BRAZIL: Power Play

President Getulio Vargas, in a sharp outburst of nationalism last week, denounced Brazil's foreign-owned utility companies for not providing enough cheap electric power to carry out the country's industrial development. By plain implication, he threatened them with expropriation unless they backed his grandiose plan for electrifying the whole vast country under government direction.

Before an audience including seven governors at the centenary festivities of the coffee-booming state of Paraná, the grand old (70) man of Brazilian politics told how he wanted to set up an Eletrobrás agency comparable to the Petrobrás recently established—under the hemisphere's most nationalistic oil law—to administer and develop Brazil's petroleum resources (TIME, Sept. 28). Warmed by the applause, Vargas struck out in strident tones at the U.S.-and Canadian-owned power companies: "I must say to you that up to a certain point I am being sabotaged in my plan by the contrary interests of private firms which have already profited much in Brazil, which now have in cruzeiros 200 times the capital they invested in dollars . . . Either we create the necessary funds to establish a national electric industry on a firm foundation, or we will have to take over the establishments which are not giving the desired results."

Such a blast from one of Latin America's most calculating politicians naturally brought up the question: Was the President really proclaiming a sharp shift in Brazilian policy toward foreign-owned companies? Rio's best guess was no, or at any rate, not yet. More probably the old man was angry because Congress has been holding up funds for his electrification program until he produces details; that may have put him in just the right mood for a nationalist harangue to an appreciative audience. Said Vargas himself, when reporters pressed for amplification of his remarks: "I've said too much already."

In Toronto, shares of Brazilian Traction, Light and Power, the Canadian-owned giant that produces half of Brazil's power, fell 13%, then bounced back.