URUGUAY: For Plenty or for Socialism

One evening last week 10,000 Uruguayans massed in Montevideo's Independence Square to cheer mild, stocky President Luis Batlle (pronounced Bat-zhay) Berres on his first anniversary in office. But even Uruguayans did not know whether the crowd was cheering for plenty or for socialism.

Purple Land. Uruguay is one of only two countries in South America (the other: Venezuela) which are not running out of dollars. In the first five months of this year, Uruguay ran her dollar kitty up from $32 million to $40 million. The Uruguayan peso rides steady at 1.9 to the dollar. But unlike oil-rich Venezuela, to which a plethora of dollars has brought sky-high prices, Uruguay has avoided inflation.

For this Uruguayans can partly thank the pastoral plenty of their purple land. A year ago, things did not seem so good. Uruguay had lost $69 million in foreign exchange in a year. Wool, the chief commodity Uruguay could sell directly for dollars, was not so plentiful in Uruguay in 1947. Now she has a bumper wool crop and a wheat crop big enough to pay off earlier borrowing from Argentina and leave some wheat for export.

Even Keel. But Uruguayans have also to thank the skill of their government for their good fortune. One prime reason for Uruguay's escape from inflation is that she spends little money on armament. Another is that she did not attempt overambitious postwar industrial expansion, confined it in the main to buying new textile machinery, a couple of hydroelectric plants, a limited amount of farm machinery.

Last _year, when Uruguay's dollars threatened momentarily to run out, import controls were clamped on "luxuries" including washing machines, automobiles, electrical equipment. What is more, they were honestly and firmly administered. Today she has enough dollars to buy not only gasoline and oil (about $20 million a year) but also to grant import permits for automobiles with reasonable liberality.

To hold the cost of living down, -the government has subsidized milk, meat and wheat. Milk, for which the producers get 8¢ a quart, is sold to the public for 9¢. Rents have been under strict control but are shortly due for some increase. Wages have also been held even; the government has set aside several wage increases proposed by labor-management boards.

The New Trend. While Uruguay has been finding a way to live in comfort, something else has been going on. Under President Berreta, who died a year ago, and even more under President Batlle, Uruguay has been moving gradually towards a moderate socialism.

Batlle has resumed the longtime practice of government intervention in industry. Telephones, banks, trains, insurance, fisheries and meat-packing plants are all government-owned enterprises in Uruguay. With accumulated sterling, the government plans to buy more Uruguayan railroads from the British. Businessmen already complain of a growing new bureaucracy, of obnoxious new controls, and the drain on Uruguay's resources.