305. Information Memorandum From the Assistant Secretary of State for Inter-American Affairs (Oliver) to Secretary of State Rusk 1

SUBJECT

  • Chilean Political Situation

Discontent within Chile’s traditionally apolitical military forces has added new dimensions to President Frei’s political difficulties. Recent events in Chile have aroused widespread public uneasiness accompanied by rumors and allegations that a military coup was possible or even imminent.

All branches of the military and the national police are dissatisfied with their pay and allowances. The military have been displeased by the weak authority of the GOC in dealing with political opposition and strikes. However, despite these and some professional grievances, there is no evidence of conspiracy or plotting within the military or police. In an attempt to placate the military, President Frei has appointed his personal friend, retired Army General Tulio Marambio, as Minister of Defense. He has also designated a personal friend as new CINC of the Army, and named a retired general to become new Director of the strike-plagued Postal Service. The appointment of General Marambio, the first military man to hold cabinet position in more than ten years, is not in itself sufficient to placate the military. On the contrary, he was considered a “political general” by his peers before his retirement. However, Marambio has already initiated discussions on substantial pay increases which should take some of the heat out of the military discontent. Also, the GOC now seems to be demonstrating a firmer hand in the face of strikes. This should improve the government’s image in the eyes of the armed forces.

On the other hand, the appointment of a military man to the cabinet has exacerbated public tensions which have been steadily growing as President Frei becomes more and more a lameduck president, and as his authority and control appear to be weakening. The basic political struggle is taking place in congress, where President Frei’s 1968 anti-inflationary wage policy proposals are being debated. The political attitudes towards these proposals, however, should be viewed in [Page 667]the context of a situation where all political parties have found common cause in a campaign to discredit President Frei and the Christian Democratic Party. At stake are the 1969 congressional and 1970 presidential elections.

President Frei’s wage proposals have already been emasculated. Indeed, it is questionable whether what remains of President Frei’s initial proposal can even be considered anti-inflationary, or if in its present state it would only contribute further to the inflationary spiral.

The current level of political tensions can be expected to continue, if not increase. All the strikes are not over, and preferential treatment for the military could trigger strike activity on the part of other public employees. Prospects are that there will be continued agitation from wage earners as the rate of inflation accelerates. With the government unable to impose its will on the congress to approve an anti-inflationary wage policy, it will probably rely more and more heavily on the police and armed forces to contain labor pressures. Even though there is little evidence of a possible coup, there is a real possibility that the police and the military, by receiving special wage treatment and carrying out the government’s dictates in containing labor pressures, will become more closely identified with and eventually more involved in the Frei Administration. The appointment of military officers who are personal friends of President Frei to key positions may indicate that the process has already begun. Although each move by Frei with the military has a logic of its own, the inexorable buildup of circumstances compelling the military and the government toward each other, if carried to extremes, could eventually compromise the military’s traditional apolitical stance. This would come about more by accident than design. But the result would be that the military, caught up by circumstances, would find itself propelled into positions and activities which clearly extend into political and government spheres.

The spectre of military participation has frightened the Communist Party, the best organized of President Frei’s opposition, into a counter-coup campaign. The communists justifiably fear that they would be the first victims of any extra-constitutional steps by the Frei Administration or the military. The communists charge that the US is plotting with the Chilean right to persuade the military to initiate a coup. On the other hand, in an attempt to establish its own credentials with the military, the communists are expressing their sympathy for the financial plight of military personnel.

Although there has been no significant evidence of military plotting or conspiracy, and although it is most unlikely that extra-constitutional means will be employed to deny President Frei the remainder of his presidential term; the entire process of cabinet changes, military appointments, coup scare and communist counterattack must [Page 668]be viewed as a manifestation and warning signal of the political and economic malaise gripping Chile. Its acknowledged successes notwithstanding, President Frei’s Administration has not succeeded in solving Chile’s ingrained economic problems, particularly inflation. Social discontent and political agitation are on the upswing. The political consensus with which President Frei assumed office, unless in retrospect it was in fact illusory, has disappeared. He faces political opposition on every front, including from within his own party.

Although the wage bill struggle, a festering sore that has been draining the country’s energies since last October, is almost over, the more serious, deeply rooted problems are still unsolved. We expect that the political difficulties that plague the Frei Administration will continue and even possibly grow worse as the forthcoming elections draw nearer. However, in considering the current and projected crisis situation, we should not lose sight of the fact of Chile’s jealously guarded tradition of constitutionalism and democratic processes. This is the foundation of the Chilean political and social structure, and all political parties and groups, except the most extremist, quasi-terrorist lunatic fringe, can be expected in the final analysis to behave in a manner consistent with this tradition, even though their tactics are so self-serving as to raise serious doubts.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL CHILE. Confidential. Drafted by Shankle and Morris. Copies were sent to Korry and Bowdler. A notation on the memorandum indicates Rusk saw it.