302. Editorial Note
Documentation on relations between the United States and Chile is presented in an accompanying microform publication. A narrative summary based upon that documentation and a purport list of the documents included in the microform supplement are provided below. The document numbers cited in the summary correspond to the document numbers in the purport list and the microform supplement.
Although the United States and Chile continued cordial relations during 1958–1960, there was considerable tension between them over copper policy. About one-half of Chile’s foreign exchange was derived from this one commodity, and the United States affected Chile’s copper market in a variety of ways: as consumer, as homeland of Chile’s two principal copper operators (Anaconda and Kennicott Corporations), and as prime mover in the worldwide COCOM effort to keep vital raw materials out of East bloc countries.
At the beginning of 1958, U.S. Congress was preparing legislation to reinstitute a copper duty to protect domestic production in the face of declining world demand. The Embassy in Santiago, pointing out that the Chilean perception of the importance of the U.S. market was even more important than the market was in actuality, recommended alternatives such as stockpile purchases or an outright subsidy. The Department fundamentally agreed but observed that some compromise would have to be found. (CI–1) Vigorous public support of the duties by Interior Secretary Fred Seaton led Chilean President Carlos Ibáñez del Campo to cancel a scheduled visit to the United States. (CI–2, 4) In the wake of this setback, the Embassy recommended increased U.S. support of Chile, especially including measures of economic aid and cultural exchange which would remind Chileans that the United States did “recognize the difference between a Dominican dictatorship and a Chilean democracy.” (CI–5)
In elections held in September 1958, Conservative-Liberal candidate Jorge Alessandri gained a narrow 31 percent to 29 percent plurality over Salvador Allende, the standard-bearer of a broad left-of-center coalition. Increased foreign exchange problems coincided with his victory. [Page 801] (CI–11) The Department and Embassy wanted to help Chile work out a favorable solution with the International Monetary Fund, especially as they perceived Alessandri as “much more business-like” than his predecessor. (CI–12, 13, 16) Along the way, however, the Department grew more skeptical that Alessandri had the will to introduce a thoroughgoing stabilization program. (CI–17) The Department also worked to head off the plans of other agencies to dispose surplus copper stocks. (CI–20, 21) Finally in May 1959, a package was worked out combining U.S. and IMF assistance to Chile. (CI–19)
In the spring of 1960, President Eisenhower visited Chile during his Latin American tour. The two Presidents, in cordial conversations, discussed general disarmament, Chile’s own military situation, and economic topics. Alessandri assured Eisenhower of Chile’s welcome to foreign capital investment. During a discussion of copper, it appeared that Eisenhower had not been aware of the U.S. import tax on imported copper. Eisenhower did promise Alessandri to make no releases from the copper stockpile except in emergencies, and issued appropriate instructions to carry out this promise. U.S. domestic considerations prevented the administration, however, from taking action on the copper duty. (CI–29, 30, 33, 35)
During the President’s visit, Chilean officials told Secretary of State Herter that while they privately sympathized with the U.S. position regarding Cuba, Castro’s revolutionary government in Cuba had great popular appeal in Chile and other Latin American countries. It was therefore better to isolate Cuba than to take direct action against it. (CI–32)
In May 1960, Chile was struck by a series of earthquakes, accompanied by tidal waves, avalanches, and floods, which wreaked extreme havoc on the country. The closing documents in the compilation detail the considerable efforts of the United States to meet Chile’s needs for relief and reconstruction. (CI–37 through 41)