Unemployment – Wheat Sowings – Bank of Italy

«The Economist», 26 agosto 1933, p. 410

Turin, August 21

Business indices are encouraging. The numbers of building permits, after falling from 187,355 rooms in 1929 to 81.568 in 1932, increased to 23,793 rooms in the first quarter of 1933, against 21,378 in the corresponding quarter of 1932, and 29,659 rooms in the second quarter of 1933, against 21,373 in 1932. The increase may be attributed to the anxiety of builders to have new houses ready before the end of 1935, when the 25-years tax exemption will no longer be granted. Building activity is also stimulated by the policy of slum clearings in the biggest cities; against 4,610 rooms demolished in 1927 the corresponding number was 5,329 in 1928, 6,857 in 1929, 6,502 in 1930, 11,347 in 1931, and 11,579 in 1932. Unemployment figures are also improving. In 1931 and 1932, after the February maximum, the minimum was reached at the end of June, July again showing a rise. In 1933 the decrease continued in July. The figures are as following: -1931: February, 765,325; June, 573,593; July, 637,531. 1932: February, 1,147,945; June, 905,097; July, 931,291. 1933: February, 1,229,887; June, 883,621; July, 824,195. Thus in 1933 not only was the decrease more marked but it seems to be something more than seasonal. Unfortunately, the classification by industries was changed in April, 1933, to suit the legal classification of working-men in the corporative associations. The improvement appears, however, to be fairly well diffused, except in textiles and chemicals.

At the end of the last session (August 9th) of the Permanent Wheat Committee no figures were made public of the 1933 crop; which is said to be of very good quality. But a hint was given that efforts at propaganda by agricultural authorities should be concentrated on keeping constant the surface sown. The increase in new redeemed lands should be compensated by reductions in the least favourable lands. If the price is to be kept at the 900 lire per ton level the internal production must be limited.

The fiscal year closed provisionally on June 30, 1933, with better results than in the past year. The deficit decreased from 4,274,300,000 lire in 1931-32 to 3,937,700,000 in 1932-33. The decrease was the consequence of a decrease from 19,033,300,000 lire to 17,965,000,000 lire in revenue, and of a greater decrease from 23,307,700,000 lire to 21,903,600,000 lire in expenditure. The increase in the internal public debt was greatly inferior to the deficit: 1,413,000,000 lire, from 95,572,000,000 lire at June 30, 1932, to 96,985,000,000 lire on June 30, 1933. The explanation is the usual one: cash outgoings are less than the budgeted expenditure, some payments being postponed until legally due, for instance on the completion of public works, etc.

The position of the Bank of Italy on September 20, 1931, April 10, 1933, and August 10, 1933, respectively was as follows: – Gold reserves, 5,407,700,000 lire, 6,313,600,000 lire, 7,013,400,000 lire; gold devisen reserves, 3,326,500,000 lire, 799,700,000 lire, 335,900,000 lire; note circulation, 14,512,400,000 lire, 13,019,300,000 lire, 13,019,300,000 lire; discounts and advances, 4,214,000,000 lire, 5,423,400,000 lire, 5,000,700,000 lire. The sale of about 3,000 million lire of foreign bills (gold devisen reserve) was partly utilised to purchase gold to the amount of 1,600 million lire, at home and abroad, and partly to increase internal discounts and advances. If we take account of the enormous burden of frozen assets which in the meantime was carried over and digested, we are bound to conclude that the Bank of Italy is coming through the crisis very well.