260. Telegram From the Embassy in Chile to the Department of State 1

10. I saw President Alessandri for about one hour today accompanied by Jova. President said that while new $15 million credit helpful, he disappointed in that he expected $30 million along with a rise in copper prices. I reminded him that he could add the PL–480 proceeds to his $15 million but he maintained that little of this would [Page 580]arrive before election date and much not until after his mandate finished. Hence, he foresees deficit of as much as $45 million.

He said he profoundly disturbed by short-sighted political stance we seem to be taking in that he understands USG only concerned with period through September 5 with the implication being that an Allende victory might see shutting off of aid. He said that while he believes Frei will win we should not discount possibility of Allende victory and urged that we take longer, broader view of matter. Should Allende win, Alessandri would have two months during which to educate Allende and to “channel him into less poisonous paths.” He did not think that Allende himself wanted “extreme solutions” and would do his utmost to hold down the Communists. In answer to my question, said he did not believe Allende is true Marxist but merely an opportunist whose campaign was considerably less violent than that of Gonzalez-Videla. When I expressed concern at Allende’s links with Communists in today’s circumstances, Alessandri observed that in many ways Communists easier deal with than Socialists and that his real fear was of Ampuero whom he considered real extremist. In any case, should Allende win, he hoped USG position would be one of reserved watchful waiting and readiness to move rapidly and with flexibility.

He maintained that if we closed all doors on Allende, we would push him further left and on path similar to Cuba. He compared cases of Cuba and Bolivia maintaining that latter had been saved by US flexibility but recognized that this flexibility easier for US due to minimum US investment as compared to Cuba and (Chile) he speculated whether Cuba might not have taken different route if US had been more prudent and then urged prudence in regard Chile even if Allende won.

In view of above, he felt it particularly necessary that during his last two months in office, Chile have an easier economic situation in order give Alessandri some room for economic maneuver during time when he will be “educating” the next president. Regardless of who wins, he said it would be necessary bring him down to earth after stratospheric euphoria of campaign and its many promises. If either candidate were to attempt to fulfill promises, would soon ruin Chile and would be thrown out in a short time. In many ways, he said Frei’s lot will be more difficult than Allende’s as he will be under greater pressure fulfill his promises.

In any case, regardless which is victor, Alessandri felt he himself would have important role to play during two month interim period and felt if he given the necessary assistance, his influence on next president might be decisive.

I told him that I would report his views to Washington and was certain that his opinion as to next administration would be useful. As regards his request for more aid, told him could make no commitment [Page 581]and while I would report his views to Department, still hopeful he would find that PL–480 would arrive soon enough to do the trick in conjunction with $15 million credit. The president said he wished he could believe this but is certain he would need more money.

Comment: I believe Alessandri’s views important but think it by no means certain that Allende will be willing to work with Alessandri and be “educated” during interim period.

I see no immediate need give active consideration Alessandri request for additional $15 million. But it may become clear that further US aid required after IMF review Chilean situation scheduled later this month or, more likely, after September election. In either case, we should be prepared move fast if necessary.2

Cole
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 14 Chile. Confidential; Priority. Repeated to CINCSO and CINCLANT for POLADs.
  2. The Chilean Ambassador to the United States, Sergio Gutiérrez-Olívos, reiterated much of Alessandri’s argument in a meeting with Mann on July 6. According to a memorandum of the conversation, “Mann said that while he was not as optimistic as President Alessandri regarding Allende’s susceptibility to influence, the Department intends to be realistic and flexible if Allende wins.” (Ibid., AID(US) Chile ) In telegram 25 to Santiago, July 8, the Department reported that Alessandri should now feel reassured that the United States would not “cut his Administration adrift in final 60 days in event Allende wins.” The Department, however, did not wish to negotiate the terms for additional economic assistance until September, “when our response can take into consideration Frei’s views and/or situation then prevailing as well as incumbent GOC position.” (Ibid., AID(US) 9 Chile )