Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

CH–23. Memorandum of Conversation, by the Ambassador in Chile (Howe)¹

Santiago, August 18, 1959

SUBJECT

• Chilean President’s Views on (1) Meeting of American Foreign Ministers, (2) U.S. credits to Chile, (3) IMF-Latin American relations.

PARTICIPANTS

• President Jorge Alessandri of Chile
• Minister of Finance Roberto Vergara
• Secretary Herter
• Assistant Secretary Rubottom
• Ambassador Howe

At the invitation of the President, Secretary Herter called on him at 5:30 Tuesday, August 18.

The President opened the conversation in French, expressing his satisfaction at the way the Meeting of Foreign Ministers had come out and his great pleasure that it had been possible for Secretary Herter to attend the conference. He continued that he was pleased that the meeting had been held in Santiago as he felt it had given the Foreign Ministers of the other American Republics an opportunity to see at first hand that Chile has both a democratic and responsible government. Secretary Herter replied that he, too, was very pleased with the results of the meeting and that he wished to compliment the President on the way in which Chile, as the host country, had managed all matters relating to the conference in a way which greatly redounded to its credit and made an important contribution to the success of the Meeting. The Secretary especially wished to comment on the statesmanlike and efficient manner in which the Foreign Minister, don German Vergara, had conducted the plenary sessions of the meeting and on the contribution which he had made towards resolving a number of the more difficult situations. The President, in thanking the Secretary, said that, in truth, there had been the possibility of difficult situations created by the Cubans both in the meeting and by the non-authorized arrival of the two planeloads of visitors. He said that he had just received reports on the arrival of the second Cuban plane with Raul Castro and that he and most of those who accompanied him would be admitted to the country although two of his companions, who were armed, were being held at the airfield. The President said, however, that neither he nor the Chilean Government would take any official cognizance of Castro’s arrival, as whatever invitations had been issued to the Cubans had come purely from individuals representing opposition political groups and the Cubans themselves had never even visited the Chilean Embassy in Habana to learn whether the visit would be acceptable to the Government. In sum, the President thought the Cubans had lost a great deal of prestige by the manner in which they had behaved and had only succeeded in making themselves ridiculous. The Secretary again complimented the President on the way in which the Chilean Government had handled this potentially difficult situation, which was strictly in accord with Chilean laws and regulations and to which nobody could have valid objection.

The President then continued that his government was grateful for the financial assistance received from the United States through the series of credits which were recently approved and emphasized that the present administration was a responsible one, seriously concerned with putting Chile’s financial house in order and establishing its economy on a firm basis for growth. Here Mr. Rubottom mentioned the general respect in which the present Government of Chile was held in the United States and added that he ventured to feel that Chile was not alone in showing this sense of financial responsibility, mentioning specifically the efforts being made by President Frondizi to improve the situation in Argentina, and the program just now being developed by Sr. Beltrán, the new Prime Minister and Minister of Finance of Peru. The President agreed that these developments were all encouraging and mentioned that Sr. Beltrán had been following closely for the past eight months the development of the program in Chile and had indicated that it would have a strong influence on his own plans for Peru.

The President went on to say that he felt that the International Monetary Fund needed to show more flexibility in dealing with the problems of the underdeveloped countries of Latin America. He emphasized that, while Chile was perfectly satisfied with the treatment it had received, in his opinion it was not necessarily sound policy to apply the same type of rules which might be applicable to the highly developed countries of Western Europe to the nations of Latin America, and that, unfortunately, this alleged rigidity of the IMF often resulted in the United States bearing the brunt of the criticism. The Secretary then pointed out that, as the President knew, the United States did not control the IMF but that we felt it was important to work through and in close consultation with it and the other international lending agencies. The President replied that he of course did realize that the IMF was an international and not a United States agency, but, nevertheless, the fact remained that the United States was often blamed for policies which, in his opinion, were frequently too inflexible. He then went on to say that even the U.S. lending agencies frequently seemed to demand more of sound responsible governments than they did of irresponsible governments which did not have the courage nor will power to take steps to put their own houses in order. While he didn’t mention any specific countries, he implied that both the United States and the international lending agencies should have sufficient confidence in responsible governments, such as his own, so as not to insist on tying then up with strings which were frequently tighter than those applied to more irresponsible governments.

Comment: While the President specifically said that he was not complaining of Chile’s treatment by the IMF, information reaching the Embassy from other sources close to the government suggests that in fact the government, or at least some of its high officials, may be chafing somewhat under some of the restrictions placed upon it by the IMF.

The Secretary stated that he was very appreciative of the opportunity to converse with the President and to hear some of his views. The Secretary continued that both during the negotiations for the credits and in the arrangements leading up to the Meeting of Foreign Ministers, Chile’s Ambassador in Washington, Mr. Walter Muller, had gained the respect of all the people in the State Department and the other U.S. government agencies and he wished to assure the President that Chile was extremely well represented in Washington and also that the U.S. Ambassador in Chile had his entire confidence. The President replied that he had known and worked with Ambassador Muller for many years and that it was because of his confidence in him and respect for his judgment that he had asked him to undertake the important mission in Washington. In closing, the President asked Secretary Herter to convey his sincerest greeting and best wishes to President Eisenhower and expressed once more his pleasure at having had the opportunity to welcome Secretary Herter to Chile and to talk with him.

1. Source: Department of State, Central Files, 363/8–1859. Confidential.