Opera Omnia Luigi Einaudi

Italy. Politics and stock exchange fever. Plenty of money. New issues. Unemployment. Foreign trade

Tipologia: Paragrafo/Articolo – Data pubblicazione: 28/06/1924

Italy. Politics and stock exchange fever. Plenty of money. New issues. Unemployment. Foreign trade

«The Economist», 28 giugno 1924, pp. 1304-1305




Turin, June 21



Political events have been prominent since the meeting of the new Legislature. As my letters relate to economic affairs, I will only note that the lurid Matteotti affair acted as a check on the frantic upward movement which was going on in Italian Stock Exchanges. If we take as basis 100 the quotations for December, 1918, the Bachi index number of State securities, which was as low as 73.8 in September, 1920, reached 100.2 in January, 1924, 101.3 in February, 103.0 in March, 103.9 in April, and 109.5 in May, 1924. That is a general average; 5 per cent. consols, which at a time in 1920 went as low as 67, touched in early June 102.50.



Yesterday (June 20th) they fell to 98.85. But the wildest fluctuations took place in «variable dividend» shares. Bachi’s general index number (basis 100 at December, 1918) touched bottom in April, 1922, at 56.45. At the end of 1922 the index was 72.08; at the end of 1923, 85.67. In 1924 every month, save April, saw a rise to 89.79 in January, 96.18 in February, 101.70 in March, 100.51 in April, 114.34 in May.



The leaders in the upward movement were easily the silk shares, especially artificial silk. At a time, the greatest artificial silk concern, Snia- Viscosa, with a paid capital of 600 millions lire, was capitalised at 1,500 millions lire; the next one in importance, the Soie de Chatillon Company, with a paid capital of 75 millions, at 675 millions lire. Following these spectacular rises, operators multiplied; crowds congregated every day on the floors and outside Stock Exchanges; fortunes were made. Stock Exchange men were all Fascists; no more strikes, social peace, abundant work, State Budget in equilibrium, no more prosecution against capital. Every-one was persuaded that Bourse quotations would rise indefinitely. On this excited state of mind the Matteotti affair acted like a bombshell. Something like a stampede took place. Snia receded from 504 to 400, Chatillon from 900 to 680, Fiat from 754 to 565, Bank of Italy from 1,950 to 1,625. Perhaps nothing more tragic will happen save losses suffered by over-enthusiastic bulls. Money is abundant and is anxiously seeking employment. After many years, during which the State absorbed all available savings, the situation has wholly changed. Public internal debt has decreased from 95.544 millions lire at June 30, 1923, to 93.655 millions at April 30, 1924. No wonder that the market situation was favourable to buoyancy and to new issues. In 1923 new issues of shares by joint stock companies, less decreases of capital or winding-up of companies, amounted to 2.131 million lire. In the first five months of 1924 the figure went up to 1978.8 million lire, against 515.2 in the corresponding months of 1923.



As far as can be guessed by the belated unemployment figures, the industrial situation seems better than a year ago. At February 28, 1923, unemployed were 327,892; they decreased to a minimum of 178,612 at August 31, 1923; seasonably rising to 258,580 at end of December, 1923, to 280,765 at January 31st, and decreasing to 259,360 at February 29, 1924.



Foreign trade in the months from January to April, 1924, compared as follows with the corresponding period of 1922 and 1923 (in millions of lire):









1922 & 1924

1923 & 1924





+ 978.1

+ 290.3





+ 1,613.4

+ 1,214.3

Excess of imports over exports




– 635.3

– 924.0



The excess of imports is decreasing, thanks principally to more abundant exports, the most notable increases being in silk and artificial silk (from 850.1 million lire in 1923 to 1,077.3 million lire in 1924), fruits and vegetables (249.9 to 373.4), flour, macaroni, pulses, & c. (56.1 to 239.2), milk and cheese (71.8 to 136.4), meat, eggs (59.8 to 146.4), cotton goods (448.8 to 648.8), motor-cars and other vehicles (91.5 to 120.6), wool, & c. (73.0 to 129.8), hides (105.4 to 158.8).



The general trend is towards increasing imports of raw materials, machinery for industry, exports of manufactured goods, increasing at the same time at a more rapid pace.



An index of industrial condition is the increase in the consumption of electric power.

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