Miller Files, Lot 53 D 26

The Assistant Secretary of State for Inter-American Affairs (Miller) to the Ambassador in Chile (Bowers)

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Dear Ambassador Bowers: I am very concerned over the attitude of President González Videla towards the Compañía Chilena de Electricidad.1 I had a visit this morning from Grant Hylander2 and he filled me in on some of the details of their unhappy predicament.3 I know that you are equally concerned and the company is grateful for your sympathetic cooperation with them.

The thing that disturbes me is the harm that Chile does to its own long-range interests by this type of performance on the part of the President, especially since it comes so soon after his unfortunate statements about copper shipments to Russia and the International Bank just before my arrival in March.4 For a country with which we have so much sympathy as Chile and with whose government we have cooperated so closely, it is undeniable that Chile does not stand very high with our financial community and that undoubtedly is one reason why they have so much difficulty with the International Bank. Of the major U.S. interests having investments in Chile the only ones which are pro-Chilean and have received good treatment over the years are the nitrate companies. The copper companies are much more sympathetic now than they have been and this is due in large part to the statesmanship which has been displayed by Cox since he took over management of Kennecott. However, the attitude of the copper companies is now in the balance depending upon what Chile does in regard to taxes and exchange rate for them. As for the IT&T, their experience has been so unhappy that it was definitely reflected in the attitude which General Harrison assumed in the copper negotiations in his capacity as Defense Production Administrator during the early stages of the negotiations when he evidenced considerable hostility to increased production of copper in Chile. The point I am making is that from [Page 1281]Chile’s own standpoint their tendency towards shortsightedness in dealing with important American investors is bound to have adverse repercussions in regard to their credit standing in this country. It certainly will affect their ability to attract any additional private investment over the years. Perhaps they don’t want any more private investment, but I don’t see how they are going to realize their maximum economic potential without it. These are just random thoughts which you might want to pass along in a friendly way either to the President or the Foreign Minister or Ben Claro5 if you see fit—or if you don’t, just file them.

I have just received your letter of May 3.6 The prospect of Ibáñez’ victory is definitely not encouraging, particularly following upon the unhappy turn of events in Bolivia yesterday,7 and I might add that the turn of events is not any too happy in this country. I feel exactly as you do about the situation here and think the furore which has been raised over the return of our conquering hero must necessarily encourage tin-horn generals of the type of Ibáez. We are making a very sad spectacle of ourselves indeed and there is no possible way to minimize it. In short, I am disgusted.

Trusting that you are the same, I remain

Sincerely yours,

Edward G. Miller, Jr.
  1. A Chilean subsidiary of the American and Foreign Power Company.
  2. Vice-President, American and Foreign Power Company.
  3. In 1951 the Chilean Electric Company experienced difficulties in its efforts, inter alia, to obtain rate increases. Pertinent documents are in decimal file 825.2614.
  4. During the latter part of February and early March, Mr. Miller visited five Latin American countries: Argentina, Brazil, Chile, Peru, and Uruguay. He traveled to Chile ostensibly to observe several meetings of the twelfth session of the United Nations Economic and Social Council (ECOSOC), held at Santiago, February 20–March 21, 1951, but the actual purpose of his visit was to engage in preliminary discussions with Chilean officials about matters relating to the forthcoming Fourth Meeting of Consultation and current problems in United States relations with Chile. For excerpts from Mr. Miller’s address on United States-Chilean problems of economic development, delivered to the delegates to the twelfth session of ECOSOC on March 6, see Department of State Bulletin, March 19, 1951, pp. 454–457.
  5. Benjamín Claro Velasco, Chilean Minister of Economy and Commerce.
  6. Not printed.
  7. Reference is to the electoral victory of Victor Paz Estenssoro in the Bolivian presidential election of May 6. Documentation on the subject may be found on pp. 1141 ff.