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Document Creation Date: 
December 16, 2016
Document Release Date: 
October 6, 2004
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Publication Date: 
September 22, 1974
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(Lj iao"6 THE SI DAY Approved For Release 2004/10$ 843E STAT 'HEN thelate' Salvador Allende, President of Chile, remarked defiantly in 1971 that the United Stetes marines were not "going to impose their will, here,' he had misunderstood t h e strategy of the enemy. For the Central Intelligence Agency the Chile operation was not to be aft old-fashioned mili- tary intervention as in the Dominican Republic, nor a blood and guts affair, as in the Bay of Pigs. Money was to be the weapon in Chile. Too -many dollars in the wrong places, so far as Allende was concerned; too few in the right places. The rest would be left to the pressures of an economic crisis., .. The C.I.A., contrary to the iIU- pression 1 ft by various leaks of documents, wg;r not responsible for every-tbing. It conducted only the strictly political and internal side of the operation, while being In olved in the overall; planning. Starving Allende of credit was pri.:,arily the responsibility of the State Department, which worked through Government companies in Chile suggested f intervention" as- he told a that they should proszde money 1 Chilean businessman in London which the C.I.A. would then in 19;0. funnel into anti-Allende activi- Chile's short-term credit n-ith ties. The idea was rejected as American banks shrank from unsvorkable. The same idea was #9d million in 19i0 to #14 million Put up by - the multi-national in 1972. For 'openly 1 political corporation, International Tele- reasons arising from Allende's phone and Telegraph (I.T,T.) ',campaign against American after Allende was elected. >Anterests, the . _k-por'Import Between 1970 and 1973 more than #3ra. Was appropriated Bank (a Federal institution in for ? Washington) announced it would antiA.lende'acti -'ties. The basic give no loans or guarantees to tactic was to support the middle- Chile, class opposition,- including the. The official lead, was un- small businessmen, such as the doubtedly reflected in the lorry-owners. Thanks to Chile's general and soaring inflation the C.I ~..--and cocet whichofta took place. the middle classes--got excellent International institutions such c s value through the currency black the Inter-American Development market. The inflow was the equi- Bank and the World Bank took valent of about #17m. the hint or responded to Allende's position was weak American pressures. - Only the from the start. He had been International Monetary- Fund elected with a minority of the .'declined to cut back on credit. . vote in a country where the { After the coup, the aid and middle classes are. exceptionally the credit bean to flow back to strong by Latin American Chile--more than #300m. from standards. - private -banks and international Each move, each fresh burst ? organisations. For a modest in- of inflation, infuriated and con- vestment there had been a high solidated his opposition. The return, even if Chilean demo - C.I. A. money helped keep the cracy had vanished in the middle classes opposition from process. collapsing amid the tur i mo l . - Money 'went to strikers, politi?-i l parties and the media, grin= Export-Import Bank and exerted 1 ca iiifiuence on the Inter :American Santiago urio, the main Development Bank and the Santiago newwspspaaper; In the 1973 World Bank, where the tinted municipal elections alone some States has veto power. #030,000 was spent. But what has been called the Allende-..-and doubtless the '."invisible blockade" was a con, great majority of Chileans-' ut fused affair. Even if D. Iii: ia- knew what was happening, but - Was ger had not been. in tae back- pnve fors to stop a proC~w ground pulling strings, bankers which he foresaw leading to his would have been unwiliin; to overthrow. The strike by im. make leans to such a bad risk Poverished lorryowriers in 1973 as Dr. Allende's Chile. was kept going for a month and The strictly C.I.A. side of the su a mmery ofI that nvear nnonltess operation was approved by than 250,000 members of the former President ?eixon and middle class were on strike. monitored by the Forty Cerra- mittee, an inter-departhrental The C.I.A. and the present body which is usually chaired by ruling ncy had no claim that the tae Presidents adviser on part in the actual national security affairs. At the coup. Howeve+, the American moment Dr. Kissinger (s,-ho military and the C.I.A. kept in 11 wears two hats as Secretary of close contact' with the Chilean State and security advisee) pre- services throughout the Allende sides, years. It required little in the llendn became a target as slay of reasoning power - to. deduce that aBight-snr.g coup far ba-._ as 1962 and `.ot rein by the ril;`ary would o?rerthrosti than his death in 193 Allende. .nearly #:D million was seen' first on t-'?::.,, to keep bile' out of c!:. or In 1 ? 1 'none than #lrh. went on a :;di?`n Eeulardo l:re.'s Cl ris'_.. Democratic p .t', the ma'. : --o?ition to A::enue in the E:__ ;?~ that yea,-. la the sat~ie _ alarmed Ainer:c, The Chilean President s?: is unable to' end the links which pro" ded for joint m. noeuvres by the two navies. 'Military aid continued to arrive from the United States. although in di>.n- inis?led qa atiries. at a t'me when the Chilean National = - :-line. could not obtain credit buy m_,. Borings. The invisiale blockade" contrn''ed b-. Dr. Kisstn;er, the pivotal figure in the campaign I t f '' ce, M Approa e s bd 4 short of a Dominican-etcie ------------------ By DAVID ADA IIS%XFA IT' in Washington CIA-RDP88-01314R006300450021-1