825.00 Revolutions/192: Telegram
The Ambassador in Chile (Culbertson) to the Secretary of State
[Received 8 p.m.]
202. I talked with Dávila today about the various political rumors which were current during the past week end. Many of them were mere fabrications but not all. He stated that he expected to change three ministers in his Cabinet this evening and that he hopes that General Blanche will accept the post of Minister of the Interior.
Speaking very confidentially he then told me that the next 24 or 48 hours will be critical and that he may find it necessary to retire from the Moneda. He said that there is a movement in the armed forces, supported by the Conservatives, which may try to force him to accept conditions inconsistent with the principles for which he has been working and to which he is devoted, and that if an effort is made to exert this pressure upon him he will retire. He has communicated his views to the leaders of this movement and expects the issue to be settled within a short time. His attitude was one of confidence. Until this political situation clears therefore the question of recognition, referred to in your number 80, September 10, 2 p.m.,53 must await decision.
Dávila begins today serious discussions with Whelpley on the question of Cosach. In view of your telegram No. 79, September 1, 4 p.m., I have confined my activities in this matter to keeping myself informed. As reported in my despatch 1237 of August 17th53 the Government authorized production by a number of independents who are proceeding rapidly with their arrangements. It thereby created a very difficult situation since politically it is almost impossible now to cancel the authorizations and withdraw its financial aid and internationally the independents are disturbing the market. The creditors will insist at least that the independents be controlled within very definite limits. Moreover, it is feared that if the Government withdraws from Cosach its proposals concerning the nitrate lands and concerning its right to taxation or participation in the profits will be far beyond anything which the creditors can accept. When we answer finally the question raised in your number 80, September 10, 2 p.m., I believe we will have to consider whether the program of the Government toward Cosach is acceptable within the assurances given to me to respect international obligations.