825.00/9–249
Memorandum by Mr. Bainbridge C. Davis of the Division of North and West Coast Affairs to the Acting Assistant Chief of the Division (Krieg)
Subject: Summary of Events in Chile, August 22 to September 2.
A slight increase in bus fares on August 12 due to higher cost of operations touched off street disorders which reached a peak some days later with a least 5 dead and 300 injured. Student demonstrations received popular support at the start in reaction to increasing living costs but this support was quickly withdrawn when Communists attempted to create chaos in the hope of overthrowing the Government. [Page 601] Order was restored by energetic but well-tempered action by the President, supported by emergency powers promptly granted him by Congress, and by the use of the Armed Forces.
Chile formally protested against false and defamatory statements appearing in the Argentine press reporting the overthrow of the Chilean Government. It has also expressed grave concern over the Bolivian revolution1 and has felt that the United States has not been sufficiently ready to assist the Bolivian Government in what Chile considers a revolt inspired and aided by Argentina. The Chilean President feels that if Argentina succeeds in Bolivia, Chile will be next. He informed Ambassador Bowers on August 30 that the Bolivian situation and its implications for Chile had been sufficiently grave to overcome a cabinet crisis resulting from economic and political stress, (including a proposal by the Radical Party of an economic program “amounting to state socialism” due to its “disbelief in US intention to render any assistance”).