Evening star., 1949-02-27

unQerQeVclOp6Q areas Oh CI]e WO
sponse III every Latin American
tevideo. Newspapers everywhere
glowing editorials on the subject.
of Chile seems to realize that the
Truman plan is not and cannot
be a one-way road.
At any rate President Gabriel
Gonzalez Videla has announced a
fve-point program Of his own by
which Chile proposes to take ad-
of Mr.. Truman's offer to
make available to other countries
'the benefits of United States SCI
entif1c know-how and industrial
progress" The Chilean chief ex-
ecutive declares that "his country
will open its doors to United States
capital without discrimination OF
any kind" He assures investors
that 1.-The interest and profits on
their capital can be taken out OF
the country in dollars" with the
qualification that it must be done
under government regulation,
after the customary taxes have
been paid"
Made Brave Effort
In order to meet one of the
chief objections that private in
vestors are raising everywhere. the
Chilean President says he is will
ing TO undertake negotiations
with the United States" to prevent
double taxation of private capital
invested in Chile" His country
will be glad to apply United
States technical knoW-hoW" ir
building up Chilean industry
What is probably more important
he pledges the maintenance of "a
stable. democratic form of govern
ment," which, he declared. is 1.-THE
only form of government that car
offer real guarantees to private
capital
Very few Of the 20 southern
nations have ever been willing tc
pledge publicly. at least to the
outside world, such conditions tC
attract investments from abroad
Although the long, slim repub-
lie is graphing with Communist
infiltration, imitation, food short
ages and many of the same social
handicaps that beset its neighbors
the Chilean government has made
a brave effort to resist extremist
political pressure. 1t has banned
the Communist Party and disfran-
chised avoWed Communists. II
has imposed rigorous economic
measures upon its own people. II
is one of the very few Latin Amer.
lean governments with a balanced
budget. AS some Chileans insist
"The balance may be little pre-
carious," but nevertheless outgt
has been brought somewhere II
the neighborhood Of income.
1t is also one of the handful O.
nations in the whole world that !!
trying to honor its back debts. I
is even making small payments or
some of those defaulted bonds thai
were foated back in the '20s. i
has imposed heavy taxes on bott
the people and industry. Income
taxes in Chile are very high. espe.
cially those in the upper brackets
A man with the equivalent Of a
$20,00O-a-year income or salary
must pay about % per cent in
come tax, together with various
other excises and levies.
Resources Limited
Since the country's entire econ
omy is based on the export OF cop
per and nitrate, these products
pay extremely heavy income and
export taxes. Yet the two great
companies that produce the bulk
of both, and which are dominated
by United States capital, admit
that they are making money and
exporting comparatively as much
as they did in wartime. AS. an in
dication of their confldencesin the
future. both are at this moment
getting ready to plow back mil
lions in improved productive
methods. The Guggenheim cop
per interests have announced theil
intention to spend upward o1
Sl50,O00,000 on their plant al
Chuquicamata, the largest copper
mining establishment in the world
The nitrate company is planning
to scrap its present method of ex-
tracing nitrate from the "caliche,
that is to say. from the ore. and
replace it with a new solar evap-
grafton process.
But Chileans are determined to
diversity their industry and pro-
duction. In the past when world
demand and world prices for cop
per and nitrate have been de-
pressed. the Chilean nation has
faced bankruptcy. and masses OF
it's people have hovered on the
brink of starvation. In such cases
workers have descended in droves
on the populous center, creating
the most serious social hazards.
Aside from copper, nitrate, iron,
coal and a few other minerals.
Chile's resources are limited. In
the far south it does have vast
forests suitable for numbering and
pulp industries, and substantial
amounts of oil have been discov-
cred in the region of Cape Horn.
But it must have outside capital
before these can be turned into
large-scale economic advantages,
Needs More Capital
The Export Import Bank and
also the World Bank Reconstruct
tion and Development have
granted substantial credits and
loans to the Chilean government
and to semi-government corpora
tions. The Export Import Bank
has granted two credits totaling
48 million dollars for the con-
struction of a steel plant at
Huachipato, near the city of Con-
,n,>o;op south of Contiooo Tho