Sapir Indicates He May Reconsider Treasury Move to Raise Prices

Finance Minister Pinhas Sapir indicated last night that he might reconsider the Treasury’s decision to raise prices of basic commodities in the wake of the devaluation of the Israeli pound and thereby avert workers’ demands for higher wages. Sapir, addressing an audience of industrialists, told them that they too must make sacrifices for the benefit of the national economy. “There is no reason to cry.” Sapir said, observing that businessmen have been doing quite well. Sapir’s dispute with Histadrut secretary general Yitzhak Ben Aharon over the price rise was not settled at his meeting with Histadrut leaders yesterday. But the Finance Minister appeared ready to roll-back the cost of bread to its pre-devaluation price and to reduce the prices of other essential commodities such as eggs, milk and oil. Ben Aharon, after consulting with experts, said that he was convinced there was no need for higher prices on essentials. He said if the prices were not reduced Israeli workers would demand full compensation and would not agree to a wage freeze.

In another important economic development today, the Housing Ministry published an order freezing the price of apartments until Dec. 31. The freeze is based on the price as of Aug. 15, 1970. Under the order signed by Housing Minister Zeev Sharef, an apartment may not be sold for a higher price without special permission from the Ministry. The order applies to prices quoted orally or in writing. Complaints of alleged violations may be submitted to any one of 22 bureaus, it was announced today. Where no contracts exist, the complainants were advised to bring witnesses or other evidence of an unauthorized price hike. Sharef told a meeting Friday of private contractors that the price of flats was bound to rise but promised that his ministry would do everything in its power to hold back the increase. The price rise is not an immediate result of devaluation but has been going on for the past two years due to the housing shortage. Sharef said devaluation should cause no more than a four percent increase in contractors’ costs. Meanwhile, the price control board was at a loss to control or roll-back the prices being asked for synagogue seats for the high holidays. Many complaints have been received that the seat prices have been hiked from ten to 30 percent over last year although there is no foreign currency component involved as in other goods and services that have been subjected to price rises. But the board can find no regulation applicable to synagogue seats.