Nixon, Kissinger & Connally on International economics and Expropriation

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I've been with the president.

How are you, sir?

You're working hard.

Let's sit over here.

I'm kind of ranging around today, so I move a lot of slow ground.

Well, what I wanted to talk to you about is to make you understand what my energy is on the first hand, and it's very slow.

And I reminded him, I told him,

And I said, I wanted to be sure that you understood that when I saw that, on that day, on that children thing, that I thought that I was in your position as your treasurer and senator and everybody else.

So that's trying to make sure that you accomplish the task in all sorts of variety of reasons.

So it was like we were flying on the, uh, the, uh...

I realize at the start of this proposition that everything we do with the Chilean government will be watched by other governments and revolutionary groups in Latin America as a signal as to what they can do in their way.

Therefore, I

and we against one another.

The second thing is that I feel that if you do business to earn your people to devote their time to the book, aren't you in a not that strong position against one of these people?

And I know that it encourages a lot for us to do that.

The other problem that really confuses us from time to time is

I always have this thrown out to us, it's ridiculous, the argument that is made by the state of people.

If it were to be convinced that he said that they always made it, that is, well, you're going to help them more than you hurt them by turning them down.

The point being that you make monitors of them, and everybody watching this to see whether we're being fair and all that sort of thing.

I wrote him this morning, and I was a little tired of hearing that argument.

Now, let's leave that and go to one other subject.

Pakistan, as I implied, is terribly important to us.

Nothing has happened to the IAEA on Earth.

And I hope, I'm glad to have water, but at least we've got water.

The second thing is that the Indians are waiting, Keating is up here, and Lockheed and the Senate,

Congress got all made to bash them because of the variety of reasons why I want to get involved in that.

First, it's a civil disturbance.

Second, as far as the Indians are concerned, if they can't digest, well, I don't know how the hell they can digest these things.

And that's what they've got on their hands.

Third, this is a part of the IOC.

And they've already, you know, even out there, you can take this from them, especially the Nazis, who come just like voters, and all these other monsters around them, and they get rained on.

This is the message that John Cooper told us this morning.

First of all, I didn't want to take your stand on the election.

And secondly, if we were going to have a period, we did it pretty stupidly because she won big.

the, it's like Allende, you know, trying to make us the code of the assassination of the British Democratic Secretary of the Interior down there.

First of all, we had done it.

We did it.

We were participating.

We were just doing a goddamn poor job.

And I used to work in a poor CIA, but not that poor.

But nevertheless, coming back to India-Pakistan,

You were right, and Bill was wrong.

On the point that the United Nations, of course, and the World Bank, particularly their staffs, I don't think we will even slice her back morale.

that they, I must say, they will all understand, but they are playing the role of God in judging not just the economic viability of loans, but whether or not loan treaty made to nations that might be lived up to the moral criteria that we think government should and should not do.

I don't think that has anything to do with the law.

The state argument there is that it does on the ground that that affects the ability and so forth.

You showed me, on the other hand, that my view, if a home is to be made, maybe a dictatorship is the most significant country to make it to, and if it is to make it to a dictatorship, if, on the other hand, you show me some successful and, you know, some of these Latin American countries, some of them are going to be depressed when they're trying to make it the other way, they may be very bad.

It's the very fact that they are supposed to be very generous on this thing.

I frankly feel that on this moment, it's extremely important, extremely important for us to stay on, when I say us, for the international lending agencies to get into this whole bit of political care.

Now, I said some of these things last night, and I want you to know that that's the feeling.

I'm not here to say a word about the children and where it stands.

and Bolivia, and where we go from here, it is very important that you, in other words, you keep, and I have a lot of people in Peterson, because he doesn't get sophisticated enough in this field, but I want to talk to him about his candid business.

But it's very important that

If you've got one of my kids that you have a bad reaction on, I want you to know that you're right high.

But the way it comes to me, you see, I've got a whole stack of papers.

And my views are strong, strongly in this direction.

Not that he allowed his views.

I mean, he got, that just forced money from him as a matter of conviction.

But I'd like you to tell me how, uh, Johns, uh, did, what did get him, that we did take him into account, and what we finally did.

Well, first, I'll tell you.

Uh, one professor of mine, Senator John Steele, and I sat down this evening with you.

Right.

And I shared these meetings.

I gave a lie to the president, between the president and me.

the bureaucrats, any extent of what my thinking is.

And they will have to play a very good role, except as the devil's advocate of these meetings.

But when I pass this on to the president, for example, I undermine your opposition and attach your opposition as the only backup to the Chilean people, only Chilean people.

So you and I should draw the line.

Uh, I've got no such indication, sir.

I don't know.

Now, we do have the property.

I would like to go back to normal relations as soon as steady as we can.

Almost any issue that can come into the scene is reduced to a launch.

It has that bias of, under the pretext of not giving them an excuse to make an issue with us.

which

What was the effect, actually, of the child's representation?

It wasn't mine.

If we don't agree with that, if we just give this five million dollars,

Because now with this accusation against our being involved in the murder of a right-wing politician, which is really sad, it just kind of opened our eyes.

I wasn't bothered about the end of it.

Sure.

Just made me assassinate him.

It's just, they assassinated him.

The communists did.

Almost certainly the communists assassinated him.

Why not play this like the Nazis played the Reichstag?

Exactly that.

Just to tell the truth.

Now that we've disadvantaged, what should we do about 707, sir?

Well, that's right, Mr. 707.

We can write credit restrictions into it that will give us a hand, but it will then open the door for every other credit application brought to the bank.

So what, Kevin?

400 cents.

There's really no material.

There's somewhat of a purpose to be served.

I have no argument now.

To the extent that in any case we're going to continue to give them credit, that's where I'm going to give them credit.

That's the part of your argument that one can't deal with not just speaking about the restrictions on that particular loan.

All the loan plans would almost certainly be used on a loan that's not secure.

I think you should turn it down.

Why don't we settle it?

We don't have to do anything.

All right.

That's fine.

Just don't accept the application.

And now that he's accused us of assassinating their politicians, they are the ones that have made this lie.

The argument that was made was that the FBI insisted that we were refusing these loans on political grounds.

And the fear that the state had was that we were that way giving them a pretext for a showdown in the House.

And that doesn't mean it's a pretext.

You're also trying to locate the pretext for the lawsuit.

And how are you going to make one?

Well, if one arrives tonight, I'm in the mood.

I agree.

So I think we should either accept it or reject it.

If he gives us a good deal on the copy, we can then accept it.

He's not going to give you a good deal on the copy.

He's going to penalize him.

He's going to come to the United States.

He's going to come.

He's going to call them by name.

And he didn't.

He didn't denounce IT&T.

But he did these two copper companies.

And he said they, in fact, they raped us.

They, you know, they ravaged this land with the people who lived in it.

It was an exorbitation.

Well, that's big.

He's a copper company.

He's a, he's bad news.

Well, this is going to cost us smoking in terms of dollars.

We have in Chile $300 million of guarantees that will cost the government $300 million because it's expropriated.

He doesn't pay for it.

And he is now asking, and he's this smart, he's now asking what the guarantees are.

that cover these actual operations.

So what he's going to do is he's going to get the total value of the products now.

So without further guarantees, none of us are going to have the whole task of an American company.

So that's what he needs.

That's what he's going to get.

So, well, I've made my point.

That's all I need.

That's all I'm going to do.

Here's what we want to do, John.

All right.

Basically, this kind of thing normally would be held through the Peterson Committee.

Now, I want to set up a procedure where I, if you would, I want you to just go to the places of where you send your guy.

But where this, where this economic and political problems are involved as well, you should be able to pick up the phone and ask Henry.

Henry, I want you, it's your turn to ask him.

You got to stand.

We have, we're interested in your economic judgment, but I'm also interested in the political judgment.

And we're playing, well not, let's talk about Bolivia, how we think about Bolivia.

I mean, that's just to keep the bureaucracy happy.

And I haven't seen this at the same time.

Just between us and him to do an all-out plan to see what we can do.

But for six months, they were giving us the wrong information.

About what the danger was.

Well, in fact, they told us there was no danger.

Well, if they were backing Rob Horst, that was their problem.

If they were backing Richard Jenner, that's the third right.

He should have backed the old man.

That's right.

They should have backed the old man.

And actually, on this, the terms of the program is almost as bad as on the end.

Yeah.

The only difference between them and on the end is that he's a captain.

We have

Two general propositions.

One, we have a bilateral aid in what we do.

And we have, secondly, what we do in the multilateral field.

In Bolivia specifically, on March 30th, before the Inter-American Bank is going to come, the proposition due, we approve a $19 million loan to Bolivia.

It will have to be followed up.

approximately $24 million, a move from the World Bank for a total of $43 million, to build an island from this oil field that they had expropriated from the Gulf of London to Argentina.

They proposed the payment of $78 million from this expropriated oil and gas market over a 20-year period, had no interest,

25% of the oil and 33.3% of the gas that they develop and sell from Gulf oil to Argentina after we put up the money to build the mine.

Now, that's their proposition to Gulf.

Gulf wants it because they say, well, you know, they sell our oil, but we don't get this, we get that.

Well, then we give them a P.L.

for waiting on them.

We negotiate with them on April 30th and 31st.

And the very next day, they explode.

They expropriated Matilda, which is a company in the United States.

They made the purchase right then.

In January, they expropriated the International Metals Company, IMPC is the little one, that was formed for the purpose of taking tailings.

out of one of the old patina mines, which is waste material.

They love the little process.

They take the waste patents from this mine and get it up in, literally, economically feasibly.

Not a lot of money missed it there last week.

A million dollars.

We got a million dollars guaranteed.

Then we come to Guayana.

These are all pyramids, as you well know.

Guayana has legislated that through their legislation.

In effect, expropriate all bauxite.

Now, the Canadians, on the other hand, are saying this directly.

They're going, I'll get away with it.

We're going to get it right, right.

We're going to have to expropriate all of it.

The bauxite holdings in American countries and Jamaica.

Look, between Suriname, Jamaica, and Guayana, that's 8% of the bauxite produced in the world.

And in Jamaica alone, you've got a lot of countries in America, you've got Reynolds, you've got

We've got exposure.

We've got an investment of 750 million dollars in Jamaica.

We've got insurance of 465 million.

We've got a billion and a half dollars in Latin America alone and we're already looking to pay it out somewhere between 500 million and 700 million just to get this thing started.

So at some point,

I think at the minute we ought to be dying for a month and get this full tissue looked at.

In the N.S.C.

procedure.

I sure agree.

Don't you say, I sure agree.

Yes, sir.

You know, these things have come on us.

I heard one the other day.

It was, the other day, it was eight, more than six million.

I won't believe you.

It was a cattle, you know, five, six million cattle, but it's eight billion bucks.

And it helps them to that extent.

And the only reason, the only reason why we have them, the only reason we have them is because they said we could cut off their credit.

We have to impose some economic sanctions on them, including both military sanctions, but we can't impose them on any other economic sanctions.

You see, here's the thing we face a lot in America.

It seems to me that as this virus spreads, we also have a problem with that.

Looking at the State Department, one of the reasons we rage, my great-grandfather,

Just get you somebody over there in the state that would take a hard-nosed view of this.

And I told John that the disaster area in the Latin American Division of the State Department is...

In fact, I'll tell you, one of the... You remember old Andy Holland?

Sure.

It was a good man, isn't it?

He knew what this was all about.

Latin American Division of the State Department in the days of the disaster area.

They are in the century.

They're nice people.

I admire them being nice people.

But now, oh, they're a hell of a lot.

Well, they had this ideological preference for the South African Christian Democrats.

And the South African Christian Democrats very often agreed with the communists on almost everything.

Except certain...

Except for a policy.

He had hopes and wants of it.

He didn't liberalize his regime.

He built it with his father.

But, you know, uh... Well, you shouldn't have to say this.

Well, frankly, I don't want him to liberalize his regime.

I hope he keeps it like it is.

He's the only friend we've got that has the American power.

So, from issue after issue, we have that.

I'm not getting any sort of confidential exchange with the largest country in Latin America.

It's basically on our side.

The Brazilians at the present time are going to be held quite with us about this issue until now.

I don't have a reason.

We've got to fight this issue.

It's the last thing we

Brazil, Brazil.

But the pure state department wasn't keen on taking on some of these other communities that were carrying us around, the fishing rights.

But Brazil, because it's a dictator ship, goddammit, they want to find us.

Which isn't even exposing the requisition.

Well, they've promulgated them.

I see.

They've promulgated them, specifically Brazil people.

And they said, Danny, that you cease after the warning.

Well, can't you cease after the warning?

They always make sure.

We've got to keep ourselves strongly on our side, and the hands of the strong, stable, conservative government.

I don't know why the people are here in Medellin.

You know, they, they, the, the problem really is when all these walls hang against the, that I'm concerned about, is the,

pretext or no pretext.

He doesn't need it, I agree.

Second, it's just the fact that if you start doing it, it's going to encourage others to go and do likewise.

And I think John's point is that someplace along, maybe we ought to find a place to kick somebody in the ass.

Now, you know, we didn't kick the last one.

Now, everybody says, well, that was great.

I'm not so sure.

I'm just not so sure that we, you know, a lot of our laps, it wasn't because you handled that just right.

But the night before, I had to say, and I had to say, you know, there's a lot of kids.

But the children, which is a marvellous job, the guys going all out.

One incentive to the neighbors had not to yield to the domestic life.

Argentina has a big terrorist group, which really, for operational purposes, could go on a program very similar to the communists for expropriation.

And the U.S. doesn't have to be communist, but for our interests, I don't know what you think, John.

Thank you, thank you.

That affects internally.

It will be totally...

but basically more than that.

Basically more than that.

It'll be on the right, but completely nationalistic attitude.

There are four points that would be a little different.

That's all.

Maybe, maybe, you know what I'm saying.

I would be very happy with a very humble speaker here.

Of course, as soon as, once you get this study, you know, it's just, even if she gives the vote, you're the president, right?

making the statement, issued the statement, a statement of policy, a white paper, so to speak, in which he instructs all of the government that as a matter of policy, this government will not vote for or favor any law move to any country that has expropriated American interests unless and until that country is furnished good and sufficient evidence that satisfactory payment has been made

And that's basically the policy of the World Bank now.

It's not the policy of the Inter-American Global Bank.

It's a loose thing.

We operate one global bank one way, one has no policy.

Our bilateral aid is operating also another policy.

And this has been finished.

It seems to me, it is.

And it seems to me this does two things.

One, it served what

I said I'd rather deal with one policy than the second thing.

And it's a beautiful policy.

Secondly, it says to all the United Nations, you can't expropriate our people.

And it's actually up to us.

And third, it says something to the American businessmen that I think is extremely important and extremely powerful.

It says, for a change, we will start an African American business.

You want all of these applications from countries where there is expropriation going on held up?

Wouldn't that help you?

Oh, sure.

That would be great.

And Wilbert will make that line.

That will give you that handle.

I don't think all the notes are kept here.

I'm sure Peterson is way more.

This doesn't involve our attitude toward the American Republic.

Well, I think basically it's a political statement.

I mean, the economic part of it.

I'm just curious.

You know, the thing is that we, let's now get this little procedure worked out.

You see, the problem is, the problem is that through an IE view, some of our people and our own as well as your church,

They're very mighty, huh?

We've had more admirals and generals in Chile since Amiens than in any comparable period, or than in any other Latin American country.

Because they've measured red.

It's the benefit that we keep up relations with the military.

For Latin America?

For Latin America, yes.

in such a way that they've done all the...

I'm inclined now, I mean, to reevaluate the keeping our relations with the military in Chile.

I personally think the chance of a coup there is huge.

I also think that the military has been isolated.

I think all we're going to do is choose poor money.

God damn it, let the Russians.

We're up to money.

I just have a feeling here that I think we ought to treat children, begin treating them as we get along.

I worry too much about if I can treat this damn Castro kid.

And as I said earlier, if you leave your inheritance about Castro, it can't be any change on that.

We're doing the right thing about Castro.

We should not open up there.

This fall, this fall is a deep, deep trouble.

Normalizing the relationship with Castro at a time that he's stepping up some of his subversive activities is just the wrong thing to do.

I agree with you, but the state should be followed.

Well, there's a view here that comes down to it.

It hasn't in the last week, but we have this understanding.

Well, they run these banks.

The way I work this, John,

I think what you want to do is have a memo written for cosmetics.

Pick up the phone and when you have something like that, I'll say, look, if I have this one, we've got to get it.

If you feel it, let us know.

See you.

We will.

All right.

Thank you very much.

I've gotta go rehearse the linen now.

Nixon, Kissinger & Connally on International economics and Expropriation

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Nixon Library Finding Aid

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Also recorded on June 11, 1971

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Nixon, Kissinger & Connally on International economics and Expropriation

AI Summary

Audio

NARA Description

Nixon Library Finding Aid

Transcript (AI-generated)

Also recorded on June 11, 1971

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Cite this conversation