Opera Omnia Luigi Einaudi


Tipologia: Paragrafo/Articolo – Data pubblicazione: 15/02/1936


«The Economist», 15 febbraio 1936 pp. 12-13




Despite the extraordinary expenditure of 975 million lire for the East African war, the year 1935 marked a continuation of the effort to reduce the Budget deficit. Compared with 3,867 million lire in 1931-32, 3,549 lire in 1932-33, and 6,377 in 1933-34 – inclusive of 3,036 millions for the Consol’s conversion – the deficit fell to 2,030 in 1934-35. Besides the East African expenditure, the main source of the deficit was a grant in aid of 840 millions to the State Railways.



The estimates for the current financial year 1935-36 were 18,067.9 millions of revenue and 17,788.6 millions of expenditure; i.e. a prospective deficit of 279.3 millions. The effective revenue for the first quarter (July-September) was 4,768.2 millions, and expenditure 6,409 millions, i.e. a deficit of 1,769.4, of which the main part (1,345.4) was due to the East African campaign. With revenue estimated at 20,312, and expenditure at 20,291.5 million lire, the Budget for the year 1936-37 closes with a surplus of 20.4 millions. This figure is, of course, exclusive of East African expenditure, which it is impossible to estimate. The Internal Public Debt, amounting to 91,442 million on June 30, 1931, increased to 105,389 on June 30, 1935, and 107,078 on September 30th. This figure does not include the external public debt (79,275,000 dollars on September 30th), nor other State liabilities. According to the latest official Treasury statement, the total of public debts and Uabilities amount to 149,900 million lire, which exceeded by 2,700 million the corresponding figure for June 30, 1922. No figures can be quoted covering the period since September or at most October 20th, because the publication of Treasury accounts, Bank of Italy returns and all the relevant economic statistics were discontinued as from October. Statistics for population, education, crime and public assistance alone are now published.



LABOUR CONDITIONS. – Agricultural wages in August, 1935, were on the same level as the average for 1934: 75.84 per cent, of the 1930 basis. Industrial wages had risen from 83 in 1934 to 86 in August, 1935. The trend is probably upwards, owing to the enlistment of many young men and the needs of the war industries. The total number of unemployed fell from 887,345 in September, 1934, to 609,094 in September, 1935. The employment index (1929=100), which rose in 1933 from 72.40 in January to 83.39 in September (maximum), and in 1934 from 75.84 to 87.52, rose in 1935 from 83.10 in January to 100.05 in August. The cost of living (June, 1927=100) was 74.71 in 1933, 70.89 in 1934, and rose from 69.74 in January to 71.87 in September, 1935. The index of retail sales of clothing and home articles (1928=100), after falling from 137.03 in 1929 to 91.08 in 1932, rose from 69.45 in January, 1935, to 133.08 in June, 1935.



AGRICULTURE. – Crops were better than in 1934. The yield of wheat increased from 6.3 million tons in 1934 to 7.7 millions in 1935; of rice (raw) from 0.62 million to 0.66 million. Spring maize, however, yielded only 2.3 million tons, against 2.9 millions. It is understood that the wine grapes yield, which was indifferent in 1933 and 1934, was much better in 1935. Prices of cereals were good, and those of wheat and maize respectively rose to 1,150 lire and 850 lire per ton. High prices of cereals were a mixed benefit for agriculturists, as they increased the cost of production of meat, milk and cheese.



INDUSTRIAL PRODUCTION. – The new index of production of the Corporations Department (1928=100), which fell from 109.1 in 1929 to 73.0 in 1932, and rose to 80.5 in 1933 and 88.3 in 1934, rose further to 102.7 in June, 1935, and then fell to 92.8 in July and 95.2 in August. For the first eight months of 1935, the increase in production compared with the corresponding months of 1934 was 19 per cent. The smallest increase in industrial activity was in the electricity and gas branch (6.2 per cent.) and the highest in the engineering section (28.6 per cent.). The building industry followed with 25.7 per cent.; iron and steel next, with 21.7, paper with 15.9, and textiles with 11.6 per cent. Since August there has been great activity in the engineering, textiles and other industries, as a result of Government orders.



TRANSPORT AND TRADE. – Goods carried by State Railways in the first nine months increased from 30,751 million tons in 1934 to 33,169 millions in 1935. Sea-borne traffic, which went up from 9,683 to 11,272 million tons, was responsible for about two-thirds (1,589 million tons) of the above total increase in the railways goods traffic. Railway passengers increased from 60,524 millions to 62,226 millions (9 months). The number of motor cars produced has increased greatly this year. The present high price of petrol (3.80 lire per kg.), oil and naphtha, will give a temporary fillip to railways transport; but more permanent assistance will come from the new stringent regulation of road traffic. Sea traffic expanded in the first nine months of the year; 14.3 million tons of goods arrived from foreign countries by steamers and 0.3 by sail in 1935, compared with 11.8 millions and 0.3 million respectively in 1934; 1.3 million tons were exported by steamers and 0.2 million by sail, against 1.1 million and 0.2 million respectively; while 98,138 passengers arrived from foreign countries in 1935, compared with 114,555 in 1934. Idle ships in the ports, which amounted to 828,518 tons at the end of 1931 and 302,062 at the end of 1934, had been reduced to 171,411 in September 30, 1935.



Foreign Trade. – The decrease in foreign trade has continued:



(Million Lire)

Annual Decrease

in the Gold Reserves of the Bank of Italy




Import Surplus




































(9 mths.)











The approximate correspondence in 1934 and 1935 between the import surplus and the decrease in gold reserves is a symptom of the waning of emigrants’ remittances and the decrease in other sources of invisible exports.



THE MONEY MARKET. – Deflation of the note circulation continued until the end of 1934. But owing to an increase in industrial and commercial turnover the circulation, after the usual seasonal reduction to a minimum of 12,268.7 million lire on February 20th, again increased to 13,028.6 million lire on June 30, 1935. The needs of industry connected with the East African expedition caused a further increase to 15,278 million lire on October 20th, which is the last published figure. Discounts and advances rose from 6,454.8 millions at the end of 1934 to 7,827 millions on October 20, 1935. Money was easy for the first eight months of the year.



The discount rate on commercial paper ranged from 3 per cent, to 5 per cent, and on financial paper from 3.50 per cent, to 6.25 per cent. In September money hardened somewhat; the foreign exchanges are strictly controlled by a State monopoly.



In the Stock Exchanges the prices of State securities were weak until August; 3.50 per cent, redeemable fell from 85 in December, 1934, to 67.2 in August, 1935, this contrasted with a rise in the index of variable-dividend securities from 65.1 at the end of December, 1934, to 76.5 at the beginning of August. The limitation of dividends and the 10 per cent, tax on non-State bearer securities depressed both markets further. At the end of the year there was some recovery in these prices.

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