Italy

«The Economist», 9ottobre 1937, pp. 69-70

REVIVAL IN INDUSTRIAL EMPLOYMENT. – Turin, September 25. – Industrial activity is rapidly increasing. The industrial North is the chief beneficiary. The general index of employment (1929=100), which went down to 79.41 in 1933 and 82.99 in 1934, increasing to 93.95 and 94.90 in 1935 and 1936, was in March last 100.67 and in April 104.01. The index of number of hours worked, after touching bottom in 1933 with 75.11, increased steadily from 77.80 in 1934 to 81 in 1935, 80.99 in 1936 and 91.40 in April, 1937. As employment in industry increases, employment in public works and land reclamation is reduced: the average number of hands daily occupied decreased from 261,960 in 1935 to 241,805 in 1936. In June, 1937, the total was 217,315, against 263,551 in the corresponding month of 1936. Activity is also decreasing in the building industry: 102,691 new rooms were authorised in 1933, 173,866 in 1934, 177,860 in 1935 , 91,681 in 1936 and 49,188 in the first six months of 1937.

THE CHANGING BALANCE OF FOREIGN TRADE. – The figures of international trade are being keenly discussed in circles concerned with economic prospects in this country. At first sight the deficit in the balance of trade seems to be increasing. Excluding trade with the colonies in 1936 and 1937, the figures for the first six months of recent years are as follows:

After the slump of the sanctions year imports and exports have more than recovered the lost ground. As, in the meantime, the lira was devalued by 41 per cent., adjusted figures are given, and the resulting deficit of 1,864 million lire is then comparable with the previous deficits.

As foreign travellers have arrived this summer in unprecedented numbers, the commercial deficit is expected to be easily compensated by the excess of invisible items. The returns of the 23 clearings now in operation give the following totals:

The figures for the Anglo-Italian clearing, at the above dates, showed credits in the favour of Italy of 36.6 and 40.8 million lire respectively. But the real problem is not the balancing of international payments but their level. Imports and exports both remain near the lowest level of the post-War period. This seems to be the inevitable fruit of bilateral balanced agreements, monetary clearing and all the paraphernalia of modern protectionism. The table below compares Italian trade with her main customers in the first six months of 1936 and 1937:

Clearly, the alignment of the lira has given, quite apart from the abolition of sanctions, a fillip to exports; but the favourable effects of it are progressively vanishing in the face of the increasing cost of imports.

RECOVERY AND THE STATE MONOPOLIES. – The report on the State railways for the fiscal year 1935-36 gives some interesting figures concerning the financial results of the coal and metal trades monopolies, both of which are administered by the State railways. They received 240.5 million lire from direct coal sales, 16.6 millions freights reimbursement, 0.9 million miscellaneous revenue, and 23.0 millions monopoly dues from private merchants on their direct purchases, giving a total revenue of 281 million lire. The expenditure was 175.2 millions purchase price, 52.9 millions freight, insurance, etc., 1.4 millions general expenses, or 229.7 millions in all. The net profit was thus 51.3 million lire, and of this 10 millions went to reserves and 41.6 millions were paid into the State railways exchequer towards extraordinary capital expenditure. In the same fiscal year the State railways obtained a profit of 24 million lire from the metals monopoly, of which 13.8 millions went to reserve and 10.1 millions were paid to the State Railway exchequer. The railways’ opinion is that these huge profits were obtained without increasing the prices which would have been otherwise paid by customers, but the truth of this suggestion is very difficult to decide since prices have changed a great deal since the monopolies were established.