Tax Problems Haldeman: Now we came to a problem with taxes. Our taxes were way, way up. In fact, our direct and indirect taxes were 82 percent. The exchange rate was an indirect tax, and so on. Swent: Did they tax your ore? Haldeman: No, they just taxed all of the business part of the thing transfer taxes, exchange rates, import duty rates, corporate tax rates. Nothing to do with the ore in the ground. Swent: No severance tax? Haldeman: No. Of course, the companies were really groaning. The government needed some help from the United States , which used to give money to cover up the deficit problems. So in '55 they legislated a new law, Number 11,828, in which they reduced the tax rates for increasing production with certain investments, which was a very modest and nominal thing, but it got Chile off the hook. They had also accumulated an awful lot of copper there when they decided they were going to sell it through the Chilean Central Bank and give us the proceeds. They weren't able to sell it, as nobody would buy it. There was a blockade on the thing.
Swent: Through the Chilean Central Bank?
Chilean Central Bank Santiago, Chile
Yes. So Uncle Sam bailed them out on the basis, "I'll pick up
the copper as long as you make a better shake for the copper
companies." They did, and that law came out. That also created
what the Chileans had always wanted to have, what they called a
Departamento de Cobre, which was a fiscalizing agency, an
overseeing agency that would centralize all of its activities on
the copper companies' exports, imports, profits, and all the
rest of the stuff. It was a watchdog kind of thing. That
satisfied an awful lot of political anger, because nobody was
quite sure whether we had a lot of gold that we were sneaking
out in bars of copper that we were shipping and not declaring.
Everybody was suspicious of everybody, so they just put up a
government agency. This was a watchdog, and you reported on
everything. We had to report to them. Finally it took the heat
off of us, which was very good.
What were your relationships with the American embassy?
Haldeman: Very good.
Did you work with Chile through the American government?
Haldeman: Oh, no. I worked directly with the Chilean government. At that
time, really the major export industries were owned by American
interests. There were the nitrate and the copper companies,
Bethlehem Steel, and iron ore. There was a big American colony
at that time. I was the second-most important man in the mining
industry and in foreign investments in Chile. Anaconda was
number one because of their size, and we were number two. I was
seated accordingly in protocol.
So when they wanted to put the squeeze on someone, they went
directly to you and Anaconda?
Haldeman: They would do it through Congress,
have to enforce it .. . Then the government would
Index to Haldeman Interview