The Chilean Road to Socialism


CHAPTER 5

The United States Presence in Chile

By the time Salvador Allende was elected President of Chile, United States influence throughout the Chilean economy and society was extremely pervasive. Mining and significant sectors of the industrial economy were under U.S. control; the country was heavily in debt to U.S. financial institutions (or international institutions under U.S. control) and thereby subject to the "strings" attached to U.S. aid; military and police forces were equipped and trained by U.S. assistance programs, and the national culture had been undermined (especially among the middle strata and upper classes) by a very strong North American cultural presence propagated through penetration of the Chilean communications media. The selections in this chapter document some aspects and consequences of U.S. corporate presence in industry and the mass media, Chile's technological dependence, and the U.S. build-up of a contingent of the Carabineer Corps (The "Mobile Group" tactical squad) as a reactionary and repressive force.

Wall Street Behind the Plot Against Chile

Abridged from Punto Final Nº. 119, December 8, 1970.
The author is unidentified except by the pseudonym "Observador."

One billion dollars—which produce a yearly profit of $500 million from return on investments, interest, amortization of investments, and payments for technical services—is the sum of American capital invested in Chile. This billion dollars converts Chile into a big business for the imperialists. Different governments, such as the Christian Democratic, have endeavored to protect these investments to such an extent (as occurred with El Salvador Copper Mine in March 1966) that the state preferred to assassinate Chilean workers rather than endanger the interests of the North American companies.

After the triumph of the Popular Unity in September, imperialism embarked upon a rightist conspiracy that culminated in the murder of General Rene Schneider. In the meantime, measures were taken to withdraw certain projects installed in Chile, such as "meteorological" observation centers, and to reduce the large Yankee military and police missions. Parallel to this, private American firms such as NIBSA, a foundry employing 280 workers, and Alimentos Purina de Chile, S.A. started output reductions that almost resulted in total shutdowns.

NIBSA, a subsidiary of the conglomerate NIBCO, which controls over 50 per cent of the shares (25 per cent are owned by ADELA, an international financial corporation, and the rest by the Chilean firm SGM), adopted a belligerent attitude toward the new government. NIBCO sent David Hyams to Chile, and the manager proceeded to close down the factory on November 2 (Allende was inaugurated on November 3, 1970). Simultaneously, unacceptable communications were exchanged between NIBCO and their representative in Chile. One in particular referred to the anti-Communist blood bath occurring in Indonesia as a good remedy against the revolutionary process in Chile. This revealed the line of thought of the American investors.

President Allende's government ordered state intervention of both these companies. The workers began to produce under optimum conditions. In Purina (a plant producing balanced poultry and pig feed near Limache, a farm producing six hundred thousand chickens per year, and a plant processing three hundred thousand chickens per month in Nogales), the workers raised production by 50 per cent. They have requested the government to definitely expropriate the industry so that this may form part of a state-owned feed enterprise. . . .

The Purina Ties

Like all North American consortiums, Purina is a link in a vast financial complex with ramifications buried in political terrain. The firm intervened by the government is an affiliate of Ralston Purina, whose capital is valued at $676 million. At the same time, Ralston Purina is an active participant in the Latin American Agricultural Development Program (LAAD), headed by the Bank of America, whose tentacles within the Chilean banking system will shortly be cut off.

In February 1970 the Bank of America announced the formation of LAAD, with the participation of the Atlantic Development Corporation for Latin America (ADELA), a private investment corporation, and ten other large, multinational corporations. Among these are Caterpillar Tractor Co., Deere & Co., Gerber Products Co., Monsanto, Standard Fruit, Borden Co., Cargill, Inc., CPC International, Ralston Purina, and Dow Chemical. The Bank of America (which has eight branch banks in Chile) slipped into Chile under the Christian Democratic administration of Frei. The same happened with Dow Chemical, which took over our petrochemical industry. . . .

Alimentos Purina de Chile, S.A., had handed over 20 per cent of its shares to the influential owner of the El Mercurio newspaper, Agustín Edwards, who is presently in self-imposed "exile" in the United States. Edwards, through his influence, acted as an agent to obtain —without too much difficulty—what Ralston Purina wanted from Frei's government.

Ralston Purina, which owns four plants in the Peruvian fish-meal industry, was fortunately not able to penetrate into the Chilean fishing industry, where there are already other foreign interests. The strategy of Ralston Purina in Latin America includes three stages: 1. The establishment of a marketing organization to collect, process, and distribute chickens produced by the numerous small breeders, who in general are badly organized. 2. Once this network is established, Ralston Purina sets up plants to produce feeds and organizes supplies to provision breeders. 3. Once the breeders become dependent upon Purina for their feeds, sale of birds, etc., they are faced with the situation of increasing exploitation and are more and more subject to any crisis in the industry, such as the recent shutdown of Purina. This is what motivated the government intervention.

A multinational corporation such as Ralston Purina can, as it did in Chile, suspend its operations in any country without seriously affecting its margin of total profit. The Chilean "partner"—in this case, Agustín Edwards—also does not suffer as a result of the closure of the plant. Those really affected are the Chilean poultry producers and consumers.

It is worth noting that Ralston Purina, established throughout Latin America, has already achieved the first stage of its strategy in Colombia, Brazil, Peru, Nicaragua, El Salvador, and Jamaica. It has also made firm progress in Venezuela, Argentina, Guatemala, and Mexico. Nor is this mechanism peculiar to Latin America. Their strategy is in advanced stages in countries such as Australia, where the effects upon the producers and the deterioration of their standard of living has become a political issue.

The Bank of America

The alliance established by the Bank of America with the largest multinational corporations operating in agriculture means that the influx of foreign monopoly capital (represented in the agricultural sphere in Chile by Petrodow and Ralston Purina) will be difficult to control. Through the Bank of America the financial alliance reached with LAAD has a direct influence on the North American "aid" program. The President of the Bank of America, Rudolf Petersen, was chosen by Nixon to head a committee to study and make recommendations redefining North American "aid."

The strategy of the Bank of America is to obtain control of Chilean agriculture. Agriculture is the specialty of the bank. In the past five years it has managed to establish forty-five branches in Latin America. In 1968, the president of the bank made the following statement regarding its interests in the agricultural fields: ". . . [we] have profound roots in agriculture. We are the largest agricultural lenders in the world. . . . Our total commitments in agriculture are approximately three billion dollars. We have been in agriculture for a long time and it is our aim to remain [in this field] for an even longer period. In a very real sense of the word, agriculture is our business."

Due to the fact that further exploitation is somewhat difficult in the United States, the Bank of America has extended its operations abroad since 1968. Within Latin America it has shown special interest in Chile, where it has the largest number of branches.

The danger that is presented separately by Ralston Purina, Petrodow, and the Bank of America is multiplied even more by the joint strategy of these corporations through LAAD.

Foreign Control of the Chilean Economy

The real magnitude of foreign control in the national economy, accentuated during the Frei administration in manufacturing, has not been estimated or analyzed by many of the Left's analysts. . . . Foreign capital tries to control the industrial sector and, within it, the more advanced and dynamic technological sector. Due to the insufficiency of data, it is difficult to make a detailed examination of the process. However, as a result of a recent publication made by ODEPLAN, [1] it has been possible to appreciate more exactly how foreign capital has penetrated and exploited those sectors of commerce and manufacturing where expansion and profits are possible.

The statistics indicate that foreign investments grew rapidly from 1966 and that the remittances abroad started to rise sharply as of 1967. In the fields of rubber, chemical products, petroleum, and coal the investments started to diminish in 1966, whereas the profit remitted abroad rose spectacularly after 1967. If it can be considered that this trend has continued, it might well be shown that in 1969 and 1970 the foreign capital investments were slowly being illicitly withdrawn. If other sectors are examined (apart from commerce and construction), where investments have grown rapidly, it can be shown that foreign influence was already well advanced by 1968. Some experts calculate that in manufacturing the proportion of the total assets controlled by foreigners was thirty per cent, as against the 17 per cent estimate indicated by Pedro Vuskovic, present Minister of Economy. . . .

The notorious movement of investments toward manufacturing makes it necessary for nationalization to be introduced in this field also. It is possible that the industrial field, which has replaced the Yankee interest in mining, will be where the most serious confrontations with imperialism will take place. The same will occur in banking, insurance, and shipping, where the influence of North American capital is tremendous. The nationalization of the financial and insurance sectors will no doubt produce an important reactivation of the conspiracy : governed and financed from the United States with a 1 view to destroying the national economy. . . .


THE HIDDEN INVASION

JOSÉ CAYUELA
From Ahora Nº 5, March 5, 1971.

Technological dependence is one of the most complex problems confronting today's Latin American governments. In simple terms, the question is, how much does it cost the Chilean economy to assemble in Chile the cars we use? How much does each Chilean pay for the privilege of wearing a prestigious American-label shirt made here in Chile, by Chileans, with Chilean materials? More importantly, how can we replace foreign technology with our own?

The International Research Institute of the University of Chile is currently working on a study project that shows that most technological innovations currently in use in Chile have been imported from abroad. This process of technological importation, while probably as old as our industrialization process itself, was accelerated in the fifties to reach an incredible level during the Frei administration.

What has been called the "denationalization" of Chilean industry is part of a world-wide trend. While grave, the Chilean case is less alarming than that of Argentina or Brazil. Yet this is a difference in degree, not in kind. Moreover, did not our governments in the past two decades claim to hold to a much more independent international road than those adopted in Buenos Aires or Brasilia? Yet a close examination of patent registration yields these disturbing facts: in 1965, 87 per cent of the registered patents were of foreign origin. In 1969, as a result of the acceleration of the "denationalization" process, the proportion of foreign patents reached 94.5 per cent. ... In 1969, forty-seven foreign firms, most of them North American, controlled 53.7 per cent of all patents registered in Chile.

The Price of Dependence

This situation is grave for two reasons. First, it is economically costly. In 1968, for instance, we paid foreign corporations $4,670,000 for patent rights. In the sector of food, beverage, and tobacco production alone, we paid $1,713,000—quite a price to pay for the privilege of producing Coca-Cola, Viceroy cigarettes, and Nestle's powdered milk. . . . Much graver still is the political dimension of this denationalization. Foreign corporate giants not only seek to curb our technological creativity, but also attempt to determine our collective needs and aspirations, making sure that our privileged classes will keep up with the Joneses. . . . 

Our technicians in the copper industry are now acutely aware of the political dimension of technological dependence. In the old days, when our mineral resources were foreign controlled, technical problems were easily solved. A telex message was simply rushed to the United States and a new part promptly flown in. Now, of course, the replacement of broken parts is not so easily resolved. . . .

Technocrats have always preferred to "solve" such problems by merely paying the political and economic costs of technological invasion. Under the Christian Democrats, our markets were literally flooded with American-brand products, and our economy was turned over to American corporate giants. The present government must face the problems of technological dependence with courage in order to curb its economic costs and, more importantly, protect our political independence.


FOOD PROGRAM FOR CHILE WILL BE ENDED
From Times of the Americas, March 31, 1971.

The U. S. government will not renew its government-to-government food for peace program with Chile, according to a U.S. embassy statement.

The elimination of the program, valued at $4,320,000 in 1970, comes at a time when Chile is experiencing serious problems in agricultural production.

News was communicated to the government of President Salvador Allende by Charles Mathias, head of the U.S. economic mission.

The decision could also foreshadow the refusal of a $12,000,000 project request made by Chile to the U.N. World Food Program for nutritional assistance to hospitals, university hostels and disadvantaged children.

Allende is carrying out at present a national plan to supply free milk to all children up to 15 years old and to pregnant and nursing women. To fulfill this, it has been necessary to import whole milk from Belgium.

During the present year, the government has contracted commitments for $21,000,000 with the object of assuring the supply of 105,600,000 lbs. of free milk to Chilean children. The proposals for 1972 are reported to be for the supply of 132,000,000 lbs. of milk.

To meet these goals, the country has to supply a good proportion through its own milk production. This presupposes that agricultural activities are normal with preferential treatment for dairies. These last two requirements are not being Mulled.

Agrarian reform has been, in the last three months, tremendously disturbed by the seizures of lands and strikes. To these have been added adverse climatic conditions all of which indicate a decrease in national farm production.

U.S. GIVES CHILE CREDITS FOR MILITARY PURCHASES
From the New York Times, June 30, 1971

The United States has granted Chile $5 million in credits for purchase of military equipment here in the first such gesture by Washington toward the socialist government of President Salvador Allende Gossens.


YANKEE TELEVISION CONTROL
From Punto Final Nº. 87, September 9, 1969.

MÁXIMO HUMBERT

During the past ten years, television has become the world's most important means of information and communication. The North American imperialists have well understood that it could be utilized as an essential tool of political propaganda, as a vital instrument with which to shape societal values and aspirations. . . .

In the United States, three powerful networks compete in the field of television: the American Broadcasting Co. (ABC), the Columbia Broadcasting System (CBS), and the National Broadcasting Co. (NBC).

Unable to compete within the United States with the two giants (CBS and NBC), ABC was the first to extend itself into international markets. Its international subsidiary, Worldvision, controls an extensive chain of commercial stations throughout the world. In 1965 ABC and ITT proposed to merge. Had the merger been completed, it would not only have permitted ABC to consolidate the precarious state of its internal finances but would also have provided it with the international "contacts" of ITT, the giant of international communications systems. As one of the five corporations authorized by the Federal Communications Commission to lease transmission channels from COMSAT (the Communications Satellite Corporation) , ITT would have found in ABC an ideal client. ABC of course would also have become an ideal outlet for ITT's manufactured telecommunications systems. Alas, both corporations were forced to scrap their idyllic plans. The Justice Department, in the name of the antitrust law, denied them the merger, which the Federal Communications Commission had already authorized. In spite of such adversity, ABC continued to expand. In 1968, ABC controlled sixty-seven television stations in twenty-seven countries. Twenty-seven of those stations are located in Latin America, reaching twenty million households, or roughly eighty million spectators. ABC expanded abroad in a typical imperialist fashion. Counting on the technological dependence of underdeveloped nations, ABC starts by supplying the elected station with technological know-how. Financial aid soon follows, with technical and administrative services and personnel-training programs. Most important, however, for the consolidation of its empire, ABC supplies the station with its prepackaged programs while it also becomes the station's sales representative.

As part of the business agreement, the station must surrender to ABC the power to choose both programs and sponsors for its peak hours. ABC, for instance, may sell "Batman" to a particular corporation and impose both the program and the sponsor's commercial "spots" upon any of its affiliated stations. Thus ABC is more than a gigantic publicity agency, for it directly controls the buyers and distributors of its products. ABC has thus constituted itself into a worldwide centralized network able to supply the prospective sponsor with whatever market he may wish to penetrate in any region or country of his choice.

ABC's expansion tactics and organizational structure illustrate the mode by which a communications medium, especially television, can be utilized to insure the penetration and domination of foreign economies. No sooner was the so-called Central American common market created than ABC invested $250,000 in each of the five member countries.

Through its television stations, ABC is promoting a style of consumerism that in the majority of the so-called Third World nations should in no way have precedence over public education needs, national health, and basic economic development. Such real development needs are of course totally opposed to the economic interests of international monopoly capital. Not satisfied with only CATVN, its Central American television network, ABC now plans a similar chain, LATINO (International Organization of Latin American Television), which would service Venezuela, Ecuador, Uruguay, Argentina, Chile, and Mexico. ABC's Chilean subsidiary station goes under the name of PROTAB.

The two giants of North American television, CBS and NBC, have not of course left their "small" competitor alone on the international gravy train. They have not, however, thrown themselves into the international field with the zest and ardor of ABC, for they enjoy within the United States exceptional financial strength. Their profits climb higher every year. NBC is itself a subsidiary of RCA, which also owns publishing houses, a rent-a-car company, various manufacturers of electronic equipment, etc. CBS's vast empire also includes publishing houses, film-production industries, toy companies, even the New York Yankees professional baseball team. Although much smaller than ABC's, CBS's and NBC's foreign investments tend to be placed in highly strategic locations. CBS, for instance, owns film-production companies in Buenos Aires, Caracas, and Lima. NBC is established in Mexico, Caracas, Saigon, and the Middle East. NBC specializes in the fields of programing and service contracts rather than in direct investments in television stations. Its subsidiary, NBC International, does business with eighty-two countries, selling programs and "administrative services."

The purpose of these "management services" becomes clearer as one encounters NBC insisting on a specific type of programing with respect to certain "priorities." NBC has declared that its objective for Latin America is not the control of television stations but rather the sale of RCA's television equipment.

As for CBS, it has concentrated its foreign investments in Latin America. CBS owns subsidiaries in almost every Latin American capital: PEOARTEL in Buenos Aires, PROVENTEL in Caracas, PANTEL in Lima, the Trinidad-Tobago TV Company, Telegramas Latino-americanos de Panama. The imperial octopus has not left a single region untouched. . .

Meanwhile, no matter how violent or objectionable, certain programs keep on rising in the weekly ratings. These ratings are what determine a series' sale value. If it rates low in the United States, it disappears and the producer loses most of his investment. Not all of it, though: there is still the back yard, Latin America, where it can be peddled along with a high-rating program. Series are sold in "packages." The chain of distributors and intermediaries is endless, with sizable chunks for everyone involved. There are agents, for instance, who buy the distribution rights for all of Latin America or for a particular country and promptly resell these rights to specific stations. In Chile, there is PROTAB, a subsidiary of ABC whose objective is to resell television programs made in the United States. The price of each canned idiocy is determined in the United States and is directly proportionate to the number of prospective viewers and advertising benefits. ... In order to lower these sometimes astronomical costs, the station is forced to buy whole "packages," which may well include particularly bad movies. All of this Yankee production aims at the moronization of the masses and strives to keep the people content inhabitants of the capitalist universe, to transform them into mindless consumers. All the "bad" men in American television have either Russian or Chinese names. As for the heroes, they are prototypical American marines.

The mind-rape occurs at all levels. The advertisers impose tremendous distortions of contemporary history. All television stations in the capitalist world must obtain their information through international news services. Most are North American, English, or French. To top this, the United States Government, through USIS, supplies free of charge the information any medium might request. We have all heard and seen in movie houses as well as on television the sinister apologies of the endless virtues of the Alliance for Progress.

Communication via satellite now provides imperialism with the greatest means of ideological subversion ever known to man. While the imperialists reap stupendous profits, mesmerized Latin America can see through the magic box what is happening on the moon—the planting of the American flag on lunar soil; President Nixon's chat with the astronauts—and listen to the United States national anthem transmitted directly from the moon. It can also see that Coca-Cola is better, that Ford is superior, etc.


U.S.A. MANIPULATED THE "MOBILE GROUP"
From Punto Final Nº. 119, December 8, 1970.

P.D.G.

When the guanacos (high-pressure water trucks), which formed the attack vanguard of the Mobile Group, appeared in the neighborhoods of Santiago to comply with their peaceful mission of watering plants in the outskirts of the city, something must have collapsed in the Office of Public Safety Assistance (OPSA) of the United States. There, the expectations and calculations, as well as the high expense of maintenance in dollars, form part of a strong and protective tower of police assistance for all the organizations of repression that function in the countries of the Third World. The objectives are very different from the social task that is being carried out today by the former Mobile Group of the police.

North American imperialism attacks with its programs of foreign aid and investments by monopolies for the purpose of obtaining from the underdeveloped countries a very slow economic growth and, consequently, easy and abundant profits. In this environment, even the smallest manifestation of insecurity and rebellion becomes the main enemy to be combated. In this environment, unattractive for investments, OPSA put into practice a remedy that mixed the democratic concept of "law and order" with North American experience. The experience had been gathered by local police forces and compiled by the Office of Crime Control and Riot Security together with "counterinsurgency" measures and lessons drawn from the study of repression of urban subversives.

The axioms for these programs stemmed from such elemental premises as: "The maintenance of law and order, including internal security, is one of the fundamental responsibilities of a government," and "In order to maintain the social, economic, and political progress of a country, it is first necessary to develop an ample program of police function."

The Mobile Group of the Carabineers was one of the favorites of OPSA. There were important considerations: its financing was lower than that of the military forces and its pay-off was greater effectiveness. Airplanes, tanks, and artillery cost more than water-throwing trucks, tear gas, laxative gas, shotguns, etc. At least that was the argument used to obtain backing from President John Kennedy and his brother Robert, Attorney General in 1962, for a substantial expansion of the Internal Security Program, which afterward centered all the activities of North American Police Assistance in the Office of Public Safety Assistance. These same two Kennedys also enthusiastically backed the creation of the Inter-American Police Academy in the Panama Canal Zone, which was later moved to Washington and reorganized as the International Police Academy.

It was here that Vicente Huerta Celis attended special courses. He later attained the rank of general of the Carabineers and became Director General of the Mobile Group. Under the command of Huerta, the Mobile Group grew enormously, until it became one of the most experienced repressive forces of Latin America. With the acquiescence of the former administration, North American "internal security" advisers proliferated. They gave complete courses not only to the personnel selected for the Mobile Group, but also to rank-and-file policemen and line officers. Many officers of the Carabineers followed the same road taken by the pioneer Huerta, thus converting the Carabineers into one of the favorites of the International Police Academy. This favoritism was concretized with light armaments, ammunition, radio equipment, patrol cars, jeeps, chemical munitions, and various other equipment, which were delivered with such generosity that it even created unpleasant difficulties with the Armed Forces.

The International Police Academy sent many of their personnel to other Latin American countries, and by the middle of 1970 they had no less than ninety internal-security advisers in about fifteen countries of this hemisphere. In addition, the Academy trained in its Washington headquarters about two thousand officers of Latin American police forces. Total spending by OPSA by July 1, 1970, was estimated at approximately $39 million. North American expenditures for police assistance for each country ranged from $2 million in Bolivia, Costa Rica, El Salvador, Guyana, Honduras, Uruguay, and Venezuela, to $3 to $4 million in Colombia, the Dominican Republic, Ecuador, and Panama. Chile occupied the second place with $5 million, while the gorilla military regimes of Brazil and Argentina were at the top of the list with $7 million. . . . The efficiency of these services has been proved quite well and to the liking of the United States if we measure the degree of repression that exists in the Brazilian regime. This regime holds the sad record of being one of the countries "where torture and police brutality have attained such a degree of perversion that it is repulsive to human nature," as denounced by international organizations and by Pope Paul VI himself. (Over one hundred thousand Brazilian police have been trained through U.S. aid.)

Thanks to the help and loyal service of Huerta, the Carabineer Corps not only gained the efficiency of its regular police, but also started to include in its organization paramilitary forces, distorting its old mission of guarding the security of citizens into that of a sort of praetorian guard. At one time, its chief—fortunately today former chief—intended to use the guard against the constitution of the republic. This plan of the former Director General of Carabineers has come to light before the military court hearing the case of the murder of General Schneider.

Converted into a sort of "Frankenstein," the forme functions of the Carabineers became distorted, and th corps evolved into an organization for the detection am identification of subversive individuals or organizations for the neutralization of "subversive" activities, and fo the control of demonstrations and revolts. The objective of OPSA in Chile had thus been attained. The Mobil Group was a power that acted rapidly, vigorously, am effectively against any popular expression. Attesting fl this are the many students, workers, and slum dweller who faced the Mobile Group and became victims of their actions.

The OPSA must indeed be in mourning for this sudden change in the function of the Mobile Group of Chile in compliance with point 37 of the first forty measures to be taken by the government of the people. The re-organization of this section of the uniformed police, so that it may not be used again as an organization of repression against the people, has now become a reality.

However, within the Carabineer Corps—in spite of Allende's instructions that they should not shoot against the people—there are still provocateurs at the service of the parties of the Right. One incident occurred on November 26, 1970, at the "Lo Prado Abajo" estate of Las Barrancas. A group of Carabineers under order of Captain Conrado Pacheco Cárdenas, who has a fearful history, fired upon a group of peasants and severely wounded seventeen-year-old Juan Félix Leiva Riquelme The estate, property of José Guzmán Riesco, was intervened by "CORA" (Agrarian Reform Corporation). The landowner, who did not farm even 10 per cent of his land, asked the Carabineers to attack the peasants, a task that Captain Pacheco accomplished with pleasure. The government ordered a thorough investigation, and sanctions were announced. Cases like this reveal that the reactionary seed sown by Huerta and the North Americans in the Carabineers grew vigorously and that it will be hard to remove it by its roots. However, this is a task that must be done without hesitation, because the threats that proceed from that quarter are obvious.


Notes:

1. National Planning Office.


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