404. Memorandum of a Conversation, Department of State, Washington, April 3, 19571
SUBJECT
- Call on the Secretary of State by the Chilean Ambassador
PARTICIPANTS
- Secretary of State
- His Excellency Senor Mariano Puga Vega, Ambassador of Chile
- Wiley T. Buchanan, Jr.
The Chilean Ambassador requested an appointment to pay a courtesy call on the Secretary, inasmuch as the Secretary was at SEATO2 when the Ambassador arrived and presented his credentials. He had called on the Acting Secretary of State, Mr. Herter, but had not yet met the Secretary. The Secretary granted an appointment on April 3rd for this purpose. Between the time the appointment was set up and the call was made, the riots occurred in Santiago, Chile.3
During what had started out to be a courtesy call, the Ambassador began to speak of conditions in Chile which had precipitated the riots which occurred yesterday, during last night and some minor disturbances today. The Ambassador stated that, in his opinion, the riots were caused by the drastic steps taken in his country to curtail uncontrollable inflation. The Ambassador further stated that “when the horse kicks, it’s often because he is tired and over-worked and does not necessarily mean that he is vicious.”
He made a plea for a “financial injection” to aid his country during this crisis and stated to the Secretary that he hoped his plea would be sympathetically heard by the proper sources and that financial assistance would be rendered. The Secretary assured the Ambassador that his comments would be most sympathetically heard, but that he could not say what action would be taken.
Ambassador Puga also made certain remarks which do not require elaboration, such as Chile respects and treasures the right of private enterprise; approximately 25 per cent of the money earned in Chile from copper and nitrates is not returned to Chile, but is capital taken out of the country. He considered this to be one of the major factors in the unstable condition and inflationary situation in Chile [Page 824] today. Sugar, which had once been subsidized, (and which subsidization he did not approve) is no longer subsidized. Sugar is now so high-priced that the average person is not able to purchase it. The Government allowed wage increases at the same time so that both wages and the prices of commodities were rising constantly. This he did not consider to be a good policy.4
- Source: Department of State, Central Files, 611.25/4–357. Confidential. Drafted by Buchanan, Chief of Protocol, on April 5.↩
- Dulles was in Canberra for the third meeting of the Council of Ministers of the Southeast Asia Treaty Organization (SEATO), March 11-13.↩
- The Embassy reported on the disorders in Chile in despatch 1030 from Santiago, April 5. (Department of State, Central Files, 725.00/4–557) In despatch 1060 from Santiago, April 11, the Embassy described and analyzed the background of the disturbances. (Ibid., 725.00/4–1157)↩
In telegram 487 to Santiago, April 5, the Department informed the Embassy of the gist of this conversation. It noted that Dulles had strongly urged that Chile formulate long-term plans based on recognized economic principles rather than short-term resolution of problems. The Department suggested that the Embassy take the same line. (Ibid., 825.10/4–557)
A detailed analysis of the serious economic difficulties facing Chile is in Current Economic Developments, Issue No. 514, March 5, 1957, pp. 26–29. (Ibid., Current Economic Developments: Lot 70 D 467)
↩