Of Cl ASSlr- 'D 1 J r crii n - exempted f L'' - - · ' Y J Cl J - c r C jg · ct 'f _ v -- t J er · -1J 11 p 22 Sept er 'c_ __J_ _9_7_0 ·- -r - - IOI - - - - - - _ _ ' R PL C i S ' C'A l 0 •101 HICH MAYO USEC -- - DA TE ' I• 7 r 21 Siptember 1970 with _ i 1 Following up on the 14 Septer Jb e r 19 7 0 discussions w it h CIA Di -cctor Richard 1i e lrr cl I for furtllE 'l' d sc _1ssions of' mili t 2 -y politic l anci econor iic factors a-'' Jectirw the pr esenc situation in Chile Accompanying to Wa sL i nrct on was L I 1 t bcug t too part in - - - - - - - - - - - - - - - - - - - ' _ _ _ _ _ _ _ __ 11 a _d with At t or' 1ey General Mit cbe l l lJr Ki si n c e c· v ' - - - - - - - l - - J preferred not t o participa t e i -oui· subsequen t aiscuss i o1'1s wit l1 noting th t J ·-should proba ly stz y out o E _ uch ta lks z t th i s C _ poixn • · Furth e r Thougl it on the fj_lit2 ry d 2 · extended his pre i ious comments o J key Chil ean military the context of t heir possible actions to avert the inaugura ti on of Marxist Salvador Allende as Prcsiden of Chi l e on 4 November A1lende's slim plura l i t y in the 4 Sep t ember electicr1 mus t be submitted to a cong essional v o te on 21 0 ct ob er a 1 d h c n c eds · t o a cl d ab out 2 0 v o t es t o t i o s e he bas to be the c onsti t ution2 l president-elect H s r e r arks inclu de d the following a Ma jor General Camilo Valenzuela God o y Co mmander c f the Santiago Garrison and as such nomin2 l commander of aJ l Arr 1y forces in the Santiago area He commands no t r oops except in a s t ate of emergency CO l iEYT -As Co 1 n der o f the S tn t i o Garri son Valenzuela co 1ands a bout 30 men Duri g a s t at e of eme r gency he ass umes nominal bo 1and of all Armed Forces in Lhe Santiago area including tho carabinerbs or Nation1l Polic e BY rJ t• rt'' DATE --1 1 J _ ' SENSI TIVE EYES ONLY - 2 - Durin g the recent presid n t ia l election Valenzuel was appointed temporary military gover n or jefe de plaza of the Santiago area s D e cificD lly because J1e co1112na11cted no troops and would not be at le t s tag-e u n ila ter il mj_li tary act ion he would have to issue c on1n a nd It is not necessarily the case tha t Val e nt i roug-h oth e r gen e rals z eln· would be appointed jefe cie plaza if a state of emergency were dee L n· c d b Bri g General Oriando Urbj_na Herrera Comm a n d er of the S ec cnd Di vis5 on th e largest Army unit is statione d in an t iago and i s Valenz u eJ a 'S mo s t impor t ant s·tibor di na te J C h3 r3 Ct er i z e s hi-m a s a top--no t ch tro o p commander s-up e rior incapacity and_ int e J J igc t o V cle az u ela His coop e a-ti_on and t ha t o f hi s d i vh· i an w c-1d cl be vit a l to n 'ny milj_ tary mov e but hj_s iJ ol i t ic il att itu d es ay e nb t clear A we ll-infor med cl an des tin 8 socr cc hp s r por t c d tba t Drb i r _ _Jwould r sp o nd_ t o or d e rs f rom Army comrr 1n dc 7 Re n e Sc1rneJ cler ratl1e r th i n ·vaJ enzu cda J f the two i s s 1e on i j c t i ng i jS t1 ' L C - ·rJ on· · I · ·'l l -1· C- c ·J ·•• •• tr ' • j Ge 1ie 1 ·n l R e ne Sc h nc i d c Chercc t'--1 Comm2 n d er j_n Chi · r ·• l ·· d _ - -_ c 1 ··1-·-· · · i l_ - l - 1--·· c • C - l - 1 i · 1 0 I -'· ·c _ D J 1 ✓ r OI J - C J i v · · C f v t of 0 i nd i c Ltr t · J 1· e d iJ nvt h d i e ·e Sc h nei de r r1ouJ d ta k e 2 n y J C t i n pps s i t · _ · t i c - i j _ 1 t ll l l e D dG ' s a s s u n Jt i · 11 of t b o p r· os i c1 -1 c y a r d t b -i t i · l E w -c eamed M _ n is t c r of D e fense as has l C e n c1 l1 01· c d j t Y Cl tJ d be a 11 r e J Jr 'f if i t d B J g· Ge ne i 11 E11ri q_u e Garia Ce2- C0m 2 n clG c o f l U i t2 xy Sch oo ls a ep ra te and i1 1p o ct 2 n-i - coiiima nd i n t he Chi lea n Ar ny w hic i i n cJ LTd 3 t21- c - -rn --cor m i ssi oned Of i'ic·2rs ' Sc hool the S-p c c ia l For c e Sch ool t be Ii l i ta ry i ademy t h e Viar · Ac demy and ot he r c o r c t- n- tr a t i or s c f elite mi1 i t l r · ersonnel i n tr 2 inj_n g most o f t h er locat ed i n Santi a ga - - - - did not chai acteri z e Garin exc e pt t o in di c 1 t e tha t h e con s J e r s i is co operation along with t l- t o f Ur bin a to b e v it al i n any m litary action e Major Genera l Ca rlos Prats Goczalez Chief o f the National Def inse_ Sta ff a nd s ec o nd·-rn imp ortance in the Army only to Schnei de r As an officer assigned to the National Defen s e Staf f Pra has _no p·osi tion in the chain of command of the Army I_ __ singled out Prats as th e most important figure in any military action which might be taken He · described Pr 1ts as cag e y cau t ious calcul a tin g h i ghly ambitious and very a le lie is well-regarded by nearly all Army offi ce rs and possesses t he q aliti e s which o t her officers l ck to become a ra llying t actu ly SENSITIVE __ EYES ONLY __________________________ _ --- -•- --- - I l ti J - oin t for i c t ion V I ' I I 3 - Li k e oth e rs wh o s p e ll h i ghly o f Prats h o wev r lap pe arcci to have no clc i r id ea of this general ' s o li tical a ttitudes and to fe l that tl1is was because Prats does not ·want them known f Bri g Ge nera l Robe rto Vi a u x 1 1 ranbio i nvol un ta r i ly re tir e d a f l e r h e le d th e upri s in g of a n Arm y unit in Oc tob er 1969 to pro tes t p oor p ny a n d e q u ipment Al th o u g h Via ux ' am bition s and e1· l ' c t i c s ta te men ts have di rni n ish ecl bis s11 p pc 1 - t s o rr ew ha t f be l i e vc s that Vi a u x ' s tr ong d emago g ic ap pe a l an d h is influ e n ce u on f t l1 8 CO's p rob ably o ffsets t h e inf i lt r a tior of l12fti st i nfl u ence in th e s t rat eg i c NCO sc h o ol i n S ant i lg o Th e k12y qu e sti o n is wh et her VL 1 ux would sc t t l2 for no 1 t ore than a role as a ne mbcr of i team tcfr in g milit iry J ction when J1is st ·ong pr c d i le cti on i s t o l ea d CO r E NT Vi aux on 1 7 S epte mb er 1 12 d e a significant pujl i c sta tement sa y ing t h at he was not a rx is t n e go ti abl e a nd exi ress i n h i s s olid iT i ty wa s in touc h with Va len zu el i throu gh 2 co mnon cl o s e frierl d dlD i n g t he re c cn t p · 3icl c nti a l c2 r 92 ign He con s i de rs Va l enz u ela· h oni St b ut no t ir c J i ned to tak e t c ugh -o r un pop ul r pos t ures i n d n·ot a l wa s wel l i n f c - ne d abou t his s u bord n t te s He j_s n o t be lie ve d to ha ve we l1 --org · n i z e ci contingency pla 1 s fo1· any ac t i on again s t Al l e n de Val e nzu e J llz over 30 y e ars o f 'i r r 1 y servi ce a n d is gr·e8 t l y inter P sted in 5 ur- ances that h is in min e nt rc t irement wiJ l inc l ude g'Jara ntc e U 12 t h e an d ·hi f mi ly wil l b e we l l c 1red fo r 0£' p ar t ic u la r im p c · a rice r po in ted o ut i s tl18 longstan din g e n mi ty b e t ween Vi a n a n d Pr t s wh o w0u l d b e th e two ke y f i ure s in r al lyin g mjli t r y action This en mity of man y year s was co mpl icat e d at the t iu e of th e uprisi ng a y e a r GO sinc e Via1 x co nfided his un e a s e ov er conditions in th e Ari1y and the n e ed f o t· t he govern 11en t and hiz-h co m in and to do sor 1ethtng to ov e r c o me t he m onl y to Prats The latter did not pass them'along or ind ic ate support of the n eed s of Army troops as Viaux had -hoped · that l i berty wa s n c t wit the hith con a n d of the Array j L g _i n t h e i n d us tr i al an ct min i n g '------------ -ar o und Con ce pcio n · Chile' s sec o nd lar c st and a rlre a center0 d · 11eavily leftist city said that believes tha t he could hold out with rne help b e kn o ws he wo u J l receive fro7n but- ----- doubt tl lti t this ' ' 1 $ s o since arm e d stu le nts and labor le are numerocs in Conc e pcion I J SEC RH- SENSITIVE EYES ONLY - 4 - I 2 reiterated liis belil' f that the n i tional police the largest and pro bably the best trained and best a1·r 1ed uniformed force in Chile would certainly join in any move against Allende They h 1 ve been under intense prcissu r e from extr e me leftists without being iven the g·o ahead to deal stron ly witll t cm C i rabinero co uander General Vicente Hu rt Celis could count on his t1·oops for support n nd prolJo blyon mo t of his officers as well if they were assured that he wpuld retire and open promo ti-on possibili tics iiuert i and Ge 1cr8 l Valei1zuela get long welt and share many similar views up I 3 repe a ted his belief that Pre ic cnt Fre i will not act set off 'ntili tary action to prevent an Allende governmen t and said he felt the I11·esideni mjgbt even welco me being fa ced with the accomulished £act of a military takeover and relieved at bej ng- whisked mt of the coun_try o 4 J _ warned that the armed forces le 1ders are unlikely to take action without sever al clear and specific guarantees primarily fron tl1e United States bee a use they a r e f e t riul thr it tl1ey and tJ1ej r families would pay a high price if they were to act and n ot rec e ive im1 edi2 te decj_si re and substa nti2 r assis-· tance These· guar rntees would hive to include a immediate logistic l · support consisting · of arms ain1111 mi tiqn · tr 2 nsport 1 tion cornmunica tio n s equipment and flle 1 b imm edi ate _nd possibly 111assive econon d c s upport outside c assurances that they would not ·be abandoned and os tracized by the same powerful U' S cri ti cs who denounce the military government of Greete 5 L believes too that the Chilean military lnaders would want strong assurances of support from Chilean c vilians and indicitions from political leaders that action by the military mirrors civilian attitudes C · G _r said that no Chilean military or civil an would consider the of'fer ofC __Jmili tary backing a mon va ting factor to move ngainst the prospec t of a arxist government If i t were offered such backing · might have exnctly the o posit effect 1 7 like to ove rsaid that al though the Navy would probably the re is little i t can do to assist the A-rmy if the latter s hould i c t The · one exception he said was the control of the power station at ncrica whic h is in t h e hands of the Navy 8 t reco nui1end ed conversations be he l d with 7 who ha s s tr onr tie s in the Communi s ' t-led Chilean Labor Confederi tion and in tl c' Commun ist Party Whi le he believes that most Ch i lean wor1 er s wou ld res pond to ti e Ln· gely Co mmu nist leade rs h ip of the uni on mo v ernent he knows there ar many among the high e r paid workers who fear who lesa le nationalization as a c ertai n blow to the ir priv i leged position and income L tli i_ t Psy chci l og i ca l and Pol itic al Obse r va t ion · · 9 J lrema rks on Chile2 n publication s we re not mea Dt t o g_i_v_e_a_c_o_m_ iete picture b t ar e interesting a Jn r e - po rrs 2 to a question as to· why the pool1 l 2 r T 5 r 0 -• style weekly Erc ill a had u ddenly just b e f6 re t he e l e tion -··-wr it te n auda t cu y o r soo t U ng prognost ica tions on n Al lencte gove rnme nt he responded that some strong pressures ap eared to have babn brou ht to beai on the e ecutives of Erci lla wh ch were r medi a te i y r otice alJle i n its reporting j · also confin ied the re i ort from the U S Embassy in Sarit i a g o - h2 - Ge rm2 11 Pic o Canas major fj_gure 2 t the high--circulat ion for me r J y ind e pe11de nt daily Te r cec a de 1a Bor3 is coming to some accom1 1od ati cm with Al l ende repr •2' sen ta1 ives This r iay be due to Sr J ico 's RadiuLl Party backgr oµ nd since the Radi'cn l Party l cc1 d ers1 i i · supp o rted All rnde an·d is now trying to get its payoff ' ' ' ' f l't · b fsaid that the t akeover of rexte n sive El erc n- 5 o pub lishin g operation would not be d i ffic u J t for Allen de t o do ii thou t making any overtly illeg il move Jle des- cribed the prbcess of int er vention in which the gov e rnm nt takes over a business or enterprise in the event of a strike bankrup tcy lockout layoffs in excess of a very stri ng ent hil ean l bor law or just the apparerit inabil i ty to keep operati ng He pre di cted that El e rcur i o would be taken over by its union leaders and vould JoJ lo w c h e government line he pointed out this had happe n ed before in El hl ercurio ' s hist o ry of over a century of publ i cation l SH--JSITIYE EYES ONLY I 10 jdi id ed President Frei's cabi net into Uw s e who are loyal and those disloyal to Frei The loyal are Minister of Econo my Carlos Figueroa thnis ter of Finance Andres · Zaldivar orgio Ossa Pr e tot Minister of Housin g Andres Donoso Larrain Minister of Interior Patric io Rojas Th o se dis i c y · l to Fn- i are roreign Li 1iste c Gabriel Valck s Suberc2 se 2 n · 1Iin L te c of Ag ric11J ture Hufo Trivell i r 1in is _ t c 1 of i JustJ ce Gustavo L t _ _ _ atus r ------ c L_____ 1 po Ln ted out 'L ----------------------- J tha t x r ·1 s and Valcl0 s 2 pp0ar to have rej oi ncd the coup in ad e the Ch L st ian Democ· ·3 tic Party wh i cb is a tt r i pt i ng to ottn 5 11 r uarant c - e c from Allende before the 24 October congn ssion J vat a d plan to sw ing the PDC vote in response to Allende's j assurancr s · h · 11 described eloquently and at some length the 1 mbiva ence wh i ch he believes charac te rizes attitudes of Chileans both civilian and militar as well s t e relations between Chile and the U S _He _ said that this ambivalence inhibits the p ros pee t that anyone feels s ire enough of anyone else in the present circumstanc2i t6 move strongly in any one direction He described _the charatteristic Cl1ilian predilection for co promise for refusal t o face up and act decisively to look for a way to salvate the most from n situation rather than fight it He warned that no encourngement to act io n should be given Chilenn military igures unless there was clear certainty 6£ th e ir response nnd will to -i ct fdid not appear confident enough ofpossible Chile i n response civili n or military to t i l e soiue action against Allende to wnnt to be involved in it I EYES ONLY 7 Examin i tion of Potcnti ll Economic Pressure Poi nts 12 Credit monev and bank policies In the week to t en d iys toTI°ow ing -ch - '-i ep-ce noer elec cion the run on Chile i n banks w s intense a d wi dE spre td k one point the fino ncial situ o tion tllrc i tened o gft completely ou t of hai d rnd aJ r ost certainly would n i ve done so h2d the Frei govern ncnt not 1 oved to s a ve · i t 'Ii t i1 th c prin ti ng presses w o _ kin f or 1 t 1 rec - 1ii i t basi s and the Ccrctl•a __ Bant sup Jlyir g the esc 1dos o satisfy al i B d the F rei adrninistr l ticn not c o ners panic was short-lived loosened its cred i t and money policies many b anks woul d have been forced to close icd the i1qbili ty to n eet i ndus tria 1 p ' lyrolls would have been widespread Under these circu mstances i t would 11 v8 beEcn difficult to e - p workQ rs 0 1 1t of the s t ·eets or to restrain them from D ying to take over th e pl i nt s In th 2 fac e of riots demonstrations illegal takeove rs and g rowing chaos the Cl1ilean military might h i ve · b 0en galv3ni u d inl c acU on if onJ y to regain some sel lbl ice cf pub ic order I 13 pointed ou t that i Yl o i e l rr por t - r t 12 y the opp rt ' i ty to apply prer sc1re in thj_s field h S 2 l rw ciy lH e t- l ost IJ11 J-- ieciiatcJ y following the electj_on Frei c ou 2-d 1V '' aJ m c ·t 11e ban - run tight credi t I unmet payrc11 - £ inane i 1 c li2 os mi l ita ry ta keove -sccnario to play i self out sim ply ·b y taking nt act ion at all Although a s milar chain of events could be tri ger c•d ·at ar y ti ' 'le vith p r -o iably equ effoct it r10 ' Vt iu Jd t a • · o v c r t and de r i s v c a c t i or o 1 F · e i ' s pa t to do s o - - 2 h i h J y unli ccly event give n the Preside nt• p2ncl1 rnt for i H' c•cj_sj_oli u 3 co nce rc f or his pl ace in Chi lean history In add iti on t hP f c t h at the administration ' s acti ons on economic in ttter·s arr now be i g fol owed clo sely by iµJ ende ' s w tcr dog r u Vuskov i c I 2 _so maintained ti at Central i3ank President Carl0s s_ _ 3 d would be- a hindr n ce to such a policy reversal since his lean in g s would be quite in the opposite direction Ee a d ded that there re ot her 1 cf t i s t sympa t h izeTs among Frei' s economic adv is ors wh Ll th ose who share Frei ' s pol i tica l and econor 1i c ' ews i re i ncf fec t iv ' C J 14-- ----- -- ---' 'e then reviewed several possi bJ e situations with D a Wi des p r ead unemp l oyment ·The possibility of a scen r io u nf olding b0c Lis c1· or growing- unemployment also was ex2 min e d une p J oyment 2 J re 1 dy is growi ng- despite very restri c tive ChiJ e 1 1 l e r isl atio n proscr i bing layoffs As pr o duction continu2s to slow it SENSITIVE t' ES ONLY ' ' • ·- - - 8 - will be inc reasingly difficult-for ________ retain underemployed workers on the pay r o lls - - ·poi nt ed out h owever that i f tn entrepre 1e ur exceeded t he i yof f limits and to pay the government would clo ely e i rnj_nc t his claim and perhaps provide credit to ease the - in 1ncial crunc11 rare important the business would be inv ting the · arriv-al of a- g o venrn1ent ''interventor t0 simply t ake o -rer the opera ti on Un d er these c j_r c u ms t ances a bus inessma n wo uld be unlik e ly to at·t emp t any willful redu c tion in f orce witho ut gl1 -i r o ntce s fr orr th e F rei go vernment t h a t puniti ve a ct io n wo uld not _b e taken clearly fe lt s uch gua r ante es ar e out of i he ques t1 on claimed i nibi l i ty I b Ec onom ic slow fo wn and det e rioration Ch ile ' s s hort- term ec rncmj c SJ t 11 a 1 i e n is n ot go o j a n d is dete r ioratj_ng b ut lc orrrn1e n tc d that the impact of produc t i o n sl owd owns 1 f' li'i--J'i1 · car L·' t e SSl T ' - -- nete l'V e1n1 c• 51' on o ·r l 11 G 11 ±· 1 1 - ·t O J 1 · t L-J _ • _ a _ J b t · and t te J j_ ke w i lJ bt t o o la t e to h ave any ef f e ct By t11e n · Alle n d e would l e fi rmlf in con r o l In 2 ny e ven t th ci F re i b _ 0 7 1- I - • • ' Y administration is usirig all aviilable meLns to slow d o wn or offs e t the rat e of e cunomic do t eri or at jon c - ro i - c - Ur n bank p ess 1 res 1 - o t J d 11g - ·c i _ I cC0ic c fr i c• - I 11 • tr1 i -- the ll c tl'l t couJcl be w id e and U1cix th a t • -e 'J _c i- 1 _ -r eem e ci c1 b u u t i m' act Al t lw u gl 1 Chil e --------------------s i1 a rc of j_ t s o ff i c i2 2 r0scrv er3 in U S banks t h0 1 t o ·u i in 1 ' a s b-u t- 1 v a - u r J e ep a l 2 rg r o l 0 o f th e 3S a wo i d b i nl er iir pos e s i aportan t cons tr a i 1t s action in this - fiel d - Unit ed St a e s d Orga njza t i on a n cl Hes ista n ce in nura J Ar e a c° rir di ca i cd a' t J per nap s J llO l 'Gl n L e lacK o t coni j dc nc c in _t_1_1_e_s_·t-- ' ' 1ength 2nd ·a 'o ili tic s of tradi ti anal rur al organizations such as the Natj_onal Agricultural Society the Council of Ag ricul tura1 Employers of Chile and the Consorti11m of Agri c ultural -Socieu es of the South He doubted that the ir leaders had niuc h· of an orGani ed foll o wing or would be a f o cal point of ef f e cti v e opposition to soc i alizat i on of the countryside The one exceptio n is Domingo· Duran who very well might s rganize sout h ern f rmers in a strong r istance· movement Supplies Evidently a favorite but J is the impact of a cutoff in fue l oil s uppli es to the Chilean Navy He maintained that the Navy's supplies of some types of fuel are low that th e United States e Cutoff df Oi l uncl ear th eme ot j SENSITIVE EYES ONLY is not a maj6r s upplier but c o u l d bring effective influence to bear on friendly countries to ho ldup deliveries that without these supplies the Chilea n Navy wo uld be immobilized and pre sur i i bly this wo u ld tr igge som e action on the Nayy I s part ·Al though he returned to tl1is poj_nt · sev e ral times what wou id be gained from the operation r ema ins so e what uncl e ar 1s The am j_val 1ce th tJ · j t ribute o_Chilean in gencraJ · t o the ClnJ e an mJ li a ry and c1 v1l1an pol1 t i cians an o tci U S Government policies was evident in his p osture as well He is · perhaps unduly pe ssi mistic about actions that c ould be taken in both the mil i tary an d or economic f i elds al thcnigh he clearly woul d like to sec something do n P He di d however keep asking what won1d you do i f y o u were a Chilea 1· This quest Lon was no t only diref ted at his hosts but mo r e s ig n LiicantJ y at himsel and it doesn't haVe an an wer as yet SENSITIVE EYES GNLY