawed and their leaders imprisoned, killed, or driven underground...
...Until the government clarifies this important point, it is unlikely to see foreign investors rushing in...
...Saez is exactly the type of man the Chilean bourgeoisie needs to defend their policies...
...Moreover, three years of expropriations and the signs of growing Resistance make the foreign investor exceptionally wary of Chile...
...in fact, by the end of the Frei period, the economy had lapsed into stagnation, and unemployment had increased...
...More generals are on active duty in Chile than in the United States.40 Under the banner of "free enterprise," inflation is allowed to run at a percentage point and a half a day...
...But the junta is falling back on old solutions - i.e...
...The bourgeoisie used Saenz to broaden their anti-Allende coalition...
...The proposed A.I.D...
...Responding to these pressures, the junta is now calling for a revision of the ANCOM treaty...
...We urge all NACLA readers to express their solidarity with the Chilean people by joining in the struggle to free Carmen Castillo...
...This economic program demands a new political structure, since the philosophy would not survive if the old one (i.e., free elections and active political parties) re-emerged...
...2. Susanne Jonas, "Showcase for Counterrevolution," Guatemala, NACLA, 1974, pp...
...With their Chilean class allies in prominent positions, U.S...
...plays a strong role (see box on p 23 ).15...
...Cauas, a long time Christian Democrat, resigned from the party in order to take the post...
...companies...
...and if he joins the junta, I can just hear him before long telling the generals that they're stupid...
...ET-74-073, July 1974, p. 7. 22...
...2 Variations on these rescue operations have become the hallmark of U.S...
...Furthermore, negotiations31 MAJOR FOREIGN INVESTORS Manufacturers Hanover Trust First National City Bank Bank of America Chase Manhattan Bank J. Henry Schroder Banking Corp...
...Bolivia has sought an outlet to the sea since losing it to Chile in the War of the Pacific (1879-1884...
...Aside from the activievents show that even some trade union groupings tradi- ties described above, the C.I.A.'s propaganda activities on tinally closest to AIFLD can not stomach the junta's behalf of Chile's ruling class must be investigated further...
...clearly, though, it originates deep in the right-wing, and it winds around and through many people with CIA connections...
...There is little reason to believe the situation has changed much in the year since the coup, though now the funds go to "stabilize" junta-ruled Chile...
...Saenz saw the situation correctly...
...is helping in costly post-earthquake programs in Nicaragua...
...If the opponents of the aid requests are successful, it will be a signal to investors throughout the world, that the junta can not count on the United States for help in hard times...
...But as the months passed and the total effect of the junta's agricultural program began to be felt, these words became empty promises...
...They complained to him that these 3500 farms were in jeopardy, and wanted assurances that they could work their land without fear of it being taken away...
...Carmen Castillo, who is eight months pregnant, was seriously wounded in the battle and was taken prisoner...
...CLASS ALLIES AT WORK Over the decades, close ties have been forged between certain members of the U.S...
...They had not, however, succeeded in infiltrating the MIR...
...Such investments will ultimately serve to deepen Chile's dependency on imperialism...
...activities in support of anti-Allende forces in 1970-73...
...4 1 We have not positively identified their newer colleagues working under embassy cover...
...9 At the same time, it hired the J. Walter Thompson advertising agency's subsidiary Dialog to do its public relations work...
...program is intended to play an important role in a coordinated multilateral effort to support the recovery and developmental program...
...Business Latin America (Dec...
...With the intensified repression the struggle has entered a new phase, but in no way has the left been defeated...
...When the UP came to power, Wyant acted as the "Brazilian connection" in the U.S...
...Leniz also served as supervisor of production of the large paper industry owned by Edwards and other prominent members of the bourgeoisie...
...MAJOR CUSTOMERS FOR U.S...
...Without these jobs, beggars and street vendors once again fill the streets of Santiago...
...The junta argues that the drastic rise is necessary because the "purchasing power of the community is higher than the supply of goods and services...
...The possibility of a successful "Chile model" (including the nationalization of natural resources) under Allende was especially threatening to U.S...
...His job is especially crucial, as opposition to the junta in Europe has led to a virtual boycott in some countries of aid and trade to Chile (see Part V...
...What are these interests...
...Before the arrival of the sets, officials heralded the TV agreement as an experiment in how to lower prices and stimulate more efficient national production through tariff revisions...
...Laurence Stern, "CIA Role in Chile Revealed," Washington Post, September 8, 1974...
...he also supports ending the blockade of Cuba...
...Alvaro Puga, another Santiago-based junta spokesman, worked closely with the CIA as a key leader in the 1970-1973 anti-UP propaganda campaign...
...The junta asserted that peasants would also benefit through the lifting of price controls, since they would be receiving more money for their produce...
...and Western European capital specializing in Latin American investment, is acting on this high risk principle...
...9. Industria, Boletin de la Sociedad de Fomento Fabril...
...mission in Santiago, the junta is increasingly anxious about the international outcry (it blames the "international Marxist conspiracy") and particularly by the lack of large amounts of aid, credit, and arms sales from Europe...
...financing," on September 26, 1973 (Miami Herald, October 5, 1973...
...No new union elections will be allowed...
...Given these realities, what is the economic future of the junta's Chile...
...The nation's capital will be concentrated in the hands of the bourgeoisie, who - according to the philosophy - will invest wisely...
...Credit went primarily to large operations under the control of the bourgeoisie...
...7 This philosophy and program of the Chilean bourgeoisie has three basic roots: (1) the pre-Keynesian ideal of free-market capitalism (commonly referred to as the "Chicago School...
...as under Allende, they persuaded the U.S...
...1 0 The third major figure making economic policy is Jorge Cauas, the Finance Minister...
...imperial designs...
...Although not having signed a formal contract with the junta, one Cyprus Mines official said in a telephone interview that "the only reason we are there is to fully exploit and develop anything we uncover...
...The international solidarity movement against the junta has effectively limited the flow of aid and trade from such key countries as Britain, Sweden, Italy, Mexico, Venezuela, the Soviet Union and the socialist nations of Europe (except for Rumania...
...4 2 The junta's repression aims at stopping resistance, and the United States is helping in the effort...
...Projected $100 million mining investment...
...Tariff reform info...
...This loan was announced in Chile in August by Central Bank President Eduardo Cano...
...The Japanese are making a strong bid to corner the Chilean iron and steel market...
...2 0 But although governed by caution, some international finance capitalists are taking calculated risks in Chile...
...The IMF's loans to Chile have not prevented it from criticizing the junta's economic programs...
...Immediately after the coup, the junta turned over to the private sector the State's majority shareholdings in the Central Bank of Chile...
...on October 6, the day after Enriquez' murder: The responsibility for the death of Compafiero Miguel Enriquez, and for the deaths of other thousands of Chileans, does not fall solely on General Pinochet and his fellow executioners inside Chile...
...Thus, the needs and the imperatives guiding U.S...
...As we shall see, the United States is fighting a losing battle...
...One U.S...
...In his position as Director of the Center of Latin American Studies, Harberger advised the Brazilian government on economic policy...
...The owners of production can now concentrate on profits, rather than worrying about costly workers' needs and benefits...
...Army Secretary Howard H. Callaway...
...Espousing the sanctity of private property and free enterprise, the plan limits the role of the state to providing guarantees for effective competition...
...With the reduction of subsidized food programs and the withdrawal of free social services, such as medical clinics, more and more of the unemployed face malnutrition...
...Ambassador to Chile, served as ambassador to Cyprus from 1969 to 1973...
...And from there they kept going up: bread went from 134 escudos in April to 240 escudos a kilo in May (a 79 percent rise...
...INVESTING IN THE JUNTA The U.S...
...State Department agreed to push for substantial bilateral economic assistance...
...CHILE: FOR SPECULATORS ONLY Despite the aura of activity and interest, no deluge of foreign capital has poured into Chile...
...an iron-fisted regime, guaranteeing their profits while rescuing them from strikes and worker agitation...
...government continues its intervention in Chile...
...cit., p. 19...
...Financed by industrial and individual contributors, the ASC includes on its National Strategy Committee three former Chairmen of the Joint Chiefs-of-Staff, corporate executives, and right-wing academicians...
...Activists" were purged...
...interests will be dealt with, as always, harshly...
...The pro-government Sociedad de Fomento Fabril (SOFOFA) predicts 500,000 jobless out of a total work force of three million by next year...
...This involves continuing aid to Chile's military and police...
...BIG GUNS FOR CHILE The Plot Thickens To fight the counterrevolution, Chile's military needs weapons, and since the coup Chile has bought more arms from the United States than any other Latin American country...
...In an upcoming meeting of the Andean pact members, the junta will demand the suspension of the 14 percent profit ceiling for foreign investors, and argue for a general relaxation of ANCOM restrictions on foreign corporations...
...Once this was accomplished, the multinational corporations moved to extract from Chile only those resources of special interest to them, given the international crisis confronting capitalism...
...In 1960-61, he received a U.S...
...He also later resigned from SOFOFA, to be replaced by Raul Sahli who is closely tied to the bourgeoisie...
...I Flu, Utirln U 1- -. u tflr j t l , W- LurL LUuI...
...Only 130 to 150 farms have been redistributed in individual plots to over 3500 peasants...
...The military aid is particularly important to policy makers, because it has historically played a role in cementing relations between the U.S...
...Payments due in 1973-74 (a total of $760 million) were postponed until 1977...
...Junta apologists are justifying large military sales to Chile by claiming that Peru, armed with Soviet-made weapons, might attack Chile's northern border, presumably to retake Arica, which Peru lost to Chile in the 19th Century.27 The argument is a classic case of doubletalk, but under its umbrella, Chile is buying more and more U.S.-made weapons (see below, "Big Guns for Chile...
...There is going to be a period of most severe belt-tightening...
...in mid-June, 1974, one well-informed banking source estimated that short term lines of credit to Chile hover around $150 million, well below the $250-300 million that prevailed in 1970...
...In Chile, representatives of the bourgeoisie with close ties to U.S...
...The two men clearly in charge of the economic Counterrevolution, Fernando Leniz, Minister of the Economy, and Raul Saez, Economic Coordinator, fall into this category...
...This is not to say the Chilean elites - military and civilian - who took over in Santiago are mere puppets who blindly follow orders from Washington or New York...
...The underdeveloped countries must obtain foreign capital on just terms in order to be able to take off economically...
...By December and January, in Washington and Santiago, the outlines of this "Mini-Marshall Plan" sharpened...
...103-135...
...Though he was a member of the Panel of Experts of the Alliance for Progress (the "nine wise men"), Saez often attacked the reformist rhetoric of the Alliance: Unfortunately, the Alliance, in its efforts to point out the path for the Latin American countries to follow, has used terms such as "planning," "structural reforms," "revolution," etc...
...diplomatic and other sources admitted that Chile is buying 18 F-5E Freedom Fighter jets (at a cost of $60 million) and 36 A-37B counterinsurgency planes, manufactured by Cessna, and used by U.S...
...But even the inflow of capital resulting from aid and investments could not "save" the Chilean economy...
...cit., pp...
...and Frederick D. Purdy remain in Santiago...
...and last establish a capital goods industry (the machinery to make the machines...
...In 1970, U.S...
...aid programs served as foreign policy levers, and to lessen the government's accountability to the American public on aid matters...
...General Motors, Volkswagen, DuPont, and a host of other multinational corporations will build large integrated industrial plants in Brazil, knowing that the internal market will absorb a large percentage of their output...
...Allende had used the liberal state, developed by the bourgeoisie and its allies in the middle sectors over the past forty years, in the interests of the Chilean working class...
...investor in Chile...
...Hoping to stop revolution, they are uprooting the political and economic institutions of Chile's recent past, while striving to implant a socio-economic system that combines the nineteenth century concepts of laissez-faire and free trade with the latest twentieth century techniques of ideological control and repression...
...1 Nevertheless, under the final terms of the agreement, which were announced on March 26, 1974, Chile was allowed to refinance 80 percent of its debt falling due between January 1, 1973, and December 31, 1974...
...Why has the ChileanAmerican investment community encountered only limited success in its efforts to stimulate new foreign investment...
...The liberal democracy of the past, with its welfare-capitalism, its half-hearted nationalizations, its "import substitution" industrialization 2 - these would have to go...
...4. Washington Post, October 28, 1973...
...The July-August NACLA Report and newspapers over the past month carried stories with detailed information about U.S...
...and millions of people around the United States who have made their will known through demonstrations, letters and well-organized lobbying...
...Several months after the coup, the bourgeoisie turned on their tactical allies and instituted policies that smacked of vindictiveness...
...For Anaconda and Kennecott this meant no payments at all...
...A more important meeting occurred in New York on February 4 when the Council sponsored a luncheon which drew over 100 representatives from major U.S...
...The recent appointment of William D. Rogers as assistant secretary of state for inter-American affairs should also be seen in this light...
...23-24...
...Fernando Leniz, who had served on the board of directors of a Rockefeller subsidiary, IBEC Chilena, became Minister of Economics...
...He charged that the Peruvian government signed an agreement with the Soviet airline, Aeroflot, whereby Aeroflot agreed that Peru could make use of its facilities in an international conflict or a natural disaster...
...Thus, U.S...
...2. Society for the Prevention of World War H, Business as Usual...
...For more36 on the December 1973 agreement, see Noticias, Weekly Digest of the Hemisphere Reports, National Foreign Trade Council, December 26, 1973...
...However, the reaction of Chile's fellow ANCOM members was far from favorable...
...3, Comit6 Chileno de Solidaridad, Havana, August 1974...
...investors are on the move in other mining areas...
...3 For the previous year (Sept...
...b) Right-wing lobbying groups and, to a lesser extent, right-wing congressmen...
...Won a $1.5 million bid to construct a liquefied natural gas plant...
...Repossessed a controlling bloc of shares in Cemento Bio Bio...
...elected delegates were shot...
...This is especially crucial given the growing awareness of U.S...
...The increased monopolization and concentration has already begun...
...As one source put it, "There were a lot of people in Santiago on the far right who were essentially dedicating their lives to the overthrow of Allende - it was like a holy war...
...The government's goal is to reach a maximum tariff of 60 percent by the beginning of 1977 (prior to March, tariffs averaged about 500 percent...
...According to Hersh's sources, there is a bitter dispute in the State Department's Bureau of InterAmerican Affairs over the question of the administration's willingness to "press fully the human rights issue with the junta now ruling Chile...
...3 As the story is repeated, relations between the two countries become more and more strained, and there is a possibility that some kind of conflict might break out...
...As part of its appeal to foreign capital, the junta issued a new foreign investment law in mid-July, 1974...
...Having played an important role in erecting the economic blockade which led to the overthrow of Allende, U.S...
...1, no...
...and Canadian banks...
...To it must be added the innumerable private meetings between representatives of Chilean and U.S...
...N.W., Washington, D.C...
...The Cuban exiles mentioned by the Embassy spokesman as special "friends" have interesting connections themselves...
...These expenditures paid for the purchase of a radio station for $25,000, and the provision of $9,000 to finance a trip by junta spokesmen to other Latin American cities to "reassure" them about the military takeover...
...George Meany is president of AIFLD's Board of Trustees, and J. Peter Grace, president of W. R. Grace & Co...
...It had not solved Chile's industrial problems...
...He has a tremendous capacity for work...
...Out of these meetings came the blueprint for the rescue operation...
...For more on the credit blockade, see "Chile: Facing the Blockade," NACLA's Latin American and Empire Report, January, 1973, also reprinted in New Chile, NACLA, 1973...
...See "U.S...
...A study done by a Canadian professor at the Catholic University of Chile shows that prices of commodities more than doubled between November 1973 and March 1974...
...9. Washington Post, September 12, 1974...
...Though the December 1973 agreement did not specifically say so, it was clear that the junta had agreed to pay off the copper companies...
...But even the U.S...
...On September 26, the U.S...
...Invested $250,000 in Chilean finance bank...
...4 Kissinger's Chile policy, and now his so-called "good partner" policy are aimed partly at avoiding the possibility of blocs of commodity-producing nations which might follow the example set by the petroleum exporting nations and form cartels in an effort to increase prices...
...William F..Buckley has long ties to the CIA, reaching back to his OSS experience in World War II...
...Information in this section is from El Mercurio and sources in Chile...
...Along with this, the bourgeoisie attempted to destroy working class organizations and consciousness...
...Both the IMF and CIAP reported that for the junta's economic programs to get off the ground, Chile needed around $1 billion in external financing very quickly...
...Encountering strong opposition from the American people and the U.S...
...Moreover, the 1970's are not auspicious for the recreation of the Brazilian model anywhere in the world...
...Confronted with the acceleration of the repression, NACLA reaffirms our support and solidarity with the United Chilean Resistance.3 THE NEEDS OF THE EMPIRE The U.S...
...direct investments in Chile plummeted from $1 billion to approximately $100 million, as the UP and Chile's workers bought out, intervened, or took over most U.S...
...then in spite of the profound economic crisis facing our country and its international isolation, the junta will be able to assure enormous profits for national capitalists and attract foreign capitalists through servile guarantees...
...To overcome the reluctance of international capital, the bourgeoisie must provide exceptionally attractive terms for foreign investors...
...The crucial discussions that led to the resumption of full-scale banking assistance to the junta occurred in early October, when the junta's minister of foreign relations, Ismael Huerta, traveled to the United Nations to whitewash the bloodbath occurring in Chile...
...Suddenly It's Maniana in Latin America," by Richard Armstrong, Fortune, August, 1974, p. 216...
...Under Allende these State functions expanded and were re-directed to serve the interests of the poor and working class...
...it is probable that more and more covert operations take place under "deep cover," because of the job involved - i.e., rounding up leftist leaders and assassinating them when necessary...
...also remarks by Henry Shlaudeman, Congressional Record, June 20, 1974, p. E4050.19 S.l...
...Ataka ADELA Dresser Industries First National City Bank Goodyear Tire & Rubber Co...
...The CIA and the Chilean dictatorship are following old patterns in their attempt to eliminate the Chilean Resistance...
...dollar.is Internally this has caused food imports to rise at least ten times and manufactured imports to rise five times...
...The Export-import BankOne of the key factors in the anti-UP credit blockade was the hard line taken by the U.S...
...Headed a second syndicate with other banks to loan money to the junta...
...All these groups and individuals - as well as others the Embassy spokesman mentioned - are right-wing groups who have worked closely throughout the years with Richard M. Nixon...
...How successful will they be...
...the Chilean bourgeoisie receives the technology and the foreign investment funds needed to maintain its ascendancy within the country, while the multinational corporations rest assured that they can count on the support of the local elite when they encounter economic or political problems...
...corporate investors to look at Chile...
...The effort calls for new tactics, new operations, even some new operatives...
...He made sure that policy was made in the way he and the president wanted it...
...We have taken up Miguel Enriquez' example and his rifle...
...2 3 Copper remains the mainstay of the Chilean economy...
...The United States is prepared to yield a little ground on both these issues...
...Until that problem is solved, the question of Chile's credit-worthiness, which was attacked by the international banking community during the Allende regime, remains unanswered...
...Indeed, symbolically and objectively, Chile is more important than ever to the U.S...
...8 October 1974 Published monthly, except May-June and July-August when it is published bi-monthly, at 160 Claremont Ave., New York, NY 10027...
...Its activities are deliberate, not haphazard...
...This section of the Report explains what this model looks like, where it got its inspiration, and the effects of the economic Counterrevolution...
...from Business Latin America, July 3, 1974...
...Of the original group identified previously by NACLA, John B. Tipton...
...According to the New York Times...
...In December the United States and Chile agreed on terms for the repayment of Chile's overdue debts to the United States, due from November 1971-December 1972...
...An "enclave economy," in which foreign investors create pockets of mining prosperity from which they suck out the country's mineral wealth while the rest of the economy stagnates, is already forming in Chile...
...It is only a matter of time before the agrarian reform law, which in reality is already dead, is technically removed from the books...
...9-10...
...However, there are contradictions facing U.S...
...As stated by former economics advisor Orlando Saenz: "You need to create some realistic relationship between prices and costs...
...6. Le Monde, December 1, 1973...
...Miguel Enriquez, in a statement issued shortly before his death dramatically outlines the task that lays before us...
...A.I.D., ibid., July 1, 1945-June 30, 1972...
...17 Julian Hayes, a consultant for the Council who worked for Anaconda in Chile until it was expropriated, also aids the junta's cause at the Council...
...cit., and An Analysis of Our AFL-CIO Role in Latin America, Emergency Committee to Defend Democracy in Chile, San Jose, Ca., 1974...
...NACLA will publish more on this subject in upcoming Reports.25 AID AS A WEAPON 1967 1968 1969 1970 1971 1972 1973 1974 1975*** "* A.I.D...
...Miami Herald, August 6, 1974...
...Anxious to appease Peron and to stave off threatened nationalization of its Argentine branch, Citibank sent technicians to Chile to set up the finance company...
...To these men, and to the military men they answered to, the Allende years had served as a warning that the bourgeoisie would have to change Chile's entire political and economic structure in order to avoid losing control over it...
...This assessment, combined with the very large loan approved in August, may indicate that the IMF is exchanging loans to Chile, which the U.S...
...Fiscal responsibility is praised as the way to bring stability to the Chilean economy...
...Armco Coming Glass Airco, Inc...
...1 Overseeing the covert activities, as well as the U.S.sponsored credit blockade of Chile, was Henry Kissinger, then assistant to the president for National Security Affairs and head of the "Forty Committee" which is supposed to regulate the CIA's covert operations...
...Sectors of the bourgeoisie see the Christian Democrats and the petit bourgeoisie as having opened the gates for the socialists to gain power...
...corporate community...
...Under the agrarian reform law, 5600 farms were expropriated and given to workers, tenants, or peasants...
...5 The official call for an "international rescue operation" came from the International Monetary Fund and the Inter-American Committee on the Alliance for Progress (CIAP), which - although the Alliance is pretty much moribund - still plays a coordinating role in channeling U.S...
...Conscious of the growing criticism of the use of the Eximbank as a "big stick" in U.S...
...Funded by corporate donations and foundation grants, it is headed by former Nixon campaign-worker William Joseph Baroody...
...C.I.A...
...Private banks, the financial nerve centers of the business world took the lead in the private sector's rescue mission...
...2 0 No direct loans were authorized to Chile after May 7, 1970, and no supplier credits were approved after June 19, 1971...
...Few senators or representatives took the junta's case to their colleagues in Congress...
...Ernest Lefever of the Brookings Institute, and Dr...
...What we are fundamentally interested in is stable, non-Communist governments which command and can retain the support of their peoples...
...He helped organize the February 4th meeting with Saez and Leniz...
...Under the auspices of the Chilean gremios, or business associations (which played a key role in the overthrow of Allende), a bank is being formed in Chile which will provide long term loans for industrial and agricultural investment projects...
...Latin American Economic Report, London, July 5, 1974, pp...
...When these international conditions are combined with the specifics of the Chilean situation - a small consumer market, runaway inflation, an abrupt drop in consumer demand, and the possibility of mass-based resistance - the result is a Chile with only limited appeal for the foreign investor...
...THOSE WHO BENEFIT As the junta's economic program took effect, it rapidly became clear that the ultimate victors were: the upper stratum of the agrarian, industrial, and financial bourgeoisie...
...3 8 The devastating effect of inflation can best be understood by looking at the cost of living - the price of basic goods...
...In exchange for a cancellation of debts to Union Oil totalling $6.5 million, Diamond M granted Union Oil a large bloc of shares in the company...
...The terms were considered a great victory by the Chileans and received front page coverage in El Mercurio...
...Sources inside Chile report that U.S...
...Several days later, the first representative of private business, William Bethune of the J. Henry Schroder Banking Corporation, flew to Santiago to analyze the situation.' Although not a large bank in terms of assets, the Schroder bank is closely tied to prominent financial groups in the banking and corporate community...
...in 1970, $7.6 million...
...has increased its housing guarantee program in Chile...
...they can no longer justify the continuing repression, nor can they overlook the increasing evidence of U.S...
...Instead of imitating the Brazilian model, the junta's Chile seems more similar to the Mexico of Porfirio Diaz (1876-1911...
...Industrial investments are likely to be neglected while aggressive mining companies like the Cyprus Mines Corporation and Falconbridge seek out the country's rich mineral deposits...
...Interview with high official at Manufacturers Hanover Trust...
...These people are "illegal merchants" and the junta occasionally raids the market to "clean up the city...
...He later worked in the public relations department of the Braden (Kennecott) copper company...
...The truth is that the real interests of U.S...
...reporters, editors and wire services in major U.S...
...Moody s Industrial Manual...
...During the 1960's, the multinational corporations raced around the globe searching for new investment opportunities...
...He was still in Chile as of October 10...
...6 To oversee the rescue operation, David H. Popper became ambassador to Chile, replacing Nathaniel Davis (who took the post of Director General of the Foreign Service in Washington - a reward for his work in Chile...
...business interests assumed key positions in the government...
...The DINA oversees the current repression of the Left...
...Luis Villena Arellano (graduate of Front Royal School...
...Riordan Roett of Johns Hopkins University to address the House InterAmerican Affairs Subcommittee...
...the world's four largest copper producers (Peru, Chile, Zaire,* and Zambia) met in Austria in May to discuss long-term mechanisms for supporting the price of copper...
...furniture and accessories down 14...
...But more important, the administration needs to show the private community that it can call the shots in terms of aid to Chile, that private investors can count on executive and congressional backing for their "faith" in the junta...
...Boletin Informativo, Vol...
...Participated in first syndicate which extended $150 million credit...
...In Chile the word usually refers to an association of owners, or a professional association...
...ECONOMIA Fernando I.niz Fernando Lniz Jorge Cauas HACIENDA Jorge Cauas8 These terms have been used in a distorted form by the enemies of democracy, in such a way that in the minds of our peoples, the objectives of the Alliance for Progress appear to be identical with the objectives of the enemies of civilization and liberty...
...He drafted the generals' first decrees declaring the UP government "illegitimate," and then joined the commission charged with drawing up a new constitution for a corporate state...
...The new Chilean foreign investment law issued last week offers numerous safeguards to companies willing to give Chile another try after the Allende debacle...
...backers...
...Repressing the Left The key problem facing the junta and its U.S...
...FENSA and MADEMSA, both producers of durable goods (such as refrigerators, washing machines, stoves, etc...
...Our relations with them will become more important to us out of self-interest, quite apart from history or sentiment...
...What accounts for this situation...
...govermnents...
...Total 12.0 53.9 34.6 17.2 1.5 1.0 0.8 0.6 26.4 Loans 9.2 51.0 31.9 14.3 0 0 0 0 25.0 Grants 2.8 2.9 2.7 2.9 1.5 1.0 0.8 0.6 1.4 "* P.L...
...4 In recent months, though, major U.S...
...In this way, they hope to make Chile a model (like Brazil) for the raw materials producers of the world...
...the "friends" cultivated throughout the Frei and Allende years now ruled Chile...
...An IMF delegation traveled to Chile in early November 1973 to analyze the junta's programs and to draw up a report to be used at the Paris Club negotiations in February 1974 (see below...
...cit., No...
...The junta hopes foreign capital will play the crucial and dominant role, from the financial and technological point of view, in the expansion of the most dynamic sectors of the export-oriented economy: mining, industry, and agriculture...
...On September 16, 1974, a Chronicle editorial endorsed an investigation of the CIA in the hope that it would "provide some clue as to why the United States continually finds itself in the absurd position of trying to overthrow foreign governments" as in Chile.24 For the most part, academics have vigorously protested the junta's acts, but some influential, conservative academics continue to serve the junta's cause...
...Latin American Economic Report, August 2, 1974...
...He was the former chairman and manager of the Edwardsowned El Mercurio, Santiago's leading right wing daily...
...General Assembly Affairs ('49-'51...
...San Francisco Chronicle, October ,71974...
...Hernandez, op...
...3 However, the present economic slump in Brazil may limit its "sub-imperial" designs...
...86-89...
...How do the junta's economic plans fit in with U.S...
...As a secret leader of the neo-fascist Patria y Libertad and as President of SOFOFA, Saenz rallied the middle sector against Allende...
...The Dow Chemical Company also displayed a certain impatience to return to the business of exploiting Chile...
...To maintain control of the surplus derived from copper sales, it maintains control of the nationalized mines...
...WHAT IS MISSING IS THE MENTALITY OF THE NORTH AMERICAN PUBLIC...
...An analysis of the figures given out by the junta reveals that inflation for the first 10 months of their rule has been about 1,752 percent...
...Ten-year $50 million credit to build an iron ore pellet plant...
...foreign investment...
...The diversity of its exports also helped the country...
...The overt, economic aid aspect of the rescue effort is not enough to assure the success of the Counterrevolution...
...5. Paul E. Sigmund, "The 'Invisible Blockade' and the Overthrow of Allende," Foreign Affairs, January, 1974...
...military aid and arms sale to Chile...
...At the same time, U.S.-sponsored "experts" literally ran Guatemala for several years, writing its first Five-Year Plan and helping the Castillo Armas government root out the "communist infrastructure" left over from the Revolutionary era...
...and in August, a special loan of about $41.5 million (41,470,000 SDR's) to "assist [Chile] in meeting the impact on its balance of payments of increases in the costs of petroleum and petroleum products...
...The other interesting link of Cyprus Mines Corporation is with the Union Oil Company of California...
...For more information on the resident structure and deep cover, see ibid., pp...
...hard-line to UP Chile now lobbied for a rescue operation for junta-ruled Chile...
...New York Times, November 12, 1973...
...12, 1973...
...It is of little consequence that the result of these measures in Brazil is rapid economic growth accompanied by a widening gap between rich and poor...
...21-26...
...They hoped that the imported sets would cost 30 percent less than the national product...
...Although the gap between rich and poor has widened in Brazil during the past decade, for the rich - the multinational corporations and the Brazilian bourgeoisie - the opening of the country to international competition and foreign capital proved extremely lucrative...
...They control the most efficient industries in Chile, which can easily shift to the production of export items...
...The present minimum wage of 37,000 escudos a month (around $37.00) doesn't keep up with the rising prices...
...And President Ford - a militarist and an anti-communist like his predecessor - could be counted on to back the operation all the way...
...CORFO'will sell these companies in a "rational and gradual manner," which will probably continue until the end of 1975...
...Retook control of an intervened subsidiary called Electromat S.A...
...In July, the junta invited Harberger to address a SOFOFA conference (the Chilean equivalent of a meeting of the National Association of Manufacturers...
...With the military in power, the Japanese moved quickly to capture the position formerly held by the United States...
...Callaway's visit to Santiago and other Latin American capitals was considered part of the Pentagon Campaign for arms sales in Latin America...
...their elected represen- tatives, whether leftist or not, face interrogation sessions in the junta's torture chambers, which leaves most of them dead...
...A.I.D...
...Retook control of shares of Sheraton Hotel subsidiary in Chile...
...Noticias, Buenos Aires, May 18, 1974...
...First, as already mentioned, it granted extremely attractive conditions for10 foreign re-investments in formerly nationalized industries...
...Business Latin America (July 17, 1974) summed up the favorable reaction of the international corporate community to the new investment law: Chile is strongly courting international companies in sharp contrast to the nationalist trend that prevails today in some other countries of the region...
...World Bank, IDA and IFC, "Policies and Operations," Washington, D.C., June 1969, p. 3; for more information on U.S...
...A portion of their investments will suffer from the junta's economic policies...
...government, under the direction of Secretary of State Kissinger, wasted no time in helping launch the various rescue operations Chile's bourgeoisie needed...
...But while accepting the fait accompli of the Soviet Union, China,or even Cuba, the United States could not sustain further losses - especially in its own back yard...
...press - in its coverage of the Chile coup - "legitimated incipient fascism...
...By October 1973 most of these economists were in positions of influence within the junta's government...
...After the coup, the reintegration of Chile into the capitalist fold became the immediate imperative facing the bourgeoisie...
...government in cutting off Export-Import Bank (Eximbank) loans, guarantees, and insurance for Chile...
...government, in an effort to buoy up Frei's so-called "Revolution in Liberty," gave more aid per capita to Chile than to any other country except Vietnam...
...1 9 El Mercurio on May 12 indicated how the imports into the country are changing...
...The IMF has approved two loans for Chile since the coup: in January, it approved a standby loan of $94.8 million...
...VIII, No...
...2 4 With the formation of producer's cartels and the skyrocketing prices of minerals, the opportunities and guarantees extended by the junta make Chile's mining wealth especially appealing...
...Entering into production in 1972, Falconbridge's Dominican holdings represent the largest nickel mining and smelting operations in Latin America...
...The company began in 1912 when a prospector, grubstaked by Henry Mudd's grandfather, discovered an old mine on Cyprus abandoned by the Romans in 300 A.D...
...The Big Lie As mentioned above, the junta and its U.S...
...clearly, it will only back large infrastructure projects in Latin America which benefit regimes that are open to U.S...
...A monopoly owner can include the past debt as a production cost item, knowing that the people will eventually have to buy his product...
...A former deputy U.S...
...Time, Nov...
...For more write LAWG, Box 6300, Station A, Toronto, Ontario, Canada, M5W 1P7...
...The absence of Eximbank services makes lending more risky and expensive for private banks, because they can no longer count on Eximbank guarantees and insurance...
...Furthermore, in 1964 when the Brazilian military opened the country to the vicissitudes of world competition, the economy was much better prepared to adjust without collapsing...
...There, foreign investors hauled out the raw materials and the agricultural produce, while the standard of living and the per capita food consumption of the population plummeted...
...Then, in two to three years, it could stabilize itself indefinitely and even achieve relative economic success...
...Textron Nestles General Electric Glaverbel Koppers Company Soc...
...5 The generosity of the banking community with the junta amazed even some representatives of the U.S...
...involvement in Chile's repressive apparatus.4 Pacifying the Workers For Chile to get a good credit rating from international bankers, the workers' movement must be repressed...
...William Randolph Hearst, who writes a weekly column in the San Francisco Examiner...
...Rockefeller, the Attica assassin, the multinational corporations who are the ultimate instigators and profiteers of the bloodshed in Chile, and Mr...
...Designed to attract investments to Chile, the conference proved a dismal failure for the junta...
...On February 7, the Bank announced a $5.25 million loan to cover the foreign exchange costs of carrying out preinvestment studies...
...If Pinochet, the CIA and imperialism think that with his death they have destroyed the MIR, they are gravely mistaken...
...Buckley, for example, recently claimed in his column that Peru aimed to make war on Chile...
...Within Chile the junta's base of support continues to erode...
...The Administration's FY 1975 aid program for Chile (see Table) indicates that Kissinger intends to use the bilateral aid channels in every possible way to help out the junta...
...The junta's first experience with this new import policy backfired...
...Newsweek, April 22, 1974, p. 23...
...AIFLD (American Institute for Free Labor Development) operatives and their Chilean trainees made sure Marxist labor unions were outlawed and began to build a new, more "cooperative" labor movement...
...This ultimately leads to a greater concentration of wealth by the larger firms...
...States.31 Though we have no figures on arms sales from Brazil to Chile, Newsweek reported that the Brazilian military government had offered to act as "brokers" for Chile's junta to buy $30 million worth of arms from countries unwilling to deal openly in Santiago...
...The junta's "democracy" has no room for "communitarianists" or their economic policies...
...In the late 1960's after the U.S...
...The solidarity movement had an especially strong impact in England, where the British labor government suspended aid and future arms shipments to Chile...
...With the drop in tariff barriers and the decline in domestic consumption, this industry will suffer...
...Another effect of this policy has been an industrial slump...
...6. Sedwitz was paraphrased in Chile, Summary of Recent Events (Washington, D.C.: Embassy of Chile), February-March, 1974, p. 5. See also Organization of American States, CIAP, "El esfuerzo interno y las necesidades de financiamento externo para el dessarrollo de Chile," February 5. 1974 (OAE/Ser...
...Workers salaries do not keep up with the inflation rate...
...After the coup, the metropolitan centers acted quickly to bolster the junta and to reintegrate Chile into the capitalist fold...
...CHILE'S OPEN VEINS Historically, Chile has always appealed to one group of investors - the foreign mining interests...
...Peter Winn, "The Economic Consequences of the Chilean Counterrevolution: An Interim Assessment," Latin American Perspectives...
...Senate Hearings, Foreign Assistance and Related Programs Appropriations, FY 1974, Part II (Washington, D.C., 1973) p. 1342...
...BEHIND THE SCENES Some Preliminary Observations on U.S...
...Overseas Loans and Grants and Assistance from International Organizations: Obligations and Loan Authorizations, July 1, 1945-June 30, 1970, Chart, p. 39, reprinted in New Chile (NACLA, 1973), p. 48...
...No less than five of his former pupils now hold senior advisory posts in the junta's administration...
...Buckley claimed such an unprecedented agreement would permit the Peruvians to launch military actions against their traditional rival to the south, Chile...
...Foreign businessmen remit higher profits abroad, and according to the U.N...
...While here, they met with23 AFL-CIO Inter-American Affairs Director, Andrew eration, formerly active in support of AIFLD programs, McLellan, who has travelled to Chile three times since the voted an international boycott of Chilean transport on coup...
...1972 to Aug...
...Frederico Willoughby, for example, one of the junta's chief Santiago spokesmen, studied at the University of Texas in 1961 and was made an "honorary citizen" of the state of Texas...
...New York Times, September 19, 1974...
...8 During the Allende years, the Bank granted two small loans to Chile totalling $11.6 million - both for conservative universities...
...According to the Financial Times of London (October 23, 1973): "It would be little exaggeration to say that Leniz plus Edwards is a very large chunk of Chilean big business...
...By Roger Boyer, Elizabeth Farnsworth and Bill Felice Photo by Paul Cantor35 References PART I. THE IMPERATIVES 1. Seymour M. Hersh, "CIA is linked to Strikes in Chile...
...The PL-480 loans, for example, represent a large increase over such loans in previous years: in 1968 Chile received $33 million under the PL-480 program...
...2. U.S...
...The latter report contains an in-depth analysis of the U.S...
...The U.S...
...foreign investors...
...businessmen...
...he is well known and trusted by American bankers...
...approval on loans to some other country that European bankers favor...
...and Secretary of the Army Howard H. Callaway traveled to Chile in July...
...By investing now, corporations and banks in effect are putting down seed capital...
...agents and informers had infiltrated every major party in the UP...
...The Fund makes "standby" loans to member countries experiencing financial crises...
...1 Fernando Leniz, Minister of the Economy In July 1973, two months before the coup, the United States Embassy in Santiago sponsored a seminar on Chilean development problems...
...Adolfo Yankelevich, the junta's press attache in New York...
...Even before the advent of the large aid programs of the 1960s, the U.S...
...Counterrevolutionary Apparatus: The Chilean Offensive, op...
...3 Competition, of course, plays a vital role...
...In addition to the loans already granted, World Bank executives are currently discussing a large loan to a Development Bank authorized by the junta and destined to form part of a future Chilean capital market.'14 The International Monetary Fund While not a lending bank in the same sense as the IDB and the World Bank, the International Monetary Fund (IMF) has played an important role in the Chilean counterrevolution...
...policy objectives...
...10017), 1974, pp...
...2) As a leader among Latin American nations, and as an important producer of raw materials (mainly copper), Chile receives special attention from U.S...
...The bank - performing its role as "the bridge" - will cover the foreign exchange costs of consultant's services and of equipment for the different studies, both of which will probably come from abroad...
...The term "petit bourgeoisie," which is used later on, refers to a disparate group of people ranging from small shopkeepers and well-paid government employees to medium sized industrialists and landowners...
...5 The junta continues to subsidize certain items that are still imported in large quantities (for example, one million tons of wheat in 1974...
...But the aid programs cannot succeed...
...3 5 Venezuela and Colombia have also raised questions about the compatability of the Chilean investment law with the goals of ANCOM...
...7. Chile: Informativo Internacional, Buenos Aires, date n.a...
...General Nufio, Vice-President of CORFO, spelled out what was meant by "just terms": "The government will give every guarantee to foreign investors...
...He fell in combat, at the front of his organization, struggling for the unity of the forces of the left, for the defeat of the fascist tyranny and for the ideals of socialism...
...After the conclusion of the CIAP meeting in Washington D.C...
...Subscriptions: $10 per year for individuals ($18 for two years...
...Paul N. Rosenstein-Rodan, head of Boston University's Center of Latin American Development Studies, has been especially helpful...
...The junta is counting on the international community to bail it out...
...In December 1973, the U.S...
...9 In order to clear up this situation, Saez called for the adoption of a new reform, a "reform for the development of private enterprise...
...The most recent figures, which are referenced in the text of Part III, are from interviews, newspapers, press releases etc.26 IV...
...BLOOD MONEY U.S...
...Aside from their military salaries, those who serve in the government benefit from government pay (which is added to their military pay), graft, and the "plunder of victory...
...The funds are being made available to the Chilean Development Corporation (CORFO) at 71/4 percent interest, including five years of grace...
...for more on CIA penetration of foreign police, see Jack Anderson, S.F...
...See also El Mecurio, August 14, 1974...
...Arnold M. Isaacs, as the Chilean desk officer, helped whitewash the junta's actions...
...3 1 In Chile, Falconbridge is hoping to invest $300 million...
...ruling class...
...and (b) provoke hostility be- tween Chile and Peru which would eventually end in the overthrow of Peru's independently-minded military gov- ernment...
...See also Moody's Industrial Manual...
...To reduce pollution in Japan, the ore will be imported in the form of pellets...
...2. By the late 1960s import substitution had failed the Chilean bourgeoisie...
...4. Ibid...
...exports...
...5. Business Week, Aug...
...Allende would not even con- sider the idea.33 In January 1974, a U.S...
...policy makers that will make their job impossible...
...and those companies in which the workers simply took control (and the state either did not act or acted belatedly...
...op...
...government is the main support of a repressive government...
...6 The junta is trying to channel political energies into a corporate-state structure, with representation based on organizations that can be controlled from above rather than in popular based political parties or unions...
...Construction jobs have a multiplier effect on the job market of 5 to 1 - i.e., five other jobs depend on every one construction job...
...and Western Europe...
...Repossessed its Chilean auto plant subsidiary...
...Translated by Andre Gunder Frank in an unpublished paper entitled: "An Open Anniversary Letter to Arnold Harberger...
...The New Republic, September 28, 1974 An analysis of some of the figures reveals the nature of the rescue operation...
...Well aware of the fact that the Chilean investment law violates the Andean Pact, they are claiming that they cannot invest in Chile until its legal dispute with the other Andean countries is settled...
...and No...
...First, the bourgeoisie dismantled the country's political structure...
...From the Phoenix program in Vietnam, to the assassination of Che Guevara in Bolivia, and now with the death of Miguel Enriquez, the United States and its allies have tried to wipe out the forces of resistance around the world...
...The treasurer of Union Oil also keeps an eye on Diamond M by sitting on its board of directors.27 Through the activities of Diamond M in Chile's oil fields, Union Oil will obtain first hand economic intelligence for making decisions on future petroleum investments...
...Aside from United States and Japanese investors, Brazilian business interests also display an interest in Chile's mineral wealth...
...meanwhile, it sells the food for escudos within Chile...
...37, August 5-11, 1974...
...In the process Diaz constructed the most repressive regime in the country's history, and, contrary to his intentions, laid the groundwork for the Mexican Revolution...
...THE JUNTA'S MAJOR BANKING CREDITORS Junta's largest short term commercial creditor - $75 million in June 1974...
...Owns 30% of stock...
...The junta's easing of import restrictions has already had a dramatic effect...
...8. El Mercurio, July 14, 1974 (International Edition, July 15-21...
...Together the U.S...
...New York Times, September 19, 1974) The "40 Committee" (From New York Magazine, September 30, 1974)22 military intelligence did not end when the junta took power...
...The United States helped train and equip Chile's police before 1970...
...Ambassador to Cyprus ('69-'73...
...Received a $25 million contract for oil exploration in Chile...
...3, 1974...
...In the past, when low harvests would occur, the loan would not be paid off and the bank would merely keep a running account...
...or other countries...
...3 It was followed up in November by credits for Chile to buy $28 million in feed corn...
...support for the junta...
...El Mercurio, June 25, 1974...
...In a word - the state is to get out of the marketplace and let "supply and demand" take over...
...1972, $85.8 million...
...Devalued at least 17 times, the present rate is 1000 escudos per U.S...
...The central purpose of this program was stated bluntly by a former landowner: "Once and for all it will be eliminated from people's minds that peasants have a right to land...
...El Mercurio...
...Examples of production decline from comparing April 1974 to April 1973: printing and publishing down 40.3 percent...
...involvement in setting up political intelligence units in foreign countries, see "Uruguay Police Agent Exposes U.S...
...estimates guarantees of around $25 million for Chile, half the total for all Latin America...
...According to CORFO, "the ultimate goal is to rebuild a healthy private sector...
...Right after the coup, for example, U.S...
...More than this, the junta and U.S...
...foreign policy...
...He often acted as Frei's intermediary for dealing with foreign businessmen, making numerous trips to the U.S...
...8. This partial list of returned companies was gleaned from various newspapers from October to December, 1973...
...The military's share of the national budget is being increased from below 10 percent under Allende to around 45 percent...
...it will go on our fight will go on in the land, in the factories, in the farms, in the streets the fight will go on, and then...
...The creation of a uniform exchange rate (i.e...
...Director William Colby testified to the House Armed Services Special Subcommittee on Intelligence that the Agency had authorized $1 million for "destabilization" activities in August 1973, one month before the coup...
...Further, the loan encourages the junta's "free market capitalism...
...a task which will be diffi- cult given the political consciousness achieved by the peasantry over the last three years...
...A clear example of this upper stratum of the industrial and financial bourgeoisie taking advantage of the Counterrevolution is the Edwards family...
...Exports of raw materials and some manufactured items rose sharply, while industrial production boomed...
...Esteben Ferrer, the Vice President of the Council, is a Cuban exile with close personal ties to Agustin "Dunny" Edwards, the leading member of the Chilean bourgeoisie...
...From September 1973 to August 1974, inflation reached an official rate of 637.2 percent...
...The intelligence forces of the Chilean dictatorship which tracked down and killed Enriquez had been trained, funded and supplied by the government of the United States...
...Peter Winn, op...
...Projected, or requested spending...
...Chile is a country of approximately 10 million inhabitants, while Brazil contains 100 million people...
...Information provided by Latin American Working Group (LAWG...
...Under Allende, the parties of the Popular Unity coalition had used the Chilean political system to further the interests of the workers and to threaten the privileged position of the upper class...
...The total amount of currency in circulation expanded in the first three months of 1974 by 171,453 million escudos or 59.6 percent...
...Overseas Loans and Grants and Assistance from International Organizations, July 1, 1945-June 30, 1972 (Washington, D.C., 1973...
...It is likely that the DINA is responsible for the deaths of both General Carlos Prats and Miguel Enriquez...
...NEW OR PROJECTED INVESTMENTS Projected $300 million investment to exploit copper mine at El Abra...
...In an interview, Ferrer said he saw "Cuba happening all over again" when Allende took over.'" Jack E. Wyant, a Council officer has developed a special interest in aiding repressive regimes...
...ITn IIII CMF 'a are proceeding over the formation of a binational enterprise which would refine and manufacture Chilean copper in Brazil...
...Only foreign industrial investment...
...Fernando Leniz is closely connected with the most prominent family of the Chilean bourgeoisie, the Edwards...
...It can then use the escudos for "development projects," or - in special situations - for buying arms...
...NACLA, "The Andean Code: An Attempt at Latin American Nationalism," Yanqui Dollar, NACLA, 1974, pp...
...It wasn't a new formula: Chile's current leaders had watched events in Brazil, Greece, Spain and other countries carefully and learned their lessons well...
...Forced to deal in a fairly open political system, the bourgeoisie also had to accede to the State taking on welfare functions and the initiation of agrarian reform...
...Clearly, the Chilean junta fulfills the fondest dreams of the returning American27 corporations...
...Their action was a response to a report that the Leniz/Edwards group was planning to build a huge, modern bread industry, which would drive many of the smaller bakers out of business...
...No one knows the exact unemployment figures, but even the junta lists the highest official unemployment rate for Chile in 15 years - 9.2 percent (under Allende, unemploy- ment was reduced to 3.1 percent...
...see Hernandez, op...
...2 6 Diamond M may be setting the stage for a move by a better-known30 corporation - the Union Oil Company of California...
...economic 20.9 87.0 69.4 24.8 7.8 6.9 3.3 55.0 73.4 "* Military Loans & Credits 0 6.0 11.0 0 5.0 12.3 15.0 11.5 20.5 "* Military Grants 4.2 1.8 0.7 0.8 0.7 2.3 2.6 1.5 .8 TOTAL Military 4.2 7.8 11.7 0.8 5.7 12.3 15.0 11.5 21.3 * Eximbank (Loans) 240.9 14.2 30.1 3.3 0 0 0 0 40.0 ** I.D.B...
...policy-makers possessed a ready-made apparatus to draw from as the official rescue operation began...
...This will force the peasants to sell or to place into mortgage their land in order to purchase seeds and fertilizer...
...This story was one of many El Mercurio ran in an attempt to show that the junta was "responsible" and able to attract foreign financing...
...This is obvious in the current battle over the FY 1975 Foreign Assistance Bill, where the Ford Administration has fought hard to keep provisions it felt crucial - like military aid to Chile and Turkey...
...The junta has few friends in the United States...
...Her life is in danger, and an international campaign has begun to pressure the junta to release her...
...Reintegration into the Capitalist World Soon after the coup the junta took a number of measures to stimulate exports...
...Nothing now remains of this empty propaganda...
...Any protest is dealt with ruthlessly by the military and its new secret police (DINA...
...In the long run (this philosophy continues) Chile will be better off exporting what it produces efficiently, and importing what it does not, even if in the short run some small and medium size industries go bankrupt...
...The government air-freighted from the United States 3,000 RCA remote control television sets, in time for the Chile-West Germany World Cup match on June 14...
...Latin American Economic Report, August 23, 1974...
...NACLA, Yanqui Dollar, 1971...
...interests were progressively eliminated, as Bethlehem Steel was forced out and the Eximbank broke off its loan agreements with CAP...
...8 Whatever Happened to Dialog...
...Both elites benefit from these close relationships...
...and Frederico Mujica...
...Fortune also notes that "like other American companies Dow has been much impressed by the results of military government in Brazil...
...Another source added...
...In fact, the "War with Peru" line is one of the Junta Lobby's most sophisticated tactics...
...25 per year for profit-making and government organizations ($48 for two years...
...Walter Heitmann, the Ambassador in Washington - who were nurtured by Alliance for Progress programs, who studied in the United States and worked (Mira and Yankelovich) for U.S...
...During July and August, 1974, 6,000 units of housing under construction were halted, putting 9,000 wage-earners out of work...
...J. Walter Thompson may have dropped the Chile account because of public sentiment against the junta, but the rest of the Lobby continues to push for more aid and trade with junta-ruled Chile...
...these programs, as well as those aimed at the military, built a framework over the years for current U.S...
...many came from upper-class families with close ties to the U.S...
...First bank to talk with junta representatives...
...Nevertheless, Corrigan is clearly working in some capacity for the junta, even now...
...refusal to renegotiate the debt with the UP government, see "Chile, Facing the Blockade," op...
...For more on DINA, see Boletin Informativo, op...
...6. Wall Street Journal, June 3, 1974...
...there would be an economic Counterrevolution Naturally these decisions pleased leaders in the United States, who had groomed Chile's elites in the hopes they would move in such a direction...
...Nevertheless, U.S...
...Of the 168 firms that are members of Business International, only 55 (all U.S...
...The first installment of the U.S...
...embassy estimated 13 percent unemployment at the end of January 1974, and most observers feel that unemploy- ment reached 20 percent at the end of May 1974...
...As described above, the United States has greatly cut back on its bilateral aid program in favor of the multilateral banks...
...After a similar stoppage on a Santiago subway construction site, a dozen more workers were executed...
...government and Chile's military...
...Internationally, the efforts to reincorporate Chile into the capitalist fold come at an extremely difficult moment...
...business interests form only the visible side of the Chilean-American business community...
...Faced with slumping sales, rising prices for raw materials, and capital shortages, Photo by Pat Taran29 the multinational corporations are not in a position to move into new areas of investment as aggressively as they did in the 1960's...
...La Opinion, Buenos Aires, September 11, 1974...
...1 Who Are the Junta's Friends...
...The workers' struggle to create a socialist society had severely crippled the economic, social and ideological power of the bourgeoisie...
...As the table below shows, Chile has ordered $68,194,000 worth of arms from the United States since July 1973...
...While food imports have dropped, the junta proceeds to bring in machinery and toys for the rich...
...The main group of former owners accepting the government's offer to regain their former companies, are those that have a monopoly in a given product...
...Established in 1969 by five countries - Colombia, Chile, Peru, Bolivia and Ecuador - the members' goal is to eliminate all tariff barriers between them by 1985...
...PART IV...
...Bulletin of Statistics, the foreign traveler finds Santiago the cheapest city in the world...
...The Schroeder Banking Interests in Germany, Britain and U.S.A...
...According to Fortune, "Dow thinks Chile is a more secure base than even before: if the military leaders relinquish power at all, they are unlikely to give it to any political faction not kindly disposed toward private enterprise...
...Joseph F. McManus...
...Harry W. Shlaudeman, as deputy assistant Secretary of State for Inter-American Affairs, became the key State Department apologist for U.S.-Chile policy...
...In January 1974, the Santiago bakers' association came out against the abolition of price controls on bread...
...Pinochet himself listened to Harberger's speech...
...The members of the bourgeoisie sit on the boards of directors of the largest enterprises...
...Nations which threaten U.S...
...The law places no limits on profit remittances, grants foreign companies operating in Chile total or partial exoneration from customs duties on capital goods imports, and permits multinational corporations to do whatever they wish with the foreign exchange derived from export sales...
...The Chile Embassy Report of February-March 1974 states that the "new administration is transferring to the private sector maximum economic responsibility...
...Little foreign capital will go into the more risky industrial sector...
...ruling class has close alliances in Chile which have been forged throughout the Alliance for Progress years - a well-trained, sophisticated group of leaders in every field, courted and funded by the United States, and who, for the most part, share the economic and political views of U.S...
...35 million of that - or nearly three-fifths - is slated for Chile...
...147,796,000 China (Taiwan...
...In financial circles around the world, the stance of the IMF on a given country is considered crucial: an endorsement by the IMF encourages private investors to proceed...
...To do this it proceeded on several different fronts...
...3 The Chilean venture of Cyprus Mines is also of interest from two other angles...
...He is also a former Director of AID in Chile (1969-1971...
...The story of Chile's military buildup surfaced in the newspapers on October 7, 1974...
...8. Congressional Record, July 15, 1974...
...The money supply increased by 416 percent in the last 12 months...
...Import statistics from El Mercurio, Sept...
...1973), inflation was around 300 percent, which means that officially under the junta the inflation rate has more than doubled...
...By September 30, 1974, Chile had received about $247.15 million in credits from multilateral agencies...
...In the end, they voted forapproval or abstained, rather than take a stand on a losing issue.17 In April 1974, the IDB awarded Chile the largest IDB loan ever granted to Chile, a $75.3 million credit (at 8 percent per year) for construction of a hydroelectric plant in Antuco, 315 miles south of Santiago...
...operations to oust Allende, making a number of trips between Santiago and Sao Paulo...
...Political and economic stability, assured by the junta's repressive apparatus, will bring in the investment funds...
...A step in this direction occurred when ENAP awarded a three year $25 million contract to the Diamond M Drilling Company to drill exploratory wells in the Magellan straits...
...The greatest increases in imports are in pick-ups, jeeps, motorcycles, sound track equipment, watches, special textiles, filming equipment, and photographic equipment...
...The junta uses the State of Siege to justify higher salaries for the military, so that as a whole military men do not feel the bite of inflation...
...74-82...
...But the junta's needs are tremendous too, and, as we shall see, the inflow of aid can not fulfill all those needs...
...In actuality, he does little more than travel around the country delivering economic speeches...
...corporations entered Chilean industry in increasing numbers...
...Friends in Media and Academia The U.S...
...In the disregard for distribution of wealth, and in the tremendous emphasis on exports and on foreign investment, the junta's program borrows heavily from the Brazilian model...
...When the Popular Unity government assumed office in 1970, Ferrer personally sent someone to Chile to file bi-weekly reports with the Council on conditions in Chile...
...The spectacular rise in the number of bankruptcies is also resulting in a constant swelling of the unemployed...
...and when the junta decided to drop tariff barriers, Saenz resigned from the government...
...To charge interest will undoubtedly bankrupt many small farmers, already deprived of CORA support and credit...
...The United States contributes 40 percent of its ordinary capital and over /4 of the "concessional" resources for the Fund for Special Operations...
...Each A-37B plane costs $300,000.29 Aside from these specific purchases, it is difficult to confirm exactly what weapons the junta purchased over the past year and from whom...
...Diccionario Biografico de Chile, 1968-1970, Santiago, Chile, Decima Cuarta Edition, p. 282...
...see also Hernandez, op...
...The right-wingers in the military demanded more and more arms in case of war with Peru...
...TOTAL U.S...
...7. Christian Science Monitor, April 13, 1970...
...control of the World Bank, see The United States and the Multilateral Banks, op...
...El Mercurio, May 18, 1974...
...Much of this will be provided by the international lending agencies and Chile's creditors, through the renegotiation of Chile's debt (see Section III...
...This list is not complete...
...Thus, the junta abolished Parliament and banned or placed in recess all of the Chilean political parties...
...Actually, the so-called "multilateral" banks are controlled by the United States, which uses them to further two basic U.S...
...The petit bourgeoisie is attempting to maintain its influence in the banking sector of the economy...
...33-38...
...Under Allende, these ties assumed a special importance, as members of the ruling elites of both countries traveled back and forth between Chile and the United States, providing each other with information needed for overthrowing the UP government...
...James R. Schlesinger, "Strategic Leverage from Aid and Trade," in National Security (New York: Frederick A. Praeger, 1963...
...8 The motives of these corporations for returning are not hard to uncover...
...3 8 Aided by Bolivia, Brazil (and secretly by the United States), Chile would try to defeat the Velasco government, leading to its demise and the installation of a right-wing government...
...Thus, the government no longer maintains control over prices and is "denationalizing" hundreds of state-owned businesses, including some which belonged to the State before 1970...
...Made long term $40 million loan to junta to build smelter...
...As before, those in control of the U.S...
...Prices One of the junta's first economic moves involved a radical change in Chile's pricing policies...
...And so the imperatives of empire dictate continued U.S...
...They took no chances however...
...3 5 - improved on the story in his column of August 27, 1974...
...government to carry a brief for them by tying the renegotiation of Chile's external debt to the payment of compensation...
...Luxembourgeoisie Gratry S.A...
...And at a time when Third World nations are forming cartels to charge the United States dearly for its raw materials, the Chilean bourgeoisie is pleading with multinational corporations to open up new investments in its mineral-laden country...
...I Even the banks, after an early honeymoon with the junta, are acting cautiously...
...2 2 Since the purchasers paid in foreign exchange for the notes, the Chilean treasury received an influx of hard foreign currency, which it then used for trade purposes...
...Under the junta, the State now has become a tool of repression and little else...
...34 (July 13-19...
...Air Products...
...investments in Latin America...
...One source suggests that about 33 foreign companies returned after the coup...
...A month after the coup, Pinochet invited those corporations which had been intervened, or "illegally" taken over by the workers to reclaim their Chilean subsidiaries...
...Much of the glamor of the "social economy of the marketplace" stems from the relative success it enjoys in Brazil...
...In May 1974, Citibank chartered a Chilean finance company, Adelantos y Creditos Ltd., which issued $11.2 million in notes and bonds on behalf of the Chilean treasury...
...9 percent...
...But he's like a machine without any human feelings...
...Chile has received no economic (i.e., non-military) loans from the Agency for International Development (A.I.D...
...While the banks acted to buoy up the regime, the other sectors of the business community worked to salvage their old holdings...
...Second, the policy makers face tremendous opposition to their rescue programs in Congress and in the U.S...
...In May 1974, the junta returned to11 their former owners the forty huge agro-industry complexes which had become state farms under Allende.2 The confusing nature of the junta's agriculture policy, i.e...
...Counterrevolutionary Apparatus...
...The economic model they follow is full of contradictions...
...Implementing the Philosophy Though the junta claims it wants to "reduce the role of the State" in Chile's economy, it actually is just changing the State's role...
...ANCOM'S SOFT UNDERBELLY Aside from their interest in the mining sector, foreign capitalists are using Chile to undermine a major barrier to foreign investment in Latin America - the Andean Common Market (ANCOM...
...4 On October 5, the $24 million credit was announced as a great victory on the front page of Chile's right wing daily, El Mercurio...
...But the task of attracting foreign investors is especially difficult at this moment in world history...
...and to justify this aid, a "Guatemala lobby" appeared...
...The story leaked on to the front pages on September 8 with the news that CIA Director William E. Colby admitted to the House Armed Services Special Subcommittee on Intelligence that the United States had spent some $11 million on covert activities designed (1) to keep Allende out of office...
...cit., p. 28...
...Business Latin America, after lauding the new investment law, went on to state that the law deftly sidesteps the vital issue of how Chile will enforce the ANCOM foreign investment code, Decision 24...
...I have argued, at least tentatively, the advantages to be gained by distributing aid primarily on the basis of the recipient nation's attitudes toward our foreign policy objectives...
...2 9 THOSE WHO SUFFER The Petit Bourgeoisie The social economy of the marketplace is a disaster for the petit bourgeoisie...
...A lobby is organized...
...This law states that anyone charged with or convicted of a "major" crime or who participated in a "violent" toma (land takeover) will be denied title to land even if he is an asentado (legal recipient of land...
...When the military assumed power, the very success of the credit blockade meant that the junta had virtually no funds to begin the economic program of Counterrevolution...
...The workers and unemployed also suffer the most from the rampaging inflation, which is now totally out of control...
...policy towards the junta...
...foreign investment - for the development of new mines (see Section IV...
...businesses operating in Latin America...
...Repossessed a Chilean subsidiary called the American Screw (Chile) Co...
...Copyright @ 1974 by the North American Congress on Latin America, Inc...
...since the alternative might encourage anti-U.S...
...Interview with Esteben Ferrer at the Council of the Americas...
...outside Chile, workers all over the world oppose the junta It is too soon to have more than a partial picture of U.S...
...Hernan Uribe, La Opinion, September 11, 1974...
...Post 1970 figures come from IDB Annual Report, 1971 and U.S...
...corporate community and the Chilean bourgeoisie...
...Popper will (a) coordinate the aid from the United States and the multilateral agencies, and (b) try to get Western European countries to grant credits to the junta...
...policy-makers who want to make sure the junta stays in power and provides a "lesson" for other Third World nations...
...In the junta, in the ministries, in the media - everywhere the counterrevolutionary leaders were ideologically and objectively linked to the United States...
...This included the funds owed Chile's creditors, so a renegotiation which included lenient repayment terms amounted to a loan from the creditors...
...For more information on U.S...
...intelligence community operatives in the Santiago Embassy and elsewhere joined their Chilean counterparts in the brutal repression of the Chilean Left...
...Extended large commercial credits to the junta...
...Further, according to the U.S...
...Historically, the bourgeoisie has always looked to foreign investors for assistance, especially in developing the mining and industrial sectors...
...In the 1950's and 1960's, the large profits generated by the mine enabled the company to expand its activities around the world, from a silver-lead-zinc mine in the Yukon territory in Canada, to iron ore mines in Australia and Peru.28 Thus, Cyprus Mines Corporation comes to Chile well adept at profiting from social strife...
...went to aid the flow of Argentine commodities into Chile...
...In total, the junta has received over 3,000 applications from previous owners for the return of, their lands...
...The economic and political foundations of the Counterrevolution may be fatally flawed, but through terror and repression it hopes to keep the Resistance from growing into a full scale revolutionary war...
...For the foreigner the effect has been the opposite...
...The peasant is going further into debt...
...To do this, the State has become an instrument of terror unparalleled in the history of the republic...
...Miami Herald, January 19, 1974...
...Even with their chief in disgrace in San Clemente, the well-funded, influential lobbyists of the Right continue their work...
...Chile Monitor, London, No...
...and (3) the military intervened only after the situation became unbearable, somewhat against its will...
...The Inter-American Development Bank The Inter-American Development Bank (IDB) is multilateral in name only...
...A small drilling firm based in Texas, Diamond M in 1969 encountered financial problems and turned to Union Oil for assistance...
...In addition, other countries, from Argentina to Japan, had granted liberal trade terms and promised investments...
...At the same time, the junta's supporters in the United States tried to defuse the tremendous criticism leveled against U.S.Chile policy by the American public and certain Senators and Congresspeople...
...Over 10,000 of them have emigrated to Argentina...
...Boletin Informativo, Vol...
...economic blockade on the other, Chile had loosened its ties with the capitalist world...
...Previous NACLA reports describe and document the close ties between U.S...
...3 7 To finance this inflation, the junta has pursued the expansionary monetary policies for which it criticized Allende...
...UP - Unidad Popular - the coalition of political parties which won the 1970 Chilean presidential election.5 ing in the way of their own dignity and well-being was the Chilean bourgeoisie allied with foreign capital...
...One of the partners in Nixon's Los Angeles law firm, Henry Duque, sat on the National Strategy Committee of the ASC...
...There is no need for a "parallel government" sitting in the U.S...
...After providing the junta with a quick dose of short term commercial credits for trade purposes, the foreign capitalists are acting cautiously in making new investments...
...Kissinger, in effect, became a Chilean desk officer...
...Thus, in meetings in Mexico and Atlanta, Kissinger and the Latin American foreign ministers have met to discuss such thorny issues as the Panama Canal and Cuba...
...Even U.S...
...In the United States, Kissinger was still calling the shots...
...Other corporate ghosts of the past soon followed in Crown Cork's and Dow's footsteps, including General Motors, Phelps Dodge, Textron, General Electric, and the General Tire and Rubber Company...
...These figures were given to us in interviews at the IMF...
...Since Chile has had a subsidized economy for over twenty years, this policy has meant drastic rises in the prices of all products - including basic necessities...
...L IrW -, II.tvIur- -J -pl J .UI...
...Raul Sahli, President of SOFOFA purchasing power...
...They get on the buses and try to sell 20 buttons or five bandaids for 100 escudos, a plastic documents holder for 200, and even glossy pictures for 200 escudos...
...Two-thirds of the agrarian reform land (roughly 3,500 farms) was expropriated under Allende, a qumber that closely corresponds to the number of expropriations being challenged by former owners (3,000...
...With over 40 percent of the total vote on the Bank's Board (voting power is weighted according to the amount of money contributed by the country to the Bank), the United States retains a real veto over decisions to make loans from the Fund for Special Operations and a virtual veto over loans from the ordinary account which are lent at regular commercial rates...
...Letters or telegrams should be sent immediately to the Chilean Embassy, 1736 Massachusetts Ave...
...40.9 85.8 95.3 136.3 - TOTAL Multilateral 91.0 16.5 43.5 64.9 52.5 85.8 95.3 247.2 - * Figures for fiscal year from June of previous year to June of year indicated...
...There, Leniz and Saez assured them that, in Chile "we are striving for effective improvement of efficiency and to destroy reasons for hate...
...Andean Times, Lima, July 5, 1974...
...For 1975, A.I.D...
...The ferocity of the repression attests to the strength and growth of the liberation movement...
...Meanwhile, Mitsubishi is also interested in opening up new iron ore deposits...
...and the ASC's library includes bound material from hearings of the House Un-american Activities Committee (1938-1941) - all stamped on the flyleaf, "Property of Richard M. Nixon...
...52.0 n.a...
...The international vice-president of Manufacturers Hanover Trust, James Greene, revealed that the banks' motives went beyond mere financial considerations when he stated in Santiago that the credits were meant as "psychological assistance and an expression of good faith...
...New York Times, September 27, 1974...
...Boletin Informativo, Comite Chileno de Solidaridad con la Resistencia Antifascista, No...
...After, meeting with representatives of the junta, William Bethune returned to the United States with a report on the situation...
...rescue operation was completed only 15 days after the coup when the Department of Agriculture authorized a shipment of $24 million worth of wheat to Chile...
...The tragedy is that even if the street vendors sold all their goods, the most they would take home would be 500 to 1000 escudos - i.e., 854 to $1.00...
...As a specialist in "international organizations," Popper is well qualified for the job...
...Later he worked in Chile as an economist for the Kennecott Corporation and taught economics at both the University of Chile and the Catholic University of Chile...
...THE ECONOMIC COUNTERREVOLUTION We are not copying any particular scheme, but if I had to say which country appears similar to what we are trying to construct, I would say the United States...
...The Council publishes studies (The Role of Business in the Cold War), Washington Report Newsletter, radio programs (Radio Free Americas) and sponsors various other "educational projects" which are often lobbying operations of the most sophisticated sort...
...News and World Report, Nov...
...while the civilian economists, with their ties to the U.S...
...policy makers and the Chilean bourgeoisie complement each other...
...20036...
...20.5 million $84.65 million Foreign military sales credit program Total Source: Agency for International Development, Program Presentation to Congress, FY 1975...
...he also taught at the Catholic University of Chile, the most reactionary and conservative campus in Chile...
...However, IDB regulations require that 75 percent of voting members approve any loan coming from Special Operations, and the opposing countries did not control 25 percent of the vote to block the loan...
...Under Allende, international banks cut their trade credits from $300 million to approximately $17 million...
...the rapprochement with the Soviet Union and China, and the tough new international economic policy moves of 1971-72 reflected this reality...
...Arnold Harberger coordinates the Latin America exchange programs for the University of Chicago...
...It is this group which first backed Nixon in his House and Senate races, and then played a very important role in his White House years...
...is becoming a have-not nation, and the Latin Americans are haves...
...Repossessed a textile factory called Establecimientos Gratry (Chile...
...First, they face in Chile an organized Resistance that aims to wage war against the junta and its U.S...
...But although the junta is on the defensive internationally and losing support internally, the Chilean military and the bourgeoisie still maintain control of the state apparatus and all of the power which that implies...
...16, June 21, 1974...
...In the aftermath of the coup, Colby said, funds authorized but not committed were spent...
...One of a long line of exile plans (most with CIA sponsorship), the "Torriente plan" called for a unification of all Cuban exile groups (in and out of Cuba) in a new effort to retake Cuba.' Manolo Reyes, another of the junta's Cuban-exile "friends," is an anti-Castro journalist working out of Miami and was one of Nixon's key supporters among Cuban exiles there...
...IT'S ONLY A PROBLEM OF MENTALITY...
...government during the course of the twentieth century has developed an array of bilateral and multilateral aid programs designed precisely to ward off the explosive conditions of an enclave economy...
...From the conservative economic philosophy of the "Chicago School," the junta draws its insistence on the return of nationalized properties to former owners, the elimination of price controls and subsidies for basic consumer items, and the reopening of the country to foreign investment...
...and Hector Melo and Israel Yost, "Funding the Empire: Part II, the Multinational Strategy, NACLA Newsletter, May-June, 1970...
...The economic Counterrevolution is intent upon destroy- ing the organizations and leaders of the working class...
...THE NEEDS OF THE CHILEAN BOURGEOISIE These, then are the imperatives and contradictions that guide U.S...
...In addition to helping "pacify" workers inside Chile, CNT leaders travel around the world trying to whitewash the junta...
...leaders, as it does upon the Chilean government...
...3 El Mercurio reported that one store which before the coup sold 500,000 escudos worth of goods a day, had sales of only 660,000 escudos worth of goods in an entire week in October...
...Chile was one of the first nations to receive a loan under this new IMF program...
...and so he is overthrown by more bellicose officers...
...In early 1974, when the junta sought foreign loans for CAP, the Japanese responded first with a $40 million credit for equipment purchases...
...Import duties have been reduced by between 10 and 20 percent...
...This kind of "black propaganda" may be initiated by Buckley's old friends in the CIA in order to justify more military aid to Chile, and to lay the groundwork for getting rid of President Velasco of Peru (see Section III...
...The only companies remaining are those with lower production costs and those which can import raw materials in large quantities...
...All these operations, it was hoped, would provide the proper "atmosphere" to attract U.S...
...Under Allende U.S...
...Foreign cash reserves stood at less than $3 million...
...3. John Polloch and Torry Dickinson, "Apologists for Terror," Chile: Under Military Rule, Part I, IDOC, (235 East 49th St., N.Y...
...IMF Press Release, September 6, 1974...
...Beginning one of the largest divestiture programs in recent history, the junta announced in June that it would sell 150 enterprises to the public...
...supporters use Peru's acquisition of Soviet-built tanks and artillery to justify U.S...
...One textile producer with a monopoly on a particular fabric has raised prices to 40 times what it was before he reassumed control of the company.' 6 In April the junta announced its decision to return even those enterprises which the State had legally purchased...
...58,739,000 Source: Pentagon Figures in the L.A...
...2 5 No longer an expendable anachronism, the landed aristocracy is reasserting its privileges, and is a major beneficiary of the Counterrevolution...
...Such efforts have already paid off...
...Anti-aid forces included some strong senators (like Kennedy, Abourezk, and Church...
...In April, General William Rosson, Commander in Chief of the Southern Command based in Panama, met in Santiago with members of the junta...
...Hot Spot That Produces Plenty of Cold Cash," Business Week, October 10, 1964, p. 102...
...involvement in the coup.* But there are important media people who still make a point of "apologizing" for the junta and justifying U.S...
...Headed by Henry T. Mudd of Los Angeles, Cyprus Mines has developed a knack for making huge profits in the midst of social strife...
...October 7, 1974...
...Henry Kissinger, speaking of Chile, June 27, 1970 Now, as before, U.S...
...The tariff and import policies follow the broader strategy of reintegrating Chile into the capitalist world...
...The aid controversy surfaced in the newspapers on September 27 when New York Times reporter Seymour Hersh, citing anonymous administration sources, wrote that Secretary of State Kissinger told U.S...
...But the situation now calls for the most repressive counterrevolutionary measures...
...The five business associations that are stockholders in the bank are: Sociedad de Fomento Fabril, Confederacion de la Produccion y el Comercio, Sociedad Nacional de Agricultura, Camara Chilean de la Construccion, and Sociedad Nacional de Mineria...
...Because of the tremendous difference in the size of the internal markets of the two countries, Chile will never repeat Brazil's success in attracting multinational industrial corporations...
...foreign policy structure are working with certain sectors of Chilean society to further U.S...
...A.I.D., U.S...
...intelligence reports" that Peru had bought Soviet tanks and artillery and that Chile sought tanks and jet fighters21 from the United States to offset Peru's purchases.34 Throughout 1974, Chilean newspapers ran stories charging Soviet intervention in Peru and building up public opinion against President Velasco's government...
...The total PL-480 budget for all of Latin America in 1975 calls for $50 million in Title I aid...
...Allende reclaimed the country's mines from foreign capital, but, now with a right wing regime in power, some mining companies seem willing to overlook the problems of the past in order to profit from Chile's great mineral wealth...
...2 Adolfo Yankelevich, the junta's New York-based press attach, is a former Chief of Public Relations for the Chilean subsidiary of the U.S...
...ruling class leaders...
...The Peasants Soon after the coup, the junta promised peasants living in the agrarian reform sector legal titles to their lands...
...The 1973 and 1974 figures come from the AID Program Presentation to Congress, FY 1974, p. 105...
...A stream of Chilean economists attended who had been trained and educated in the United States...
...As one Washington observer put it, "He'll keep Kennedy off Kissinger and Rockefeller's backs while they call the shots...
...in May 1974, Argentine guerrillas blew up 16 of the carriers, which were destined for the Carabineros.3 There are also reports that Chile has purchased submarines and destroyers (equipped with missiles) from the United 1. 2. 3. 4. 5. 6. 7. 8. 9. 10...
...In the first four months of 1974, goods of everyday consumption and small manufactured goods (i.e...
...Further, he was one of the main exponents of the "Allende was an incompetent" sub-theme, having written an article on the topic for the New York Times (June 16, 1974...
...The World Bank In the words of one of its own publications, the International Bank for Reconstruction and Development (World Bank) sees itself as a "safe bridge over which private capital [can] move into the international field...
...Johns Manville Co...
...and (3) the corporate-fascist model...
...The oldest worker in the factory now automatically succeeds to "leadership" positions in the powerless unions...
...Construction workers that can no longer find work are leaving Chile...
...First as press attache to the U.S...
...As far as U.S...
...In February 1974, some representatives of campesino organizations were allowed to meet briefly with Secretary of Interior General Oscar Bonilla...
...The Social Economy of the Marketplace In mid-March 1974, under the guidance of civilian economic advisors, the junta stated its formal economic philosophy in a "Declaration of Principles of the Government of Chile...
...The Wall Street Journal published articles by Everett Martin that lauded the change in government and covered up the atrocities committed by the junta...
...government trusts and will support the Chilean junta...
...cordones industriales (the militant industrial workers organizations) were liquidated as were their leaders...
...They have the resources to survive the present slump caused by the abruptness of the economic Counterrevolution...
...The foreign investors' demands are clear - alter the conditions imposed by the Andean Pact, or else foreign businessmen will hold back on new investments...
...A banking syndicate composed of Bankers Trust, Irving Trust, the First National City Bank, and a number of other banks followed with a $150 million line of credit...
...government grant to study economics at the Columbia University Graduate School...
...Since then, the petit bourgeoisie has fought the junta's private banking policies, fearing a restriction of credit once the bourgeoisie regains control...
...But this confusion has helped, rather than hindered, the landed oligarchy to reassert itself...
...Raid Saez, well known in Chile for his espousal of conservative economic philosophies, serves as the junta's special advisor for overall economic planning...
...In addition, the spokesman recognized the "full cooperation of dozens of Cuban exiles," including Jose Elias de la Torriente, Manolo Reyes, and Lilian Ghiberga...
...and overseas training in "various professional areas for the three armed services...
...Immediately after the coup, the junta promised to maintain and protect the workers' "social and economic conquests, the fruits of decades of struggle...
...Lloyds & Bolsa International Bank Mitsubishi Falconbridge Cyprus Mines Corporation Diamond M Drilling Company Mitsubishi...
...Behind them lie major forces in American society...
...The MIR militants sustained the fight against the security divisions of the four branches of the armed forces for over two hours...
...H/XIV...
...These people were increasingly seen at the embassy in 1972 and 1973...
...military and police advisors and the agents and organizations of repression in such countries as Uruguay, Brazil, and Vietnam...
...Address all correspondence to Box 57, Cathedral Station, New York, NY 10025, or Box 226, Berkeley, CA 94701...
...Washington Post, December 22, 1973...
...The London Financial Times reports that a common dish in the shantytowns surrounding the capital is "pantrucas" - a simple mixture of flour and water...
...From sources in Chile...
...is chairman...
...Generally these measures have the effect of discouraging socially progressive programs...
...Since his entrance into the State Department in 1945 he has served in such posts as Officer in Charge of U.N...
...ambassador to Brazil, and then as the representative of the Council of the Americas in Sao Paulo, Wyant worked closely with the CIA in Brazil...
...He personally chaired - for maybe as long as 10 or 12 weeks - a working staff group dealing with economic sanctions," one source told New York Times Reporter Seymour Hersh...
...Boletin Informativo, No...
...On October 3, J. Walter Thompson released a mysterious statement saying that the deal was off...
...Two beneficiaries of the trips, Riordan Roett and Ernest Lefever, asked the Congress to overlook the "mistakes" made by the junta and grant speedy aid to Chile...
...For more on this, see "The Food for Peace Arsenal," NACLA Newsletter, May-June 1971, p. 5. The Food for Peace figures are from U.S...
...blocs which could push for more threatening concessions...
...aid strategy for the past several years...
...These are articles which are used by the bourgeoisie and a limited middle sector, but not the working class...
...In contrast, as mentioned earlier, over 1,200 farms have been returned to their previous owners, mostly by the military bypassing CORA...
...Ambassador David H. Popper to "cut out the political science lectures" after Popper had discussed torture and other human rights issues during a meeting in July on military aid with Chile's Minister of Defense and U.S...
...If the dictatorship is able to maintain "public order," to super-exploit the working class...
...Factories were occupied by the military after the coup, and those which had been nationalized were returned to their previous owners...
...Treasury Department renegotiated Chile's foreign debt on lenient terms, shortly after the junta agreed in principle to pay compensation to the companies...
...Shortly after the coup, a group of apologists (including Leon Vilarin, who had led strikes of truck-owners before the coup) traveled around Latin America and to Europe in an unsuccessful bid for world support for the junta...
...The junta's steps to denationalize Chile's oil and gas industry appeal especially to U.S...
...All these men serve under the nominal direction of Admiral Jose Tiribio Merino Castro, the junta's formal spokesman on economic policy...
...and foreign economic interests...
...Many of these men worked in the government of Jorge Alessandri...
...A.I.D...
...ruling class...
...Earlier, under the Frei administration, Saez served as Vice-President of CORFO (the Chilean development corporation), and later as Finance Minister...
...August IPC (Indice de Precios al Consumidor) Report, Santiago, Chile...
...Much depends on what the revolutionaries, the working class, and the people do...
...2 Putting Out the Bait To complete the "social economy of the marketplace," the junta has put out urgent appeals to foreign capital...
...After a work stoppage in the port of San Antonio, the protesting longshoremen watched their five elected union leaders shot...
...imperialism are in line with the junta's current policies If there were no real threat of resistance in Chile, the U.S...
...4. Miami Herald, November 26, 1973...
...3 7 In this dispute, foreign capitalists are the only ones that can emerge as victors...
...He found his views a distinct minority among the U.S.-trained civilian economists making economic policy...
...Department of Commerce, Bureau of International Commerce, Foreign Economic Trends and Their Implications for the U.S...
...33, July 6-12, 1974...
...Operation Rescue repeats many of the mistakes of the 1960's when the U.S...
...The statement was read to me over the telephone by Eugene Secunda, vice-president for public relations, J. Walter Thompson...
...According to our source, the IMF said as much in a private letter to the junta...
...PART II...
...None of them announced new investment plans for the country...
...During the Allende government, the bridge temporarily closed, but now it has opened and the Bank is granting the loans which encourage private investors to follow...
...Only the struggle of the Chilean people and the continued assistance of the international solidarity movement can determine the outcome...
...Along with another Japanese firm, Ataka, it is reportedly planning a $55 million investment near Chanaral, Chile.2s In addition to mining, Chile's huge forest reserves and paper industry are also drawing the attention of Japanese investors...
...Though some faces around him had changed, the basic policy did not...
...In fact, there have been three recent examples of attempts to organize such groups: representatives of 7 bauxiteproducing nations met in Guinea in March 1974 to form a producer group...
...The United States had hinged its bilateral debt negotiations on repayment of the copper companies, which the UP refused to do...
...participation in Chile's Counterrevolution called for more subtlety than in Guatemala...
...Also, Arnold Harberger, professor of economics at the U. of Chicago, praises the junta's economic policies, as explained in Part II...
...Comentarios Sobre la Situacion Economia, Universidad de Chile, 13...
...OPERATION RESCUE The U.S...
...Further, the junta has bought an unknown quantity of arms from European and other Latin American countries, and from Israel...
...then produce a consumer durables and intermediary goods industry (such as chemicals for rayon, needed in the production of textiles...
...The state reserves for itself only certain fields of special strategic importance for development...
...Some listings of 1974 amounts do not include the "Mission Support" Category and thus appear much lower...
...the same exchange for televisions or wheat) is crucial in this reintegration process...
...3 The Chileans came away from these meetings assured that the flow of credits would resume and would reach pre-Allende levels...
...Conscious of the critical role of foreign capital, after the coup the bourgeoisie realized that it must reopen the flow of capital from abroad if it were to survive and flourish...
...corporations...
...102-103...
...Chile ought to be a nation of proprietors, not a nation of proletarians...
...firms...
...Counterrevolutionary Apparatus: The Chilean Offensive," NACLA's Latin America and Empire Report, JulyAugust, 1974...
...Pablo Neruda28 Several officers of the Council have a special interest in aiding the junta...
...undertook a massive program of economic aid to Guatemala...
...ruling class and the Chilean bourgeoisie are waging a Counterrevolution that is unprecedented in Latin America...
...Walter J. Sedwitz, CIAP's Director, gave away more than he knew when he endorsed the plan saying that countries such as Indonesia, Brazil and others which have found themselves in similar situations have received the cooperation of the international financial community...
...2) an end to economic policies which favor only the very rich and foreign investors...
...The junta never released a public list of all of the foreign companies that returned to Chile...
...business leaders began to assist them...
...Lefever told subcommittee members that Congress should be more tolerant of the "mistakes" made by the junta and should not let concern for human rights influence its aid policy to Chile...
...unions, and AIFLD is jointly funded by the AFL-CIO, American corporations, and U.S...
...Oscar Munoz Barrientos (was active in AIFLD-sponsored attempts to create a Confederation parallel to the CUT in 1968...
...They talked of communitarianism instead of communism, but people without perception believed that they were both equal within democracy...
...THE JUNTA LOBBY 1. The definition, like much of the "lobby box" draws its inspiration from Susanne Jonas, "The Best Lobby in Washington," Guatemala, NACLA, 1974, pp...
...Kissinger's rebuke "gagging" Popper (as Popper put it to his staff) gives the lie to State's claims that they've pressured the junta for more humane policies...
...The founders of the new bank are looking to agencies such as AID, the World Bank and the Inter-American Development Bank to provide a large part of the $55 million which will form the bank's operating capital...
...3 2 Even Business Week (August 3, 1974) received a cold shoulder, and noted that "Falconbridge will not discuss the talks...
...For example, the Compania Manufacturers de Papeles y Cartones (CMPC), is owned jointly by the Edwards, Mattes, and Alessandris...
...These forces won a victory on October 2, 1974, when the Senate voted to end military aid to Turkey and Chile...
...President Velasco tries to avoid the situation...
...marines in conjunction with Joaquin Balaguer had placed a temporary cap on the country's class struggle, Falconbridge stepped forth to develop the huge nickel reserves on the island...
...But even if all its aid and loan requests are met, and even if foreign capital floods the country, the Chilean people will fight back to regain from the Chilean bourgeoisie and the imperialists what is rightfully theirs - Chile...
...In 1951-52, he worked in Mexico for the Agency under E. Howard Hunt, on "tangential special projects...
...Import substitution was to first create a light consumer goods industry (such as textiles, cigarettes, etc...
...One former economics professor at the school is former U.S...
...military continues its close relations with its counterparts in Chile...
...He had been a CIA operative in the Chilean Embassy in 1970-73...
...Over 84 percent of Chilean export earnings from January to May 1974 came from the sale of copper ($878.8 million out of $1,042.0 million...
...corporate interests along with policy makers in Washington worked in a coordinated fashion to stabilize and sustain the junta...
...On March 30, the IDB announced a $22 million loan to Chile's Banco del Estado to help finance an "agricultural recovery plan designed to overcome present food shortages...
...4, 1973...
...But inflation is running much higher than these official figures...
...First corporation to return to Chile under the junta...
...economic dealings, the bank moved slowly in granting loans to post-coup Chile...
...Buckley's stories provoked charges and counter-charges in Peru's and Chile's newspapers...
...4, 1964, pp...
...The armed confrontation took place in the barrio of San Miguel, a former stronghold of the Unidad Popular government located a few kilometers outside of Santiago...
...The framework for the overall rescue operation had been perfected throughout the Allende years: policy makers who had orchestrated the credit blockade of UP Chile now organized the credit boom...
...These spokespeople draw information and stories from the Chileans assigned by the junta to spread its story - including several public relations executives who worked with U.S...
...leaders are unable to fulfill their commitment to the junta...
...As John Duncan, president of St...
...Boletin Informativo, Vol...
...Thus, appropriations for the banks have grown from four percent of total U.S...
...David M. Popper, the present U.S...
...Resumed control of Cobre Cerrillos, a copper fabricating industry...
...For example, the Chilean beer industry, owned by the family, produces only for internal consumption...
...Still rich in copper sulfur ore, the mine proved to be a bonanza for the Mudd family...
...Conversations are now under way for Brazilian participation in the exploration of natural gas deposits in Magallanes province...
...Chile's creditors agreed in principle to the renegotiation of Chile's debt (which represented the equivalent of a large loan...
...government's endorsement of the Frei government, U.S...
...In interviews at the World Bank, as at the IDB, we were told that some of the loans had been in the planning stages under Allende but that for one reason or other the Banks could not reach an agreement with Chile over the "administration" or "repayment" of the loans...
...5 So far, Kissinger and other policy makers have used both the "hard" and "soft" approach in dealing with the Latin American nations in this time of increased U.S...
...The liberal rhetoric of the past would go...
...The American Enterprise Institute for Public Policy Research is a lobbying group which aims at teaching the public the virtues of private enterprise...
...This was to be a multilateral affair, where the United States could maintain a low profile while still insuring that plenty of dollars reached Chile...
...Agriculture Secretary Earl L. Butz told everybody the name of the game when he announced that the United States authorized the credits in the interest of "national security...
...13 In March the bank made "amendments" to former loans, which provided $1.6 million to the junta for a highway project and $6.7 million for a power project...
...government might push for a different sort of government there - one with at least a facade of democracy...
...New York), pp...
...Thus, Chile plays a special role in the world wide strategy of imperialism...
...Capitalism will thereby by reinvigorated by denationalization and privatization of sectors previously held by the state...
...Agency for International Development, Program Presentation to Congress, FY 1975, p. 34...
...This Senate vote was attached to a broad resolution needed to extend beyond September 30 the spending authority for foreign aid programs for which regular money bills had not yet been passed on October 2. The resolution then went to a House-Senate Conference Committee, where conferees killed the Senate bans on weapons for both Turkey and Chile...
...Chilean subsidiary...
...Individuals have the right to own not only consumptive goods, but also the means of production...
...There could be only one answer to this threat: a revamping of Chile's economic and political structure so as to reinvigorate the bourgeoisie's power, and the imposition of fascist like control of the populace to be sure no insurgency developed...
...but the plans of the junta were credit worthy, and the rescue operation meant to assure that those plans worked...
...In June, for example, Eduardo Rios led a delegation to the 59th Conference of the International Labor Organization in Geneva, where Rios was unable to stop delegates from recognizing the CUT as the true representative of the Chilean working class...
...government helped overthrow Allende and now plays a key role in a Counterrevolution meant to put an end once and for all to the threat of communist insurgency in the southern cone of Latin America...
...A former member of the Alliance for Progress Panel of Experts, he endorsed and helped push the "mini-Marshall plan" for Chile, mainly at the CIAP February 1974 meeting...
...40, Havana, September 1-14, 1974...
...36, in Boletin Informativo, Comite Chileno de Solidaridad con la resistencia anti-fascista, Havana, August 1974...
...Allende's expansionary moves were made to serve the interests of the poor...
...Such reports come from all parts of Chile - from the coal mines at Lota to the textile factory of Sumar...
...Subsequently, the junta awarded Cerro de Pasco $41.8 million while Anaconda settled for over a quarter of a billion dollars...
...Philippi is also a former Catholic University professor...
...Resumed control of a ball bearing plant, Armco Chile S.A.I...
...In the Central Market one finds people with five or ten cans of peaches or mixed vegetables, hawking them to the passerby...
...Worried about growing public criticism of its operations under repressive regimes, Falconbridge refuses to discuss its Chilean activities with anyone...
...According to the Chilean Embassy spokesman, the third member of the "Cuban connection," Lilian Ghiberga, is actually an "American widow of a Cuban who represents Latin American dissidents at the State Department...
...coordinator of the Alliance for Progress and former deputy assistant administrator of AID, Rogers is a "Kennedy liberal" who supported the termination of the AID-sponsored Public Safety Program, which once funded the training of Latin American police officers...
...Village Voice, September 5, 1974...
...Business Latin America, July 17, 1974, p. 232...
...for the most part the plan agreed to during the CIAP meetings was adhered to...
...imperial system...
...Moreover, five Japanese steel producers - NKK, Kawasaki, Nippon Steel, Sumitomo and Kobe - signed preliminary agreement to purchase 32.5 million tons of iron pellets between July 1978 and December 1985...
...In general, the figures given come from the Program Presentations to Congress...
...business community its full endorsement of the new regime...
...government, through a $24 million agricultural credit, alleviated the plight of the junta, while at the same time signaling to the U.S...
...Paul Sigmund of Princeton University wrote one of the first apologies for the coup, but he has changed his tune because his friends in the Christian Democratic Party are not getting what they hoped out of this Counterrevolution.s Voices on the Right A spokesman for the Chilean Embassy iri Washington, D.C...
...Though both IDB loans appear innocuous enough, they are actually political and economic tools of considerable impact...
...Richard Fagen told us about the State Department packets...
...The Renegotiation of the Foreign Debt The renegotiation of Chile's foreign debt also represented a form of aid to the junta...
...private business community moved soon after the coup to help reclaim Chile for the capitalist world...
...milk from 60 to 120 escudos a litre (a 100 percent rise...
...2) the Brazilian model of develop- ment...
...bank credits...
...We must get ready for hard times...
...The situation is far worse for those workers who have been laid off as a result of the junta's economic policies...
...foreign assistance in 1962 to 23 percent in 1973...
...In the United States, William Buckley - perhaps under prodding from his friends in the C.I.A...
...This group has funded several trips to Chile for potential apologists...
...policy makers were concerned, Chile joined the long list of countries in a state of permanent counterinsurgency and thus in continual need of U.S...
...What are the methods for doing this...
...bilateral aid bill will not pass if the junta does not at least change its image...
...Kevin Corrigan was moved quickly to New York from the Washington office of J. Walter Thompson to handle the account...
...The movement from bilateral to multilateral aid programs has been a part of U.S...
...Advisors," NACLA Newsletter, July, 1972...
...newspaper article cited "U.S...
...The Amalgamated Union of Engineering Workers and other labor unions made their militant opposition to trade with the junta concrete by refusing to repair the motors of Hawker-Hunter jets which had been sabotaged by the Chilean Resistance...
...the CIA contributed by developing a special political intelligence police force, in the form of the Committee of National Defense against Communism...
...29 (June 8-14...
...Through the return of foreign-owned industries, the payment of compensation to Anaconda, the abolition of leftist political parties and nearly all unions, and the repression of the workers, the bourgeoisie hopes to demonstrate to international capitalists that Chile will be a safe and lucrative environment for their investments...
...Thus a "Junta Lobby"grew up to whitewash the junta and push for aid and investments...
...They do so because the payout, when they succeed is swift and large...
...aid situation is especially confusing, since Congress is currently discussing and changing the amounts requested for FY 1975.16 $760 million through a renegotiation of its debt...
...In Argentina, the Peron government, anxious to sell large quantities of wheat and agricultural produce, moved to correct the junta's poor credit rating by pressuring the Citibank branch in Buenos Aires to help the junta...
...It is likely that the C.I.A...
...760 million were due in 1973-74...
...Though the agreement was endorsed by all of Chile's major creditors (the United States, Britain, West Germany, and France), some of the participants, particularly France, admonished Chile in vague terms for the junta's repressive policies...
...68,194,000 Brazil...
...policy there, including Everett G. Martin of the Wall Street Journal...
...Embassy in Santiago in April reported that an official there was frustrated because the State Department had not been able to pressure the Bank into approving some important loans...
...Thus, a source inside the Fund said in June that the Fund believes that the junta is "completely incapable of managing the economy," and that the junta's policies favor only the upper classes...
...As part of the Administration's lobbying efforts, it arranged for two "foreign policy experts," Dr...
...THE ECONOMIC COUNTERREVOLUTION 1. Bartolome Hernandez, El modelo economico de la Junta militar chilena, Documento no...
...We trust that the progressive and revolutionary people of the United States will express their repudiation of those criminals and their backers and that, in solidarity with our struggle, they will make their impact felt...
...Both men urged Congress to approve the aid bill...
...The junta began this process in January by announcing that all an original owner had to do to regain his company was to assume the debts accumulated from the Allende years...
...Saez quoted in Que Pasa...
...Quote from interview at Leslie, Weinert & Co., Inc...
...policy objectives: to help prop up friendly governments (or unseat them, as in the case of UP Chile...
...since 1970, and only minimal technical assistance grants (about $815,000 in 1973 and $572,000 in 1974).2 Yet, the total requested economic assistance for FY 1975 - about $26 million - is the largest amount for any Latin American country after Nicaragua...
...The Junta Lobby With a Little Help from its Friends For our purposes a lobby is a pressure group organized by those who have a large stake (economic and political) in a particular country, in order to influence government policies and mold public opinion...
...To contain this growing consciousness, the military after September 11 murdered thousands of workers, outlawed the central labor confederation, and imposed new labor laws that lengthened the work day, denied the right to strike, and did away with much of the protective legislation won in previous struggles...
...The hesitancy of foreign investors stems from two unsettling factors - the worldwide crisis facing capitalism and conditions specific to Chile...
...The junta's program has meant the destruction and liquidation of many small and medium enterprises by the conglomerates...
...While Kissinger in the post-Vietnam era is carrying out an imperialist counter-offensive aimed at isolating and eliminating insurgent threats in their early stages, the Chilean bourgeoisie is using all the tools of repression to try to control the Chilean working class...
...I must speak to the dead now as if they were here, brothers...
...Saenz saw what effects the plan to open the door to foreign capital would have on the medium and small bourgeoisie...
...Foreign investors have levelled strong criticisms at the code...
...Exploration office in Santiago...
...In one article, Martin stated that "if the junta can make its ambitious ideas work, it could produce truly revolutionary changes, and perhaps at last put Chile firmly on the road to economic development...
...Santiago Embassy, tfhe Eximbank recently approved in principle a $40 million loan for a copper and electrical expansion project at Las Ventanas...
...imperial system...
...Dominican Republic: Military 'Democracy' " NACLA Report, April, 1974...
...Encouraged by the U.S...
...With U.S...
...When Ricardo Claro, the economic adviser to the foreign ministry, declared that foreign capitalists are considering investments in Chile totaling $1 billion, he noted that all of the investment proposals are for the mining sector...
...The junta's program is designed to bring stability to the Chilean economy in order to attract foreign investment...
...See also Standard & Poors...
...3 2 U.S...
...Chile paid cash as down payment for most of the arms, but even such direct sales must be approved by the Pentagon...
...As an example of this, on September 24, 1973, an editorial in the San Francisco Chronicle debunked the "so-called" North American Congress on Latin America's accusations about CIA involvement in the coup...
...2 1 Thus, ADELA, along with its German and Chilean partners, hopes to capture funds from the international agencies which will then be used to control and direct Chilean development projects for its own profitable ends...
...policy makers claim Peru might actually provoke war with Chile...
...All the UP parties and the MIR operate clandestinely...
...Further, many precedents existed for such a rescue operation...
...Envious of the power and wealth of the class above them, many members of the petit bourgeoisie strive to improve their position, or that of their children, within the capitalist framework...
...5. For more on this point, see Foreign Affairs Division, Congressional Research Service, Library of Congress, The United States and the Multilateral Development Banks, prepared for the House Committee on Foreign Affairs, Washington, D.C.: GPO, March 1974...
...will manufacture mining equipment...
...13 For reporting the junta's version of events, Martin received the Polk Award from the Overseas Press Club...
...See also Business Latin America, September 4, 1974, p. 288.37 22...
...Clearly, the coup in Chile and the recent appointment of hard-line ambassadors to Mexico (Joseph Jova) and Argentina (Robert C. Hill) represent one approach...
...3, 1974...
...The lobby is just beginning to surface...
...policy makers...
...interests dominated the scene through Eximbank financing of the Chilean Steel Company (CAP) and through Bethlehem Steel's iron ore mining...
...and cooking oil from 600 to 1,140 escudos a litre (a 90 percent rise...
...Times, September 22, 1974...
...This right to private ownership would be "effectively diffused to all social strata," so that it can be a reality for all Chileans...
...pro-junta operations will be revealed...
...See also, New York Times, November 12, 1973...
...At present the views of these groups are expressed by a "junta lobby" which includes the following sorts of spokespeople: (a) Friends in the press and academic world...
...2, Summer 1974, p. 102...
...owned businesses...
...The Chilean Movement of the Revolutionary Left has neither surrendered or been beaten...
...August 3, 1974, p. 30...
...2) threats to political stability were leftist in origin, justifying the repression...
...The money went mostly to anti-Allende middle class strikers in their efforts to create economic chaos and force the military to intervene...
...The venture of Mudd and Union Oil into Chile indicates that the Los Angeles financial group is determined to expand its influence, and that it believes it has enough political clout in Washington, D.C., to protect its new Chilean investments against future threats of expropriation...
...5. "Chile: An Uphill Struggle to Revive Business," Business Week, November 17, 1973...
...Chile had many light consumer and intermediary goods industries, but never approached the establishment of a capital goods sector...
...dependence on other nations for raw materials...
...Brazil possessed an infrastructure far superior to that of Chile's in 1973, and some Brazilian-based subsidiaries, such as Volkswagen, already produced for foreign markets...
...RETURNING COMPANIES* Repossessed two plants worth $30 million...
...They diversified their interests, putting a little money in agriculture, a little in industry, a little outside the country, etc., so that if they lost in one sector they make it up in another...
...The Unidad Popular expanded construction and public works programs to provide the needed jobs for these people...
...U.S...
...See Ercilla, June 12-18, 1974, p. 16...
...From various Resistance sources including reprints in Boletin Informativo, op...
...As one reporter sees the scenario: Chile could provoke the war by promising Bolivia "an outlet to the sea...
...Treasury Secretary George Schultz...
...An employer in a small textile mill reported, We haven't had one important order in the last three months...
...Now, though, instead of spending millions to "destabilize" a democratically-elected government, it spends millions to "stabilize" a repressive military government...
...The definition of "major" crime and "violent" toma are up to the political criterion of the deciding officer or judge, which leaves all those who gained land under Allende extremely vulnerable to expropriation by old landowners...
Vol. 8 • October 1974 • No. 8
