164. Telegram 1687 From the Embassy in Chile to the Embassy in Panama and the Department of State1
1687. Subject: Shultz-Pinochet Meeting. Panama for Secretary Shultz and Hennessy.
1. Following report of conversation evening April 2 between Secretary Shultz and junta President General Pinochet is uncleared by Secretary, who departed Santiago early April 3. Assistant Secretary Hennessy and Ambassador Popper also present. Pinochet accompanied only by foreign office interpreter.
2. Summary. In cordial 40-minute meeting late April 2 Secretary Shultz and junta President Pinochet covered range of economic questions and touched on human rights issue. Pinochet stressed Chile’s [Page 444] need for foreign investment and its desire to encourage them, under new legal arrangements. Secretary Shultz noted importance of private as well as public investment for Chile, and expressed hope remaining copper compensation negotiations would be promptly concluded. Pinochet hoped this could be done by end of year.
3. On human rights, Secretary welcomed constructive remarks in Pinochet’s IDB (Inter-American Development Bank) speech (septel) and described concern felt by visiting US Congressional delegates over reports of detention of persons without due legal process. President explained reasons for delayed trials. Said trials under provisions of Chilean law would begin in Paris. Emphasized importance for entire hemisphere of the setback communism had suffered in Chile. End summary.
4. After amenities, Secretary Shultz said that President Nixon had asked him to extend to President Pinochet his greetings and his best wishes. President Nixon hoped that, out of the chaotic economic situation the present government of Chile had inherited, order, discipline and progress would emerge. Pinochet expressed his appreciation and referred warmly to presidential letter which Mrs. Nixon had given to him in Brasilia.
5. Continuing, President Pinochet expressed particular appreciation for the assistance US had rendered Chile at Paris Club negotiations, and for various other types of “indirect support” (nature not specified) which US government had rendered to Chile. Pinochet said his government considered the IDB meeting extremely important, since it was a developing nation which need assistance. He said Chile now had a government which respected human rights, but which was also authoritarian. After the events of September 1973, there was no other way in which leftist infiltration could be prevented, but the authority of his government would always be exercised within the framework of respect for the individual as a human being.
6. The President said his government was now studying ways in which to encourage and receive foreign investment. Chile urgently needed foreign resources to bring it to the point of economic take-off. The regime had inherited many industries which had been put under state control. Most of them were in bad shape and needed “an injection” to put them into condition for productive and profitable work.
7. Secretary Shultz said he recognized that the receipt of both private and public capital, the latter largely from the IDB, was of strategic importance to Chile. He considered the steps Chile had taken with respect to appropriate compensation for past expropriations to be very significant as far as the US was concerned. Noting that an agreement had been worked out with the Cerro Corporation, he hoped negotiations would proceed promptly for a settlement of the Anaconda and Kennecott cases, as this would be an essential consideration in the resumption of the flow of US private capital to Chile.
[Page 445]8. President Pinochet said this was exactly right. His government had said in the first days of its incumbency that it intended to resolve the copper problem. “Ours is not a thieving government,” he said. The previous government had used what it called expropriation as a means of stealing the clothes from people’s backs. The government was now trying to normalize its relations in many ways; it was dealing with the companies concerned; he hoped that by the end of the year all of the outstanding problems in this regard would be solved.
9. As regards foreign investment, the president stated, Chile was attempting to work out a single legal statute or code (Cuerpo) which would include regulations with respect to private investment, social organization problems, and taxation. This was in part responsible for the delay in proceeding with settlements. The junta had been in power only a little more than six months; it was worth remembering that before President Geisel even took over in Brazil, he had had six months of preparation and study. The junta was adapting itself to emerging problems as it went along. It was completing a study of the political, economic and social situation of the country and attempting to chart its course systematically, so that it would not uselessly dissipate its energies. One should remember that the junta had had no experience in the art of government.
10. Secretary Shultz indicated that the president was being unduly modest. He was glad the president understood that an essential aspect of Chilean economic recovery was the establishment of conditions under which private capital would agree to come in.
11. In this regard, the secretary went on, the entire world economy was in a sense in turmoil, and this created many difficulties for all government. It was often hard to determine just what governments of underdeveloped countries wanted. Citing a purely domestic example, Secretary Shultz noted that in the United States last summer, people wanted lower prices, especially for food, and there had been great emphasis on the price of chickens. Somehow, over the objections of professional economists, price ceilings had been put on broilers. What happened was that farmers who could not make a profit producing them started to drown their little chicks. This was a predictable result, and the kind of thing that was happening all over the world today. The Secretary appreciated the problems confronting developing countries. But it had to be remembered that economic forces were relentless, and that economic problems had to be worked out with due regard for them, and not by working against them. This had been the American experience.
12. President Pinochet said that he understood the point. On his side he wanted to stress that the present Chilean government must be successful. If Chile went down, the repercussions would be immediate, not only in Chile but also in all of Latin America, Central America and [Page 446] Mexico, and even further north. The communists understood what the Chilean experience meant to them, and they realized that this experience had had a destructive effect on their doctrine. Thus they were seeking by every means to bring down the junta. They had been able to provoke tension between Chile and Peru. They were trying to enlarge their foothold in Peru and extend it from that point to the rest of America. The Chileans were the ones who were stopping communism today. He believed they would be successful.
13. Secretary Shultz said that he knew this to be the case, and he hoped they would be successful. He understood how difficult this struggle was. One problem involved was the matter of the preservation of human rights, which President Pinochet had mentioned in the address to the IDB April 1.
14. Secretary Shultz noted that eight congressmen had come to Santiago with him as members of the delegation to the bank meeting. They had done their best to ask as many questions as possible, to explore every interesting line of inquiry, and even to ask questions at random of people in the street.
15. Their findings might interest the President. The Secretary had met with them at noon April 2 and had found that they came away with a basically favorable impression of what they had seen in Chile. They found an open community, not one with the feeling of being overwhelmed or oppressed in any strenuous way. On the other hand they had expressed concern regarding the question whether justice was being applied on an even handed basis. They had an interest in being assured that persons were held and tried in a proper judicial and legal way. Accordingly, they had welcomed the comments on human rights in President Pinochet’s speech to the bank and assumed that over time his announced respect for human rights would be fully implemented in the country.
16. Exactly, replied the President. Perhaps Chile had been somewhat slow in pronouncing judgement. If so this was for two reasons. First, the government kept finding more and more incriminatory material. Only the previous day the newspapers had published a letter indicating that Orlando Letelier (when Chilean Ambassador to the US) had been involved in selling machine guns clandestinely to President Allende. Second, if trials had started early on, they would inevitably have been biased because of the highly emotional mood of the country with respect to members of the previous government.
17. Therefore, in this month of April, Chile would begin trials in accordance with its laws, and those accused would have all the rights accorded by the legal code of the country. Unfortunately, the law did not cover in precise terms all of the presumed offenses, such as preparations which had been under way for massive killings, or the kind of [Page 447] stealing and extortion in which some of the accused were involved. Nevertheless, the accused would be judged under the law. Even if a man who in equity would deserve a life sentence should receive only a year’s imprisonment, this would still be a useful outcome for the future. Chile was acting serenely and calmly.
18. The President reiterated that he respected human rights. Logically, he said, at the beginning, because of the hatreds on both sides some things had escaped control. This had long since ceased. As the Secretary could see, the allegations made by Socialist Party leader Carlos Altamirano of constant political killings in Chile, with bodies floating in the Mapocho River (which cuts through Santiago) and lying in the streets, were utterly false. If the situation depicted by opposition Chilean leaders abroad still existed, there would be no Chilean children on the streets or women driving cars on the streets.
19. Secretary Shultz remarked that he had heard that the women of Chile had led the opposition to Allende, and that they were a major force to contend with when aroused. It was said that in the US men had the last word, which he personally found quite acceptable.
20. The President, matching the Secretary’s jocularity, said that there was a proverb among Chileans, that “women always have the superior rank.” In his speeches he constantly referred to the role of the women in recent political developments. Chilean mothers realized that unless they acted, their children would lose their liberty. They were educating a new generation of Chileans. This was why he would strive to ensure that communism would not come to Chile.
21. Ambassador’s comments in septel.
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Summary: In Santiago for a meeting of the IDB Board of Governors, Shultz discussed economic and human rights issues with Pinochet.
Source: National Archives, RG 59, Central Foreign Policy File, D740074–0992. Confidential; Immediate; Exdis. Sent to Panama for Shultz and Hennessy. In telegram 1726 from Santiago, April 4, the Embassy concluded that Shultz seemed to convince Pinochet of the harmful potential of criticism Chilean human rights abuses. (Ibid., D740076–0934) In telegram 1731 from Santiago, April 4, Popper reported that he had spoken to Huerta about human rights along similar lines, drawing upon the instructions he had received in telegram 64524 to Santiago, published as Document 163. (Ibid., D74077–0016)
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