Opera Omnia Luigi Einaudi


Tipologia: Paragrafo/Articolo – Data pubblicazione: 27/07/1935


«The Economist», 27 luglio 1935, pp. 176-177




A steep rise in prices – The course of wholesale prices in Italy in 1935 has been largely different from other countries. As the Economist remarked in its issue of July 6th, in the face of stagnation or very moderate rises in Great Britain, the United States and Germany, and deflation in France, price have risen steeply in Italy. Whether the rise should be called inflation is perhaps an insoluble terminological problem. There is, at any rate, no sign of an increase in the quantity of note issued. From July 31, 1934, which was the point of minimum price, to June 20, 1935, the circulation decreased from 13,330.2 million to 12,684.9 million lire; Bank of Italy circulating cheques from 366.7 million to 326.4 million lire; and ordinary deposits from 685.9 million to 521.8 million lire. Cheques issued from other banks increased only from 439.2 million lire at the end of June, 1934, to 443.1 million lire at the end of April, 1935; nor is an appreciable growth of bank deposits observable.



More remarkable perhaps than the absolute rise of the index of wholesale prices is the distribution of the rise between different groups in the period from July, 1934, to June, 1935 (1913=100):




Absolute rise of the Index

Spread between Group Index and General Average

National agricultural products

+ 67.26

+ 35.56

Industrial raw materials

+ 4.45

– 12.85

Half-finished products

+ 29.16

+ 12.44

Finished products

+ 33.22

– 9.48

General average

+ 41.60



Industrial raw materials, in fact, can be bought now at lower prices, comparatively, than a year ago. The rise in prices has mainly benefited the agricultural classes. If this sort of readjustment of relative prices continues, it may in the long run increase the velocity of circulation of money. Hoarding is not practised extensively in Italy; but such small hoards as do exist are to be found among the peasants. The rise in the prices of cocoons, wines, wheat and rice may therefore be a stimulant to direct investment, cattle breeding, improvements, etc.



Another feature of the Italian price rise is the lessening of the spread between export prices and the general index. In July, 1934, when average prices were at their bottom (272.91) export prices stood at 23.1 per cent. below the average. Now (June, 1935), when the average has risen to 314.51, export prices are only 15.6 per cent. below the average. Conversely, the excess of import prices over average prices has decreased from 7.6 to 3.8 per cent. Italy is now buying abroad at relatively reduced prices and selling at higher prices.



Finally, the cost of living is not rising as fast as wholesale prices: between July, 1934, and the first week of July, 1935, wholesale prices rose by 16.3 per cent. and the cost of living (Milan) by only 3.6 per cent.



THE STATE’S ASSETS AND THE NATIONAL DEBT: A preliminary statement is now available of the result of the Treasury’s statistical investigation into the national debt and the State’s assets. The following are the figures for June 30, 1934, with the net change (after eliminating double entries, compensating items and revaluations) compared with June 30, 1922 (in million lire):




June 30, 1934

Net Change since

June 30, 1922

Current financial liabilities (overdue sums, Treasury debts, State notes and coins)


– 49,620

War indemnities due on June 30, 1922 paid thereafter

– 2,010


Consols and redeemable debts


+ 37,017

Sundry liabilities


– 2,691

Deferred payments


+ 20,009



+ 2,705


June 30, 1934

Net Change since June 30, 1922

(A)  Financial assets (cash, Treasury credits and overdue sums receivable)



– 25,653

(B)  Disposable assets (credits, securities, real estate, State railways and other industrial State concerns assets)



+ 20,946

(C) Total (A) and (B)


– 4,707

(D) Non-disposable assets (land, sea and air war material and other materials for State services)


+ 12,464

(E)  Non-disposable scientific and artistic material



+ 73



+ 7,830

(F)  Public works carried out by deferred payments or Budget expenditure since June 30, 1922

+ 15,459

Total net change

+ 23,289



The total liabilities on June 30, 1934, are slightly under 150,000 million lire. The figure of deferred payments includes all payments due for public work already finished or for which a definitive Treasury liability is extant.



The above calculation has not been published before. Sections A and B include such assets as can be described as of an economic nature, and which could be disposed of without impairment of the State’s regular services. Sections C and D include assets which are essential to the State’s existence. Section E represents the increase of wealth (not necessarily State assets) due to completion of public works.



With the aid of the two tables of liabilities and assets, the changes which have occurred in the last twelve years can easily be calculated. If we only compare the total increase of liabilities (+ 2,705 millions) with the decrease of sections A and B assets (- 4,707 millions), we obtain a decrease of net assets or increase of net liabilities of 7,412 million lire. If we include, on the assets side, the C and D sections we obtain a net increase of assets of 5,125 million lire. Finally, if we include section E, the increase of State and public assets amounts to 20,584 million lire. In the last figure are not included such expenditure as was made for reconstruction of assets destroyed by war, inundations, earthquakes, etc. (4,601 millions), or assistance to aqueducts and other health works (2,097 millions).

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