Plan's Plight

As soon as President Juan Domingo Peron gave the signal last fall, Argentina's Government press went lyrical over his Five-Year Plan. The Plan Quinquenal, chorused the press, would bring hydroelectric plants, irrigation, new ports, housing, highways, airports and all the benefits of modern industrialization to Argentina. The cost: $1,650,000,000. But for several months now Peron's papers have been silent. Last week the reason for the silence became as obvious as the unbuilt dams. Argentina is short of money for the plan.

The plight of the plan, and of Argentina, was summed up in a blunt letter written to Peron by slim, brisk Major General Royal B. Lord, U.S.A., retired. As president of the Inter-American Construction Corp., Lord was hired by Peron last winter (TIME, Feb. 3) to draw blueprints for the plan's engineering projects. From his cluttered headquarters on Buenos Aires' Calle Uruguay, General Lord wrote:

"It becomes increasingly evident that the Five-Year Plan must either be seriously curtailed in order to prevent more unfavorable trade balances or that other means must be resorted to in order to continue the plan without adversely affecting the economy of the country. . . ."

Spendthrift. On the day Lord wrote, Argentina's total gold and foreign exchange dropped below the amount of money in circulation, for the first time in eight years, Argentina, which had been fat with the profits of selling foodstuffs to a hungry world, had splurged like the most reckless Argentine playboy. A U.S. machinery salesman who had hoped to sell the Argentine Government 20 units was amazed when he easily sold 400, is still trying to figure out how the Government can use them.

General Lord suggested to Peron that one way of easing the situation might be to invite foreign capital to help the Plan Quinqnenal. His urging was believed to be partly responsible for last week's lifting by the Central Bank of all restrictions against the entry of foreign capital into Argentina. There was even talk of seeking a U.S. loan. For Peron, this remedy would have a bitter taste. He has boasted that by the end of his six-year term "not an inch of soil, not a breath of air" in Argentina would be alien-owned. Now foreign capital was to receive "the same treatment and rights enjoyed by Argentine capital."

The Government's economic difficulties, the worst since Peron came to power, encouraged the opposition in its criticism and attacks, and also brought about counterattacks. Tubby, nearsighted, German-born Rodolfo Katz, whose weekly Mimeographed Economic Survey has long predicted economic troubles, was taken for a ride and beaten up by men masquerading as policemen. The nationalist Tribuna, which has centered its fire on pale-faced, pudgy Miguel Miranda, Peron's financial czar and president of the Central Bank, was closed on "technical grounds."

Bold Front. For President Peron, busy with last week's reception to visiting Chilean President Gonzalez Videla, it was all very embarrassing. But he put on a bold front. When the two Presidents journeyed to Tucuman, to celebrate the anniversary of Argentine political independence declared in that garden city in 1816, Peron issued what he called a declaration of "economic independence." Argentina, he said, had freed herself of "capitalistic, national and foreign" ties. But one result of the Gonzalez visit was an Argentine agreement not to build synthetic nitrate plants, but to take its nitrates wholly from Chile.

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