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The Economist

Italy. Postal services. State railways financial results. Cost of living again decreasing

«The Economist», 3 giugno 1922, pp. 1154-1155

 

 

 

Turin, May 27.

 

 

Postmaster – General has published a very interesting report on the working of his services. The figures (in millions of lire) are based on the estimates:-

 

 

 

1907-1908

1922-1923

Income

151.2

794.2

Expenditure

113.4

962.0

Profit: (+) or loss (-)

+ 37.8

-167.8

 

 

The war has played havoc with this great public service. While in 1907-8 there was a margin of 25 per cent. between income and expenditure, in 1922-3 the expenditure exceeds income by 21 per cent. A remarkable decrease in the traffic handled by the Post Office took place-between 1917-18 and 1920-21, and his partly attributable to the all round increase of the tariffs. For instance, parcels, which once cost 0.60 lire up to 3 kilograms, and 1 lira up to 5 kilograms, must to-day pay 2.50 lire up to 1 kilogram, 5 lire up to 3 kilograms, and 8 lire up to 5 kilograms, and so the traffic dwindles. In February, 1921, postal charges were increased by 60 per cent. If the traffic had maintained itself at the previous level, income should have increased by 60 per cent. In fact, the increase was considerably less. In the telegraphic services the increase in the tariff charged was only 20 per cent. but (excepting the period from February to May) the income was every month below the expectation by margins varying from 4 to 15 per cent. In the case of telephones, the experience was somewhat mixed; but when, in January, 1922, to the old increase of 33 per cent. was superadded a new increase of 53 per cent. in the tariff charged, the increase of income fell short of expectation by 24.8 per cent.

 

 

Signor Repaci gives in the April number of the Riforma Sociale (Turin) an interesting account of the Italian State Railways. Unfortunately, as Senator Bianchi, chairman of the permanent supervising Parliamentary Committee on State Railways, remarks in a report laid on May 17, 1922, before the Senate, the railway administration has not yet published its report for the financial year 1920-21. But, although somewhat belated, the figures calculated by Signor Repaci are of importance as being the first attempt to gauge the financial results of the State Railway sistem from its origin in 1901-6 up to 1919-20.

 

 

The following table shows expenses (in millions of lire):

 

 

 

1

2

3

4

5

6

7

8

 

General

Maintenance and Inspection

Rolling Stock, Railway Materials and Exs. of Traction

Traffic Service

Navigation on the Messina Channel

Additional Expenses

Additional Reserves & C., not included in Official Accts.

Interest and Ammortisation of Capital

Total

1905-6

35.3

36.5

93.4

64.9

21.0

17.6

241.5

510.2

1906-7

53.4

46.8

122.9

93.3

0.3

25.0

20.5

247.0

610.4

1907-8

54.6

52.5

144.1

104.3

0.5

26.1

20.6

255.4

658.6

1908-9

60.7

57.3

140.7

119.0

0.4

21.6

29.6

266.3

695.9

1909-10

56.0

61.6

159.8

128.7

0.6

22.2

28.6

262.8

720.5

1910-11

59.8

64.7

166.5

133.3

0.7

23.6

29.9

271.4

750.2

1911-12

61.2

70.0

188.8

139.6

0.8

25.7

28.0

279.5

794.0

1912-13

68.5

73.1

193.9

140.6

0.9

26.5

30.2

287.1

821.0

1913-14

72.9

74.4

194.6

144.7

0.9

27.1

34.8

293.9

824.6

1914-15

77.5

80.0

223.6

150.6

1.2

19.7

39.2

303.8

896.9

1915-16

79.9

76.9

340.0

165.5

1.9

24.4

48.8

311.9

1,048.5

1916-17

61.2

85.5

560.7

164.0

2.9

42.6

61.5

312.2

1,290.8

1917-18

102.9

99.8

811.0

218.0

6.3

36.2

92.7

313.1

1,680.2

1918-19

194.8

164.6

855.6

326.1

4.8

64.0

100.4

314.1

2,024.8

1919-20

63.3

312.6

1,528.5

614.0

8.5

72.2

118.1

315.0

3,032.3

 

 

The official figures are those for the first six columns. The two columns 7 and 8 had to be estimated by the author so as to give a complete idea of the position. Owing to legal technicalities the railways administration omits in its accounts some items of expenses, which must be included if we wish to have a complete idea of the whole working of the railways. For instance, the interest and amortisation of the old capital invested in the state railways – i.e., the capital invested previously to July 1, 1905, is wholly omitted from the accounts. Signor Repaci estimates this charge at 214 millions lire, which are included in column 8. The next table shows income (in millions of lire):

 

 

Passengers

Baggages and Express Goods

Goods

Navigation in the Messina Channel

Transportation for State Accounts Miscellaneous and Indirect Income

Total

Deficit

1905-6

129.5

26.2

183.1

8.3

347.2

163.0

1906-7

153.9

30.7

221.8

15.9

422.5

187.8

1907-8

161.9

33.1

238.9

20.1

464.1

194.4

1908-9

172.1

33.5

249.8

25.9

481.2

214.9

1909-10

181.1

34.9

274.9

0.5

26.5

518.0

202.5

1910-11

186.6

35.6

287.0

0.5

31.7

541.5

208.6

1911-12

202.2

42.6

300.7

0.6

32.6

578.9

215.2

1912-13

218.3

42.2

311.6

0.7

36.2

609.1

211.9

1913-14

227.8

41.4

320.0

0.7

37.3

627.1

215.5

1914-15

197.3

56.0

327.7

0.7

35.4

617.2

278.7

1915-16

251.3

135.3

376.5

0.7

52.4

816.3

232.2

1916-17

324.3

289.9

457.0

1.6

47.6

1,120.4

170.6

1917-18

405.3

377.4

467.4

1.3

103.9

1,355.4

324.8

1918-19

653.4

352.7

574.9

1.4

111.6

1,694.0

360.7

1919-20

734.3

237.6

806.6

1.8

139.7

1,910.1

1,122.2

 

 

The extraordinary increase in 1919-20 in the deficit, and the even greater loss which in 1920-21 is known to have been suffered, is an intolerable burden, especially in view of the manifold increases of railways charges. The increase in the price of coal goes far to explain the loss; and so far as coal goes it is hoped that better times have come. But other more permanent causes are at work. The recent debate in the House of Deputies on the Railways Budget was terminated with an unanimous vote on the desirability of a better application of the principle of an eight-hour day for railwaymen. Many members spoke with alarm of the fact that railwaymen understood the eight-hours’ principle as an obligation not to work, but to be present for eight hours, so that the effective hours of work are said to be only 2.6. The number of men employed on the State railways went up from 147,289 in 1913-14 to 206,600 in 1920-21, and the average annual cost from 2,065 lire to 9,700 lire. And this greatly increased number of men gives a less efficient service, as appears from the vastly increased cost of damages paid to shippers for delay, waste, thefts, & c. From 3.9 millions lire in 1913-14 (1.13 per cent. on a total of goods carried of 347.4 millions lire) the damages paid rose in 1920-21 to 97.8 millions lire (3.64 per cent. on a total of goods carried of 2,685.6 millions lire). Public opinion, as the debate in the Chamber shows, is awakening to the danger, and the responsible Minister claims that in a year or two things will be once more normal.

 

 

The cost of living is again slowly receding; but we are as yet at a level very much higher than the lowest reached last year. The following index number relates to the city of Turin, and is calculated on the basis of the first half of 1914. I have only included the maximum and minimum levels after September, 1920:

 

 

Food

Clothing

House

Light and Heating

Miscellaneous

Total

First semester 1914

100

100

100

100

100

100

September 1920

420.1

531.2

100

430.8

455.9

398.4

March 1921

536.6

496.8

110

428.5

543.9

472.2

July 1921

446.3

411.4

120

354.2

537.1

404.7

December 1921

536.7

448.0

120

433.5

578.3

471.0

January 1922

523.7

454.3

120

435.4

590.7

465.6

February 1922

522.7

449.6

120

406.9

597.5

463.5

March 1922

491.4

437.7

120

383.1

597.5

442.3

April 1922

470.3

433.3

120

378.0

587.1

424.4

 

 

The index applies to a working man’s family, with wife and three children, inhabiting a house under the Restriction of Rent Acts. If the family were obliged to find a house in the free market a rent from two to four-fold the pre-war rent would have to be paid.

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