Chile: Allende's Rise and Fall
Both the rise of Salvador Allende to the presidency of Chile in 1970 and his overthrow (and
death) in 1973 are the subject of historical controversy. This essay, written in the mid-1970s, posits some
reasons for both.
Throughout most of the 19th century, the Chilean oligarchy was able to impose its own order
upon the country, for the military and other armed forces were controlled. In 1891, the oligarchy managed
to preserve its ascendancy by defeating the forces of Balmaceda who seemed to threaten their hegemony.
In the following century, except for the short-lived military revolts in 1924,1925, and 1931, Chile utilized
elections to determine public policy. Nevertheless, the masses were held in check by poverty, a strong
class system, voting restrictions, intimidation, and the threat of violence.
Despite its reputation as one of the more Latin American prosperous countries, Chile suffered
serious economic problems. The most obvious and serious was its over dependence on copper production.
Copper sales accounted for approximately 80% of exports, yet pricing and marketing of this commodity
were beyond the control of Chileans. Numerous Chileans relied upon the copper companies: workers for
wages, merchants for sales, and the government for taxation. Low industrial and agricultural productivity
necessitated the expenditure of the limited foreign exchange for manufactured goods and food ($217
million worth in 1970). The sluggish economy was dominated by the few.1
Expansion of domestic production to offset importation was hampered by the distribution of income, for 3.2% of the remunerated
population received 42% of national income while the bottom received only 12%. Imports as well as
domestic production were absorbed primarily by the upper and middle income groups, who lived well by
world standards but whose purchases increased Chilean dependency. Inflation was a chronic problem,
rising from 28% in 1968 to 35% in 1970, but having been 45% in 1963. To sustain the economy, Chile
resorted to extensive borrowing from United States and multilateral agencies; by 1970, the debt was 25%
of the $8 billion gross national product.
By the late 1966s, the Chilean state played the dominant role in the economy, accounting for
about 40% of the gross domestic product and over 60% of direct investment. In addition, the state was the
chief borrower both for long-term and short-term credit (handling about half, which was used for trade).
As the employer of 13% of the labor force, it was the single largest employer. Few were the activities in
which it did not engage, even in the copper industry. Before the 1967 Chileanization law, taxes on copper
earnings were high2 ; by 1970, the government, which had bought majority control of the big Anaconda
and Kennecott mines, received 84% of the profits in the form of dividends and taxes. Using the 1967
agrarian reform law, the state had begun to break up the large estates The private sector, particularly in
mining, was still large and vital, but increased state ownership and control would occur regardless of who
won the 1970 presidential election.
The state's activist economic role was linked to the nation's strong leftist movements as well as to
its efforts to escape dependency. Radical parties were formed as early as the nineteenth century, initially
drawing their strength from the mining regions. Support for economic statism grew in the twentieth
century among almost all groups. Leftists supported some form of state socialism; Christian
Democrats supported a mixture of state socialism, communal socialism, and capitalism; and conservative
groups supported varying forms of statism, usually in areas which would not compete with their interests.
The democratic political system aided the growth of political parties but discouraged
compromise. Tolerance of political diversity and the use of proportional representation produced a
multi-party system which necessitated post-election coalitions to establish a functioning government. The
vote was so often fragmented that no party could as attain an absolute majority of Congress (the Christian
Democrat majority in Congress in 1967 was the first time since 1851 that the ruling party had a majority).
At times, a very mo small party could provide the margin necessary to govern. At the presidential level,
elections were consistently thrown into Congress for resolution since no candidate won a majority.
Congress chose the front-runner, even if he had as little as 25% of the vote.
This extremely competitive political system created public administration problems. With such a
splintered electorate, few parties or presidents were able to legislate their programs; the parties out of
power blocked any measure which would aid their opponents. One result was the rapid growth of the
bureaucracy and the introduction of new programs, for it was easier to add agencies than to rearrange
existing ones. More important, presidents relied upon their ability to interpret old laws in new ways or
their right to issue decrees, thus bypassing congress. As a result, the Chilean government remained free
but cumbersome. Problems lingered, in part because those who had something to lose did not want
change. Both Eduardo Frei (1964-70) and Salvador Allende (1970-73) found this to be true when they
tried to change Chile.
By the time of the 1964 presidential election, the Chilean electorate was demanding a break with
the past in order to free the country from the evils of underdevelopment and economic dependency as well
as to increase the masses' share of national income. The Left offered Marxist socialism whereas the
Chilean Democrats promised a "revolution in liberty"; both promised to destroy the system of great estates
which dominated the countryside, nationalize the mineral industry, increase socialism in other sectors of
the economy, and redistribute income. Conservatives, unable to draw enough votes to win and fearful of
an Allende victory, threw their weight behind Frei as the lesser of two evils. Frei won with 56% of the vote.
The United States, which had once viewed Frei with misgivings, also decided that Frei was preferable to
Allende. To aid Frei's victory, Washington poured money and technical advice into the campaign.3
The Kennedy administration decided to make Chile a showcase of the Alliance for Progress. If
Frei could produce the revolution in liberty in the face of a strong leftist tradition, the leftists throughout
the Hemisphere would be undercut. Chile's dependency upon (foreign loans would enable Frei and the
United States to use loans to alter the society without unduly arousing the rich. Frei's government had no
majority in Congress during the first two and one-half years, so loan policy was important. Between 1964
and 1970, Chile received $1.1 billion from the United States and multilateral lending agencies, most of it
during the first four years of Frei's term of office. The loans drastically increased the foreign debt,
however, and left a heavy burden of debt for future administrations.
When the Frei government passed Chileanization legislation to acquire majority control of
copper and otter key industries at the expense of foreign investors, Washington supported Frei. His
government also received moral support when it passed the 1967 agrarian reform law. Frei was unable to
overcome his domestic opposition and implement all of the Christian Democrat proposals, but significant
change did occur and the United States proudly pointed to Chile as an example of the success of US
policy—that Chile was undergoing social change without resorting to Communism.
The reforms had actually increased Chilean dependency for the country now had an enormous
foreign debt which would restrict the actions of future governments. The Christian Democrats had
organized militant agrarian unions, alienated landowners, and sown frustration among the rural poor who
did not receive the land for which they had hoped. Frei could not control the Chilean congress which
blocked many of his proposals; neither the Left nor the Right would cooperate with the Centrist Christian
Democrats when cooperation would strengthen Christian Democratic hold on the electorate, Further, the
Christian Democrats split as radical Christian Democrats formed a splinter group in protest to Frei's
conservatism. Chile's problems could not be solved in six years, even with a US-supported majority
president in office. Frei's last year (1969-70) was marked by a coup attempt, rising street violence, protest
meetings, and unemployment, capped by a 35% inflation rate.
The 1970 presidential election became a test of the success of both the Christian Democrats' and
the United States government's approach to social change in Chile, The three major political camps saw
possible victory and campaigned hard to win. The Right, no longer willing to support the Christian
Democrats as it had done in 1964, nominated Jorge Alessandri in the belief that the electorate was tired of
change. The Left, after some internal jockeying, finally united as Popular Unity and supported Salvador
Allende. The Christian Democrats decided that the election would be won by capturing the votes of the
Center and the Left; their candidate, Radomiro Tomic, campaigned so far to the left of Alessandri that his
platform was barely distinguishable from Allende's.
Washington saw the election as a major test of its policies in Latin America. According to secret
testimony before a Senate committee, the CIA spent $400,000 in the campaign in media support. The US
ambassador testified that all three parties had asked for a subsidy, which was refused. Since the embassy
in Santiago estimated that Alessandri would squeak through to a victory, little money was actually spent
of the several million authorized.
Apparently the International Telephone and Telegraph Company (ITT), which had extensive
holdings in Chile, was not so sure, for, according to secret testimony, ITT officials offered $1 million to
the CIA in July to prevent Allende's election. Official sources assert that the offer was refused. The truth
of these allegations is difficult to determine but it is likely that limited expenditures were made both by
government and private US sources.
When Allende won the September election with 36.3% of the vote, thus forcing the Chilean
congress to decide between him and Alessandri with 35.27% of the vote, Chile want into crisis as the
anti-Allende forces began maneuvering to prevent his ascension to power. Tomic, who won
quickly announced his support of Allende's election, but he did not represent majority sentiment in his
party. Attention now centered on the congress (elected in 1969) where Allende would have 80 votes,
the Christian Democrats 75, and Alessandri 4. On the 9th of September, Alessandri offered to resign
immediately if elected to force a new election in which he would not run if the Christian Democrats would
support him in Congress, an offer they refused. By the 24th, the Christian Democrats announced that they
would vote for Allende if Congress passed a Statute of Guarantees to prevent the possibility of a
When Allende emerged as the frontrunner, ITT reiterated its $1 million offer, this time to
Secretary of State Kissinger's office, and sought the aid of US companies operating in Chile. Apparently,
Washington rejected this offer in order to see how Chilean politicians would solve the problem, but one
report asserted that the CIA was given $350,000 with which to bribe congressmen. Now that it appeared
that Allende might actually take power, the CIA approached ITT to discuss the possibility of a
"destabilization" plan to discourage Allende's election or, failing that, to inspire the failure of his
government. Leftists contend that the plan was implemented; official US sources say it was only
discussed. It is probable that Chilean opponents of Allende received some encouragement from private
and public US sources during this period, but its significance is debatable.
The Statute of Guarantees and the attempts by the Chilean Right to block Allende's election
turned the tide in Allende's favor. On October 3, an extraordinary Christian Democratic Party convention
voted to support Allende's election by congress by a 54% margin. On the 15th, the Chamber of Deputies
approved the Statute, followed by the Senate on the 19th. Right-wing extremists , however, had started
planting bombs and engaging in street violence to provoke a military interventions on the 22nd, army
commander-in-chief General René Schneider, known for his support of constitutionalism, was shot in an
apparent right-wing kidnap attempt.4 He died three days later. The Schneider incident infuriated Chileans
and probably removed the last roadblock to Allende's election. Whom Congress on October 24th voted
135-35 to elect Allende, he became the majority-elected president of Chile. On November 4th, the first
freely-elected Marxist president was inaugurated.
Allende's commitment to create a Marxist socialist state by democratic means was not as
unrealistic as his narrow victory in the popular elections or Popular Unity's minority position in Congress
might suggest. There was broad support to expand the government's already large role in the economy, to
acquire all of the assets of the copper companies, to redistribute land, and to break dependency upon
foreigners. A large faction of the Christian Democratic party had advocated measures as radical as those
of Popular Unity and the combined Christian Democratic-Popular Unity vote could be interpreted as a
popular mandate. Popular Unity, although rent by ideological splits, was sufficiently unified in the
beginning to make Allende's peaceful, democratic approach a possibility. The Chilean military supported
the regime and Allende was careful not to offend it.5 Washington adopted a policy of watchful waiting,
of correct but cool relations, even though the Nixon administration was actually hostile to a Marxist
government. Washington would monitor the situation and key on expropriation policy as a test of
Allende's intentions. The Chilean president's considerable decree powers would enable him to bypass
some congressional opposition. Further, until mid-1971, the opposition was divided by the mutual
antagonisms between the Christian Democrats and the Nationalists.
Most of the considerable potential opposition to Allende was domestic. As had happened under
Frei, Allende could expect the congressional opposition to vote against any measure it considered
beneficial to the government. As Allende's government began to implement its expropriation program,
those adversely affected—landowners, industrialists, and financiers—would fight back with all the
resources at their command, resources which all Chileans knew to be considerable. Most of the resistance
would be Chilean, but expropriation of such companies as ITT, Anaconda, aid Kennecott meant that Chile
was contesting with corporations more financially powerful than Chile.
Chilean conservatives would
resist socialism and the upper and middle classes would resist any attempts to destroy their existence, as
Allende foresaw "we shall meat reactionary violence with revolutionary violence, because we know they
are going to break the rules." The military would act if the government ever directly threatened its
interests or allowed the country to move to the brink of civil war, Finally, Washington, which had its own
publics to serve, would certainly throw its full weight against Allende if it thought Chile was becoming a
threat to US interests.
To overcome opposition and achieve socialism peacefully, Allende's government opted for the
non-Marxist strategy of building popular support for a future plebiscite by extensive public spending while
simultaneously pursuing its goal of public ownership of land, mines, banking, and industry. Since Popular
Unity could not outvote its congressional opposition (the next congressional elections were scheduled for
March 1973), Allende either had to compromise with the Christian Democrats ( which is apparently what
they had expected), attempt a coup (which would fail), or obtain majority support of the voters in order to
hold a plebiscite to abolish congress and substitute a "popular assembly" which the then-majority Popular
Unity would control. In his first message to Congress, Allende announced his intention of amending the
constitution to create the popular assembly as well as to destroy the legal basis of capitalism. The
government and its supporters began to implement the program.
In the first months of the new government, Allende had the necessary room to maneuver. Even
the most radical members of his coalition
were willing to follow his electoral strategy and the opposition
was disoriented. Chile had a net international reserve of $343 million, a balance of dents surplus of $91
million, a halt in inflation in December, and millions of dollars in loans from US private banks and the
Inter-American Development Bank in December and January. By the government spending money, the
8.3% unemployment rate in greater Santiago could be reduced and the unused industrial capacity could be
eliminated to mast rising demand. By making the annual wage adjustment in favor of lower income
groups (giving them 40% increases instead of the 35% the inflation rate indicated), the increased domestic
production would be absorbed by those most likely to vote for Popular Unity. Inflation would be controlled
by strict price controls, refusing to devalue the escudo in relation to the dollar, tighter collection of taxes,
and increased production.
The effort to socialize ownership of the means of production proceeded while the electoral
strategy was being pursued. Companies would be expropriated by (1) using state agencies to buy out
stockholders, who were willing to sell as stock prices dropped when wages jumped and prices were strictly
controlled, (2) takeover by "intervention" when plants stopped functioning during labor disputes, often
started for the purpose by Popular Unity workers, and (3) takeover by "requisition" when factories failed to
produce sufficient quantities of prime necessities. That the laws were old and had not been used in this
manner did not make them illegal although their use united the opposition which had expected to control
expropriation through Congress. Using the Chilean Democrats' 1967 agrarian reform law, the government
expropriate land because it was "badly exploited" or abandoned and paid 1% in cash and the rest in bonds
(which might either be repudiated later or be devalued by inflation). Where workers or ruralites thought
the government was moving too slowly, they seized property, actions which the Allende government felt
obligated to recognize. With broad popular support and Congressional unanimity, the copper companies
were nationalized by constitutional amendment in July, 1971 so as to cancel all existing Chilean
compensation and to avoid compensation. The highly-respected Comptroller-General's office was given
the task of determining the value of the properties and the amount of excess profits the companies had
earned since 1956. In these expropriations, as long as Allende followed the letter of the law, military
intervention was unlikely, If the program was successful, the economic power of the opposition would be
Allende stated the goals of his government on numerous occasions. It intended to raise the class
consciousness of the workers, to engage in class war. "Our objective is total, scientific, Marxist socialism,"
as Allende put it. "As for the bourgeois State at the present moment (1971), we are seeking to overcome it.
To overthrow it!" The Chilean opposition and the US government understood what this meant. Further,
the US government had infiltrated the high ranks of Popular Unity and knew in detail what Allende's
plans and problems were. It knew that many Popular Unity members wanted a direct, violent
confrontation with the capitalists and would institute the necessary steps if the electoral strategy failed.
Allende himself, in published conversations with Regis Debray in 1971, agreed that his current policy was
only a tactic, that violence was still a possibility. Thus, the Allende government was in a race; the success
of the consumerism strategy depended upon the ability to build majority support by the April, 1971
municipal elections or at least before the opposition solidified.8
Initial success obscured the flaws in the strategy. The economy responded as Allende hoped;
unemployment dropped to 3,8% by the end of 1971; industrial production increased 6,3% over March,
1970; agricultural productivity (based on pre-Allende plantings) rose 5.3%; real wages climbed 27% by
April; and the state took control of numerous enterprises. In the April elections, Popular Unity received
49% of the vote, a tremendous vote of confidence but insufficient to guarantee victory in a plebiscite.
Thereafter, the most radical Popular Unity members put pressure on Allende to act more swiftly and
illegally or simply ignored the government and acted on their own, including the assassination of the
former Christian Democratic Minister of Interior in June. Nevertheless, had Allende taken steps to curb
inflationary pressures, stem the loss of foreign reserves, and prevent the coalescence of the opposition by
compromising with the Christian Democrats, he probably would have been able to complete his program.
The failure of the plebiscite strategy brought confrontation closer. Allende rejected Washington's
offer to guarantee the bonds with which it expected the Chilean government to use to pay for the
nationalized copper mines. Instead, Allende took ITT's properties in September by intervention and
announced on September 29th that the copper companies' excess profits of $774 million exceeded the
compensation they were due; in other words, Allende decided for a direct confrontation with powerful
When Congress passed the "Area of Three Properties" constitutional amendment in October to
limit the right of intervention and "requisition" as well as to establish Congressional control over
expropriation, Allende vetoed the measure and continued to block all efforts of the opposition to control
him. Hence, war was declared on Congress. By November, the government had to suspend payments in on
the foreign debt. Shortages had begun to appear and the opposition mounted a housewives' "March of the
Empty Pots" in December to pressure the government,
From this point onwards, the Nixon administration began putting overt and covert pressure do
Allende to modify his program. The United States Congress passed the González Amendment in January,
ordering US representatives on multilateral lending agencies to vote against loans to governments which
expropriated without compensation. President Nixon that same month announced that the United States
would not aid countries which did not take reasonable steps to provide adequate compensation or where
there were not other policy considerations to warrant aid. In specific reference to Chile he said, " we and
other private and public sources of development investment will take account of whether or not the
Chilean government meets its international obligations." Aid to Chile dropped. Although the Chilean
central bank was able to refinance the debt in January and with the Club of Paris in April, the Washington
refused to sign the necessary bilateral agreement to settle the dispute between the two countries. The
United States as squeezing Chile in order to force it to negotiate on expropriation.
Throughout 1972, the opposition stiffened its resistance by impeaching and removing
government officials, judiciary protests, cutting production, sending capital out of the country, courting
the military, and a massive strike in October. The October strike, which began among small truckers
in southern Chile and then spread to include large segments of the self-employed as well as employees,
cost Chile $100 million, which it could ill afford, and radicalized the situation.
Armed workers from
Popular Unity created workers' zones (cordones) near factories and communal commands which
only they could enter; they also seized factories (state ownership of factories jumped from substantially in
one month), confirming the fears of the opposition. At this point, Allende brought the military into the
political arena by appointing three officers to his Cabinet to end the strike and insure the March, 1973
In the meantime, the lid had blown off the economy, and the Allende government was in a
precarious state. Kennecott Copper had gone into French courts to block the sale of Chilean copper, thus
embargoing Chile's critical export. The balance of payments deficit was $298 million; net international
reserves had fallen to $289 million; inflation was 163%; and real wages cropped 7%. Agricultural imports
had jumped to $400 million, up 84% over 1970, By January the government was considering food
One of the major debates over U.S.-Chilean relations is whether this economic crisis was created
through an invisible blockade by the United States government. Pro-Allende groups contend that the
Nixon administration and private capitalists joined in a conspiracy to deprive Chile of the loans and
economic aid it needed, that the CIA actively supported the domestic opposition with funds, and that
the United States government aid and private corporations in their fights against Chile in the courts. They
stress that, by the end of 1971, private banks had substantially reduced short-term loans in response to
American government assertions that the Chilean government’s policies made it unworthy of credit, that
the US government refused to loan money and also used its power in such agencies as the World Bank
and Inter-American Development Bank to tie up loans indefinitely. The United States, unlike other
capitalist countries, refused to renegotiate the Chilean foreign debt. Thus, US economic assistance
dropped from $80 million in June, 1969 to less than $9 million at the end of fiscal 1971 and international
economic assistance dropped from $49 million in 1969 to $9.3 million in 1973. Most of the continued US
assistance went to the Chilean military, which it was courting.
The other view, held by diverse groups, was that there was no invisible blockade which created
coalitions for the coup d’etat against Allende. This argument asserts that private banks continued to loan
money to Chile as long a there was a reasonable hope that the government would pay its debts, that,
although credit might have been withdrawn before it was absolutely clear that Chile was not creditworthy,
this is not surprising given Allende's statements. After Chile's economy went berserk in 1972, lending
further such money would have been foolish, especially since Allende's government was virulently
anti-capitalist. Although credit from the United States dropped, Chile offset most of this by borrowing
from other sources, both capitalist and socialist. Primarily, however, they argue that no country which
manage its economy as Allende did and with the goals he had could possibly expect capitalists or the
United States to finance a socialist revolution. Allende had other options which would have allowed him
to create a socialist state; that Chile chose the path it did was Allende’s decision and it led to the
The economic crisis increased the conflict between the government and its opponents in 1973. In
the March, 1973 Congressional elections, Allende's government surprised everyone by obtaining 43% of
the vote, not enough to sake it a majority government but surprisingly high in face of runaway inflation
(which reached 323% by September and 508% by the end of the year). This vote gave Allende confidence
that he could now retire the military from the Cabinet and resist future opposition efforts to stop the
revolutionary process, Two days after the election, the government announced plans for a unified national
school system, an announcement which brought loud protests and moved the Catholic Church into open
opposition for the first time. US-Chilean negotiations over debts and expropriations broke down that same
month. In April, Allende overruled the Comptroller-General’s
decision on expropriations. In May, the
Supreme Court attacked Allende for acting unconstitutionally. Allende vetoed a constitutional amendment
which would have excluded 100 acre and smaller farms from expropriation. Although the government
staved off some opposition by granting a 100% wage increase in May, miners at the huge Fl Teniente
copper mine went on strike when Allende refused to grant them the 150% increase they believed he had
From this point until the military coup of September 11th, the Chilean polity polarized and
speculation abounded as to whether the military or the radicals aided by thousands of leftist refugees
13 would overthrow the government. On June 29th, a minor coup attempt by an armored regiment was
squashed by loyal troops. Both the Left and the Right stepped up the caching of arms and the training of
paramilitary forces. Street violence increased. On the 26th of July, a new truckers' strike began to last
until the military coup in September. The truck drivers were afraid the state intended to drive them out of
business. The lengthy strike worsened the already suffering Chilean economy.
The military now determined Allende's fate. In an attempt to stop the strike and the threat of a
coup, Allende again brought the military into the Cabinet, but on that same day a group of leftists tried to
instigate a navy mutiny. When Allende dismissed General Ruiz from his Cabinet post and from the Air
Force, that service began to fear that Allende was trying to subvert its promotion rules to gain control over
the service by stacking the upper ranks with his own followers. Officers' wives, including generals' wives,
were tear gassed by pro-Allende forces when they protested. The next day, the 22nd, the high-ranking
military officers left the Cabinet. Allende had lost military support. On September 9th, Socialist Party
leader Altamirano admitted that he had played an important role in the abortive navy mutiny. Two days
later, the military overthrew the government; Allende died; and martial law was imposed.
The origins of the coup are also a matter of great controversy and the impossibility of seeing
secret files makes it difficult to sort out the truth One analysis is that both the economy and the Popular
Unity coalition went out of control to the point that the opposition could successfully convince the military
to intervene to save Chile. Threatened with extinction at the hands of the Allende forces, they asked for
the military intervention and "authorized" it by Congressional and Supreme Court declarations that
Allende was acting unconstitutionally. They aided and abetted both the miners' two and one-half month
strike beginning in May and the truckers' strike beginning in July. Further, paramilitary preparations of
the leftists, including an alleged plan
to execute leading officers during a coup, and the attempted
subversion of the armed forces were sufficient in themselves to prompt the military to act. The programs
of Allende's government had so destroyed his popular support, even among the working classes, that the
military knew it would be welcome, that it could save the constitution by destroying it.
The other major view has been greatly influenced by the character of the military junta and the
revelations of the apparent CIA role. This view is not held just by Marxists and other leftists, although
these groups almost universally accept it. Much to the surprise of those who had assumed that the Chilean
military was apolitical, at least since the 1940s, and unlikely to exercise more than a caretaker
government, the junta took strong measures, Official sources admit that 2,500 died in the violence
following the coup (other sources claim a much higher figure
. Thousands more were arrested, some of
whom were tortured; and several thousand Chileans and foreigners went into exile where they lambasted
the junta. The constitution was discarded; Congress disbanded; and political parties outlawed. Freedom of
the press, which had been maintained under Allende, was ended. Further, General Pinochet announced
that it would be years before the junta would allow civilians to control the country, perhaps not for two
To some commentators, the nature of the military regime, especially its fascistic tendencies,
confirm what they thought they already knew, that the United States government had successfully created
another pro-capitalist, fascist regime similar to the one they saw in Brazil. In addition to the invisible
blockade, they charge that Washington, principally the CIA, spent $8 million to "destabilize Chile by
financing opposition newspapers, right-wing terrorists, opposition political parties, and the
July-September truckers' strike. Since CIA director Colby has apparently admitted that the CIA spent
money in Chile, these charges cannot be dismissed lightly but, because of the inability to discover the
truth, they must be tread cautiously.16
Washington's position on Allende's downfall minimizes the US role. President Gerald Ford
categorically denied that the United States overthrew Allende. Some Washington officials admit that the
United States government did give aid to the opposition but point out that this is not the same as
instigating a military coup. The goal, they asserted, was to enable the opposition to
survive until 1976 when it was expected to win the presidential elections. The military, they contend, was
capable and willing to execute the coup without US aid. Increased military to Chile during the Allende
years was desired by Allende, who desired to neutralize the military or win its support. Some Washington
officials contend that military aid as well as increased PL 480 aid were indications that Washington could
live with Allende. Finally, Washington asserted that it did not try to influence private banks to cut off
loans to Chile or control multinational loans, that it did not encourage individuals and companies to resist
the loss of their property, or influence Chilean opposition politicians to resist; these groups had their own
obvious reasons to try to block Allende and, failing that, to seek his ouster.
Regardless of the debatable role played by the US government in the demise of
the democratic government of Chile, relations between the two countries improved once Allende was gone.
Nevertheless, the Pinochet regime was problematical for the US in terms of its
violation of democratic principles and human rights. In economic terms, however,
the Pinochet regime was very friendly to foreign capital investment.
The junta agreed to compensate the copper companies and to return other expropriated
properties, although it did not dismantle all of Allende's changes.17 Foreign capital, public and private,
poured back into the country at the invitation of the junta. Conservative economic advisors from the United
States were imported to rebuild the economy. Even though the economy was in terrible condition and
inflation was 351% in 1974, capitalists believed that the junta would pay its debts, restore discipline to
the society, and allow capitalists freer reign. Chile shifted back to a mixed economy.
Support of the Chilean junta produced extensive criticism of the United States by Third World
countries, socialist countries, and by some US citizens. The junta under General Augusto Pinochet was a
repressive military government. It took the US several years before it began trying to stop the violation of
human rights in Chile. Critics complained that Washington does not interfere sufficiently in the
internal affairs of Chile to stop these violations. They do not equally condemn violations of human rights
elsewhere either because they ignore them for ideological reasons or believe that the US can push around
small countries like Chile but not larger nations. State Department officials were also opposed to the
junta’s violation of human rights but believed that the junta would not tolerate US pressure and might
respond with further repression.
The human toll of the coup d’etat by the junta was substantial. In March, 1975, the junta admitted
that over 41,000 had been arrested since the coup and, of these, over 9,000 Chileans and foreigners left.
Pinochet established a dictatorship that lasted until 1990, some 17 years. Dissidents were “disappeared” or
murdered. Torture was an instrument of policy. Democracy was destroyed during those years but did
return. The Pinochet legacy was so terrible that attempts to prosecute him were made in the 21st century.
1. The average increase in the Gross National Product between 1961 and 1966 was 5.4% but it dropped to
an average of 2.7% for 1967-70. Population increased at a 2.3% rate. By 1970, 17% of the corporations held 78%
of total assets and no more than 500 corporations dominated 80% of all production. In industry, 3% of the firms
generated 51% of industrial wealth, utilized 58% of capital, and employed 44% of the labor force. In 1965, in the
agrarian sector, 1.3% of the holdings accounted for 72.7% of the arable land. The utilized land was often
2. In 1961, taxes on the income of Anaconda's Chuquicamata and
Kennecott's El Teniente mines were raised to substantially as much as 84%. Nevertheless, Kennecott received a 38% return on capital.
3. The United States, which had been pouring money into Chile during the 60s, stepped up aid in 1964 to prevent serious economic deterioration during the election for fear that the
electorate would shift leftward. The CIA spent $400, 000. There is no evidence that these monies affected the election.
Schneider was killed when he tried to defend himself with a handgun. It was widely believed that a rightist group tried to sequester Schneider in hopes of provoking a military
coup, but the evidence it unclear.
4. Schneider was killed when he tried to defend
himself with a handgun. It was widely believed that a rightist group tried to
sequester Schneider in hopes of provoking a military coup, but the evidence it
5. Allende sought increased US military aid, which rose from $12.4 million in 1973, having fluctuated between $5 and $11 million during 1968-72.
6. ITT alone had some $10 billion in annual revenue in 1973 as well as
international business connections it could bring to bear; Chile's gross national product was less
than $8.5 billion.
7. Within the Popular Unity coalition were the Communist Party,
Allende's Socialist Party, the Radical Party, the Social Democrats, Popular Independent Action, and MAPU, a splinter
from the Christian Democrats. Supporting Allende from outside the government was the Movement of the
Revolution Left (MIR) which Allende could not control. The Radical Party would splinter in 1971 but Allende would
pick up the support of the Christian Left which split from the Christian Democrats in 1971. The coalition was
unstable and even the Socialists would act independently of Allende at times.
8. Local producers, who were threatened with expropriation, reduced the food
supply, thus forcing Chile to import even larger quantities of food, thus eating up substantial portions of
foreign exchange. Further, world copper prices dropped in 1972, thus reducing Chilean foreign exchange and
9. ITT would later be refused compensation from the Overseas Private
Investment Corporation, a US government agency, because it had necessarily provoked the Chilean
government, Kennecott went into courts in various countries to block the sale of expropriated copper or the transfer of
10. It is widely believed that this march was arranged by the CIA, but this
denigrates the intelligence and determination of the Chilean opposition. The shortages may not have been as
severe as the marchers asserted.
11. The October strike has also been seen as a CIA plot. The small truckers
struck because the government had decided to favor state-owned trucking and the small owners feared this
policy would shut off their access to spare parts. That the 27-day strike was quickly joined by others threatened
by the government was primarily the work of domestic opposition forces.
12. The Comptroller-General was one of the most highly respected governmental
organizations in Chile as was the Supreme Court. Both were seen as above politics.
13. Allende granted political exile to leftist refugees from other Latin American
countries such as Argentina and Brazil. Such a policy was traditional in Chile. In this case,
however, anti-Allende forces asserted that these exiles violated the rules by engaging in domestic politics, that
they were importing arms with the aid of the government and preparing for an eventual violent overthrow of the
government if it appeared that the anti-Allende forces might win. The military forced the government to pass an
arms control law and the national police used the law in the months before the September coup in an attempt to
disarm the population which was increasingly resorting to street violence.
14. Plan Zeta, as it was called, listed the steps to be taken and the
persons to be killed. The allegation is that the military intelligence obtained the plan and the officers earmarked for
death reacted quickly. It is possible, however, that the plan did not exist and that the document was fabricated
either before the coup by Allende opponents or after the coup by the military.
15. Such figures must be treated with caution since both the junta and its
opponents had ample reason to lie. The junta would not allow OAS, UN, or other agencies to enter Chile to
ascertain true figures on executions or treatment of prisoners. The United States government in 1976 began taking a
strong stand in condemnation of the violation of human rights in Chile.
16. Colby's testimony was to a Senate committee. Although $8 million would not
buy much in the US, it would be worth at least the equivalent of $40 million in Chile, depending
upon how the escudos were purchased. The exact amount spent is uncertain. Apparently $3 million was spent 1970,
the rest (either $5 million or $8 million) after Allende was elected. Nevertheless, the larger amount must be
compared to the resources at Allende's command.
17. In January, 1974, the junta agreed to pay Kennecott $68 million, ITT $125
million, and Cerro de Pasco $59 million; that is, less than these companies had claimed was due when
Allende was president.