To the Promised Land

The U.S. need not worry that a strategic embargo will damage private industry in Cuba. It no longer exists.

After an all-night Cabinet session last week, the government nationalized 382 businesses, including 105 sugar mills, 13 department stores, 18 distilleries, 61 textile factories, eight railways and all banks, save the Royal Bank of Canada and the Bank of Nova Scotia. Next day it abolished ownership of apartment houses in effect, by decreeing that tenants who continued paying rents for another five to 20 years (depending on the building's age) could thereafter take permanent possession.

Thus ended Cuba's long association with free enterprise. Having already expropriated 80% of the $1 billion U.S. investment in Cuba, the government now dropped the ax directly on local, Cuban-owned businesses. Many had already been intervened, as the phrase goes, on a "temporary" basis; now the Soviet-style takeover was declared irrevocable.

Out Go the Lights. The move will only intensify the chaos in Cuba's economy. For some time Havana has been exchanging its prosperous Western look for Iron-Curtain drab. Shortages, controls and bureaucratic mismanagement are strangling what was once the hemisphere's gayest city. Street lights go out and stay out for lack of light bulbs; hotels are deserted; grocers ingeniously display dwindling stocks to disguise bare shelves, and housewives spend their days in weary search for disappearing necessities, from razor blades to black beans. Now, as TV sets and air conditioners break down, they stay broken for lack of parts. And except for petroleum, which Soviet tankers bring, basic materials such as tinplate and newsprint are in short supply.

Import shortages are only part of the headache. Far worse is the effect of government operation of Cuba's internal commerce. Inept managers are losing more than $15 million a month in operating once-profitable firms. The giant Institute of Agrarian Reform sent technical ignoramuses to operate flourishing poultry and cattle industries. Result: meatless and chickenless days once weekly and a limit of two eggs per purchaser.

Down Go the Payrolls. Businessmen still ostensibly in control of their enterprises have been living off inventories for the past nine months and are down to bedrock. It would take an estimated $800 million to replenish their stocks. Forced to retain all their old employees at the oldtime wage rates, many pray for "intervention." Yet the workers who once cried for intervention are no longer so anxious to see the government in command. Planners have a habit of chopping wages and personnel in "the interests of the state." When the Havana Hilton became the Havana Libre and a government enterprise, the payroll was cut 50%. A few weeks ago, 300 employees of a large Havana department store voted on whether to ask for government intervention. The decision: 98% against.

Despite Castro's boast at the U.N. and elsewhere that he has reduced unemployment, some 700,000 workers are jobless, precisely the number under Batista. Downtown Havana's Galiano and Obispo streets are spotted with unemployed trying to peddle combs, hats, cigarettes, small leather goods. Those who have jobs face rugged taxation, even at the lowest unskilled wage level; a 3% income tax, a 4% "voluntary contribution" for industrialization, plus social security, union dues, and one-shot pass-the-hat campaigns cut the average worker's take-home pay 15%.

A few trade unions, e.g., the bus drivers, have tried to resist the government's emasculation of the unions. Onetime Castro Labor Boss David Salvador, ousted for Communist Jesus Soto, has gone underground, but most unions submit quietly, even beat the drums for "voluntary pay reductions" to help the dictatorship.

Inevitably, with government spending running at $23 to $25 million monthly and receipts down to $9,000,000, Castro has turned to the printing presses. Money in circulation has doubled in 22 months of Castro. The peso, once worth $1, is down to 28-c- on the realistic black market, and Cubans with savings are on a buying spree to convert their depreciating currency to furniture, jewels, paintings, anything of value. They wonder, though, how long the government will allow them that freedom.

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