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

CH–30. Memorandum of Conversation, by the Counselor of Embassy in Chile (Krieg)¹

US/MC/26

Santiago, February 29, 1960

SUBJECT

• Economic Problems

PARTICIPANTS

• United States

  • The President
  • Secretary Herter
  • Ambassador Howe
  • Mr. Rubottom
  • Gen. Goodpaster
  • Mr. Hagerty
  • Col. Walters
  • Mr. Krieg

• Chile

  • President Alessandri
  • Foreign Minister Vergara
  • Sr. Walter Muller, Chilean Ambassador to the U.S.

International Credit

President Alessandri referred to the joint declaration made by Presidents Eisenhower and Kubitschek in Brazil regarding expanded efforts toward economic development and expressed strong approval of this statement, especially of President Kubitschek’s suggestion that the Inter-American Bank should enter new fields and not simply duplicate facilities which were available elsewhere.

The President said that the United States supported the International Bank for Reconstruction and Development, the Export-Import Bank, and other lending institutions and that he did not think the IADB would replace or duplicate them. His objective was to complement not to replace. President Eisenhower added that he felt the Latin American countries would feel a greater sense of responsibility because of the fact that their own monetary contributions formed part of the bank’s capital.

President Alessandri then referred to Communist propaganda to the effect that the United States provided aid to Latin America exclusively for selfish motives and suggested that our aid be coordinated into a basic plan to overcome the charge that the United States neglects Latin America. A little later in the conversation President Alessandri repeated this suggestion and urged that a development plan to be carried out within a certain number of years be drawn up. He felt such coordination would make the plan better known, and recommended that the Department of State should answer charges made against the United States and conduct a vigorous campaign of counter-propaganda. President Eisenhower said that he hoped the Chilean Foreign Office would do the same. President Alessandri said they would but that the Communists poured a great deal of money into Latin America. President Eisenhower said jokingly he assumed that President Alessandri was not suggesting that the United States buy a newspaper in Santiago and turn it into an official U.S. propaganda organ. President Alessandri laughed and said that of course such was not his intention.

Copper

President Alessandri spoke briefly of the importance of copper to Chile as a source of employment and as a source of revenue for the government. He said there are two things connected with the U.S. policy which concerned him: the first was the United States excise tax on imported copper of 1.7 cents per pound, and the second was the possibility that our copper stockpile might be liquidated, thus causing a disastrous break in world copper prices. He said he hoped the tax would be removed and that we would not liquidate the stockpile.

President Eisenhower said he did not know about the copper tax and glanced at Secretary Herter and Mr. Rubottom who confirmed the existence of such a tax. The President said he did not know what the current situation was, that things were generally better and perhaps the tax was no longer needed. In any case, the President said he would have that matter looked into.

On the subject of the stockpile, President Eisenhower assured President Alessandri that it was not the intention of his administration to liquidate the stockpile. He said that it had been brought into existence and could by law only be used to meet emergencies; it would never be used to depress prices. The President went on to say that at one time when a strike had caused a great shortage of copper it had been suggested that copper be released from the stockpile to supply the fabricating industry and prevent unemployment and shortages of manufactured goods; it was his understanding, however, that no copper had actually been released at that time. President Alessandri expressed warm appreciation for President Eisenhower’s assurances.

U.S. Investments

President Alessandri referred to U.S. investments in Chile and added that Chile was consequently trying to improve the climate for foreign investors and to give better guarantees. He gave President Eisenhower his personal assurance of the maximum protection for foreign capital and stated that U.S. investment had on the whole been a good thing for Chile.

The Latin American Free Trade Zone

To conclude his remarks President Alessandri said that Chile was not trying to harm trade with the United States through its agreement with other Latin American countries for a free trade zone. What he was seeking was wider markets without detriment to the United States. President Eisenhower expressed his appreciation for this assurance.

Conclusion

As the group prepared to break up, President Eisenhower stressed again his confidence that the Governments of Argentina and Brazil were sincerely desirous of maintaining good relations with Chile and their other neighbors. President Alessandri acknowledged this and in return stated that he desired to give the most absolute assurances of his wish to cooperate fully with the United States.

1. Source: Department of State, Conference Files, Lot 64 D 559, CF 1596. Confidential. Information on the source text indicates that this memorandum was approved at the White House on March 22.