The International Balance of Payments -New Savings and their Investments

«The Economist», 5 gennaio 1924, pp. 19-20

Turin, December 26

Very wild statements have been published from time to time about the international balance of payments between Italy and foreign countries.

Fortunately an inquiry by Professor Jannaccone, published in a new edition of “Documents on the Financial and Economic Situation of Italy”, presented by the Minister of Finance, Signor De Stefani, to Parliament, gives, for the year 1922, a new estimate of the complete balance of payments (in millions of lire):

The balance of payments last year was thus closed very favourable to Italy. It should be added that, while the 412.8 millions of public debt bonds were repaid to foreign Governments, such as Brazil, &c, who, during the war, sold goods to Italian Governments without payment in cash, the 460 million lire of bonds sold in foreign countries cannot be considered as true debts to foreigners, as it is highly probable that they were bought by Italian emigrants, who will reinvest the yearly accruing interests in Italian securities.

The above is an official, i.e., a very prudent, estimate, whose errors, if any, are on the adverse side. A private investigator, Signor Mazzucchelli, author of an interesting booklet, “Dati finanziari italiani”, published by the Credito Italiano, draws an even more favourable picture for the same year, 1922 (millions of lire):

In 1922 we invested in foreign countries or paid debts to foreigners up to 1,250 million lire, while we sold securities or indebted ourselves only to the extent of 500 millions, and such securities were, moreover, sold to Italians living abroad.

Various other interesting figures could be extracted from Signor De Stefani’s report, or Mazzucchelli’s brochure. Among other things they show that the gold-value of the lira, after touching bottom in 1920, has not varied much in the last three years. This fact was favourable to savings, which can be said to have increased in proportion to the depreciation of the lira. Deposits in saving and other banks were:

Correspondent accounts – such is the name by which many current deposit accounts are styled in Italy – in banks with more than one million lire capital were:

The total of national savings invested in banking deposits, current and correspondent accounts, amounted, according to Signor Mazzucchelli, at December 31, 1922, at 50 milliards lire, and increased to 53 milliards at June 30, 1923. The new savings invested in State bonds, public and private securities, banking deposits, current and correspondent accounts, house building, industries, agricultural improvements, and in various other sundry ways may be estimated in all for 1922 at 12 milliards lire. In 1891 the then director general of the National Statistical Service, Signor Bodio, estimated the annual increment of the national wealth at 500 millions lire. Even after taking into account the depreciation of the lira, the present 12,000 millions, brought down, for the sake of comparison, to 2,000 millions [gold-1891] lire, compare very favourably with the 500 millions lire which was the figure for that date. It is significant that new savings are being increasingly invested in industrial enterprises. The number and capital of joint-stock companies have increased as follows:

The few figures given above may be taken as a good omen for the economic progress of Italy in the New Year.