ALLENDE FURTHER TO RIGHT

Chilean president Salvador Allende has dropped his deputy Economics Minister Pedro Vuskovic in a cabinet reshuffle which takes the Popular Unity government far to the right.

Vuskovic, member of Allende's own Socialist Party, was a determined advocate of further nationalization measures. He was dropped after secret talks between Allende and the Christian Democrat opposition.

The cabinet reshuffle implements a deal between the government and the Christian Democrats, who have been demanding a halt to plans for extension of nationalization. Allende's move had the backing of the Communist Party, which is on the extreme right of the Popular Unity coalition.

The Stalinists and the Christian Democrats had accused Vuskovic of destroying business confidence and causing food shortages with his nationalization measures. Allende has now announced that leaders of the Christian Democrat Party are joining Popular Unity in a joint commission to define the three sectors of the economy: private, state and mixed In addition, the president appears to have accepted the opposition's phoney programme of so-called 'worker participation'-designed as a substitute for nationalization. In a broadcast announcing the reshuffle, Allende said the government hoped to 'open the way for worker-self-managing companies defined by mutual agreeThe latest moves represent sharp swing the right along the so-called peaceful road to socialism'. They are an open betrayal by Allende and the Stalinists of their electoral promises to the Chilean workers and peasants.

The Stalinists have been trumpeting about 'socialist advance' in Chile ever since Allende came to office 19 months ago. But despite the measures already •taken to implement the so-called 'Chilean Road to Socialism' (a Latin American version of the British Communist Party's pacifist-reformist programme), the big monopolies still have the decisive say.

When the Popular Unity tone, i or 5000 government took office tions, total of 35,000 industries of all types, controlled 50 per cent of the capital invested in Chile's manufacturing sector.

Economic studies (included those of the present undersecretary of economy, Oscar Garreton; the CESO organization of the University of Chile; and CEREM of the Catholic University) have revealed the existence of a monopoly in all industrial sectors. A study done by the Economics School of the University of Chile, for example, showed that in 1971, from a group of 833 units, only 227 or 25 per cent controlled 82 per cent of the capital, 80 per cent of total assets and more than 76 per cent of gross income.

This picture is not complete, however. These 227 companies, or the 144 mentioned above. absorb almost all the capital and income derived from manufacturing activities. According to their own list of shareholders, a closed group of ten clans, closely interconnected among themselves, controlled not only manufacturing but almost all productive activity in Chile.

These ten groups control the boards of directors of all the big manufacturing corporations (with the exception of the completely foreign companies).

Some of the groups own only 15 or 16 per cent of the shares, but even this low figure is sufficient for them to monopolize the boards of directors.

An example of this is the textile sector where two dominant groups (the Yarur clan and the Said-Hirmas group) controlled (today this sector is under state control) more than 20 large companies with shares that at times were lower than 20 per cent of the total.

The Alessandri-Matte group, which has connections with the Bank of South America, controls 82 corporations, big and small, from lumber and pulp industries to metals, chemicals, cement, etc. In each important industry where it has almost absolute control, it has a miniamount of shares but large enough to ensure its representatives a place on the board of directors.

With each nucleus using such manoeuvres, the final picture is a monopolistic group with close interrelations, a big family which one economist defined as a 'super group'.

Each time a clan has begun to increase its scope of action, it uses this interlocking system. Yarur, for example, operating through a relatively new bank, the Credit and Investment Bank (now nationalized), had healthy growth and prosperity rates. In 1962 it had financial relations with only two other clans—the Alessandri-Matte (through the Bank of South America and the multi-group related to. the powerful Bank of Chile.

In 1970 Yarur, in addition to having increased its volume of operations in the banking sector, had extended its influtions with the Mortgage Bank, founded during the Frei government, and is now nationalized. Consisting of a group of impresarios with high technical skills, this nucleus, unlike almost all others, does not have family interrelations nor a single leader, with the exception of financier Carlos Vial Espantoso.

In a few years this brain trust developed their field of action to the point where they were competing for hegemony with more powerful groups in strategic industries. In less than eight years, for example, they obtained control of the board of directors of the powerful South American Steamship Company (one of the 23 companies with more than 2UU million escudos ann of capital, still not nationalized), the main industries of the durable consumer goods sector, the most important sugar sector (CRAV), a petroleum company (COPEC), addition to executive posts in the Bank of Chile, the most powerful credit organization in the country.

Naturally, there is a great deal of interlocking with foreign capital; during the last six years US industrial investments increased by more than 110 per cent.

US penetration in industry is most blatant in the powerful industrial-financial empire in the US today and is vic president of Pepsi Cola Inte:

The Edwards clan owns 1 corporations but influences investments; they control tr 11. press world, the beverag industry, and exert stror influence on insurance con panies,' the tood industry, fist ing industry, etc.

The Chilean IBEC Financi: Company operates in almost a these sectors. More than 66 pr cent of its shares belong 1 the International Basic Ecr nomy Corporation which i turn belongs to the Rockefell grOm 1969 IBEC was active i all sectors of the Chilean ecr nomy: foods, metals, chem cals, etc. In the decade of th 1960s the most powerfi groups had achieved such a interlocking of directorate that they controlled the entir power structure in industry.

In the food sector, 12 con panies have more than 50 pr cent foreign capital, and fiv companies have from 20 to 4 per cent. PURINA, fc example, has 80 per cer foreign capital. In the beverag sector eight corporations hav more than 50 per cent foreig capital; in footwear two con panies (CATECU and SOINCA are 100 per cent toreign cap talized; in metallurgy 17 bi companies are foreign; i in chemicals, 44.2 per cent ‹ r, all investments belong to I- foreign financiers.

EI Popular Unity's original le programme envisaged establisha- ing state control over at least es 144 of the main corporations mentioned above. The governr- ment. would intervene because of irregular financial practices; confiscate products and purchase shares through the Ministry of Economics.

At the latest count, these tactics have been used against 79 oI the biggest companies and these have been brought particularly—or in a few cases totally-under state control. Only about a quarter of the enterprises ear-marked for take-over have in fact been nationalized to date.

Among them are the banks vately-owned monopolies. valay ownta monopolies However, a great part of their power is still intact and they have proved highly successful in using their parliamentary support to knock back the government's efforts to take them over.

Allende's agreement with the Christian Democrat opposition on dropping plans for further wholesale nationalization results from a lengthy parliamentary deadlock over the opposition's Constitutional Reform Bill, which attempted to write protection of big business interests into the constitution.

Allende's clamp-down now means that the right-wing opposition will press forward with even greater force than before. They want to take away the gains the workers have made through the Popular Unity government. By their capitulation before big business, Allende and the Stalinists are opening the way for big business to deal crushing blows against the workers' movements.

BRITAIN'S BIGGEST LANDLORD The biggest landlords in falling by about 6 per coach-and-horses through And with the increasing a loophole in existing off flats as leases ran out, the PROI 6 Meertens Prode, Filtry Juno 25, 1972 London have driven a year. the legislation.

Tenants, however, do have June 1970 and later incorporated into the so-called 'fair rents' Bill.

Until the end of last year Stern was the managing director of the Freshwater group. He then broke away from the group — taking substantial property holdings with him. He was the brains behind Freshwater's expansion. It ironically came at a time when other landlords moved out of rented accommodation, complaining bitterly of Labour's 1965 Rent Act. (now the 1968 Rent Act).

When Stern left he took they found out what the regulated rent was. They are now paying the old rent.

Other Stern tenants in West London have found themselves paying virtually double what the previous tenants paid in rents. In other blocks, Stern has given notice he intends to increase rents 50 per cent when leases fall The amazing situation has developed now where the landlord is now paying the tenant. Freshwater has already paid back over £6,000 to tenants in one London block. In Camden paid by tenants when it came into force in December 1965. This rent level is known as the rent limit and applies until a new rent is : decided by the rent officer. INCREASES The only sums that can be added to these limits are increase in rates, increases in the costs of providing services to the fiat, or 12, per cent a year of the landlord's expendi. covery has meant, however, that tenants who have been paying excess rent for longer than that period will never get their money back.

Although tenants in this position could recover rent and maintain security of tenure through their leases, the Tories will sweep this limited protection away with the Housing Finance Bill. Its intention is to make lawful joint agreements 'freely' entered into by a landlord and tenant for a rent which under the present Açt would not be recoverable by the landlord It is not surprising that in anticipation of such a Tory windfall, landlords have been willing to pay back excess rent.

There is, however, more to the tale.

One tenant in East London recently got a letter from Freshwater asking for the 'accrued amount. Following the registration of a new rent, Freshwater sought to have the new figure paid retrospectively from the date of application for registration. properties state that an outgoing tenant must 'in the last three months of the tenancy, completedly redecorate the interior of the flat' One former tenant last year was sued by the company for £220 in respect of dilapidations on the flat.

The tenant refused to pay and the tenants' association was told outside the court that Freshwater would accept half the claim. The action was dropped and the claim settled.

One old lady got a bill for almost $150. Her solicitor Above left: Ex-Freshwater execu tive, William Stern. Above: the Freshwater headquarters in Shaftesbury Avenue.

increased rents has very important financial implications for such firms. It is not the income that is the main question, but an increase in the value of the property itself that is at stake.

The mechanics of financial leverage are devastatingly simple. Blocks of flats are bought on a mortgage and increased rents. will put up their value.