Evening star., 1948-01-04

Partly Due to Lack
| of Imports
| By Album West
MADRID, Jan. 3.--Growing eco
nomic dificulties have displaced In.
ternational political troubles a
Spain's No. l problem.
Where formerly interference in
SPANS affairs" and attacks on
Franco regime" were topics in the
Spanish press, official speeches and
statements on high prices, lack OF
dollar exchange. deadline Of exports
and needed imports now claim at
tention.
The turning point came in october
with the United Nations Assembly
refusal to vote further punitive
measures against the Franco gov
eminent.
Franco Admits Lag
This vote, said Jose Ibanez Martin,
Minister Of Education, ended "the
unjust international discussion Of
Spanish affairs" and heralded the
return of full, normal diplomatic
relations" with most of the govern
ments which retired their Ambassa- :
dors and Ministers from Madrid fol-
lowing the 1946 United Nations ac-
ton.
The eclipse of Spain as U. N.
problem had the almost immediate
effect of focusing internal atten-
ton on the country's domestic and
foreign economic troubles. Particu-
larly acute is the problem of rising
prices and the lack Of dollars.
Generalissimo Franco spoke plain
ly about Spain's economy in an ad-
dress to 5000 syndicate representa-
tives of farm owners and farm work.
ers in Madrid December IS.
He admitted Spanish agriculture
is behind the times because Of the
lack of technical advantages. He
explained that Spain's basic exports
have been agricultural products.
Now production has dropped and
the population has increased-there
is no exportable surplus.
No country can live Theoretically
sealed" he continued. I'VE need
tractors, gasoline, oil, tobacco, cot
ton, grease for railroads, factory
machinery, special steel, hydro
electric equipment, medicines and
an unending list of small things
which the advances Of civilization
and trade have made necessary"
Exports to u. S. Drop
The Caudillo told his audience
that the wealth Of nation was not
only In what 1t produces but In
what it is able to trade. He warned
of the dangers of the loss Of value
Of currency. Social security, pen
sions and wage increases which his
government have provided would al
be worthless If money lost its value
he said.
Franco did not mention any dol
lar loan or credit. Neither did hi
refer to the almost SO per cent droI
in Spanish exports to the Unitec
States In 1947 as compared with
1916.
For a month after the United Ma.
tions Assembly action on the Span.
ish case, Madrid was filled with
rumors Of a United States loan tt
Spain and inclusion of the country
in the Marshall plan. Recently
these reports have died out.
Diplomats scout the present pos
sibility of a dollar loan. They
doubt but do not reject the idea ot
a private dollar credit. They con-
tend, however, that a government
revision OF its economic policy would
be prerequisite.
/ Such a revision should include
these sources say, loosening Of con.
trolls over business and industry
which stifle enterprise and regu.
lations which would induce Span.
iards holding an estimated more
than $100,000,O0O in deposits anc
assets in the United States to con.
vert these funds into needed i'm.
ports.
Devaluation Considered.
Devaluation of the peseta is citee
as another necessary step. How.
ever, Frances cabinet recently pub.
licly denied such action was con.
templated.
Actually the peseta's loss Of value
is a key factor in Spain's economic
difficulties. The official exchange
rate for international trade is 10.9!
pesetas to the dollar. There is {
tourist rate of 1910.
In the internationalized city O.
Tangier, across from Gibraltar. tn,
dollar buys 40 pesetas. A year agt
the Tangier rate was 27 to the dollar
In 1945, the money in circulation
in Spain was 10000 million pesetas
Today the total is 1889 million pc
setas. The cost Of living index, with
1886 as a base Of 100, is off1ciall.
given as 433.1 for Bilbao, 432.7 TO
Valencia, 1905 for Barcelona ant
1925 for Madrid. The increase sine
1945 approximates 200 per cent.
On the surface, Spain seems pros
porous. Shop windows are fillet
with necessities and luxuries. Peo
pie on the streets are well-dressed
Night clubs, theaters and restau
rants are crowded. Travellers sa.