Miller files, lot 53 D 26, “Chile”

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

confidential

Dear Ambassador Bowers :

[Here follow comments about Ambassador Bowers’ health and the tin situation in Bolivia.]

I am extremely worried about the copper situation. Nieto del Rio 2 and Muller 3 came in to see me last Friday, as predicted in your telegram 334,4 to warn that any effort to change the price of copper without Chile’s consent could lead to Chile taking over all the country’s production as authorized in the bill5 which recently passed the Chamber of Deputies. You will be getting a report of this conversation from Barall. However, to me it is just one more instance of Gonzalez Videla and the Chileans going off half cocked without any responsible study of their action. To base a major governmental decision upon a half-garbled newspaper account by one official of our Government without any prior checking with us seems to me to represent the height of irresponsibility and to verge on Mossadegh6 tactics. We were able very simply to point out to Muller and Nieto that there was not the remotest thought of tampering with Chile’s copper price and that we would never think of changing any price covered in an international agreement without consulting with the other country. Then I think I really impressed them by saying that Chile had to stop acting in this way since they were only prejudicing their own position in this country. I said that the copper companies had already expressed grave concern to us over the pending legislation [Page 667]and that they were seriously considering reviewing their whole investment program in Chile. This could only have adverse repercussions to Chile’s economy.

It seems to me that some time you might have a frank talk with Gonzalez Videla and others about this constant trend on the part of Chileans to make their entire cooperation with us hinge upon details of our conduct towards them and to disregard entirely the things that we have done for Chile. The list of these things include the following during the last year:

1)
Export–Import Bank loan for amplification of steel mill.7
2)
Obtaining of priorities for steel mill at strong insistence of the Department of State with NPA to obtain steel badly needed in our defense program.
3)
Obtaining of priorities for construction of petroleum refinery which was equally as difficult as the priorities for the steel mill. (The result of the obtaining of these two priorities puts Chile in as favorable position for steel allocations as any country in the world and took a very great deal of urging. We had to use as a basis for these discussions with NPA the resolutions of the Foreign Ministers’ Conference8 with regard to supplying Latin American requirements which of course were predicated on the parallel resolutions having to do with their supplying us with strategic materials.)
4)
Straightening out of Chile’s long difficulties with the International Bank which as the President will remember was personally attended to by me when I was in Chile last March. At the time he seemed to express due gratitude for this although it seems to have slipped his mind since. If it had not been for the coincidence of my visit and that of Black’s, I doubt very much whether there would exist the present happy state of affairs between the Bank and Chile.
5)
The sale of two cruisers to Chile at bargain prices both of which have been delivered to Chile in perfect form ahead of those bought by Brazil and Argentina.
6)
Offer to negotiate a grant military aid agreement with Chile entirely unconditional upon any demonstration of Chile’s interest in Korea.
7)
Negotiation of copper agreement with Chile under which Chile obtains 3 cents a pound for copper more than our own producers, copper being the only commodity with regard to which our producers get less than foreign producers. So far as I know no one in Chile has taken the trouble to answer the demagogic attacks against the United States that this is so.
8)
Substantial increase in our Point IV activities in Chile especially in agricultural fields as desired by the President.
9)
United States support of Chile for the Security Council of the UN [Page 668]and for the election of Sra. Figueroa 9 as President of the General Assembly’s Committee on Human Rights.

As against this, we have the following record on the part of Chile:

1)
Total lack of interest in responding to our request for troops for Korea.
2)
Failure on the part of Chile to implement copper agreement by passing law with regard to fair exchange and tax treatment for American copper companies while on the other hand an extremely dangerous bill is about to pass giving President power of life or death over companies which he may be forced by the exigencies of the campaign to invoke.
3)
Demagogic attacks on American and Foreign Power Company and other American interests.
4)
Frequently uncooperative attitude of Santa Cruz 10 in UN, for example, in holding out until nearly the bitter end in favor of Byelorussia instead of Greece for the Security Council11 and in his intransigent and blackmailing attitude in regard to his resolution on economic development.12

It seems to me that the story of U.S. cooperation with Chile has not been told and that the Chilean public is being sold a bill of goods by their own Government. It seems to me that this is extremely unfortunate when most of the Chilean leaders are friends of the U.S. I understand that most of the Latin Americans including our friends everywhere conceive that political necessity in an election year requires attacks on the United States. I am terribly afraid that these attacks on the United States may whip up such sentiment that the Government, largely because of its own acquiescence in this type of behavior, may find itself in the position where it will have to take demagogic and prejudicial action such as invoking the authority given in the legislation under reference on acquiescing in a conference of twenty Latin American countries to put the heat on the United States with regard to raw material prices.

I think that Chile ought to realize that if they expect us in the State Department to continue to fight their battles for them successfully, as we have been doing, with other agencies of this Government which are subjected to the most intense internal domestic pressures, they will not be helping their case or ours by breaking their commitments to us or by creating in this country the kind of adverse publicity for Chile which would ensue from activities of the type mentioned.

Sincerely yours,

Edward G. Miller, Jr.
  1. Félix Nieto del Río, Chilean Ambassador to the United States.
  2. Walter Muller, Chilean representative to the International Materials Conference (IMC).
  3. Dated Jan. 4, 1952, not printed (825.2542/1–452).
  4. Reference is to the bill authorizing the formation of a national copper council which was approved in the Chilean Chamber of Deputies on Dec. 27, 1951. A summary of the bill’s provisions was transmitted to the Department of State under cover of despatch 769, from Santiago, dated Dec. 29, 1951, not printed (825.2542/12–2951). The bill became law on Feb. 12, 1952.
  5. Mohammed Mosadeq, Premier of Iran.
  6. Reference is to Export–Import Bank credit no. 502 in the amount of $10 million, authorized Aug. 9, 1951.
  7. Reference is to the Fourth Meeting of Consultation of Ministers of Foreign Affairs of American States, held at Washington, Mar. 26–Apr. 7, 1951; for documentation, see Foreign Relations, 1951, vol. ii, pp. 925 ff. For text of the resolutions approved by the meeting, see Fourth Meeting of Consultation of Ministers of Foreign Affairs: Proceedings (Washington, 1951), pp. 234–268.
  8. Ana Figueroa, member, Chilean Permanent Delegation to the United Nations.
  9. Hernán Santa Cruz, Chilean Permanent Representative to the United Nations.
  10. For documentation on this subject, see Foreign Relations, 1951, vol. ii, pp. 78 ff.
  11. Apparent reference to the resolution requesting the establishment of a special UN fund for the economic development (SUNFED) of underdeveloped countries, introduced in General Assembly Committee II, Nov. 22, 1951; for text of the draft resolution, see United Nations, Official Records of the General Assembly, Sixth Session, Annexes, fascicule for agenda item 26, p. 5. For documentation concerning SUNFED, see volume i .