Old Driver, New Road

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A new band of leaders, grimly and responsibly determined to rescue their people from disease, starvation and ignorance, is at work in Latin America. These leaders replace the medal-jingling military popinjays of old; they shun the demagogic example of Fidel Castro in Cuba; they cherish such institutions as Congress, courts, constitution. They are the hemisphere's real builders.

The nations they govern include the biggest in the hemisphere. Argentina's Arturo Frondizi, inheriting the Santa Claus economy built by Juan Peron, has fearlessly shot Santa Claus and put the nation to work. Brazil's Juscelino Kubitschek is daringly steering the fastest boom in Latin America, industrializing the country with printed money. Colombia's Alberto Lleras Camargo is bringing political peace in the wake of two dictatorships and moving toward a sound program of land reform. Chile's Jorge Alessandri is tackling one of the world's worst cases of inflation.

An Old Revolutionary. Nowhere are the challenges, the perils and the possibilities greater than in Venezuela, where President Romulo Betancourt, 51, a classic example of the legendary conspirator-gone-respectable, inherited the mess left when Dictator Marcos Perez Jimenez ran out two years ago. Next week Betancourt ends his first year in office--the longest term of constitutional government in the dictator-ridden country's history. Perhaps his biggest success is simply surviving that long.

Yet he has done much more than survive. He has braked the Communist influence that erupted when Perez Jimenez fell. He has kept a coalition of democratic parties working in harness. He has begun a sorely needed land reform, built scores of schools and hundreds of miles of highway, brought in a World Bank mission to plan the next four years of economic and social reforms.

Betancourt's skill in the art of practical reform grows out of 30 years of the trial-and-error education of a Latin American rebel. He is an intellectual who, for a short time during the '30s, called himself a Communist. He is an old revolutionary who on one occasion did not boggle at collaborating with an ambitious dictator-to-be to overthrow constituted authority. That venture gave him an intoxicating taste of power, but he was overthrown and wandered through years of exile, unsure whether he would ever get a second chance. Above all, he is a master politician who has learned about his country and its people by tramping dusty back-lands roads and sleeping in peasant huts. He organized peasants, industrial workers, students, businessmen and professional men into a leftist movement called Action Democratica (A.D.), the country's major political party.

Fortnight ago, Betancourt's cops broke up a right-wing plot against him, and he used the occasion to go on TV and say a few things about where he stands now. On Communists, he warned of those who "create hostility against foreign investment capital and against the U.S." His nation's relations with the U.S. are good, he said, and in an aside obviously aimed at Cuba he added: "If other countries are not in a similar situation, we wish that good inter-American understanding could be restored."

$2.40 Martinis. On its face and pace, Venezuela is a fabulous country. From the ranks of oil-well derricks in the greasy waters of Lake Maracaibo and the "Christmas trees" of valves spotted across the surrounding scrubby, flat land, a great flood of oil pours into the silvered storage tanks of foreign oil companies, including the world's largest petroleum producer, Standard-controlled Creole Petroleum Corp. Hard-hatted workmen spin the valves that channel the flood to docks where tankers simmer in the sun and to refineries where wastes flare in smoky orange flames.

Caracas, 300 miles to the east, consumes the oil money with gaudy flamboyance. At night, searchlights turn the circular Hotel Humboldt to a tower of golden glow at the end of its cable car, 4,000 feet above the city on Mount Avila. Inside the red-plush walls of La Belle Epoque restaurant, the oil lawyers and the air-conditioner distributors hoist $2.40 martinis and down $20 dinners. Visiting businessmen snap on black ties and pad down the corridors of the jammed Hotel Tamanaco, bound for nightclubs where sleek performers dance the traditional, twirling, fast-stepping joropo to the sound of harps twanging like guitars.

By day, fleets of bulldozers and an army of sweating workmen chew at midtown Caracas to connect bending ribbons of concrete into a superhighway cloverleaf of supreme complexity. Even before sidewalks are in and the lawn is seeded, self-service elevators begin humming in the flat-fronted apartment buildings that shoot up steadily at the eastern end of the city's valley. On the slopes to the north and south, concrete flows into forms to make walls, patios, retaining walls and swimming pools for low, clean-lined mansions that can cost as much as $3,000,000. Overnight, packing-case houses with stone-weighted corrugated roofs rise on the hills that ring the city, as the ever-worsening shortage of housing forces slums down the hillsides toward the houses of the rich.

Away from the coast, Venezuela is a varied land of goat-ridden droughtland, snowy peaks, Amazonian jungle and the lofty, remote eastern mesas where Sir Walter Raleigh looked for El Dorado. Bone-chilled peasants tend their flocks of goats on the slopes of a spur of the Andes; cowboys ride through the tough, chest-high grass of the llanos--Venezuela's central prairie--driving herds of bony cattle before them. In one of the few spots in Venezuela that are radically changed--a cooperative sugar farm on the estate of a Perez Jimenez crony long since fled--a harvester puts down his machete for a moment to talk about his life in a Venezuela freed of military dictatorship. "Before, I didn't have a chance," he says. "Now I can make a little money."

Tender Little Bull. Caracas-born Simon ("The Liberator") Bolivar was the country's first military dictator; he said that "as long as our fellow citizens do not acquire the talents and virtues which distinguish our brothers to the north, a radical democratic system, far from being good for us, will bring ruin upon us." When he died in 1830, Bolivar left the country to a long line of strongmen. In 1908 Juan Vicente Gomez, "Tyrant of the Andes," began a 27-year reign. That same year, in the poverty-ridden town of Guatire, 40 miles from Caracas, a child was born to a wholesale grocer's accountant and amateur poet named Luis Betancourt.* Pleased that his second child was a boy, the proud poet accurately sized his son up when Romulo was only four months old:

There is much of the fighting bull

In this tender little fellow.

For he begins his life knowing

That although he smiles,

He must act as fierce as ten.

In a houseful of books, Betancourt began reading in earnest when he was eight. When he finished the sixth grade--as high as the local school went--his father moved the family to Caracas.

A Hero to Worship. At Caracas' principal high school. Betancourt studied under a young psychology teacher named Romulo Gallegos. A brilliant writer--he later turned out the classic novel of Venezuelan backlands life, Dona Barbara--and an inspiring teacher, Gallegos became the idol of Betancourt, as the prototype of a proud man willing to risk criticizing Dictator Gomez.

In 1922 Venezuela struck it rich. On the northeastern shore of Lake Maracaibo, a quiet little oil well called Los Barrosos No. 2 suddenly blew in and began spouting crude at the rate of 100,000 bbl. a day. In the rush that followed, oil companies paid millions of dollars for choice concessions. Providing services and equipment to the oil industry made a thin upper crust gorgeously rich, but scarcely benefited such middle-class families as the Betancourts. Romulo went to work as a bill collector for a wholesale tobacco firm, played sand-lot soccer (right forward), entered the law school of Caracas' Central University in 1927.

There he became a leader of what he calls the "first exclusively liberal movement" in the history of Venezuela--"the Boys of '28." Some of the other "boys": Jovito Villalba, now head of the leftist Republican Democratic Union (U.R.D.), second strongest (after Betancourt's A.D.) party in Venezuela; Gustavo Machado, now a boss of the Venezuelan Communist Party. Student Betancourt quickly saw the difference between the rule of law described in his textbooks and the dictatorial lawlessness of Venezuela.

"There was a wave of liberalism through the hemisphere," he remembers. "News filtered in to us of the university reform in Argentina, the fight in Cuba against Dictator Gerardo Machado, Guerrilla Augusto Cesar Sandino's battle against U.S. Marines in Nicaragua, the opposition to the tyrant Augusto Leguia in Peru."

96 Pounds of Iron. In February 1928 Betancourt and his friends organized a week of student protest. An intense, curly-haired young man in black beret and spectacles, Betancourt delivered an impassioned anti-Gomez speech in a movie theater. Four days later he was thrown into a Gomez dungeon, clamped in 96 pounds of leg irons.

Freed after three weeks and still enthusiastically rebellious, the Boys of '28 launched outright revoluton in April. They seized Dictator Gomez' Miraflores Palace (Gomez was away), grabbed all the guns they could find. They charged up the street toward San Carlos Barracks, where a confederate was supposed to fling open the gates and let them in. But the chief of the military forces arrived before the rebels, barred the gates and organized a stout defense. For the first time in his life, Rebel Betancourt fired a rifle. It was an ancient German weapon with a brutal kick. When he is asked whether he killed anyone, he dodges. "Just say I was there," he growls. Well shielded, the barracks defenders drove off the attackers, the revolt flopped, and Betancourt fled into exile.

In Costa Rica in the early '30s, Betancourt met a lovely, brown-eyed kindergarten teacher named Carmen Valverde. At night they walked, talked politics, fell in love. "He was very fiery," Carmen recalls. But Betancourt spent his days in the university library in San Jose, reading so endlessly that the librarian finally reserved a regular seat for him. In English, French and Spanish he devoured the standard works of the intellectual left--but did not neglect studying oil trade magazines from the U.S. Suddenly Betancourt decided he was a Communist. Today, irritated at the endless necessity of telling why, he explains somewhat vaguely: "It was the era of radicalism. Sinclair Lewis. Dreiser. John Dos Passes. In Costa Rica we formed a group. We called it the Worker and Peasant Bloc." When Gomez died, in 1935, Betancourt headed home with Carmen as his wife and left Communism behind.

A Pickled Ear. Back in Venezuela he became a public battler against Gomez' strongman heir, General Eleazar Lopez Contreras, toured the nation with thundering demands that Lopez make way for a democratic election. Enraged, Lopez Contreras in 1937 drove Betancourt and his followers underground, launched a hunt for him. Once government officials took an ear bitten from the head of a hapless gardener by a cop during a street fight, pickled it and displayed it as "Betancourt's ear"--as though they were capturing him piece by piece. Betancourt's daughter Virginia recalls that in those years, "Daddy was always in hiding, and we never had lunch at home." Then Betancourt again hit the exile circuit, to live, write and lecture in Chile and Argentina.

In 1941 Lopez allowed him to return to witness the elaborately rigged election of another general, Isaias Medina Angarita. President Medina, determined to act democratic, surprisingly allowed Betancourt to launch Action Democratica and develop it over the next four years into a major political force.

One day in July 1945, Betancourt attended a conspiratorial meeting with a group of army officers. "The loudest voice in the military group," Betancourt wrote later, "was that of the then Major Marcos Perez Jimenez," a short, awkward man with "thick tortoise-shell glasses and a stutter." Despite widespread belief that Medina was on the road to democracy already, Betancourt conspired with Perez Jimenez, the future dictator, to overturn President Medina. By the terms of their compact, Betancourt, head of what was by then a strong, left-oriented political party, became Provisional President.

Rescue of the Sewing Machines. Once in power, Betancourt drove across Venezuela like a bulldozer. In his first five months he signed 226 decrees that authorized everything from government redemption of pawned sewing machines to the imposition of an excess-profits tax. He slashed rent and electricity rates, ordered businesses to distribute at least 10% of their yearly profits to employees and imposed the then-radical fifty-fifty formula that guaranteed Venezuela at least half the profits of the oil companies.

Like every Latin American revolutionary leader, Betancourt promised free congressional and presidential elections. And in order not to perpetuate himself in power, he also promised not to run in them. To the astonishment of the cynical, Betancourt kept both promises. In December 1947, the A.D.'s Candidate Romulo Gallegos won the first free election in the nation's history.

Under Gallegos, the party maintained its headlong drive for reform. A.D. Congressmen railroaded measures through Congress. Whenever there was opposition, A.D. masses, usually led by left-wingers, would jam the Plaza El Silencio and scream hatred at their enemies. By the end of 1948, when rumors began circulating that A.D. was planning to replace the army with a "peasants' militia," Perez Jimenez and his brother officers rebelled. They cut down A.D. in mid-reform, arrested Gallegos, hounded Betancourt into exile, and began a new and bloody military dictatorship.

"A Certain Arrogance." While Perez Jimenez and his cronies got rich from graft and his cops gunned down A.D. members, Betancourt traveled and talked at length and at leisure with the democrats of the hemisphere: Puerto Rico's Governor Luis Munoz Marin (TIME cover, June 23, 1958), President Jose ("Pepe") Figueres of Costa Rica, former U.S. Assistant Secretary of State (under Franklin Roosevelt) Adolf A. Berle Jr. He lingered over garlicky meals in modest Manhattan restaurants, analyzed what had gone wrong. After nine years of wandering and pondering, he decided that A.D. had made "psychological errors. There was a certain arrogance, a certain intolerance with minorities. Some say we tried to do too much too fast."

When, early in 1958, armed-forces officers finally turned on the egregious Perez Jimenez and forced him to yield to a junta headed by Rear Admiral Wolfgang Larrazabal, Betancourt returned with caution, worked calmly and steadily to reorganize A.D., stumped the country as the party's candidate for President, won a free election over Larrazabal. As his wife puts it, the maturer Betancourt has not changed "in his character, but in his way of seeing things." His days of snap decision and direct orders are over; now he probes problems with the principals involved, listens long to their points of view. For the sheer drive of his younger days, he has substituted gentle diplomacy.

Outside the Economy. It will take all these new-found characteristics to solve the problems that face Venezuela. Oil production--2,770,000 bbl. a day, second only to the U.S.--brings the government $2,400,000 a day in revenue, gives Venezuela the highest per-capita income--$800 a year--in Latin America. But oil brings poverty along with riches. Attracted by the smell of wealth and the hope of jobs, rural workers flock to oilfields and cities, only to sit idle in shantytowns. By leaving fields unworked behind them, they increase the need to import food. Last year the country spent $152 million to import staples such as wheat, corn, rice and meat. Imported eggs alone cost $30,000 a day.

The oil-economy prices are among the world's highest. It costs around $16,000 a year for a family to live a middle-class life in Caracas. And the wealth is sadly out of balance: 2,000,000 Venezuelans in a total population of 6,320,000 are outside the money economy entirely. Other problems that Betancourt faces:

P: Large landowners, 1.9% of the farming population, hold 74% of the farming land; some 350,000 peasant families have neither land nor work.

P: About 25% of Caracas' housing, 50% of housing in other cities and 99% of rural housing must be replaced.

P: More than half the population is illiterate.

&3182; Total population is jumping at a fast 3% a year, and the work force is growing by 60,000 a year; urban unemployment is rising.

P: There is only one hospital bed for every 500 inhabitants.

Betancourt's first year was a time of planning, but he took a few bites out of the urgent land-reform problem just the same. Congress is still debating his agrarian reform law, but the government seized the idle, overgrown estates of the cronies of Dictator Perez Jimenez, added some state-owned land that was not busy. By year's end, 11,000 families were at work on 315,000 acres. Welfare goals beyond land reform in the next four years: $223 million in new schools for 300,000 additional children, $99 million on hospitals.

The Venezuelan government can count on annual revenues of $1,407,000,000, more than any other country in Latin America, but in the post-revolutionary era it needs every penny of it and more. To keep the armed forces contented in the barracks and out of his palace, Betancourt has maintained high defense spending. At the same time, he has boosted expenditures on social services: his 1960 school and health budget is double that of Perez Jimenez' last year in office. What is more, he has decided to honor all the $1.2 billion worth of short-term promissory notes Perez Jimenez issued to finance showy, graft-ridden public projects, or ill-planned, incomplete and unprofitable enterprises such as the state petrochemical industry and a steel mill. For fiscal 1959-60, Betancourt has divided the budget in two--the $1.5 billion he can expect from ordinary revenues for regular expenses, and $234 million in a "special" budget for development projects. The money for the special budget must come from an overseas loan.

Waiting Enemies. Like other reform-bent leaders in the hemisphere, Betancourt faces threats from powerful segments of the population. The air-force commander, Brigadier General Antonio Briceno, says flatly: "This government will be replaced by whomever the majority elects in 1964." But certainly lesser officers yearn for their lost political power as they goose-step their troops in review.

The Caracas mob that camps under bridges, jams the slums and lives in baby-skyscraper, low-cost housing around the city is always poised to rumble down in an avalanche of violence, as it did nine months before Betancourt took over, when Vice President Nixon was stoned.

Another worry is the group that led the mob into action against Nixon: the Venezuela Communist Party. Betancourt has rigidly excluded Communists from his government as an un-Venezuelan group. But the Reds are free to organize, and they mustered 160,000 congressional votes in the last election. They are strong in the press, the unions and Caracas' Central University.

Other potential opponents wait in the wings. When land reform gets fully under way, landowner protests are certain. The most important trade union, the Federation of Petroleum Workers, is now talking wages with the companies; the government, whose revenues depend on the size of oil-company profits, cannot favor big raises, but must not invite a violent strike. Venezuela's other political parties, the U.R.D. to the left of A.D. and the Catholic Copei to the right, so far stay in Betancourt's "unity" government, but they rumble ominously, and their demands for patronage hurt hopes of getting an efficient civil service.

The big oil companies dislike Betancourt's ban on the granting of new oil concessions, and they look with suspicion on his long-cherished plan to start a government oil company in competition with them. They are also still hurting from the decision of Rear Admiral Larrazabal's junta to jump the government's share of oil profits from 50% to 63%. But Betancourt is firmly on the record as opposed to expropriation, and the oil companies are on the President's side.

The Governor's Shame. The U.S. Government also backs Betancourt--a 180DEG change of opinion. During Perez Jimenez' reign, the U.S. pinned the Legion of Merit on the dictator and regarded Exile Betancourt as a troublemaking embarrassment. In 1955 Governor Munoz Marin of Puerto Rico invited President Figueres of Costa Rica to a meeting in Puerto Rico, where Betancourt, a good friend of both, was then living. The State Department's chief for Latin American Affairs, Henry Holland, hastily got Munoz Marin on the telephone. He insisted that Munoz send Betancourt out of Puerto Rico as long as Figueres was there to keep Venezuelan Dictator Perez Jimenez from thinking that a plot against him was being hatched on U.S. soil. Filled with shame, Munoz sent Betancourt on his way to the nearby Virgin Islands.

These misguided accommodations to Perez Jimenez have been used by critics of the U.S., especially left-wing critics, to build up the impression that Washington likes dictators. Quite obviously, the U.S. favors democracy as a governing principle, does not put Latin American dictators into power, recognizes them once in power only as it recognizes any ruling government. But a policy of correctness to dictators leaves plenty of room for a policy of warmth to democratic governments, and there is more warmth in Washington these days for men in Betancourt's mold.

During the postwar period, the U.S. gave $31.5 billion in grant aid to the rest of the world, while it gave Latin America only $625 million--less than 2% of the total, less than the Philippines got. Yet even now, measured by its per-capita income of $285 a year, Latin America, with 194 million people, is a poor neighbor living next door to a rich uncle (U.S. per-capita income $2,100). The inescapable need is for more capital.

U.S. private investment, which has so far provided $25 billion to Latin America, remains the best supply, but it is shy; Betancourt is paying off Perez Jimenez' bad debts to prove good faith to private investors, nonetheless faces a painful outflow of private capital. But half a dozen new ideas for providing Latin America with capital are afloat in the hemisphere:

P: New York's Republican Governor Nelson Rockefeller, long interested and involved in Latin America (through family holdings in Venezuela's largest corporation, Creole Petroleum), urges the U.S. to take "steps to bring about the ultimate goal of Western Hemisphere economic union" to create "the greatest free-trading area in the world." Tariffs and quotas hamper trade throughout the Americas; eliminating or reducing them could touch off a burst of healthful commerce.

P: Colombia President Lleras Camargo, one of the hemisphere's most sober thinkers, believes that the U.S. should swallow hard and lend money for land reform across the hemisphere. "That is where the backwardness of our countries is," he says. "In the fields."

P: Costa Rica's ex-President Figueres presses for commodity price stabilization that will free economies and government treasuries from drastic swoops that bring "feast or famine for our people, and more famine than feast."

P: Development loans -- which Latin America so far has invariably repaid and which Latin Americans overwhelmingly prefer to outright grants -- could be stepped up. Washington's loans since the war total $2.5 billion, but currently the Export-Import Bank is cutting sharply and the new Inter-American Development Bank is still in the throes of organization.

However the U.S. might help, the manner of helping is equally as important as the aid itself. Latin Americans are too proud for alms and too cynical to be grateful for loans made with strings, e.g., as a "reward" for not going Communist, or under the condition that the money be spent in the U.S. They also suspect help given under pressure, such as the creation of the Inter-American Development Bank shortly after the Nixon stoning. The only honorable motive for aid is real concern over the size of the gap between the levels of living of the hemisphere's north and south.

Seeing the need for government machinery to express that concern, many Washington and Latin American officials frown at the low priority the U.S. gives Latin American affairs. The State Department's Latin America chief ranks with ten other Assistant Secretaries of State, below two Deputy Under Secretaries, two Under Secretaries and the Secretary of State himself. Two decades ago, the equivalent post ranked third. Some critics even think that a special branch of government, perhaps roughly similar to Britain's Commonwealth Relations office, is needed to administer the U.S.'s Latin American responsibilities with the necessary understanding.

In a pointed show of sympathy and approval for the new democratic aspirations and prospects of Latin America, Dwight Eisenhower this month will go there for a ten-day tour. Though it is a good-will tour, he will doubtless be pressed at least indirectly for aid. But he will also find that the primary responsibility for Latin American development, far from being left to the U.S., is courageously shouldered by the new leaders as their own. They see coldly that they must meet the expectations of their people for a better life; they know that television oratory feeds nobody; they believe in stable government under elected officials, with just and constant law.

* A name of French origin which Venezuelans pronounce Beh-tahn-coor.

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