State control of the economy was instituted; mineral resources, foreign banks, and monopolistic enterprises were nationalized; and land reform was accelerated. In addition, Allende initiated a redistribution of income, raised wages, and controlled prices. Diplomatic relations were established with Cuba, China, and other communist countries.

Allende’s election coincided with a severe fall in the price of copper, Chile’s major export. Inflation became ever more drastic when his nationalization efforts halted private investment and when agrarian reform disrupted agricultural production. Labor unrest hobbled industrial production, and the suspension of loans by major U.S. and international banks additionally was severely damaging to the economy.

Opposition to Allende’s program, moreover, was strong from the beginning. The legislature was controlled by the opposition parties, principally the Christian Democrats and the conservative National Party. Allende’s plans for a socialist Chile, though popular with the working classes, were opposed by the middle classes. The situation was aggravated by the United States. The U.S. Central Intelligence Agency (CIA), which initially sought to prevent Allende from taking office, then spent large sums of money to destabilize and undermine the regime.

The country became polarized along class lines. Terrorism and violent clashes between armed right- and left-wing groups increased. An abortive military coup in June 1973 was followed by a wave of antigovernment strikes. The climax came on September 11, 1973, when the military stormed the presidential palace and seized power. After the coup Allende was found dead of bullet wounds. Officially his death was declared a suicide, although some believe he was assassinated by the military after the presidential palace was seized. Encarta