Opera Omnia Luigi Einaudi


Tipologia: Paragrafo/Articolo – Data pubblicazione: 21/07/1934


«The Economist», 21 luglio 1934, pp. 114-115




ITALIAN OPINION AND THE GERMAN EXECUTIONS. – Since Parliament went into recess, political interest has been centred on the meeting at Venice between Signor Mussolini and Herr Hitler. The Press have emphasised the beneficial results of personal acquaintance and of a mitigation in the violence of Nazi propaganda in Austria. News of the recent executions in Germany was unexpected and received here with bewilderment. No comments are as yet forthcoming. The newspapers have simply printed long reports from their Berlin correspondents.



The Official Gazette has published the decrees creating the 22 corporations which are henceforth to regulate Italy’s economic life. Some of these corporations, such as that for textiles, apply to the whole economic process from agricultural production, through industrial manufacture, to retail sale. Others, such as those for the building, metallurgical and engineering industries, are limited to industry and commerce. A third group – professions and arts, internal communications, sea and air, hotels and tourist traffic, credit and social insurance, public entertainments – are sectional and specialised. Before October 28, 1934, the Corporations will actually come into existence. Nominations by employers’ and employees’ associations and other bodies will take account of big, medium-sized and small firms, so as to keep an even balance between them. The big confederations of employers’ and employees’ associations are not to be dissolved; but the centre of gravity of our economic administration will be transferred from them to their component federations, which will be more or less reconstructed so that two employers’ and employees’ confederations will correspond to every Corporation. The confederations will remain as a connecting central link. There is much anxiety, not so much in the labour world as in the employing classes, about the working of the Corporations. Many employers fear interferences in sales, competition, prices and extensions of plants.



A Departmental Committee continues to be busy examining and reporting on the question of new ventures and extensions of plant. A firm intending to start or extend an industrial enterprise in the regulated field must answer the following questions: – What goods do you intend to produce? What capital is to be invested? What machinery, national or foreign, steam or water power, is to be used? What engines, yearly electric power, yearly hours of labour, and raw material are to be used? Are they to be Italian or foreign? An estimate of employees, directors, clerks, accountants, engineers, chemists and other technicians, working men, males and females, national and foreign, has to be given; and the lenght and nature of the productive process, the capacity of the intended new plant or extension and the proposed market for the goods have to be stated.



As an instance of the field of action which the Corporations are likely to occupy we may quote a lively discussion between the Lavoro Fascista, a daily organ of the industrial employees’ confederation; and the sugar consortium. The sugar producers were accused of keeping prices much too high, 6.30 lire per kilogram retail, of which 4 lire is Excise tax and 2.30 the total cost of beet production, sugar production and refining and retailing. The outcome of the discussion was that the interested parties saw their way to reduce by 0.50 lire per kilogram the price of sugar used for marmalade, of which the consumption is extremely limited, owing to the high price of sugar.



MORE BUDGET CUTS. – At the last session of the Cabinet Budget estimates for 1934-35 were reduced by a further 396 million lire. Together with the previous reductions of 900 millions for debt conversion, 410 millions for reductions of public employees’ salaries, and allowing for the 55 million lire increase in the yield of bachelor’s tax, the reduction in the estimated deficit for 1934-35 stands at about 1,760 million lire. For the first eleven months of the current financial year (July, 1933, to May, 1934) the deficit is 6,803.1 million lire, of which 3,059.7 millions are due to the anticipated interest payment for three years to December 31, 1936, and other expenses incidental to the conversion of 61,000 millions of consols from 5 per cent, to 3 1/2 per cent. The total internal debt during the same eleven months increased by 5,000 million lire from 97,215 million to 102,224 million lire. As usual, the increase of debt, 5,009 millions, is less than the total deficit, 6,803 millions, because the deficit is a book-keeping figure, while the debt is a cash transaction.



Pessimists are disquieted by the reduction of the total gold and gold exchange reserves from 7,398.6 million lire on January 20th to 6,502.7 millions on June 30th. On June 30, 1933, the total reserve was 7,087.8 millions, so that the decrease appears to be less than 600 millions, a not excessive amount in a year of dwindling trade. In the first five months of the year foreign trade was as follows:









Import Surplus



(Million Lire)












The balance of payments was eased by other items. Foreign tourists’ expenditure appears to be better: 810,876 foreigners entered Italy in the first four months of 1934, compared with 616,919 in the corresponding period of 1933; and the percentage occupied of total beds in reporting hotels was 40.42 per cent, in the first four months of 1934, compared with 38.87 in the same months of 1933.



The most probable cause of the rising import surplus is the level of costs and prices. According to Professor Bachi’s index, the price level of goods produced and consumed in Italy stood in May, 1934, at 272 (1913=100), the price level of imports at 302.2, and of goods exported at 205.7. It seems that we pay relatively more for goods which we are bound to import and that we sell our exports at a relatively low price. The differences are not so marked in the Corporative Economic Council of Milan index, which stands at 269 for goods produced and consumed at home, 293.2 for imported goods, and 216.2 for exported goods.



In a world of high tariffs, quotas and restrictions, a country which exports fine and varied agricultural and industrial goods as against raw materials and heavy imports is bound to suffer. Equilibrium can, of course, be reached only by reducing costs; but it appears from the above figures that the most rigid costs are imported materials. The scaling down of Customs tariffs is therefore the first condition of a return to equilibrium.



Turin, July 16.


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