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    "localId": "486499377",
    "label": "Report, Central Intelligence Agency, Spain, Situation Report 11",
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    "id": "486499377",
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    "contentType": "document",
    "title": "Report, Central Intelligence Agency, Spain, Situation Report 11",
    "citationUrl": "https://catalog.archives.gov/id/486499377",
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        "President's Secretary's Files (Truman Administration)",
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    "productionDates": [
        {
            "day": 15,
            "logicalDate": "1948-11-15",
            "month": 11,
            "year": 1948
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{
    "seq": 47,
    "pageIndex": 0,
    "type": "photo",
    "url": "https://s3.us-east-1.amazonaws.com/NARAprodstorage/lz/presidential-libraries/truman/hst-psf/602196/875502/875502-01-047.tif",
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    "ocrText": "Approximately three-fourths of the budget expenditures are covered by tax\nreceipts and other income such as the national lottery and State monopolies, and nearly\none-half is financed by borrowing. Nearly two-thirds of the borrowed funds are ob-\ntained through the sale of bonds to private banks. During recent years actual ex-\npenditures have exceeded budgeted expenditures by as much as 20 percent owing in\npart to the rapid rise in prices. As a result, supplementary allocations in excess of the\nbudgetary figures have been made, although both the 1947 and 1948 budget laws pro-\nhibit this practice.\nTax income is derived from a wide variety of taxes, both direct and indirect.\nIncome and profits taxes are the principal direct taxes while indirect taxes include\nuse and consumption taxes on some food products, gas, electricity, coal, a number of\nraw materials, a considerable variety of manufactured products, and communications,\nand luxury taxes on hotels, restaurants, and patisseries. Customs duties (indirect\ntaxes) also provide considerable revenue. In addition to the taxes mentioned, there\nalso are levies on inheritance, transfers of property, and real estate, and the cumber-\nsome revenue stamps on business papers and transactions. Since a very large\nper-\ncentage of the Spanish population do not pay direct taxes and are largely unaware\nof the incidence of indirect taxes, they do not realize the burden of increased Govern-\nment expenditures and are passive in their attitude toward the problem. Tax rates\nhave been increased for 1948 in an attempt to reduce the budget deficit and thereby\nreduce the inflationary pressure. This represents an effort on the part of the Govern-\nment to combat the rising cost of living.\nc. Foreign Debt.\nThe Franco regime has a good record of payment on foreign debts. It has not\ndefaulted on any payments and even assumed the obligations incurred by the Repub-\nlican Government. Without, however, a radical overhauling of internal economic\npolicies and a marked expansion in production, it is improbable that this good record\ncan be maintained in the future. Foreign indebtedness is increasing at a rapid rate.\nSpain is now borrowing from Argentina at a rate of 350 million pesos (87 million\ndollars) per year and has arranged to do SO over the next four years. Most of this\ncredit will be required for imports of food and other consumer goods. Financial repre-\nsentatives of Spain's large banks have sought additional private credits in the United\nStates to finance the importation of industrial equipment, fertilizers, livestock, and\nmechanical equipment, and such industrial items as coal, coke, scrap iron, and other\nmetals. They estimate the requirements for national recovery at 777 million dollars.\nBecause of acts and policies unfavorable to foreign capital, as well as the precarious\nsituation of the national economy, which is a source of latent instability in the regime,\nthe granting of long-term private credits in large amounts has been refused and is\nunlikely in the near future. Lack of confidence in the ability of Spain to repay foreign\nloans is reflected in the fact that potential lenders are demanding gold collateral as\nsecurity for any long-term loans.\n34"
}