Budget – Savings – Railways – Unemployment

«The Economist», 5 novembre 1932, pp. 831-832

Turin, November 1

In past days the Fascist regime has been taking stock of its achievements in the ten years during which it has ruled over Italy. From the economic point of view, the leading idea in public speeches has been that achievements such as roads built or improved, lands reclaimed, harbours enlarged, waterworks and electric plants multiplied, railways electrified, towns beautified have been many and great, and they will in due time bear fruit. In the meantime, people must have faith and face the crisis courageously.

It is, indeed, unfortunate for Fascism, as for any other present Government, that such achievements are apt only to make themselves felt in the long run, while things are very indifferent in the short run. Italian economic indices clearly cannot be very different from those of other countries. Beginning with the State Budget, the period of post-war deficits was succeeded, from 1924-25 to 1929-30, by a series of Budget surpluses; but in 1930-31 a deficit reappeared at 504 million lire, increasing to 4,274 million lire in 1931-32 and to 1,054 million lire in the first quarter of 1932-33.

Hence the public debt, which had decreased from 95,544 million lire at June 30, 1923, to 83,675 million lire at June 30, 1927, increased again to 95,893 million lire at September 30, 1932. As the debt is not wholly dead-weight, but partly productive, it is hoped that in the long run the increase will bring in revenue to cover the interest charge.

Huge sums have lately been voluntarily entrusted to the State, about 6,000 million lire coming from the working and middle classes, eagerly bent on buying Post Office bills. Savers, excepting those who invest in their own houses or lands or businesses, lend exclusively to the State or other public bodies. The Association of Joint Stock Companies, which has just issued its year-book, shows that the amount of deposits and correspondent credits, which at the end of 1929 stood at 32,204 million lire in 278 joint-stock banks, had decreased at the end of 1931 to 27,033 million lire in 225 banks.

Railway goods traffic, a very sensitive index, is going from bad to worse. From over 60 million tons in 1929, it had fallen to 27.6 million tons in the first nine months of 1932, as against 33.6 million tons in the corresponding period of last year. The decrease is to the extent of some two-thirds due to the slump, and may therefore be considered of a temporary character, while the remaining one-third may be attributed to motor transport competition. On October 25th Signor Mussolini opened a new motor road between Turin and Milan, which cost about 125 million lire, a splendid work which will, however, increase the competition against the State railways. Similarly, a magnificent new road between Genoa and Turin and Milan for goods traffic will provide a timely outlet for excessive traffic in Genoa, when it is forthcoming, but in the meantime is proving a source of loss to the railways.

The growth in unemployment seems somewhat checked, the total increasing from 945,972 at the end of August to 949,408 at the end of September, as compared with a rise of from 693,273 to 747,764 in the previous year. The figures relate to unemployed reporting to the employment offices. The number receiving relief is much smaller. Up-to-date figures do not exist, but the latest published point to an increase from a monthly average of 2,395,602 “relief man-days” in 1930 to 4,016,948 in 1931 and 5,492,129 in the first quarter of 1932, corresponding to a yearly expenditure of about 250 million lire – not a large figure, but one to which must be added the relief given by local and co-operative bodies from sums raised by popular subscriptions.