Opera Omnia Luigi Einaudi

Central Bank Reserves – Industrial Profits

Tipologia: Paragrafo/Articolo – Data pubblicazione: 06/05/1933

Central Bank Reserves – Industrial Profits

«The Economist» 6 maggio 1933, p. 965




Turin, April 20



The end of March and the beginning of April are marked by balance sheets and reports to company shareholders. The report made on March 31st by the Governor of the Bank of Italy, Signor Azzolini, shows that during 1932 the gold in the vaults of the bank increased by 213,200,000 lire, from 5,626,300,000 to 5,839,500,000. This increase was wholly due to purchases of gold in the internal market, no part of the gold-devisen having been transformed during the same year into gold. The purchases – of gold coins and of trinkets and other used gold apparel – continued after December 31st, reaching, on March 25th, the total amount of 312,300,000,000 lire. In 1932 the gold-devisen reserve decreased by 652,500,000 lire, against a decrease of 1,847,000,000 in 1931. The reason for the decrease is not evident, as the current balance of international payments seems not to have closed with so remarkable a deficit. Probably Italian investors managed somehow to repurchase, at low prices, a part of the securities sold or issued in the New York market before 1929. To the question frequently asked in financial circles – what part of the 1,304,500,000 lire of the gold-devisen reserve is really existent, and what part of it has been swallowed up by the losses on the sterling securities held when Great Britain went off gold – the only reply is that the losses on sterling securities will be wholly amortised before December 31, 1940, with the proceeds 1) of profits on the sale of other gold securities, and 2) of part of the reserves of the National Institute for foreign exchanges, a war body whose budgets are not public, and which apparently has been able to make profits out of its transactions. “Thus ends”, Signor Azzolini says, “the gold-exchange system, although the system can yet render important services to the world. But its permanence would only be possible if central banks which hold the gold reserves of other countries are managed with a view to keeping intact the convertibility of their notes into gold”. Therefore, the Governor concludes, the Bank of Italy in the first quarter of 1933 has sold an important quota of their gold foreign securities, reducing them further to 801,900,000 lire on March 31, 1933.



The section of the report which discusses the industrial situation is not encouraging. The silk industry, for instance, is increasingly subject in foreign markets to Japanese competition, favoured by low wages and by the depreciation of the yen. To save mulberry trees threatened with destruction by peasants tired of receiving prices greatly lower than the worst-paid in the whole century after the Napoleonic Wars, the Government granted in 1932 a premium of 1 lira per kg. of cocoons sold, and the premium will also be paid in 1933. Moreover, a decree dated March 20, 1933, grants an export premium up to June 15, 1933, of from 5 to 8 lire per kg. of reeled silk made with 1932 Italian cocoons. In an interesting debate with Professor Cabiati in the current April issue of La Riforma Sociale, Signor Giretti, a former M. P. and a silk spinner, observes that only 306 out of 779 silk spinning mills were operating on December 24, 1932, and that at present only six out of a total of thirty-six in. the Friuli and ten out of fifty in Piedmont are operating.



A statistical inquiry undertaken by the Borsa newspaper gives the financial results of 307 joint-stock companies which have closed their yearly account after June 30, 1932.




(000’s omitted.)



Total Capital






















The big loss in 1930 was due to the reorganisation of Snia Viscosa.


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