Gold Reserves – Restriction of Note Issue – Changes at the Banks – Company Meetings

«The Economist», 15 aprile 1933, pp. 809-810

Turin, March 27

The shock of the United States banking crisis was well supported by Italian bourses and markets. Perhaps the most visible effect was an acceleration in the change from the gold-exchange system to a gold reserve, which was already in view. The lowest figure of 7,074.8 million lire for total reserves of the Bank of Italy on July 10, 1932 (5,676.4 gold and 1,398.4 devisen), had increased to 7,168.8 on February 10, 1933 (5,865.2 gold and 1,303.6 devisen). Suddenly the change from devisen to gold was made more rapid: on February 20^th the devisen went down to 1,238.8, and on March 10th to 912.8 million lire. In the meanwhile gold increased from 5,865.2 on February 10th to 5,939.3 on February 20th, to increase further to 6,225.4 on March 10th. Total reserves are not much changed at 7,138.2 millions.

The seasonal decrease in the note circulation, which in the past year reduced the amount of notes issued from 14,294.8 million lire on December 31, 1931, to 12,904.2 on May 20^th (minimum 12,650.8 on June 20th), is at present somewhat anticipated. Beginning at L. 13,672 million on December 31, 1932, the circulation went already on March 10^th below the 13 milliard water-mark, at 12,913.5 million lire.

Markets, if not buoyant, are more firm than of late, quotations going down more gently: after the fall from 108.20 in the last week of January to 104.76 in the last week of February, the average – according to the new Borsa index – for the week from March 6^th to March 11^th was 103.54. In some sections, such as iron and metal, chemical, real estate, food, navigation, and miscellaneous securities there was a slight rise.

The news of the month which has received most comment is the change of the men at the helm of the Banca Commerciale Italiana. The general manager (amministratore delegato), Signor Giuseppe Toeplitz, retires. A man of exceptional ability, he guided the bank through many difficulties. Age compels him to retire; but he remains on the Board of Directors and will probably be elected Vice-President (the President is Senator Conti) in a reduced Board of only eleven members. Signor Toeplitz will be succeeded by Signori Michelangelo Facconi, an experienced high official of the Bank, and Raffaele Mattioli, a young man of 38 years of age, rapidly rising from the private secretaryship of Signor Toeplitz to the leadership of the Bank. Along with Signor Beneduce, the head of the Institute of Industrial Reconstruction and of various other public financial bodies, Signor Mattioli is now one of the outstanding new men in Italian high finance.

Reports of shareholders’ meetings offer better reading than might have been surmised. The Snia-Viscosa report reveals a percentage of loss due to insolvencies of only 0.28 per cent, in 1932, a reduction of frozen credits from 35 million lire on September 30, 1931, to 1.7 millions on December 31, 1932; a reduction of salaries and other expenses of the central office from 2,700,000 lire in 1929 to 890,000 in 1932. The Lombard Electricity, as all other electricity companies, was obliged to increase its sales for less profitable uses, and 251 million Kw. out of a total of 498.3 million Kw. sold come within this category. Still, even in these circumstances a net profit was obtained of 19.1 million lire, and a dividend of 4 per cent, was declared. In the textile field one of the oldest wool-weavers, the Lanificio Rossi, shows a big reduction in the deficit, so that a dividend of 6.66 per cent, can be distributed. Reduction of costs, elimination of doubtful credits, profitable sales at low prices, these are good omens. However rare, good reports of this sort are in March, 1933, more frequent than in March, 1932. To some extent they counterbalance the ever-increasing number of unemployed, which reached at the end of February 1,229,387, a new record, against 1,147,945 a year ago.