Prices Rise in Israel As Result of New Economic Policy

The prices of many commodities and services continued to rise in Israel today as a result of the government’s new economic policy even as Parliament began a lengthy debate on the new policy.

In the Knesset the critics of the government opened their attack by demanding a vote of no confidence. The General Zionists, analyzing the new policy point-by-point, emphasized its weak points and charged that it had created “public distrust of the present government.” Moshe Sneh, Mapam leader, vigorously attacked the government for “undermining the workers’ living standards and driving the country toward unemployment.”

Making the first reply for the government forces, Finance Minister Eliezer Kaplan explained the working of the government’s new policy, which he said was an attempt to improve the economic situation by increasing output. He could not promise that the policy would be “100 percent successful,” but added that he was sure that the greatest portion of the program can be carried out if “all show good will and if all are cooperative.”

The cost of hospital services rose by ten percent today, while rentals which were not fixed have risen. Taxi fares increased 50 percent, although the government has granted no official rise. Urban and inter-urban transport companies are demanding increases while some of the bus companies went on strike yesterday, resuming service this morning only when assured that the government would grant them price increases within two days. The government is also expected to allow increases in the price of cement.

There is a great demand in the cities for goods whose prices are expected to go up shortly, and long queues formed at stores selling clothing and shoes. However, a degree of quiet was returning to the markets and even in the black market prices dipped slightly.

Meanwhile, a resolution demanding that the government fix the rate of exchange earned by citrus products sold abroad at one dollar to the pound was adopted in Tel Aviv last night by a convention of citrus grove owners. It was reported at the parley that citrus exports had earned 6,500,000 pounds sterling for Israel last year and that some 80,000 tons of citrus fruits had been sold locally. The growers demanded other concessions from the government, including an increase in the price of fruit sold on the local market.