Fighting Bear

The most controversial figure in Chile this week is Finance Minister Roberto Wachholtz. Reason: he is out to stop Chile's 300% inflation (on the 1939 price average), even if a third of the country goes broke in the process.

Chileans know Wachholtz as a tight-lipped businessman who made an early fortune in the building industry, conceived the idea of Chile's RFC-like Development Corp. and served as its first president, helped found Chile's largest oil company. He now runs a model farm in the province of O'Higgins, south of Santiago.

The first time Wachholtz held office, back in 1939, leftists turned him out of the Finance Ministry as a reactionary. This time it has been different.

Since taking office last month as the only "nonpartisan" member of the new leftist government, 47-year-old Minister Wachholtz has pushed a policy that denies credit for all but industrial purposes. The left has stood by him because the poorer classes have been almost untouched, at least to start with, by his deflationary decrees. But middle-class shopkeepers, who need credit to stay in business, have been hard hit, and some real-estate speculators and stockmarket operators have lost heavily.

Carlos Vial, president of the potent Banco Sudamericano and one of Chile's biggest bullmarket operators, tracked down Wachholtz in swank Vina del Mar and in the presence of President Gonzalez, was said to have accused him of playing bear and speculating on the market drop. Husky Minister Wachholtz swung on Vial, knocked out two teeth. Last week Vial sued for "grave lesions" to his person; Wachholtz sued also--for defamation and injury by publicity.

Last week, as Wachholtz sought widest possible support by appointing 20 representative leaders, from bankers to Communists, to serve on an advisory Council for National Economy, it was still too early to measure the effect of his anti-inflation fight. Some prices, notably the price of oil, had dropped. That pleased consumers.

The market, almost knocked out by Wachholtz' first whirlwind attack, was making a nice comeback. That heartened businessmen. Cool, self-confident Minister Wachholtz, busy with plans for cutting Government spending and starting a state bank, knew that the real job lay ahead: to diversify the economy and end the old reliance on world markets for copper and nitrates. Whatever the outcome, Chile's new government had made its choice: it would stand or fall according to the success or failure of Wachholtz' efforts.

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