ECUADOR: Simple

Years ago, Jose Maria Velasco Ibarra, now President of Ecuador, tried to learn accounting in a humble government job. His boss, according to an Ecuador legend, put him in charge of the petty-cash box. “Look,” he said. “On this page, the credit side, write down everything that comes in. On the other page, the debit side, write everything that goes out.”

At the end of the first day, young Velasco submitted his report. Two entries caught his boss’s eye. They were: “Credit: two nuns came in.” “Debit: ten sucres [$4.87]* went out.”

Now Velasco, high-minded and still “impractical,” is trying to revive his country, looted for centuries by “practical” rulers. But his view of financing has not changed. Recently, in dire need of money for vital public works, he noted the $6,500,000 which the Central Bank of Ecuador had earmarked to back the country’s currency. “It’s so simple,” he was heard to say. “The money is there. No one is using it. Just take it from one book and put it in another.”

The bank’s directors resisted, fearing for the currency. They tried to explain to Velasco the financial facts of life. But the President did not share their worries. So the board of directors resigned. The bank got new directors. President Velasco got the money.

Last week his countrymen had a new quip: “It was simple. Credit: Velasco came in. Debit: $6,500,000 went out.”

Present value:73¢.