Price Variations – Good Crops and Vintage – Cost of Living Rising -Working-Class Savings and Unemployment -The new Regulation of the Public Services

«The Economist», 8 dicembre 1923, pp. 1014-1015

Turin, November 24

Average wholesale prices have remained fairly stationary recently, as Bachi’s index numbers show:

The selected figures, up to April, 1923, are those of the highest and lowest average index numbers. Despite the stability of prices in general, particular variations are startling. Vegetable foods and miscellaneous vegetables have fallen most, owing to the excellent crops of this year. The wheat yield is estimated at 61 millions quintals, as compared with 38, 52, and 44 millions in the years 1920, 1921, and 1922 respectively. Internal prices of wheat have therefore fallen below the parity of foreign imported wheat. Imports can only be effected at about 110 lire per quintal, while home wheat is selling at 85, to the great discomfiture of the Italian producers. The cry for protection is again heard, curiously enough, though protection could only raise the cost of the imported commodity higher than 110 lire, while the internal price refuses even to reach the present parity. The vintage was also very good. Against 31.9 and 35.6 millions hectolitres of wine produced in 1921 and 1922, production this year is variously estimated at between 45 and 55 millions. Grape prices have been enormously reduced, the general average price at Casale, one of the most important markets in northern Italy, now standing at 77.6 lire, as compared with 173.7 last year.

Cost of living has not felt, as yet, the beneficial effect of favourable crops. Index numbers of the cost of living in Turin of a working family of two parents and three sons, taking the average for the first half of 1914 as 100, is as follows:

The rise in the cost of living, which has taken place since July, has two main causes; the rise in house rents, which came into force on July 1^st, when the system of free bargaining, with the right of appeal to judicial arbitration, was substituted for legislative restriction, and the rise in coal and wood due to the stoppage of German reparation deliveries.

Perhaps as a consequence of the persistent high cost of living, the increase in saving deposits is slowing down. The deposits of the ordinary savings banks, which were 2,727 millions lire on December 31, 1913, rose to 9,294 millions in December, 1922, and went to 9,896 millions by January 31, 1923, owing to the capitalisation of interest due to depositors for the year 1922. At June 30th last the sum was 10,107 millions, an increase of only 2 per cent, in the five months. On the other hand, the public pawn offices recovered the customers lost during the war, and in the immediate post-war years. The number of new pawn-loans was 1,071 in December, while loans totaled 146.6 millions lire. In the months of December, and August, 1923, the numbers had risen to 1,177 and 1,337 respectively, and the sums loaned to 176.4 and 199.6 millions lire. Unemployment is, however, diminishing; 270,214 at April 30th, 243,928 at May 31st, and 216,287 at June 30th. The only exception to the decrease is the chemical industry. The greatest unemployment today is in Lombardy, with 44.184 unemployed, while the lowest is in Basilicata with only 76. The working-world seems thus to be passing through the hard times of high prices and high costs of living, perhaps with some inroads on past savings, but with a noteworthy measure of success in the main.

The most important piece of legislation in the current month was the Royal decree of November 11, 1923, on public service rearrangement. All categories of public servants, excepting railway men, are comprised in the regulation. The number of public servants was as follows:

The A, B, and D figures are legal or theoretical ones, i.e., of the number of public servants who ought to be on the pay-roll if all the places were occupied. In practice, owing to dismissal, deaths, &c, the actual number is always lower than the theoretical one. Signor De Stefani, in the new regulation, has contrived to keep the number of public servants not only much below the present theoretical maximum number, but also somewhat below the actual number. This amounts to expressing the hope that the actual number will be even lower. It is, alas, well over the 1914 figure, specially for the non-commissioned military officers, whose number has greatly increased in consequence of the increased duties laid on the police force (Reali Carabinieri) and on the Excise and Custom armed force (Guardie di Finanza).

The most interesting feature of the new regulations is the uniform classification of all public servants, military and civil, into 13 classes. The system is akin to the prewar Austrian system. All public servants are assimilated to various military ranks, and enjoy the same salary which progresses uniformly from class to class. This Royal decree will probably be the Magna Charta of the public services in Italy for a long time. Perhaps the principal object of this general militarisation is not so much economy (to begin with the reform, with consequent variations of pensions to retired servants will perhaps cost 300 millions lire yearly), as the restitution of hierarchy and discipline among a body which at a certain moment threatened to become a mob. In the war and early post-war years, the salaries of humble servants had become about as high as those of departmental heads and great judges. When a section of public servants menaced stoppage of work, their salaries were increased under the stress of fear. Soon after agitation spread among the others, and the cost went up by leaps and bounds. The new regulations recreate a hierarchy, and put all servants of the same class on an equal footing. It will not be possible to increase the salaries of military men, or of postal servants, or of teachers only. All will be obliged to go up or down at the same time, and it is hoped that the new system will give force to the government to resist sectional pressure, as a concession to a section will imply an all-round increase of cost.