Evening star., 1949-01-23
By Alturn D. West

NEW YORK. - Oeie-dlISsllilo
Francisco franco has created a
sliding scale of values for Spanish
pesetas in his latest mancuver in
the battle for Spain's economic re-
covery.
It results in higher prices for
what he terms nonessential imports
and bigger profits for the exporter
of hard-to-sell Spanish products.
There are two principal reasons
for the new measures. One Is
Spain's lack of dollars. The other
is the governments last-ditch fight
against outright devaluation OF the
peseta.
The overall goal is to increase
Spain's dollar income and to- make
every penny count. Spanish econ.
omy requires products which must
be paid for in dollars. Needs include
heavy machinery to modernize fac.
tories, rolling stock for railroads
trucks and nitrogen fertilizer.
IDevaluation Starts
Modern machinery would increase
production; lower costs in the do
mestic market and boost exports.
Improvement Of railroads would
provide more efficient distribution
of available food production. Nitro
gen fertilizer would increase pro-
duction of such vital foods as
wheat.
The new measures were announced
recently by Juan Antonio Suances,
Frances Minister of Industry and
Commerce. Bss;cally the device
rsed Is form of devaluation.
The new measures embodied in
recently published decrees require
the importer of less essential goods
to pay a premium in pesetss for the
dollars he needs. The Spanish ex-
porter of favored products gets a
bonus in pesetas for the dollars
realized from his sales.
For example, the importer Of
typewriters and cameras pays more
than ~ pesetas for each dollar
needed for his purchases in the
United States. The official exchange
rate applicable to importers of es-
sential goods is nearly II pesetas to
the dollar.
Similarly the exporter of favored
products benefits. The exporter of
movies receives nearly % resetas to
the dollar for the proceeds of his
sales in the dollar market. The ex-
porter of nonfavored products re-
ceives only the official rate of about
II pesetas to the dollar.
Opposed Devaluation>
The new measures carry the gov
ernment nearer actual devaluation
than ever before. The first step in
this direction was taken almost two
years ago when a special tourist
rate of exchange was created. This
rate of more than Is pesetas to the
dollar is given all visitors with dol
lars.
Since then, the Franco govern
ment has negotiateds trade accords
with number of Western European
countries, including France. Eng
land, italy, Switzerland and the Low
Countries. In many of these agree
ments there were provisions amount
ing to subsidies to the Spanish ex-
porter to meet competitive prices.
But the nations dollar position
has been the major continuing prob
lem of the regime. 1t is known
that United States diplomats in
formally at various times have
urged Spanish officials to devalue
the peseta oficially as the only solu-
ton to the nations dollar difficult
ties. The Spaniards steadfastly op-
posed outright devaluation, such as
occurred in France.
As . result, the peseta's position
in the world money market has
been constantly unfavorable. In
l945 the rate in the free market at
Tangier in North Africa was around
20 pesetas to the dollar. In early
194s the rate once was A to the
dollar and recently has stood at
about. 50 to the dollar.
The Spanish governments opposi-
ton to devaluation-popularly be-
lieved to be led by Minister Suances
has been based on the adverse
effect of such action on the domes-
tic economy.
49,. - Npanal