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The Economist

Victory of Moderates at Labour Congress – Fascist Strikes -Rise in Cost of Living – State Finances and Inter-Allied Debts

«The Economist», 24 gennaio 1925, pp. 142-143

 

 

 

Turin, January 10

 

 

As foreseen in my last letter (Economist, December 13th), the Congress of the General Labour Confederation, held in Milan in the second week of December past, ended in a victory for the moderate section of trade unionism by a majority of 135,316 votes, against 54,792 Maximalist Socialist and 32,596 Communist votes. The majority stood on the ground of democratic government, and of class struggle, but not minority proletariat dictatorship. It was resolved that trade unions should keep themselves independent from political parties. The resolution was in some quarters welcomed as an augury of a new Labour Party, somewhat after the fashion of the British Labour Party. Political conditions and historical precedents make it, however, highly improbable that a Labour Party will succeed against old-established Socialist parties. The splitting of these into Socialist proper and Communists was inevitable; and it is probable that the moderate or united party will gather around itself the great thinking majority of the working classes.

 

 

Fascists struggle fiercely to win over working-men from the allegiance to Socialist parties. But they are meantime apt to become entangled in the vagaries of Socialism. An interesting instance of this was seen in the long strike at Carrara. The marble workers were always in the past a restless community. From being anarchists and revolutionists they were converted to the Rossoni creed of Fascist corporations. A local leader, a Fascist M.P., led them in a struggle which lasted 47 days. Half a dozen of the biggest marble merchants stubbornly refused to yield. In the end Fascist corporations were driven to proclaim a general strike in the Carrara district, extending to public services – truly a singular outcome for the adherents of a party whose advent to power was favoured by promises that public service strikes would be finally exterminated. The end of the strike was not a success; the men were compelled to return to work with a 10 per cent, increase of the wages for a minority only of the workers, excluding the hardest worked section i.e., the hewers.

 

 

The uneasiness felt in the labour world is partly traceable to the increasing cost of living. Wholesale prices, on the basis 1913 equal 100, have risen as follows, according to the Milan Chamber of Commerce index number:

 

 

 

 

Average for the Year

 

Average for the Month of December, 1924

 

1921

1922

1923

1924

 

Vegetable food

516.8

555.2

533.9

573.3

573.7

Animal

649.4

587.4

566.8

618.4

646.7

Textiles

480.1

583.1

673.3

709.4

718.4

Chemicals

440.1

437.2

421.6

460.1

537.5

Minerals and metals

514.4

524.1

547.7

549.5

569.1

Building materials

570.3

519.7

519.0

554.4

579.0

Miscellaneous vegetables

537.5

535.8

534.6

543.0

555.9

Miscellaneous manufacturing

516.5

529.3

535.8

553.5

593.3

General average

516.5

529.3

535.8

553.5

593.3

Purchasing power of the lira

19.44

18.84

18.67

18.1

16.85

 

After a continuous rise from year to year of the annual averages, the index for December, 1924, was the highest in the series. Never has the purchasing power of the lira been so low (16.85 per cent, on the 1913 basis) as in the past month. Below is quoted the index number (maximum and minimum monthly general average) of the cost of living for a working-class family of five (two parents and three boys) in Turin:

 

 

First Half of 1914=100

 

 

Food

Clothing

House

Heat & Light

Miscellaneous

General Index

Monthly Minimum:            
1920-Jul.

409.3

479.1

100

415.0

455.9

384.0

1921-Jul.

446.3

411.4

120

354.2

537.1

404.7

1922-Apr.

470.3

433.3

120

378.1

587.0

404.5

1923-Mar.

480.7

436.7

120

423.1

574.4

435.8

1924-Jun.

507.8

459.1

200

391.9

566.6

462.1

Monthly Maximum:

1920-Dec.

509.9

547.3

110

528.8

513.6

465.6

1921-Dec.

536.7

447.5

120

433.5

578.3

471.0

1922-Jan.

523.7

454.3

120

435.4

590.7

465.7

1923-Dec.

504.7

470.4

200

460.0

577.3

466.7

1924-Dec.

576.9

502.9

250

448.8

577.1

518.9

 

 

The monthly maximum and minimum alike are regularly growing from year to year; and the present index is at its highest level. Speculations about the origins of the rise are rife in the Press. With a Budget which closed in the financial year 1923-24 with a deficit of only 418 million lire, following a deficit of 3.029 millions in 1922-23, and an estimate of a small surplus in the current year 1924-25, and of a 178 millions surplus for the future year 1925-26; with a decrease of 1,464 million lire in the adverse trade balance in the first ten months of 1924, compared with the same period of 1923; in the face of the reimbursement made in the year 1922-23 of State debts to Brazil, Canada, Sweden, and Holland, for food and other war purchases, and the arrangements already made for the reimbursement February next of the issue of 51.6 million gold lire made in the American market, so that all external debts, always excepting the war debts to Great Britain and United States, will be wiped out; in the face of a decrease in internal State debts from 95,500 million lire on June 30, 1923, to 92,205 on November 30, 1924, and the progressive conversion of short exchequer bills into long-dated bonds, the depreciation of the lira is somewhat puzzling. The only adverse international factor is the problem of inter-Allied debts. If Great Britain and United States are serious when they talk of payments to be made by Italy, the equilibrium of the State Budget would be seriously menaced. With taxes already highly pressing on private incomes, which, on the average, are well below British and American incomes, a further increase would be perilous and almost impossible. No goverment would dare to propose tax increases for the sake of paying interest on the inter-Allied debts. Is it worth while for the creditor-States to upset Italian finances, and consequently international exchanges and trade, only to achieve the dubious result of importing Italian goods at low prices?

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