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# Allende in RetrospectPR policy resolution which the dissidents described marches and dernonstrations against the government, as "completely removed from the characteristic and the most famicus of which was the March of Empty distinctive ideology of our party" and opposed to Pots in December 1971, in which thousands of "the interest of the middle social strata" whom the housewives, mostly of middle-class background, party had always represented. For a time, the PIR marched, tanging pots to protest food shortages. continued to support the Allende government, but Those shortages had developed because the pre- within a year it had entered the ranks of the opposi- dicted economic difficulties resulting from the tion. Vuskovic policy began to emerge in late 1971: The balance-of-payments surplus had been depleted at such an alarming rate (in 1971 there was a deficit of $315 million, while in 1970 there had been a surplus of 391 million) that in November 1971 the Allende government called a moratorium on payment of its foreign debts. Chile had already experienced difficulties in securing loans from the Inter-American Development Bank, the World Bank and the Export- Import Bank as a result of its failure to compensate the Anaconica and Kennecott copper companies for the nationalization of their major mines. The debt moratorium was bound to make it considerably more difficuit for Chile to secure foreign credits, particularly for the short term. In December 1971, the Chilean government finally permitted a partial devaluation of the Chilean escudo so as to decrease the distortions created by its overvaluation, but this created pressure on prices of goods manufactured with imported components. Shortages of certain food items especially cooking oil, detergents, sugar, toothpaste, and cigarettes were ascribed by the government to upper-class hoarding and to increased consumption by low-income groups; however, the dislocations in the countryside associated with the very rapid expansion of the agrarian reform (Allende took over almost as much land in his first year in office as Frei nad in six years) clearly had something to do with the problem as well, and the situation could be expected to get worse with the harvest in early 1972. A 100-percent increase in the money supply as a result of the government's deficit spend- ing was also beginning to produce inflationary pres- sures now that the unused capacity of Chilean indus- try had been taken up by the 1971 expansion. Most important, a sharp drop in investment (Allende said it had declined by 7.7 percent, but opposition economists claimed it had fallen by 24.2 percent) meant that the spectacular growth rate achieved in 1971 would be sharply reduced in 1972.In July 1971, the Christian Democrats had voted In favor of the constitutional amendment national izing the copper mines, but from that point forward, the pattern was one of polarization of Chilean politics and society into two opposing blocks. The Allende forces controlled the executive and pursued an in- creasingly vigorous ideological purge of those who were not entirely sympathetic to the government. The opposition controlled the legislature, and in October 1971. the Christian Democrats and the rightist parties attempted to assert legislative con- trol over the expansion of the public sector by voting In favor of a constitutional amendment limiting the use of the intervention and requisition procedures and requiring that all transfers of private enterprises to the "social" or mixed sectors be carried out in accordance with specific legislation adopted by the Congress. This legislative act, referred to as an amendment on the "Three Areas of Property," became the focus of a continuing deadlock between the President and Congress that lasted until Allende's overthrow in September 1973.Allende's refusal to accept the amendment or to call a plebiscite to resolve his differences with the Congress appeared to the congressional opposition to be a decisive indication of his determination to bypass the legislature in carrying out the Popular Unity program, and from the time of the adoption of the amendment onward, the Christian Democrats began to cooperate with the rightist parties in op posing the executive. One method was to impeach ministers for violation or (more often) nonenforce- ment of the law. The first of many such impeach- ments took place in January 1972. Another method was to present a united electoral front against the government. Informal cooperation between the rightist parties and the Christian Democrats led to striking victories in two by-elections in January 1972, and a month later these groups formed the Demo- cratic Confederation (Confederación Democrática CODE) to prepare joint lists for the 1973 congres- sional elections. A third area of cooperation was inYet the degree of the incipient crisis was not*   El Mercurio, Aug. 8, 1971, p. 37.*   On the inaccuracy of the term "invisible blockade" to descr.be the Allende go.ernment's credit prociams, see Paul E. Sigmund, "The Invisible Bocrate and the Overthrow of Allenja," Foren Affairs (New York), January 1974, pp. 322-40.50