U.S. Bet on Quadros

One of Latin America's most intriguing spectator sports over the past weeks has been watching the Western hemisphere's newest and youngest Presidents, presiding over its two most populous nations, as they size each other up. President Kennedy, was plainly anxious to corral Latin American support for his New Frontier. Brazil's Janio Quadros, 44, was just as eager to map out his own new frontier--in which U.S. influence would loom less large. While declaring himself irrevocably pro-West, Quadros veered sharply away from the U.S. stand on Red China in the U.N., brushed aside all invitations to cooperate against Fidel Castro, and flirted with the Soviet bloc.

End to the Drought. The question was whether to regard Quadros as an adversary or to take a chance that, for all his neutralism, Quadros was on the right side. Last week Kennedy made his choice: to put his money on the new man in Brazil. In the conviction that Quadros, for all his eccentricity in foreign affairs, favors an economically sound and therefore healthy Brazil, Kennedy approved U.S. participation in an international aid program for Brazil that ranks as the biggest loan-grant package ever given a Latin American nation. The sum under discussion: $500 million, with more to come. Washington's only formal announcement was a brief statement by Treasury Secretary C. Douglas Dillon noting that Brazil needs new funds for development and to consolidate its crushing debt. This week the secretary goes to Rio for a board meeting of the Inter-American Development Bank. With Brazilian planners, he will start working out the details of the aid program.

Brazil, its costs spiraling higher and higher, has been without substantial foreign aid since 1959, when ex-President Juscelino Kubitschek refused to end his wild spending and to accept International Monetary Fund recommendations of deflationary austerity. Quadros is prepared to accept IMF terms. He has already introduced drastic currency reforms that have, in effect, raised prices by ending subsidies on the retail price of such commodities as bread (up 77%) and gasoline (up 80%). He has fired 35,000 government employees, and slashed the salaries of upper-rank government employees 30%. The result has been noisy grumbling that threatens Quadros' determined drive to stabilize the economy.

Appeal for Austerity. So intense is the pressure, that Quadros last week felt compelled to pass up the champagne inauguration of the U.S. embassy building in his new inland capital of Brasilia. Coming after Quadros had personally promised the wife of U.S. Ambassador John Moors Cabot that he would be there, the undiplomatic failure to show up was interpreted by many as one more Quadros snub to the U.S. But the President, explained his supporters, was putting the finishing touches on a new and dramatic appeal to Brazilians to accept austerity.

That same evening, for 100 minutes on television, Quadros used every trick in the Brazilian political book to get his point across. He shouted, whispered, tossed his hair. Emphasizing one of the major points that won him the greatest electoral majority in Brazilian history last year--his undoubted honesty--he reminded Brazilians that he had not promised miracles. "I promised an honest government, a just government, a hard government, a government of sacrifices." He promised reforms--an excess-profits tax, an antitrust law, limits on profit remittances of foreign companies. But he saved his heaviest thunder for his theme that inflation is the reason "many democracies have disappeared. They became dictatorships of the right or of the left, Communist states. As long as I live, that will not happen to this republic, not with me in the government."

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