General Alfredo Canales offered to outlaw Chilean parties for US loans
By Desmond Okafor ·
Kept secret as "Sensitive" in the Nixon files, this 1972 exchange shows how Washington viewed the suspension of Chilean civil liberties as a bargaining chip for a coup.
The people of Chile were viewed as an obstacle to be cleared by a military junta. For those living under the proposed rule of General Alfredo Canales, the cost of American recognition would have been the sudden erasure of their political existence and the outlawing of the Communist Party.
According to a memorandum dated September 19, 1972, from William J. Jorden of the National Security Council Staff to Henry Kissinger, the U.S. government was entertaining a proposal from a military plotter who saw the destruction of Chilean democracy as a prerequisite for American financial aid. The record, marked "Secret; Sensitive," describes an indirect approach made by General Canales through a CIA contact in Santiago. Canales was not merely seeking a nod of approval; he was pitching a specific brand of authoritarianism in exchange for the tools to survive a "dire economic crisis."
"Return to order"
Canales’s blueprint for Chile was a calculated sequence of repression. The memorandum outlines a plan that began with the "suspension of civil liberties for three or four months" and the "proscription of all political parties for an interim period." This was to be followed by the total outlawing of the Communist Party and the "termination of extremist groups of left and right."
In the lexicon of the coup plotter, this erasure of rights was framed as a necessary prelude to a "return to order." Once the streets were cleared and the opposition silenced, Canales promised to gradually reduce restrictions so that the democratic process could "begin to function." However, this was not a return to the status quo. The record shows Canales intended to rewrite the Constitution to limit the number of political parties to just two or three, effectively narrowing the Chilean political imagination to a narrow, managed corridor.
Canales intended to hold the presidency until 1976, ruling via a government of "talented persons, civilian or military," who would be required to renounce their party affiliations. While he claimed he would preserve the three sectors of the economy—private, public, and mixed—the underlying goal was clear: he would "encourage private enterprise" and strip the agrarian reform program of its "strictly political aspects." In short, the offer was a trade: the political rights of the Chilean people for the protection of private capital and the stability of a military dictatorship.
Davis is an idiot
While Canales was drafting his plan for a sanitized dictatorship, the U.S. diplomatic machinery in Santiago was experiencing a fracture. Ambassador Davis, the man on the ground, was aware of the General's approach. His instruction to the CIA contact was blunt: make no response.
Davis’s caution was grounded in the immediate risk. As Jorden noted in the memo, Canales’s plotting was "rather widely known" and there was a high probability he would be dismissed from the army or thrown in jail. If the U.S. were too eager, they risked being exposed by a desperate man in a cell.
Henry Kissinger, however, had little patience for such diplomatic prudence. At the top of the memorandum, Kissinger wrote a searing critique of the Ambassador: "Al—Discuss soonest. Davis is an idiot. HK."
For Kissinger, the risk of a clumsy exposure was secondary to the opportunity of a compliant regime. While Davis saw a liability, Kissinger saw a tool. This internal friction suggests that the White House was not merely observing the instability of the Allende government, but was actively frustrated by any diplomatic caution that slowed the path toward a military takeover.
General Prats
Behind the scenes, the Nixon administration was tracking not only who wanted to overthrow Allende, but who stood in the way. The memorandum refers to an attached briefing report—which was not printed in the final release—stating that General Prats was "firmly against a coup."
This detail was treated with a level of secrecy that exceeded even the "Secret; Sensitive" classification of the main document. In the margin next to the paragraph describing Prats’s opposition, the note "HAK Only" was written. This designation ensured that the knowledge of Prats’s loyalty to the constitutional order remained restricted to the highest echelons of Kissinger’s circle.
While the U.S. maintained an official stance of remaining "at arm’s length," the actions of the National Security Council suggested otherwise. Alexander Haig, in a covering memorandum, informed Kissinger that he had already asked General Walters to "prepare plan" regarding the situation. The U.S. was not waiting for a coup to happen; it was preparing the logistics for when it did.
The record leaves the fate of the plotter hanging. The memorandum concludes by noting that Canales might be "cashiered because of his plotting," a military term for being dismissed in disgrace. Whether Canales ever achieved his "return to order" remains a question for other files, but the document proves that Washington was willing to weigh the suspension of a nation's civil liberties against the price of a few emergency loans.