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CONFIDENTIAL PAGE 01 SANTIA 03426 01 OF 02 012345Z 63 ACTION ARA-20 INFO OCT-01 ADP-00 SSO-00 INRE-00 USIE-00 NSCE-00 CIAE-00 PM-07 H-03 INR-10 L-03 NSAE-00 NSC-10 PA-03 RSC-01 PRS-01 SS-15 M-03 A-01 OPR-02 SCEM-02 AID-20 EB-11 FAA-00 SY-10 USSS-00 INT-08 OMB-01 TRSE-00 SIL-01 LAB-06 RSR-01 /140 W --------------------- 114458 O R 012257Z AUG 73 FM AMEMBASSY SANTIAGO TO SECSTATE WASHDC IMMEDIATE 5075 INFO DOD/DIA USCINCSO C O N F I D E N T I A L SECTION 1 OF 2 SANTIAGO 3426 USCINCSO FOR POLAD EO 11652: GDS TAGS: CI PINT SUBJ: POLITICAL CONVERSATIONS SUSPENDED REF: SANTIAGO 3398 1. SUMMARY: ALLENDE-AYLSIN TALKS SUSPENDED AND MAY BE OVER. SOCIALISTS SLAMMED DIALOGUE AGAIN. GOVT REQUISITIONED 100 TRUCKS NEAR SANTIAGO IN MIDST OF VIOLENT BATTLE WITH OWNERS. SOME MOVEMENT MAY BE AT HAND IN SETTLEMENT OF TRUCK STRIKE. END SUMMARY. 2. PRESIDENT ALLENDE MET WITH UP POLITICAL COMMISSION WHILE AYLWIN MET WITH PDC DIRECTORS EARLY EVENING JULY 31 TO BRIEF RESPECTIVE GROUPS ABOUT PREVIOUS DAYS' TALKS. NO OFFICIAL STATEMENT HAS BEEN ISSUED BUT IN RESPONSE TO REPORTERS' QUESTIONS AYLWIN TERMED TALKS AS HAVING BEEN "INTERRUPTED" WHILE BOTH SIDES ENGAGED IN CONSULTATION WITH MEMBERSHIPS. CONFIDENTIAL CONFIDENTIAL PAGE 02 SANTIA 03426 01 OF 02 012345Z AYLWIN ALSO STATED THAT HE HAD SENT A PRIVATE LETTER TO ALLENDE AFTERNOON JULY 31 REAFFIRMING PDC'S BASIC POSITIONS AND THAT ALLENDE HAD LATER TOLD HIM BY TELEPHONE THAT HE WOULD RESPOND TO THE LETTER BY THURSDAY (AUG 2). DESPITE AYLWIN'S USE OF TERM "INTERRUPTED", INPRESSION GIVEN BY OPPOSITION PRESS AND OTHERS IS THAT TALKS MAY BE OVER. AYLWIN REPORTEDLY TOLD PDC MESA THAT TALKS HAD BEEN A "COMPLETE FAILURE." SENATOR ANDRES ZALDIVAR TOLD AMB DAVIS AT LUNCH TODAY THAT PDC EXPECTED NEGATIVE RESPONSE TO IT LETTER AND HAD GIVEN AYLWIN "COMPLETE AUTHORITY" ONCE PRES REPLY RECEIVED TO PUBLICLY STATE TALKS HAD FAILED AND NOW OVER. ZALDIVAR STATED THAT MAJOR OBSTACLE TO REAL DIALOGUE WAS PRESIDENT'S CONCERN THAT PS WOULD PULL OUT OF UP IF HE GAVE ANYTHING AT ALL TO PDC. AUG 1 EL SIGLO ATTACKS REPORTS THAT TALKS HAVE BROKEN DOWN AS "SABOTAGE" AND STATES THAT TWO SIDES WILL MEET AGAIN. 3. IN GRATUITOUS ACTION, PS TOOK ISSUE WITH JULY 30 ULTIMA HORA ARTICLE (SANTIAGO 3395) ON WEEKEND CENTRAL COMMITTEE MEETING FOR NOT HAVING BEEN EXPLICIT ENOUGHT IN NOTING PS OPPOSITION TO DIALOGUE. IN LETTER PS MADE CLEAR THAT IT "DOES NOT APPROVE" PRESIDENTIAL DIALOGUE WITH PDC, QUOTES EXTENSIVELY FROM ALTAMIRANO'S JULY 12 SPEECH TO THAT EFFECT, AND STATES THAT PARTY'S ATTITUDE IS ONE OF CAREFUL "OBSERVATION" TO MAKE SURE REVOLUTION NOT BETRAYED. OPPOSITION PRESS, FOCUSSING ON INTERNAL UP DIFFERENCES, NOTES ABSENCE OF ALMEYDA FROM JULY 30 EVENING TALKS AND FACT THAT NEITHER IC NOR GARRETON'S MAPU REPRESENTED AT JULY 31 MEETING OF UP POLITICAL COMMISSION. 4. AMERICAN OIL COMPANY EXECUTIVE INFORMED EMBOFF THIS MORNING THAT FUEL PIPELINE FROM CONCON (ON COAST) TO MAIPU (NEAR SANTIAGO) DYNAMITED THIS MORNING (SANTIAGO 3412). OTHER SCATTERED VIOLENCE REPORTED IN PRESS. MAJOR INCIDENT JULY 31 WAS POLICE-TRUCKER CONFRONTATION ABOUT 10 MILES SOUTH OF SANTIAGO WHERE STRIKING TRUCK OWNERS HAS MASSED VEHICLES ON FARM. ARMY CONTINGENTS FROM SAN BERNARDO SEARCHED AREA EARLY MORNING FOR ARMS AND MET WITH NO RESISTANCE FROM TRUCK OWNERS. LATER IN AFTERNOON, TRANSPORT UNDER SECY FAIVOVICH, PREVIOUSLY NAMED GENERAL INTERVENTOR ALL STRIKING TRUCKS, ACCOMPANIED BY DIRINCO OFFICIALS, UP DRIVERS AND HEAVY FORCE OF CARABINEROS WITH FOUR SMALL POLICE TANKS, REQUISITIONED APPROXIMATELY 100 VEHICLES. CONFIDENTIAL CONFIDENTIAL PAGE 03 SANTIA 03426 01 OF 02 012345Z PURPOSELY DISABLED TRUCKS DRAGGED FROM SCENE BY GOVT TRACTORS WHILE OTHERS DRIVEN AWAY. TRUCK OWNERS KEPT UP STEADY BARRAGE OF STONE THROWING, AND FIVE PN DEPUTIES (GUSTAVO MONCKEBERG, ARTURO ALESSANDRI, DOMINGO GODOY, FERNANDO SCHOTT AND PATRICIO MEKIS) FORMED LINE ACROSS ROAD TO PREVENT VEHICLES FROM PASSING BUT WERE DISPERSED ALONG WITH OTHER DEMONSTRATORS BY POLICE TEARGAS. REPORTS OF NUMBER INJURED IN ROCKTHROWING BATTLE VARY. SOME ARTICLES STATE THAT AT LEAST ONE AND MAYBE MORE INDIVIDUALS INJURED BY GUNFIRE. DATT REPORTS MILITARY UNITS IN SAN BERNARDO AREA NOW ON STATE OF ALERT. 5. FAIVOVICH'S IMMEDIATE RESIGNATION WAS DEMANDED BY RODADO PRESIDENT JUAN JARA IN AFTERNOON MEETING WITH PRES ALLENDE AND MIN PUBLIC WORKS AND TRANSPORT MARTONES. JARA LATER MET WITH MARTONES ALONE AND ACCORDING TO INFORMED PDC SOURCE RECEIVED SOME SATISFACTION ON BUS OWNERS' GRIEVANCES. JARA HAS REPORTEDLY RECEIVED HIS PARTY'S (PDC) APPROVAL TO PUT ALL BUSSES ON STRIKE AND IS USING THIS AS BARGAINING CHIP WITH GOVT IN HIS EFFORTS TO RESOLVE TRUCK STRIKE AS WELL. JARA REPORTEDLY WILL ASK MARTONES TO INCLUDE VILARIN, WHO HAS NOT BEEN ARRESTED AND NO LONGER IN HIDING, IN TONIGHT'S ROUND OF CONVERSATIONS. IN OTHER LABOR ISSUE, WORKERS AT POTABLE WATER SERVICE WHO HAVE BEEN ON STRIKE ARE NOW THREATENING TO CALL OFF JOB EMERGENCY WORKERS, WHICH ACCORDING LA PRENSA MIGHT LEAVE SANTIAGO WITHOUT DRINKING WATER. 6. TWO PREDICWABLE TURNS TAKEN IN CASE OF NAVAL AID ASSASSINATION. FIRST, TOPIC HAS LARGELY DISAPPEARED FROM FRONT PAGES. OTHER IS THAT ULTIMA HORA HAS MANAGED TO FIND WAY OF INVOLVING CIA IN ISSUE; IT CLAIMS JULY 31 THAT OPPOSITION, BACKED BY CIA AND WITH COOPERATION CERTAIN POLICE OFFICERS, WAS PLANNING TO ASSASSINATE JOSE RIQUELME BASCUNAN, ARRESTED CORFO EMPLOYEE WITH STILL UNDEFINED ROLE IN THE ASSASSINATION, IN SAME MANNER CIA ARRANGED LEE HARVY OSWALD ASSASSINATION. CONFIDENTIAL NNN CONFIDENTIAL PAGE 01 SANTIA 03426 02 OF 02 012351Z 63 ACTION ARA-20 INFO OCT-01 ADP-00 SSO-00 INRE-00 USIE-00 NSCE-00 CIAE-00 PM-07 H-03 INR-10 L-03 NSAE-00 NSC-10 PA-03 RSC-01 PRS-01 SS-15 M-03 A-01 OPR-02 SCEM-02 AID-20 EB-11 FAA-00 SY-10 USSS-00 INT-08 OMB-01 TRSE-00 SIL-01 LAB-06 RSR-01 /140 W --------------------- 114525 O R 012257Z AUG 73 FM AMEMBASSY SANTIAGO TO SECSTATE WASHDC IMMEDIATE 5076 INFO DOD/DIA USCINCSO C O N F I D E N T I A L SECTION 2 OF 2 SANTIAGO 3426 7. PRESS REPORTS COMBINED FORCE OF 1,000 MARINES, ARMY AND POLICE TROOPS DESCENDED EARLY MORNING JULY 31 ON RENACA (NEAR VALPARAISO) MASSING AREA OF STRIKING TRUCKS TO CONDUCT ARMS SEARCH. NAVY TROOPS IN CONCEPCION SEARCHED TWO STATE- OWNED FISH PROCESSING FACTORIES. RETIRED GENERAL CANALES HELD PRESS CONFERENCE JULY 31 TO ANNOUNCE FORMATION JUNTA UNIFICADORA NACIONALISTA (JUN) TO SAVE CHILE FROM "FOREIGN DOCTRINE OF MARXISM." CANALES STATED THAT IMPRISONED GEN VIAUX HAS GIVEN NEW ORGANIZATION HIS SUPPORT. MEANWHILE, CANALES WAS FORMALLY CHARGED YESTERDAY BY GOVT WITH MAKING COM- MENTS ON NEWSCASTS CONTRARY TO LAW OF INTERNAL SECURITY BUT WAS IMMEDIATELY RELEASED ON BAIL. 8. COMMENT. IN TODAY'S CONVERSATION WITH AMBASSADOR, SEN ZALDIVA STATED THAT PARTY IS UNITED IN ITS RESPONSE TO DIALOGUE'S FAILURE AND THAT, IN EXPECTATION OF RECEIPT OF NEGA- TIVE RESPONSE TO ALYWIN'S LETTER, PARTY IS PREPARING A WIDE BILL OF PARTICULARS WHICH MAY BE USED NEXT WEEK IN ONE OF THE FOLLOWING CONGRESSIONAL ALTERNATIVES: (1) DECLARATION BY BOTH CHAMBERS THAT PRES HAD EXCEEDED CONSTITUTIONAL LIMITS CONFIDENTIAL CONFIDENTIAL PAGE 02 SANTIA 03426 02 OF 02 012351Z OF AUTHORITY; (2) IMPEACHMENT OF ENTIRE CABINET; (3) DECLARA- TION OF PRESIDENTIAL DISABILITY UNDER ART. 43 OF CONSTITUTION. ZALDIVAR STATED THAT IMPEACHMENT ENTIRE CABINET WOULD GIVE ALLENDE ANTOTHER OPPORTUNITY TO RESTRUCTURE GOVT WITH STRONG MILITARY PRESENCE. ALTHOUGH ZALDIVAR DID NOT SAY SO, OTHER ALTERNA- TIVES MIGHT TEND TO SET STAGE FOR MILITARY GOLPE. 9. ALL THREE ALTERNATIVES HAVE FLAWS: (1) DECLARATION OF USURPATION BY PRESIDENT OF AUTHORITY BEYOND CONSTITUTION -- OR POSSIBLY OTHER ALTERNATIVES -- MIGHT SERVE AS PRETEXT FOR MILITARY GOLPE BUT THERE IS NO ASSURANCE THAT MILITARY ARE NOW UNITED, AND THEIR PAST INTERNAL DIFFERENCES HAVE BEEN SIGNIFICANT DETERRENT TO EXTRA- LEGAL ACTION SO FAR. (ZALDIVAR DID STATE HOWEVER THAT IN RECENT DAYS GEN PRATS HAS INCREASINGLY SEEMED TO BE REPRESENTING ARMED FORCES INSTITUTION'S VIEWPOINT.) (2) ALLENDE DOES NOT NEED IMPEACHMENT OF ACTIVE CABINET IF HE WISHES TO PAY POLITICAL PRICE AND CALL ON MILITARY. ZALDIVAR IS RIGHT, HOWEVER, THAT CABINET IMPEACHMENT WOULD CREATE NEW POLITICAL AND CABINET CRISIS WHICH WOULD PROBABLY CAUSE MILITARY ENTRY INTO GOVT TO COME BACK INTO CONSIDERATION ) (3) USE OF ARTICLE 43 TO DEPOSE PRESIDENT IS OF DUBIOUS LEGAL MERIT. 10. POSSIBILITY STILL EXISTS THAT PRESIDENT MIGHT SOMEHOW CONCOCT A RESPONSE WHICH WILL SERVE TO PROLONG DIALOGUE. DAVIS CONFIDENTIAL NNN