Italy’s foreign trade

«The Economist», 14 maggio 1910, pp. 1078-1079

A conspicuous feature in the external trade of Italy during the last 20 years has been a constant and increasing excess of the imports over exports, as the following figures show:

Italy, as the readers of the Economist are well aware, possesses a legal system of paper money à cours forcé. The Italian issue banks (Banca d’ltalia, Banco di Napoli, and Banco di Sicilia) have their chests filled up with gold and silver coin, but they are not bound to barter it against their notes; and, in fact, gold and silver take no visible part in the ordinary business transactions of the Italian traders. Notwithstanding this rather abnormal and unsound situation of the Italian system of currency, and notwithstanding the increased “balance of trade” since 1902, the rates of exchange have scarcely reached the gold point, and have been for nearly the whole time not against but for Italy:

During the decade 1900-9 the imports of gold (ingot and coin) and silver (coin of the “Unione Latina” only) have exceeded the exports by 623.8 million lire, according to the statistics below:

Italian statisticians are not a little puzzled to give an explanation of these facts. Commercial theory cannot be called in question, and the “balance of trade”, apart from the inevitable inaccuracies of statistics, must have been made good somehow or other. But it is not an easy task to discover and discriminate between the different sources of revenue, which have helped the Italian consumers to pay for their surplus of imported merchandise. There is, however, a general agreement that much importance must be attached to the remittances of Italian emigrants, particularly of those who have settled in South and North America.

Italy is a country of high birthrate, and the natural tendency of her people to emigration has been increased by her Protectionist policy, which has proved strongly against the interests of the great mass of agriculturists, and only profitable to a little combined band of landlords and privileged manufacturers. These baneful effects of Protection have been the more sensible in the southern provinces, because of the crisis in the exporting trades and the heavy taxation of agricultural implements and staple manufactures, produced pretty exclusively by mills situated in Northern Italy. Besides, as the late Marquis di Rudini clearly pointed out, the corn duty has reacted against any progress of agriculture from the dismemberment of the largest estates, and has enabled the proprietors of these, thanks to the raised market value of cereal crops, to continue their unscientific and even uncivilised methods of farming.

That agricultural Protection has been a complete failure is quite evident from the increased imports of vegetable and animal foodstuffs:

So far from fulfilling its promises of more employment for the Italian agriculturists, Protection has swollen the flow of emigration:

A special Commission has been appointed by the Government to inquire into the causes of the apparent contradictions presented by the statistics of external trade. At the first meeting of this Commission, the present Premier, Signor Luzzatti, expressed his opinion that the total amount of the yearly remittances from the Italian emigrants comes near a thousand millions of lire. In the course of his speech, he pointed out that it is calculated in a recent report presented to the U.S.A. Congress by the Commission on Immigration that 85 million dollars are yearly sent to their homes by Italians immigrated into the States.

The fact is that, besides the millions of Italians who have settled permanently in the two Americas, a large mass of laborers regularly every year abandon their native land in order to earn some money by harvesting in Argentina. There are in some provinces of Southern Italy many villages which at certain periods of the year are unpeopled of their whole effective male population, and are reduced to women, children, and feeble old men. Permanent and temporary emigration, then, has been, for the poorer classes of the population, a safety valve, as it were, for escape from the total ruin of Protection.

The selfish and covetous policy of the agrarian magnates has carried with it its own punishment, and in the poorest provinces of the South, as in the Basilicata, rural wages have risen to limits which render quite impossible farming on the old non-competitive methods of culture. But the large landed proprietors, blinded by the spirit of monopoly, instead of yielding to the evidence of facts, turn piteously to Parliament, imploring that a further rise of wages may be prevented by means of some ill-contrived machinery for the legal hindrance of emigration.