Evening star., 1945-06-24
Central and South America
Hard Hit by Rising Initiation
Plenty of Money and Scarcity of Food and Other
Articles Brings Serious Situation, With
End Not in Sight
By E. L. Almen

BUENOS AIRES.-Inflation is raising
havoc with Latin American economy
and all indications are that no relief
Is in sight.
Most governments have talked a lot
about curbing imitation, few of them
even have done something about it, but
in general the picture is anything but
optimistic. The end of the European
phase of the war has done little to re-
lieve the pressure.
The picture, although varying in each
country, has an overall pattern-plenty
of ready money in circulation but an
increasing scarcity of prime materials
and consumer goods. Rising prices re-
fleet the big demand for a short sup
ply, with the disparity between export
and import values creating the inf1a-
tionary wedge.
All countries have tried price control
measures, but in the main they have
failed to halt profiteering and black
market operations because of lack of
public support and opposition by mer-
chants.
Argentina Resists.
Argentina resisted the trend long
after most of her neighbors had sue
cumbed An abundance of food and the
establishment of rent ceilings two
years ago virtually eliminated two
major cost-ofliving items, while a
third factor was the development of
domestic industry to compensate for
the absence of foreign manufactured
goods
At the beginning of this year, how
ever, the inf1ationary trend was in the
making due to the heavy amount of
meat and agricultural products export
ed at high prices. The problem now has
become so serious that Vice President
Juan Domingo Peron has proposed the
freezing of wages as the only effective
method of controlling living costs and
assuring rigid maintenance of price
ceilings.
Argentina, however, is considered in
much better shape than her immediate
neighbors. Land-locked Bolivia and
Paraguay have not escaped imitation
despite their geographical isolation.
Paraguay lost most of her foreign
trade when the war eliminated Ger
many and Japan from her commerce,
but the United States took the slack
there as it has in other countries. Bo-
l1via has planned to reform its none
tary system. There are wartime short
ages but thus far no rationing. Both
Bolivia and Paraguay suffer more from
the effects of their sanguinary Chaco
war than from causes arising out of
World War II.
Prices Triple in Chile.
On the other side of the Andes, Chile.
once regarded as one of the cheapest
places in the world in which to live,
finds its cost of living triple that of 10
years ago. Although imported articles
have set the pace, foodstuffs, of which
Chile produces a great deal, have risen
almost at corresponding rate A simple
dress that would cost 1885 in New York
brings $45 in Santiago.
On one occasion, the Chilean army
was sent to take over the municipal
slaughterhouse in Santiago to keep meat
prices down. The move brought an i'm
mediate result and retail stores began
obeying previously ignored ceilings.
Across the River Platte the Uruguayan
government, too, is having its financial
headaches A costly social legislation
program has drawn criticism from the
chamber of commerce which suggested
that the administration direct its flnan-
clal policy toward moderation, order
and economy"
Big Brazil, active participant in the
war on the side of the Allies, has un-
dergone tremendous imitation and its
wartime economy has brought all sorts
OF ratlonlng and control programs. AS
the leading coffee exporting nation, it
has led efforts of the bloc of coffee coun-
tries IN seeking higher ceiling prices in
the United States. Producers claim a
rise in prices here, which would bring
corresponding lift in producers profits,
is necessary to meet high production
costs.
United States Declines to Yield.
Thus far, the United States has re-
fused to yield on this issue. While coffee
producers dispute the point, several
economists believe the United States is
doing thAcoffee countries a service bv
keeping p-Ges controlled and thus fight
ing imitation both in South America and
at home.
Colombia, another coffee country. has
had less imitation than most of its
northern neighbors, but food is up IA
per cent over 1910, despite the fact it is
mostly home grown. Prices supposedly
have been frozen in Colombia, but only
recently were any violators fined. I'M
ported Scotch is plentiful at prices
ranging from s12 to $40 a fifth. To
meet the living cost rise, the govern
ment has ordered employers to pay
workers seven days wages for six days
work. The inflationary effect of this
measure has not had time to show it.
self yet.
Official figures in Venezuela show the
cost OF living there-always almost pro-
hlbltive-has risen 26 per cent over 1888.
In many fields where there is no price
control, increases have been 200 to 300
per cent. The country depends on i'm
ports for nearly all its staples and suf-
fers periodic shortages. The National
Supply Commission has been successful
in alleviating these coditions and in
keeping prices at pegged levels Real
estate, however. is selling at 10 times
its pre-war levels and blocks of it are
moving at boomtime rate.
Cuha Has PIentv IN Snera
AS the greatest exporter of sugar,