"Audacious Nationalism"

In Spain's sleepy provincial town of Reus, Judge Alfredo Fournier has spent most of his 15 years on the bench settling peasants' disputes over stray pigs. Last week, nervous Judge Fournier had a much bigger job; he auctioned off the $56 million Barcelona Traction, Light & Power Co., Ltd., which controls Spain's biggest public utility. As everyone expected, it went to crafty old Juan March, onetime tobacco smuggler who has become Spain's biggest businessman.

Barcelona Traction was developed by an international electrical syndicate long headed by North Carolina-born Dannie Heineman, 79, a globetrotting engineer who has built electric and street car systems all over Europe and South America. At the end of Spain's civil war, during which all currency exchange was blocked, March began grabbing for Barcelona Traction. He got his great & good friend Francisco Franco to continue the ban on the export of the company profits to its Canadian headquarters. Without the profits, Heineman could not pay the interest on Barcelona's bonds, which are all held outside Spain, and they accordingly tumbled in price. March snapped them up.

In 1948, after Barcelona Traction had been charged with "irregularities," such as smuggling out capital in violation of the freeze, March struck the death blow, got Franco's courts to declare Barcelona bankrupt. Since Heineman's group held all of Barcelona's common shares in Canada, the court ordered "duplicate" shares printed in Spain. Last week's court formality at Reus was to auction off these counterfeit shares to the highest bidder. The only bidder turned out to be Juan March's lawyer, who bought control of the big utility for 10 million pesetas ($900,000).

The buyer had to pledge to pay off -L-11 million sterling in delinquent interest to Barcelona's bondholders. To Buyer March that will be a pleasure, since he owns all the bonds and thus will pay -L-11 million to himself out of Barcelona's fat profits. Spain's Dictator Franco, who would like to get U.S. venture capital to back projects in Spain, has hailed March's capture of Barcelona Traction as "audacious nationalism." It was so audacious it would probably scare U.S. risk capital away from Spain for a long time to come.

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