25. Memorandum of conversation, April 17, between and Agriculture Minister Casanueva1

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PARTICIPANTS

  • Secretary
  • Manuel Casanueva, Minister of Agriculture of Chile
  • Luis Mackenna, Central Bank of Chile
  • C. R. Harley
  • A. M. Rosenson

TIME & PLACE

  • April 14, 1961, Copacabana Palace Hotel, Rio de Janeiro

Minister Casanueva thanked the Secretary for the opportunity of speaking to him. He said Chile is now going through a process of economic adjustment and planning for the future. Inflation has been brought under control. The cost of living last year rose only between 5% and 6% and the exchange rate has been kept steady for the last two years.

The Minister expressed his pleasure with the Kennedy plan for economic development and technical assistance which, in its broad outlines, accords closely with the Chilean Government’s thinking on these subjects. Chile has formulated a 10-year plan for economic and social development which is directed toward an improvement in the standard of living of the Chilean people. This plan is the result of careful studies made by the Chilean Development Corporation in collaboration with the Ministries of Agriculture and Economy and other Chilean Government agencies and with the help of the FAO, Point IV and ECLA.

The Minister expressed his thanks for the help received from the United States for rehabilitation from the effects of last year’s earthquake. The earthquake affected not only the area immediately involved but the whole Chilean economy and resulted in a loss equal to total investment in Chile in a year, or about $500 million.

Minister Casanueva then referred to the $100 million credit now being considered by the U.S. Congress. He said it was important that this credit be used not only for construction but also for economic development; the two are inextricably linked. He hoped that it would be possible for our Congress to enact this legislation before May 21st, on which date the President of Chile goes before Congress with his [Typeset Page 62] annual message. As in other democratic countries, the Chilean Government has an active political opposition, including opposition from the extreme left and Communists. Should the U.S. [Facsimile Page 2] Congress fail to appropriate the money by that date, the Administration of President Alessandri would be subject to severe criticism from these elements. Therefore, it is very important that in his message to the Congress President Alessandri be able to announce the granting of the credit.

The Minister then said that the Chilean Government had under consideration two programs in the field of agriculture: (1) “colonization”, involving the sub-division of large tracts of land both public and private, which are being inadequately utilized; and (2) assistance to small agricultural proprietors at the lower income levels. He said that they have applied for assistance on the first program from the Inter-American Development Bank, to be made available from the Bogota funds, and expect to submit an application on the second program.

The Minister said that among other less important problems was a request for a $5 million credit from the Export-Import Bank for the purchase of agricultural equipment. Such a loan would be used in much the same way as the $5 million which the Central Bank had previously received from the Export-Import Bank to assist small and medium-sized businesses to purchase industrial equipment.

The Secretary said that he was happy to have the opportunity to speak to the Minister and to obtain the Chilean point of view. He said he had the greatest respect and admiration for President Alessandri’s program of development and stabilization. The Chilean achievement has indeed been remarkable.

The Secretary added that he hopes it will be possible for the legislation on the $100 million to be enacted by May 21st. He said he would pass on the information given him by Minister Casanueva to the State Department and others in Washington, with a view to expediting action. This information provided a good reason for the Executive Branch to prod the Congress into somewhat faster action. However, he intimated that there should be no insuperable obstacle in the way of obtaining the funds by that date. In fact, he would have ventured the opinion that the bill would be through Congress by June 1 in any event.

As regards the small pending loan application with the Export-Import Bank which the Minister had mentioned, the Secretary said he would take this matter up with Mr. Linder and ask him to look into it.

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Referring to the Minister’s remarks regarding Chile’s programs in the field of agricultural development, the Secretary said that the U.S. Government is very much interested in this field and that these are just the type of programs that the Bogota funds were intended for. Hence, there is every reason to believe that Chile’s applications in the [Typeset Page 63] IDB for this purpose will receive careful attention from the Bank as soon as it receives its share of the Bogota funds. He reminded his listeners, however, that these funds are not to be used for the purchase of land, which the Minister assured the Secretary was well understood.

Alexander M. Rosenson
  1. Chilean economic adjustment and planning for the future. Official Use Only. 3 pp. DOS, CF, 611.25/4–1761.