Foreign Relations of the United States, 1969–1976, Volume XXI, Chile, 1969–1973

287. Memorandum From Secretary of the Treasury Connally to President Nixon¹

Washington, January 15, 1972.

It is my understanding that you have made it very clear that we should keep maximum pressure on Chile.

They have recently stopped repaying their debts to the U.S. Government and reportedly most other creditors. A meeting of creditor nations has been called for early February in Paris to discuss this.

In my view the U.S. objective at this meeting is to get the other creditors to line up behind the U.S. position. If they were to go off and negotiate with Chile separately our leverage could be reduced substantially.

However, we have good reason to believe that far from keeping the pressure on Chile, they have now been led to believe we have already agreed to a renegotiation of their debts.² (If there is any doubt on this point, I have top secret information to show you.) As I understand it, this is not our intention and our principal purpose is to get broad creditor support to isolate Chile.³

Since this matter falls within the Treasury purview, I strongly urge that Treasury be named to head the U.S. delegation to Paris to insure that we fully protect our economic interests and keep the pressure on Chile.⁴

There will be a Senior Review Group meeting of the NSC to discuss this issue shortly.

John Connally

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 776, Country Files, Latin America, Chile, Vol. VII. Secret.
2. Nixon underlined the last phrase of this sentence and wrote in the margin, “Totally against my instructions.”
3. Nixon underlined the end of the sentence starting at “our principal” and wrote in the margin, “This is our policy.”
4. Nixon underlined this sentence and wrote in the margin “Approved” and initialed it. Connally and Nixon discussed appointing Treasury to head the U.S. delegation to Paris on Chilean loans in a telephone conversation on January 17. Connally mentioned his memorandum in a meeting with the President on January 17 from 4:05 to 6:23 p.m. in the Oval Office. See Document 97. Nixon then summoned Butterfield at 9:50 a.m. on January 18 and demanded to see the memorandum “within 10 minutes.” Twenty minutes later, Nixon had the document on his desk and by 10:30 had approved its recommendations and instructed that it be returned to Connally immediately and that a copy be delivered to Rogers by hand. (Memorandum from Butterfield to Kissinger, January 18; National Archives, Nixon Presidential Materials, NSC Files, Box 776, Country Files, Latin America, Chile, Vol. VII)