Evening star., 1949-08-28

many years. IN SplCe OF CQe over
,rful PRI, Party of Revolutionar!
inmates the government in Mexico
have hardly noticed it. since it il
still not much higher than thu
average price in the United States
The Mexican press insists tha'
Mexican gasoline is actually thu
cheapest in the world. Tables O.
figures are being published tt
show that it sells for much les
than in Chicago. New York. Hous'
ton and other United States cities
i The transportation companie
are, of course. calling loudly TO
higher rates, which will probabl.
be refused. The government
position is that gasoline has beer
selling for less than cost. More
over substantial wage increases
averaging about 212 pesos a day
have been granted to oil workers
which must be paid for. At an!
rate, the oil workers union being
the best paid and the most highl!
organized in the country ane
therefore one of the most inf1u'
Lential political bodies. the Presi'
dent will probably find it easy Al
we'll as desirable to justify the riss
in gasoline prices.
The devaluation of the pest
from 4.85 to the dollar and it
stabilization at 8.65 will be tn.
most difficult single act of the Ale
man administration to explain
The government has pointed ou
that the devaluation and the con.
sequent fall in imports. because il
takes more pesos to buy from
abroad, is boon to local manu-.
facturers and producers. This is
of course. to some extent true
Not only that but it may bring il
some new capital, in the form oI
branch plants and factories. Gen.
eral Electric. General Motors
Ford, Coca-Cola, Sears, Roebucl
and scores of United States con.
Germs are already operating II
Monterrey, the federal capital anc
other cities.
Peso Arguments
But, as the official organ of thu
American Mexican Chamber o1
Commerce points out, "the mair
fact about devaluation is that il
has meant a loss of 80 per CEN
In the dollar purchasing power ol
the peso" Since Mexico still ha.
to import large amounts of wheat
lard and other basic products, she
has to pay 80 per cent more fol
these necessities than she did
before.
Mexicans also argue that the
fall in the price of the peso will
stimulate the export Of silver and
other minerals and therefore in
crease mining output, and give
more jobs to Mexican workers
Officials insist that exports have
already risen since devaluation
But imports have also increased
AS for silver and other metals, q
New York banker says, "Only sales
to dollar countries will help Mex
ican economy. This means sales to
the United States. And there Is
already a tremendous slump in
the purchase of metals and min
erals in this country"
At any rate devaluation may
help Mexican exporters, but il
certainly doesn't help importers
retail merchants or large elements
of the consuming public. While
there is every effort to keep them
down. prices have been rising
Scarcity of goods in any country
forces prices up regardless of gov
ernment vigilance or pressure. I,
has already caused smuggling ant
contraband to mount.
Farm Expansion
It is also important to point out
that stabilization of the peso ever
at its present low level, which i,
approximately three-fourths of its
1947 value. was made possible BY
$25 200, 900 in new credits from
the United States Treasury ane
$22 SOC, 900 from the Internationa.
Monetary Fund. The Mexican
government had previously re.
ceived large credits from the same
sources to bolster its currency.
SpokeSmen for the Aleman ad-
ministration are also pointing out
| the fact that there is a large ex-
pansion in agriculture. For years
Mexico has actually been import
ing large quantities Of corn. one
of the basic food products of the
nation. She is now producing a
surplus, and is even exporting
corn. Sugar production is up, and
there is more sugar in the coun-
try than there has been for years.
Cotton and henequen (binding
twine fiber) production, normally
two Of the chief exports, continue
high. The banana industry Is
booming. In spite of the general
increase in imports, there is a de-
cline in the importation Of staple
foods.
But the livestock industry has
suffered a major calamity. due to
the ravages of hoof and mouth
disease. There is less meat and
meat products. Because of our
embargo against the importation
of livestock from Mexico it nc
longer sells SOC. 900 head Of cattle
a year to the United States as
she previously did.
These are only a few Of the
problems the present Mexican
government is facing. They will
have to be explained and solu-
tions laid down In the Presidents q
message to Congress this week.
As one of the most prominent
Mexican businessmen put it,
tsrTrhoco pro,e dif37n,,lfiar oo,, -