Foreign Relations of the United States, 1969–1976, Volume E–16, Documents on Chile, 1969–1973

33. Paper Prepared in the Department of State¹

Washington, November 3, 1970.

OPTIONS PAPER FOR NSC

CHILE

I. Assumptions.

A. Regarding Events Within Chile

1. The Allende government will seek to establish in Chile as soon as feasible an authoritarian system following Marxist principles. To that end it will move (a) to bring all significant economic activity under state operation including nationalization of basic industries; (b) to gain control over the security and armed forces; and (c) to dominate public information media. Allende is a Marxist, and will be faithful to his Marxist goals, but in his tactics may be a pragmatist who, for as long as it suits his purposes, might tolerate less than radical solutions. The well-organized Communist Party of Chile with its new legitimacy will be in a key position to influence the direction of an Allende government.

2. The Allende government will, at least in its first two years, encounter some political opposition from anti-Communist forces including the military, and will suffer from internal tensions, especially between Socialists and orthodox Communists, as well as between opportunists and ideologues within the UP. It will work deliberately but purposefully to eliminate that opposition and those tensions. Opposition within the military will act as both an incentive and a deterrent to Allende’s attempting to establish absolute control over the military and security forces through key appointments, retirements, and other legal measures. The pace at which Allende will proceed to obtain this control will be dictated by opportunity and circumstances, but assuredly will be as rapid as possible without inciting a dangerous reaction from the military.

3. The Allende government will encounter serious economic problems which could exacerbate tensions within the governing coalition and increase the potential of anti-government forces. The Allende government will confront these problems cautiously but with determination and without changing its ultimate goal.

4. An early test of Allende’s acceptance will be the nation-wide municipal elections scheduled for April 1971. Allende will use this occasion to seek to consolidate his power.

B. Regarding Chile’s External Posture

1. The Allende government will, despite possibly reassuring gestures, have a profound anti-American bias and will work to extirpate U.S. influence from the country and in order to do so may find it useful politically at some time to confront the United States. The Allende government may be expected to work against U.S. interests in the hemisphere and the rest of the world.

2. The Allende government will remain in the OAS, but will seek to use it as a forum for advancing its interests principally at the expense of the United States.

3. The Allende government will seek to maintain normal relations with the other Latin American governments and to influence other countries of Latin America to emulate the Chilean example. At the same time, Chile will probably become a haven for Latin American subversives and a staging ground for subversive movements in other countries despite Allende’s desire to maintain normal relations within the hemisphere. The Chilean Communist Party will exploit its new-found respectability to strengthen its ties and influence with its collaborators in the hemisphere.

4. The Allende government will establish diplomatic relations and resume full trading ties with Cuba, although it may proceed cautiously to these ends.

5. The Allende government will most likely eventually carry out its expressed intention to recognize and establish diplomatic relations with all other “Socialist” countries including North Vietnam, Communist China, North Korea, and East Germany.

6. A Marxist-Allende government in power would represent a potential danger to Western Hemisphere security, to the extent that it develops military ties with Communist powers, and is actively hostile to inter-American security organizations. Full realization of these potentials could threaten U.S. security interests specifically.

7. The Allende government will have close relations with the Soviet Union but will seek to avoid dependence on it.

8. At least at the outset, the Allende government will wish to maintain its international credibility as a responsible debtor, as a trusted borrower, and as a sovereign nation that fulfills its international obligations independent of any great power. It is unlikely, however, that it can complete its announced program of nationalization with “fair compensation” to U.S. investors.

C. Regarding Attitudes in the United States

The U.S. Congress and knowledgeable sectors of the public will follow with interest the political course which Chile takes internally and its attitudes and actions with regard to the United States. The realism, finesse and effectiveness of the U.S. posture toward Chile will receive equivalent interest.

To date, coast to coast editorial comment has generally supported the manner in which the United States has handled developments in Chile. As the actions of the Allende government become more overtly hostile to U.S. interests, however, we may expect adverse reaction by some sectors of the U.S. public, press, and Congress to the “establishment of another communist government in the hemisphere,” with consequent pressures on U.S. policy.

D. Regarding Attitudes of Other Countries

1. Allende’s assumption of power will provoke little overt hostility, at least initially, from Latin American or Western European governments, and these governments will publicly accept it in regional and multilateral organizations. To date, the results of our consultations with the other American Republics indicate concern on their part over developments in Chile but general endorsement of adopting a “wait and see” attitude on their and our parts. There will, however, be substantial official but privately expressed mistrust of and hostility toward the policies of that government as they develop along their expected lines.

II. U.S. Objectives

The Department of State recommends that U.S. objectives with respect to Chile be set after full discussion by the National Security Council of the feasible means available to the U.S. for significantly influencing the course of events in Chile.

The Department of Defense recommends that the following be considered as the U.S. objectives toward Chile: (1) The prevention of establishment by the Allende government of an authoritarian Marxist regime, prevention of the regime’s falling under Communist control, and prevention of its influencing the rest of Latin America to follow it either as a model or through its external policies; (2) to act as a counterpoise to Soviet influence; (3) to protect U.S. economic interests, and (4) to protect U.S. security interests.

III. Options

The United States should maintain a restrained, deliberate attitude toward Chile. In this manner we would maintain and exercise our influence in Chile, and have considerable flexibility and initiative while exploiting opportunities for pursuing our objectives.

Although events in Chile will be determined principally by internal Chilean forces and therefore U.S. influence can have only a marginal effect, the skillful exercise of our influence could be an important factor in complicating Allende’s task, both by exacerbating the friction between the moderate and radical elements in Allende’s coalition and by bolstering those forces opposed to the establishment in Chile of a Marxist-Leninist regime. The negative use of our influence—e.g., taking measures from the outset that manifest U.S. hostility toward the Allende government—would serve Allende’s purpose of rallying the Chilean people around him in the face of the “foreign devil.” On the other hand, failure to take any steps to achieve our objectives would leave the initiative in his hands, discourage opposition to Allende in Chile, weaken our hemisphere leadership, and create serious problems with public and Congressional opinion in the United States.

The principal targets of our courses of action with Chile would be the Allende government, the Chilean security and military forces, the non-Marxist political forces, and the Chilean public. Additional targets would be other Latin American countries and the OAS.

Option A

Treat Chile as we do Communist Nations that Seek Independence of the USSR

This option would be posited upon the belief that: (1) U.S. capabilities short of the use of armed force are insufficient in themselves to prevent the Allende government from maintaining itself at least over the short run; (2) for the foreseeable future the main course of events in Chile will be determined primarily by the Allende government and its reactions to internal pressures; (3) those internal pressures favorable to our interests can best be fostered and encouraged by maintaining as much U.S. presence and influence with the Chilean people as is possible; (4) thus we should not take the initiative in actions that would isolate us from Chile nor should we take the initiative in actions that would tend to force Chile into dependency on the Soviet Union; (5) we will be in the strongest position within Chile and the hemisphere if it is clear that sanctions that we take against Chile are in reaction to what the Allende government does rather than to what we fear it may do; (6) conversely to the degree that it is interpreted that the U.S. has taken the initiative in actions isolating itself from and creating a condition of hostility with Chile, Allende’s domestic and international position will be strengthened.

This option looks, therefore, to the longer run when, as we have experienced elsewhere in communist countries, internal developments in Chile may produce policies less hostile to our interests than the short-run “revolutionary” period is likely to do. Such a development should provide us with new opportunities for influencing the course of events in Chile.

1. Courses of Action

(a) Regarding the Allende Government

1. Maintain correct official relations with the Allende government in accord with established diplomatic practice.

2. Maintain the minimum official presence required to attain our objectives, headed by an Ambassador.

3. Keep the Allende government uncertain as to our attitude by refraining from public statements. Diplomatic actions in Chile would be limited to responding to situations as they emerge in Chile.

4. With respect to all other U.S. official activities relating to Chile, signal our reaction to any steps that may be taken by the Allende government that adversely affect U.S. interests in Chile by reducing or cancelling our programs, keeping in mind, however, our long-run objective of seeking to avoid a situation in which our influence would be entirely closed out.

5. Continue close consultation with Latin American governments regarding developments in Chile to ensure that our actions are understood and to ascertain whether we are moving in the directions generally consonant with the views of our friends in the hemisphere.

Option B

Maintain an outwardly correct posture, refrain from initiatives which the Allende government could turn to its own political advantage, and act quietly to limit the Allende government’s freedom of action.

This option would be posited on the beliefs that (a) while the Allende government will vigorously pursue its Marxist goals, the economic and political difficulties facing it will place significant obstacles in its path toward achieving those goals in the foreseeable future, and (b) overt hostile actions initiated by the United States would work to his political advantage. While we may not be able to avoid a confrontation, this option would deprive the Allende government to the extent possible of the important political benefit of putting on us the onus for any confrontation. In this manner we would limit the Allende government’s opportunities to consolidate its position internally as well as in the hemisphere through mobilization of emotional nationalism and “latin-americanism” against the United States.

At the same time we would continue to make our concerns over developments in Chile effectively felt through quiet diplomacy and carefully measured actions which would weaken the Allende government’s position and support its opposition without giving the government popular political issues to exploit.

This option differs from the previous option in that it is limited to proposing U.S. policy toward Chile for the initial and short term. Under this option, U.S. policy would be reviewed in the light of developments affecting Chile to determine which, if any, of the other policy options was called for.

1. Courses of Action

(a) Regarding the Allende Government

1. Maintain correct official relations with the Allende government in accord with established diplomatic practice.

2. Maintain the minimum official presence required to attain our objectives, headed by an Ambassador.

(a) Suspend replacements for the Peace Corps until the Allende government makes known its position on continuation of the program.

(b) Continue the NASA tracking station unless the Allende government requests its removal.

(c) Continue other scientific operations deemed in the U.S. interest, e.g., the Telolo radio-astronomy observatory, seasonal Antarctic activities involving transit and/or staging, where termination would be costly or inconvenient and not required by the Allende government.

(d) Wind down AID programs and staff to a compact presence concentrating on people-to-people relations (e.g., PL 480 Title II humanitarian programs, Special Development Fund impact projects); on those few programs of technical assistance of interest to the United States (e.g., health); and on participant training activities.

(e) Continue disbursements on the approximately $30 million now in the AID pipeline as circumstances warrant.

(f) Sign no new loans and make no more commitments.

3. Retain Chile in Eximbank’s Group D (worst risk) category, requiring all decisions to be made in Washington and raising fees on guarantees. Exporters would be serviced on the merits of each case.

4. Examine each Chilean request to international financial institutions on its merits and in the context of the political situation at the time.

5. In the event of expropriation of U.S.-owned property, seek prompt, adequate and effective compensation, insuring that our judgments on the application of related U.S. laws are based on careful assessments of all factors bearing on our interests in each case.

6. Apply the same criteria to negotiation on the Chilean external debt that we apply to debt with others.

7. Not encourage private investment in Chile.

(b) Regarding the Chilean Security Forces

1. Maintain effective relations with the Chilean military, letting them know that we want to cooperate but that our ability to do so depends on Chilean Government actions.

2. Continue military matériel and training assistance on a selective basis unless the Allende government moves to terminate the U.S. Military Mission agreement.

(c) Regarding Non-Marxist Political Forces

1. Publicize the weaknesses of the communist system.

2. Discreetly encourage selected politicians and political groups to oppose the Allende government measures leading to a Marxist and authoritarian state.

(d) Regarding the Chilean Public

1. Continue people-to-people type activities such as PL 480 Title II, the Special Development Fund impact projects, and educational exchange.

2. Publicize the weakness of the communist system.

(e) Regarding the OAS and other LA Countries

1. Quietly maintain consultations.

2. Refrain from actions which will tend to unite the other LA countries with the Allende Government.

Option C

Maintain an outwardly correct posture, but making clear our opposition to the emergence of a Communist government in South America; act positively to retain the initiative vis-à-vis the Allende government.

This option would be posited on the belief that a satisfactory modus vivendi is ultimately impossible; that confrontations are, sooner or later, inevitable; that it is in the U.S. interest to act in a deliberate, positive way that avoids over-reaction and maintains flexibility; that most importantly we work to retain the initiative while denying flexibility to Allende; that it is also in the U.S. interest to make U.S. opposition to a Communist government in South America clear to Chile, the rest of Latin America, the USSR, and the world. This option is to be considered in the framework of the introductory paragraphs to this section (III. OPTIONS). It is based on the occurrence of the probable developments in Chile (I. Assumptions). It differs from other options in that it provides for a public position by the U.S., and also holds the initiative on the actions to be taken with the Allende government, the Chilean security forces and political forces, the Chilean public and the OAS.

This option does not recommend that the U.S. take the full range of the courses of action immediately after Allende’s inauguration, nor without provocation on his part. It does recommend that U.S. initiative be geared to the situation as it develops in Chile.

1. Courses of Action

a. Regarding the Allende Government

(1) On the diplomatic level, deal with the Allende government in a manner consonant with established diplomatic practice.

(2) Early in the Allende administration, declare at a very high level that we would view with grave concern adoption of policies, alliances or courses of action by the Allende government that transformed a friendly country into a state hostile to the United States or that violated or denigrated the honored principles upon which cooperation and peace in the hemisphere are based.

(3) Express this view in statements by appropriate Administration officials and members of Congress, possibly in a Congressional Resolution, and in diplomatic contacts.

(4) If U.S.-owned property is nationalized by Chile, insist on adequate compensation. If the Allende government does not adequately compensate for expropriated U.S.-owned properties:

—Do not support rescheduling of Chilean debt.

—Veto Chilean requests for loans in IBRD, IDB, Eximbank because of Chilean expropriations and economic policies.

—Discourage U.S., third country, and multilateral private investment in Chile.

(5) Invoke as soon as applicable appropriate provisions of the Foreign Assistance Act, e.g. (paraphrased):

—620(3)(b): No assistance to country dominated by international Communist movement.

—620(3)(c)(A): Suspend assistance to country that nationalizes, expropriates or seizes property owned by U.S. citizens, and fails within six months to agree to adequate compensation.

—620(3)(f): No assistance to any Communist country without Presidential waiver.

—107(b): No economic assistance to countries trading with Cuba or North Vietnam.

(6) Encourage U.S. labor organizations to take active role in effort to prevent Communist control of Chilean labor movement and the Chilean government, and to oppose them if this eventuates.

(7) If anti-U.S. hostility is evident, discourage tourism and travel to Chile, on the grounds that we could not lend assistance in case of trouble.

(8) If Chile enters into commercial air traffic with Cuba, provide no assistance to Chilean airlines, no new equipment or routes.

b. Regarding the Chilean Security Forces

(1) Maintain effective relations with the Chilean military, letting them know that we want to cooperate but that our ability to do so depends on Chilean government actions.

(2) Inform Allende that we plan no change in military cooperation, but that U.S. public and Congressional reactions will be dictated by his government’s actions.

(3) Based on Allende’s response to this position, and on his subsequent actions, take the following steps:

—Military Assistance Program: Continue monitoring of training;MAPpipeline deliveries, and Foreign Military Sales pending Allende reaffirmation of:

—The Mutual Defense Assistance Agreement of 1952,

—The Military Mission Agreement of 1964.

If he reaffirms, continue the programs on a minimum basis; if he does not reaffirm, terminate.

—Military Group: Continue military mission operations if the Military Mission Agreement is reaffirmed within a reasonable time; be prepared to withdraw the missions unilaterally if this is not forthcoming.

—If Chile enters into trade with Cuba, maintain surveillance of Chilean Ships Transiting the Panama Canal (boarding guards, etc.).

—Impress on NATO Allies their need to support our Western Hemisphere security interests.

—100/97 Ship Leases/Loans: If U.S. security interests are affected by Chilean-100/100 Soviet military ties, inform Chilean military that we will have to recall the nine U.S. vessels (two destroyers, two submarines, five support ships) on lease/loan.

—If Chile develops security ties with the USSR, dramatically increase security cooperation with other South American countries:

—Offer to sell F–4’s to Argentina on favorable terms,

—Provide selectiveMAPmaterial for Argentina and Brazil,

—Support the Argentine position in Beagle Channel controversy if not settled.

—Increase internal security assistance (MAP and Public Safety) to Uruguay, Paraguay, and possibly Bolivia, based on the threat of Chilean-exported subversion.

c. Regarding the Non-Marxist Political Forces

(1) Give articulate support, publicly and privately, to democratic elements in Chile opposed to Allende regime by all appropriate means.

(2) In contacts with non-Marxist politicians, emphasize our desire to continue cooperation but that our ability to do so depends on Chilean government actions.

(3) Publicize on a continuing basis the restrictions to personal freedom and weaknesses of the Allende regime.

d. Regarding Chilean Public

(1) Publicize on a continuing basis the restrictions to personal freedoms and weaknesses of a Communist regime.

(2) For the short term, continue the Title II, PL 480 program and utilization of the “Ambassador’s” special development fund.

e. OAS and Other Latin American Countries

(1) Maintain consultations.

(2) Encourage major South American nations to effective opposition to a Communist Chile threat.

(3) Inform the Chilean military of our support for their actions as staunch defenders of a democratic Chile and suggest to the governments of Argentina, Brazil and Paraguay that they also convey their support to the Chilean military.

(4) Utilize OAS to oppose Chilean violations of OAS charter and resolutions.

(5) Consider exclusion of Chile from classified proceedings of IADB and in hemispheric military conferences and exercises.

Option D

Maintain an outwardly correct but adversary posture, make clear our opposition to the emergence of a Communist government in South America; adopt without delay economic, political and diplomatic measures designed to prevent Allende from consolidating his position; act positively to retain the initiative vis-à-vis the Allende government.

This option would be posited on the belief that a satisfactory modus vivendi is impossible; that confrontations are inevitable; that it is necessary to act without delay to deny the Communists/Socialists the chance to consolidate their power; that we must retain the initiative while denying flexibility to Allende; that it is in the U.S. interest to make U.S. opposition to a Communist government in South America clear to Chile, the rest of Latin America, the USSR, and the world.

This option reflects the reported evaluation of the situation by ex-President Frei (Santiago 4637) that Chile is dead, without any future except as a fully Marxist state, and that the only miracle that might save it would be the incapacity of the government to handle the economic situation.

1. Courses of Action

a. Regarding the Allende Government

(1) On the diplomatic level, deal with the Allende government in a manner consonant with established diplomatic practice.

(2) At the beginning of the Allende administration, declare at a very high level that we would view with grave concern adoption of policies, alliances or courses of action by the Allende government that transformed a friendly country into a state hostile to the United States or that violated or denigrated the honored principles upon which cooperation and peace in the hemisphere are based.

(3) Express this view in statements by appropriate Administration officials and members of Congress, possibly in a Congressional Resolution, and in diplomatic contacts.

(4) If U.S.-owned property is nationalized by Chile, insist on adequate compensation.

(5) Do not support rescheduling of Chilean debt.

(6) Veto Chilean requests for loans in IBRD, IDB, Exim-bank because of Chilean expropriations and economic policies.

(7) Discourage U.S., third country, and multilateral private investment in Chile.

(8) Invoke appropriate provisions of the Foreign Assistance Act e.g. (paraphrased):

—620(3)(b): No assistance to country dominated by international Communist movement.

—620(3)(c)(A): Suspend assistance to country that nationalizes, expropriates or seizes property owned by U.S. citizens, and fails within six months to agree to adequate compensation.

—620(3)(f): No assistance to any Communist country without Presidential waiver.

—107(b): No economic assistance to countries trading with Cuba or North Vietnam.

(9) Terminate assistance to Chilean airlines, including equipment and U.S. entry privileges.

(10) Encourage U.S. labor organizations to take active role in effort to prevent Communist control of Chilean labor movement and the Chilean government, and to oppose them if this eventuates.

(11) Discourage tourism and travel to Chile, on the grounds that we could not lend assistance in case of trouble.

b. Regarding the Chilean Security Forces

(1) Maintain effective relations with the Chilean military, to maximum extent possible, letting them know that we want to cooperate but that our ability to do so depends on Chilean government actions.

(2) Military Assistance Program: Continue monitoring of training;MAPpipeline deliveries, and Foreign Military Sales pending Allende reaffirmation of:

—The Mutual Defense Assistance Agreement of 1952,

—The Military Mission Agreement of 1964.

If he reaffirms, continue the programs on a minimum basis; if he does not reaffirm, terminate.

(3) Military Group: Phase-down, but continue military mission operations if the Military Mission Agreement is reaffirmed within a reasonable time; be prepared to withdraw the missions unilaterally if this is not forthcoming.

(4) If Chile enters into trade with Cuba, maintain surveillance of Chilean Ships Transiting the Panama Canal (boarding guards, etc.).

(5) Impress on NATO Allies their need to support our Western Hemisphere security interests.

(6) Ship Leases/Loans: Recall the nine U.S. vessels (two destroyers, two submarines, five support ships) on lease/loan.

(7) If Chile develops security ties with USSR, dramatically increase security cooperation with other South American countries:

—Offer to sell F–4’s to Argentina on favorable terms,

—Provide selectiveMAPmatériel for Argentina and Brazil,

—Support the Argentine position in Beagle Channel controversy if not settled.

—Increase internal security assistance (MAP and Public Safety) to Uruguay, Paraguay, and possibly Bolivia, based on threat of Chilean-exported subversion.

c. Regarding the Non-Marxist Political Forces

(1) Give articulate support, publicly and privately, to democratic elements in Chile opposed to Allende regime by all appropriate means.

(2) In contacts with non-Marxist politicians, emphasize our desire to continue cooperation but that our ability to do so depends on Chilean government actions.

(3) Publicize on a continuing basis the restrictions to personal freedom and weaknesses of the Allende regime.

d. Regarding Chilean Public

(1) Publicize on a continuing basis the restrictions to personal freedoms and weaknesses of a Communist regime.

(2) For the short term, continue the Title II, PL 480 program and utilization of the “Ambassador’s” special development fund.

e. OAS and Other Latin American Countries

(1) Maintain consultations.

(2) Encourage major South American nations to effective opposition to a Communist Chile threat.

(3) Inform the Chilean military of our support for their actions as staunch defenders of a democratic Chile and suggest to the governments of Argentina, Brazil and Paraguay that they also convey their support to the Chilean military.

(4) Utilize OAS to oppose Chilean violations of OAS charter and resolutions.

(5) Consider exclusion of Chile from classified proceedings of IADB and in hemispheric military conferences and exercises.

1. Summary: The attached paper, a revision of Document 30, outlined the objectives and policy options that the U.S. Government might take in its relations with the Allende government and argued that the United States should maintain a restrained and deliberate attitude toward Chile.

   Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–48, Senior Review Group, Chile (NSSM 97), 10/17/70–10/29/70. Secret; Sensitive. The paper was prepared in the Department of State in collaboration with the Department of Defense and the CIA. The paper with a revised first page was distributed to the members of the NSC on November 3 for the November 6 meeting. The memorandum of conversation of the NSC meeting is in Foreign Relations, 1969–1976, volume XXI, Chile, 1969–1973, Document 173.