Memorandum by the Deputy Director of the Office of American Republic Affairs (Woodward) to the Assistant Secretary of State for Political Affairs (Armour)


On October 6, 1947, the President of Chile, Gonzalez Videla, declared war on communism as a result of what he claims is a communist plot to overthrow the Government and obtain control of the production (in order in an emergency to deprive the US of the use) of strategic raw materials, namely copper and nitrates.

This action followed the elimination of communists from appointive public office in Chile several weeks ago, and was precipitated by a strike on October 4 of 18,000 Chilean coal miners. On October 6 the miners refused to return to work despite the Government’s assurance [Page 502] of a 40 percent wage increase, a house allowance, and a guarantee of their right to work.

The Government of Chile publicly announced that the Legation of a country which is a satellite of Russia has been intervening in the strike. The President privately identified the satellite country as Yugoslavia and told Ambassador Bowers Chilean communists were receiving orders from Belgrade and a Yugoslav General7 recently had come to Chile with specific instructions to precipitate a test of strength. He added that Chile was chosen for this test because of the heavy US investment there. Furthermore the President stated that the Communists had despatched agents to the American owned copper and nitrate mines to foment solidarity strikes, but 30 of these agents had been apprehended and were being held on warships. Later 30 armed communist pickets who were terrorizing workers at the coal mineheads were arrested and sent to the far South.

Other steps taken by the Chilean Government to date include:

Mobilization of the 1946 conscripts and of all coal technicians and specialists.
Application of emergency powers, voted by the Chilean Congress about a month ago, in the coal zone emergency area. This means all those inciting to disorder or urging miners not to return to work will be arrested. The first to be arrested were the Communist ex-Mayor and ex-Secretary of Colonel.
Rationing of gas, electricity, and out train schedules and the closing of power plants at Santiago and Valparaiso.

The President informed Ambassador Bowers that he intends to conscript 16,000 coal miners into the army but the army is convinced that even then they will not work since 60 percent of them have been keyed up to a pitch of fanaticism by communist agents. He expects they will have to be replaced by new elements, an operation which will take three months. Whether this attempt is made depends upon whether Chile can count on the moral and material help of the US.

It is possible that the drastic action already taken by the Government of Chile will induce the miners to return to work in a day or two. If this does not occur, however, Chile requests that the US provide 100,000 tons of coal per month during November, December and January while fanatically communist labor at the coal mines is being replaced.

The allocation of coal for export to Chile from the US is 18,000 tons for October and only 9,000 tons for November. The latter figure compares with total export allocations of 3,500,000 tons for November, a reduction of 500,000 tons from the October figure. Of this 3,500,000 [Page 503] tons, 3,000,000 tons are destined for Europe. This means only 500,000 tons are destined for all other sources.

Of the 500,000 ton allocation to destinations other than Europe, Argentina and Brazil have separate allocations. All other countries of Latin America are given a lump allocation of 6 cargoes or about 54,000 tons.

In other words the set aside for November for Latin American countries other than Argentina and Brazil is only slightly over half the request of Chile for that month and also for December and for January.

I consider we should instruct Ambassador Bowers to assure the President of Chile that the United States is prepared to provide 100,000 tons of coal during November as a one time operation,* the allocations to Chile for December and January to be considered later in the light of subsequent developments.

It is at least possible that Chile will not have to avail itself of such an allocation since knowledge that the US is prepared to keep essential services in Chile in operation during November may well undermine the communist test of strength and induce the miners to return to work.

Robert F. Woodward
  1. Gen. Ljubonier Ilic.
  2. Chile’s normal consumption averages about 160,000 tons per month. [Footnote in the original.]