825.00 Revolutions/15: Telegram

The Ambassador in Chile (Culbertson) to the Acting Secretary of State

102. Representatives of principal American companies in Chile met with me this afternoon at my request. Streetcar strike remains unsettled. Electric company has agreed to comply with some of demands of its employees but its problem remains complicated by communistic agitators. Other American business interests including telephone, nitrate, and copper companies have not been molested and are continuing operations subject to the limitations imposed by general conditions. I believe this meeting was helpful in easing tension and allaying fears among Americans.

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The Government, believing that the origin of the difficulty was the program to reduce salaries, has announced officially that it will pay to civil employees and to the armed forces their full salaries now due. However it is not clear from what source the money for this purpose is to come unless it is from the issue of paper money.

Information has just been received from Coquimbo to the effect that Government’s representative has been able to arrive at a settlement with the men of the fleet and that the terms of the settlement have been submitted to the Government at Santiago. It is expected that the terms will be approved and that the mutiny will be at an end.

The situation continues uncertain and serious but if trouble with the fleet is settled it may be the first step toward the restoration of the country’s morale and to the breaking up of subversive movements.

Attachés request that my telegrams of today be referred to their respective departments.