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

CH–27. Despatch from the Ambassador in Chile (Howe) to the Department of State¹

No. 489.

Santiago, January 8, 1960

REF

• CA-1486, August 14, 1959²

SUBJECT

• Object and Operation Plan for Chile³

Relations between the Governments of the United States and Chile have reached a point of cordiality which is unusual in international relations. For the first time in 20 years, the Chilean Government is sincerely desirous of emphasizing free enterprise in the economy of the country and is making a sincere effort to cope with the economic problems which face the country because fiscal improvidence in years gone by. Chile has given valuable support to the United States position in the United Nations, particularly in such delicate problems as the seating of Communist China. The political philosophy of the Chilean Government is as strongly democratic and as opposed to all forms of totalitarianism as is our own.

The election of Sr. Jorge ALESSANDRI Rodriguez as President of Chile in September 1958 by a very slender margin brought into existence a businessman’s government which has utilized some of the best brains in Chile in an attempt improve the country’s economy. But a slight change in the vote would have brought into power a government of the extreme left, dedicated to socialistic forms of economic organization, and to collaboration with the communists; that such a government would have posed serious problems for the United States goes without saying.

It must therefore be the primary political objective of our policy in Chile to do everything we properly can to ensure the success of the Alessandri Administration politically and economically. We should endeavor to enhance its prestige by having President EISENHOWER visit Chile and inviting President Alessandri to visit the United States. We should make it clear that we approve of the constructive steps which the government has taken to cope with Chile’s problems.

At the same time, we must recognize that the political pendulum has swung as far to the right in Chile as it is likely to go, and that the return swing is likely to be evidenced in the Congressional elections in 1961 and in the Presidential election of 1964. We must therefore also maintain good working relations with the non-Communist parties of the Chilean center and left and make-every effort to clear up the misapprehensions which cloud their understanding of the policy and which cause them to fail to see that the interests of Chile and the United States are basically in harmony, not in conflict.

In the economic field, our course is not difficult to state though it may be difficult to carry out in practice. We must encourage by every legitimate means constructive action by the Alessandri Administration to check inflation and provide a sound foundation for the country’s economic growth. At the same time, it would be an error to forget the political requirements of the Administration, and it would be self-defeating to insist on perfection overnight.

Alessandri was elected with less than one-third of the popular vote: his support in the Congress is based upon a delicately-balanced coalition which may disintegrate if the political sensitivities of the various parties are not continuously considered by the Administration in designing its program. These factors cannot be overlooked by the United States when we measure the effectiveness of Alessandri’s programs and accomplishments. To stint in our support because of Alessandri’s failure to achieve the ideal in his first year in office might lead to even, less satisfactory progress in achieving stability politically; the alternatives would certainly be less attractive from our point of view and less in line with United States interests.

We should therefore lend such aid as we properly can to stabilize the economy, and we should adopt a sympathetic attitude toward requests for financial assistance designed to further the sound economic growth of the country. Our technical cooperation program should be carefully examined to eliminate what is less productive and emphasize its most useful features. For the present, major emphasis should be placed on the expansion of agricultural production and on the stimulation of foreign and local investment in Chilean private enterprise, including the private housing industry. At the same time, it may be desirable to provide limited amounts of special assistance, probably in the form of equipment, where it appears that a small investment will put greater forces to work. For a more complete treatment of this subject, see Despatch 292 of October 9, 1959.⁴

It has been pointed out above that relations between the Governments of Chile and the United States are excellent. This is not true to the same extent of the sentiments of the Chilean people as a whole toward U.S. government policies. Our enemies are working vigorously and with considerable success to discredit us. Russian successes in their satellite and space rocket program have raised questions in the minds of many Chileans regarding the technical ability of the United States to match Soviet progress; it is unpleasant to learn through a straw poll that the majority of students at the University of Chile feel that the United States is losing the Cold War.

Too many Chileans associate the United States with blind maintenance of the status quo and the USSR with social and economic progress and the increasing welfare of the common people. We must therefore be ceaselessly active in putting our case before the people, and we should concentrate on the intellectual and labor groups. It is here that we are at our weakest. The various programs for the exchange of persons operated by the Department, USIA and ICA, have all been extremely useful in spreading a better knowledge of the United States among key figures in Chilean life. These program should be continued at at least the present level and greater care should be taken in planning then to ensure their success.

The celebration in 1960 of the 150th Anniversary of Chilean independence presents an opportunity for the United States to participate in a commemoration which will be close to the hearts of the Chilean people. In the near future, the Embassy’s proposals for U.S. participation in this event will be forwarded to Washington, and it is hoped that they may receive the support of the Department and other agencies of the U.S. government.

Even in a country such as Chile, where the military traditionally respects civilian control, the armed forces still represent a factor which the government cannot ignore in developing its programs. Recent events, especially the purchase of two fairly modern British cruisers by Peru and of U.S. F-86F aircraft by Argentina, have caused the military to bring pressure on the Government to increase the level of Chile’s military equipment. Unless the United States can offer, over a period of time, to supply reasonable quantities of surplus U.S. equipment to the Chileans free of charge or on easy terms, there is little doubt that they will eventually feel themselves compelled to squander a portion of their limited resources on the purchase of military equipment elsewhere.

In these circumstances, the Embassy is unable to recommend that the MAP Program here be discontinued and, in fact, hopes that forward planning will become more definite so as to give the Chileans reasonable assurance as to what they may expect to receive from us during the next five years. As in the case of the technical cooperation program, a more thorough discussion of the Military Assistance Program may be found in Despatch 292 of October 9, 1959.

The success of the Alessandri Administration in improving the living standards of the Chilean people will have a strong influence in strengthening democracy not only in Chile but in other countries of Latin America as well. Conversely, its failure would be a body blow to the principle of free enterprise and gain for anti-democratic forces. Consequently, there is no room for complacency in the conduct of our relations with Chile. During the next few years we are going to have to be alert to every opportunity to improve our situation and enhance the prestige of the truly democratic elements in Chilean public life.

If the Embassy is to do these things and at the same time keep the Department currently informed regarding developments here, it will be necessary to have the proper tools with which to work. The Embassy must be assured of reasonable stability in its personnel so that painstakingly acquired knowledge of the local psychology and an acquaintance with key individuals may not be wasted. Our primary problem is not more personnel, although there are certain urgent requirements the Department has been unable to fill; what we need most is a reasonable degree of continuity so that our limited staff can be effectively employed. Frequent changes of assignment not only reduce efficiency but lower morale. It is also essential that allowances be adjusted promptly and adequately to reflect changes in living costs if the United States Missions are to maintain an adequate level of morale in the face of the constantly worsening inflationary pressures felt by all members of the government staff here and their families. It is recognized that the Department faces many difficulties in the management of its numerous Foreign Service establishments throughout the world and that special circumstances will necessitate departures from normal standards of personnel administration. However, it must always be borne in mind that the operating efficiency of the U.S. Government in Chile is dependent in large part on the maintenance of a reasonably stable and adequately compensated staff.⁵

1. Source: Department of State, Central Files, 611.25/1–860. Secret.
2. The referenced Department of State Instruction transmitted the “Regional Operations Plan for Latin America,” approved by the Operations Coordinating Board on July, 1, 1959. (611-20/8-145[illegible in the original]
3. The following individuals participated in the preparation of this despatch: Ambassador Howe, William L. Krieg, Counselor of the Embassy, who drafted the document; Donovan Q. Zook, First Secretary of the Embassy; Charles Katsainos, Second Secretary; Norman M. Pearson, Labor Attaché; Victor Algrant, Commercial Attaché; Ralph W. Richardson, Minerals Officer; Capt. Arthur M. Savage, Naval Attaché; Col. Walter P. Goodwin, Army Mission Chief; Hewson A. Ryan, USIA Political Affairs Officer; and L. Paul Oeschli, ICA Deputy Program Officer.
4. Not printed; 725.5–MSP/10–959.
5. The enclosure, “Specific Objectives, Country Programs and Other Implementing Operations,” is not printed.