Italy

«The Economist», 9 febbraio 1929, pp. 16-17

FOREIGN TRADE. – Excluding precious metals and Reparations deliveries and adopting the corrected figures of the Central Institute of Statistics, the figures for 1928 and previous years were as follows, those for November and December, 1928, being provisional:

The increase in the imports was due partly to the bad agricultural yields in 1927, which caused abnormal imports of foodstuffs, and partly to the increase of raw material imports in comparison with 1927, when industry was shy of embarking on big imports owing to the revaluation process. The increase in raw material imports should, in due time, lead to increases in exports. Already in November and December, 1928, exports were higher than in the corresponding months of 1927. The excess of imports over exports was bigger than in the six preceding years and in the pre-war years. If, however, we calculate it not in present gold lire, but in gold pre-war lire, according to the indices of the Milan Economical Board, imports shrink to 4,354 millions lire, exports to 3,032, and the excess to 1,322, a proportion of imports not much higher than in 1910-13.

Maize and potatoes felt the consequences of the terrible drought; grapes did well for the same reason; and better methods of cultivation brought good results for wheat, making it possible to surmount the difficulties of weather.

INDUSTRY. – Perhaps the best index of industrial activity is the production of electrical energy, which increased from 6,720.2 million kilowatts in the first 11 months of 1927 to 7,573.8 in the corresponding months of 1928. Imports of oil, benzine, and oil derivatives increased from 751.105 tons in the first 11 months of 1927 to 810,170 in the corresponding period of 1928; while coal decreased from 10,253,046 to 8,325,356 tons. But in 1927 stocks were being replenished after the British coal dispute. In the same period imports of jute increased from 46,688 to 50,484 tons; of raw cotton from 191.287 to 211,767; of natural wool from 32,434 to 40,599; of washed wool from 3,961 to 5,011 tons; of dried cocoons from 1,287 to 2,660 tons. Broken iron, steel, and pig-iron imports increased also from 651,526 to 801,906; copper from 53,821 to 69,575; lead from 14,424 to 24,575 tons; spelter from 8,821 to 9,304 tons; while aluminium fell from 2,918 to 668; and tin from 3,946 to 4,027 tons. Imports of nitrate of sodium increased from 46,119 to 70,452; of sulphate of ammonium from 12,344 to 13,475; of potash from 22,426 to 46,939; and other chemical fertilisers from 142,846 to 144,067; while those of mineral phosphates fell from 816,810 to 560,092 tons, and calciocyanamide from 29,593 to 21,196.

THE PASSING OF THE REVALUATION CRISIS. – The gradual passing of the revaluation crisis, which was at its worst in the concluding months of 1927 and in the first quarter of 1928, is indicated by the fact that the 1928 imports of raw materials, in contrast to those of 1927, show more increases than decreases. The liquidation of weak firms is continuing; monthly average failures, which were 617 in 1913 and 654 in 1926 and had risen to 886 in 1927, rose further to 933 in 1928. The number of unemployed, which varied in 1926 between 79,678 (June) and 181,493 (December), and in 1927 between 214,603 (June) and 414,283 (December), increased further in January, 1928, to a maximum of 438,211, decreasing regularly to a minimum of 234,210 in July, and rising in December to 363,551, or 51,000 less than the corresponding months of 1927.

Some index numbers are given below:

As to the wages, no up-to-date statistics are available for number index-making for 1928. It is probable that, while in 1926 wages varied between five and six times pre-war level, they are today about five times.

SAVINGS AND NEW ISSUES. – Deposits in postal saving banks, which had risen to 504 at the end of 1926 (basis 1913=100) had decreased during the revaluation crisis to 460 October, 1927. In November, 1928, they were again at 494. Deposits in ordinary saving banks rose similarly from 475 in June, 1927, to 562 in November, 1928. Deposits in the six largest ordinary banks between October, 1927, and October, 1928, rose from 569 to 635; of the People banks from 652 to 676; of the regional banks from 776 to 816. Net increases in the capital of joint-stock companies, which amounted to 2,128 million lire in 1923,4,895 in 1924, 8,032 in 1925, 3,931 in 1926, falling to 1,840 in 1927, increased again to 2,698 in 1928. In 1928 the issue was also authorised of 1,187 million lire of bonds and debentures.

MONEY AND STOCKS. – The official rate of discount, which had remained for years at 7 per cent., was lowered to 6.50 per cent, on March 5th, to 6 per cent, on April 1, and to 5.50 per cent, on June 25th, remaining there until, in the first days of the New Year, it was again raised to 6 per cent. Correspondingly, the private rate of discount from 8-8.50 per cent, at the beginning of the year decreased in summer and autumn to 5.25 per cent., again to rise slightly at the end of the year to 5.50 per cent. Prolongation rates, which had fallen to 5.50 and 6.25 in July and October, hardened somewhat in November and December to 6 and 7 per cent. The Bourse improved. According to the Bachi index number (base December, 1913=100) the highest level was reached in February, 1925, at 183.05. After that date there was a more or less continuous sinking of quotations, until the low-water mark was reached at 97.80 in June, 1927. In December, 1927, the index number was 123, rising to 129.40 in January, ,1928, to 151.28 in May, and closing the year at 141.34.

PUBLIC FINANCE. – The Treasury accounts for the financial years 1924-25 to 1927-28 closed with surpluses of 417,468, 436, and 497 million lire. The first semester of the current 1928-29 financial year closed with a surplus of 21 million lire. State internal debt, which had reached a maximum of 96,163 million lire on June 30, 1924, and was 90,361 millions on June 30, 1927, had fallen, thanks to the cancellation of the Treasury debt to the Bank of Italy as a consequence of the revaluation of the bank’s gold reserves, to 86,423 millions at December 31, 1927. At December 31, 1928, the total debt is 87,006 million lire, to which must be added the 100 million dollars of the Morgan Loan, reduced in the meantime to 95,177,650 dollars.