Going Up

One of the main props of Juan Peron's popularity has been his policy of holding retail food prices at artificially low levels. Last week the prop was unceremoniously yanked away. Argentines awoke to find the costs of basic foodstuffs up as much as 100% overnight.

In the past, prices had been held down by a combination of price fixing and subsidies. Bread was price fixed, so were cooking oils and fats, milk, soap and, in Buenos Aires, meat. But to entice these products into the open market, the government repeatedly had to increase its subsidies to the producers.

On the lowest grade of cooking oil, made from sunflower seeds, the subsidy soon exceeded the price at which the oil had been pegged. The effect of generous subsidies on the capital's beef was to bring on an alltime record eating spree, which so increased consumption that Argentina was unable to fulfill its export contracts. Many housewives would not take the trouble to use leftovers; it was easier to throw the meat away and reorder.

For some time the Argentine Economic Council had been eyeing the grotesque subsidy structure, but refrained from touching it for obvious political reasons.

Last week without warning, almost casually, the council canceled the subsidies on cooking oil, soap, milk and beef for the capital. Portenos whispered that the President himself had appeared before the council to ask for the step. The rumor ran that soon all subsidies, even the whopping annual support for wheat and sugar, would be lifted.

The cheapest grade of cooking oil shot up from 17-c- to 38-c- a liter (current Manhattan price: 47-c- a qt.). In Buenos Aires good sirloin steak that had cost 18-c- a Ib. the day before sold for 28-c- (Manhattan price: 79-c-). A housewives' group called on Congressmen, persuaded anti-Peron deputies to introduce a resolution to investigate the high cost of living.

Some economists thought that putting food prices back into free play was a step in the right direction toward correcting Argentina's out-of-balance economy. Labor unions did not think so. They announced that they would seek a new round of wage increases.

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