The U.S. also all but terminated its economic aid to Chile. U.S. aid dropped from an average of $140 million a year prior to 1970 to $3 million between 1970 and 1973. At the same time U.S. military aid to Chile rose to $12.5 million in 1973 alone. International finance organizations also cut aid to Chile. The World Bank, headed by Robert McNamara, stopped all loans to Chile after 1971. It had given $270 million before 1971. The World Bank said that Chile was a "poor credit risk" and that it did not approve of Chile's expropriating foreign businesses without due compensation. The International Development Bank's funding of Chile showed a corresponding decline from $312 million before 1971 to $54,290 after. Without foreign credit to pay its debts and mortgages on past loans, Chile was unable to maintain its foreign reserves. It was basically a bankrupt country and inflation built up to 600 per cent by 1973.
The U.S. also cultivated friendship with potentially useful anti-Allende people in Chile. Through the State Department Governmental Affairs Institute, the U.S. maintains the International Visitors Program. This is designed to allow the U.S. government to invite foreigners to be official guests of the U.S. for a month in order to "broaden cultural understanding," according to Jerilyn Reuter, an official in the Governmental Affairs Institute. Reuter says that the U.S. government ties to "select potential or actual leaders of countries to be visitors" in order to acquaint them with the U.S. In September 1973, just after the coup in Chile, the International Visitors Program invited Gustavo Palacios, director of Radio Mineria in Santiago, and Alfredo Concha, owner of the Chilean National Broadcasting System, to be guests of the U.S. government. The radio stations these two men controlled were the main anti-Allende radio propaganda as one of its methods of attacking Allende in 1970.
The two Chilean radio directors visited Harvard during their stay in the U.S. in September 1973. Concha told a group of students that a Chilean coup was expected because "the Chilean people need authority, order, and strength, they need a strong hand to work." In the three years of the Allende government the U.S. International Visitors Program invited 70 Chileans to be official guests of the U.S. None of these was a member of the Allende government. According to George Porter, former acting director of information and reports in the State Department, International Visitors are selected according to a "country plan" which the U.S. Information Service draws up. This "plan" pinpoints the groups of people the U.S. government wants to contact in a country. The American ambassador in a particular country nominates potential visitors. Porter says that the nature of the country plan is determined by U.S. policy towards a country and "who the U.S. is interested in working with." It seems clear that in Chile the U.S. government was not interested in "working with" the Allende government.
The end product of the policies of the U.S. government towards Chile was the military coup that occurred in September 1973, almost three years after Allende's election. The U.S. knew about the coup at least 12 hours in advance but chose not to inform Allende of it. Whether the U.S. actually planned the coup remains in doubt. However, it is clear from the record that the U.S. did all in its power to bring about conditions that would aid a coup by fomenting economic collapse, using the CIA to "destabilize" Allende, maintaining political contacts with anti-Allende elements, funding the opposition press, training and arming the military, and finally maintaining a neutral policy at the moment of the coup, thereby insuring Allende's downfall and his death. It is curious to note that the only reporter who was allowed to view Allende's corpse worked for El Mercurio, the newspaper funded by the CIA and ITT.
It is difficult to define what elements in the ITT effort influenced U.S. policy towards Chile. ITT did have incredibly intimate contact with the White House, State Department, Henry Kissinger, and the CIA. It is true that all of the proposals made by ITT in 1970 to topple Allende were eventually implemented by either the State Department, the Pentagon, the Treasury, or the CIA. It is also true that the CIA had been involved in Chilean politics since 1964 and possibly earlier. Chile's experience demonstrates that every tie between the U.S. and another country is a potential political lever that can be manipulated to suit U.S. purposes. Whether it is private U.S. business investments or something like the International Visitors' Program, it is a dependence that can be exploited.
Leaving Santiago in early April 1972, I caught a taxi to the bus station. Jack Anderson's disclosures concerning ITT were still big news. The cab driver decided I was an American and proceeded to tell me that the U.S. and ITT were making "a big mistake" in Chile. In a pained voice he said, "What I don't understand is how a country that loves democracy like the United States could try to use the CIA to stop democracy in Chile. Salvador Allende is the president of the Chilean people, we elected him. I respect the people of America, I love freedom just like they do. When you go back there you tell them the truth about Chile." I looked out the taxi window at the trees in the pale autumn sunshine. There was no doubt that winter would come soon, the leaves had all turned brown and fallen to the ground.
Watch What We Do, Not What We Say
What ITT Suggested in 1970 with CIA Support
Give $1 million to the CIA to stop election of Salvador Allende as President of Chile. CIA refused the offer.
U.S. companies, U.S. government, international finance organizations should stop all economic aid to Chile to promote economic chaos.
Use "every pressure to keep Allende in bounds" including efforts to promote economic chaos and a military coup.
Fund opposition E1 Mercurio newspaper and a radio propaganda campaign against Allende.
What the U.S. Government Said About Chile in 1970
Charles A. Meyer, former assistant secretary of state for Latin American Affairs: "As the President [Nixon] stated in October of 1969, 'We will deal with governments as they are.' We religiously and scrupulously adhered to the policy of the Government of the U.S....of non-intervention. We bought no votes, we funded no candidates, we promoted no coups."
Former U.S. Ambassador to Chile Edward Korry: "...the United States did not seek to pressure, subvert, influence a single member of the Chilean Congress at any time in the entire four years of my stay."
What happened Between Allende's Election in 1970 and 1973
The CIA poured $8 million to "destabilize" the Allende government and to bribe Chilean congressmen to vote against Allende.
U.S. economic aid fell from an average of $140 million a year up to 1970 to $1 million a year after 1970.
On September 11, 1973, the Chilean military stages a coup. Allende is killed, the press is censored, civil rights are suspended, Congress is dissolved, thousands are executed, tens of thousands are imprisoned. A military dictatorship begins rule.