ITALY: Pumping & Pruning

Still a stranger to many otherwise well posted citizens of the world is the new Benito Mussolini, the Duce who has taken to digesting balance sheets, mastering trade statistics, engineering huge combinations of Italian industry and grappling intelligently with the octopus of hard times. Last week, without turning to foreign bankers, Il Duce floated a new $50,000,000 loan entirely in Italy, kept the lira still at par, surveyed the foreign bond market on which Italian issues remained strong and perhaps congratulated himself.

The new Duce has steadily emerged as Italy’s years have grown leaner. “Our economic life must be simplified!” he announced in 1931. Since then he has simplified with a vengeance. Not to mention Italy’s shipping lines which most people know have been merged into one vast monopoly with bonds guaranteed by the State, Il Duce has dynamically simplified the steel, iron, milling, textile, silk, rayon and other trades into a constellation of unified industries whose sun is the Dictator. With the Kingdom’s foreign trade shrunk by Depression to approximately half its volume of three years ago, the State is able to present current statistics showing Italy’s woolen and worsted mills running at from 65% to 91% of capacity, paper mills 88%, cotton mills 70%, rayon factories 65%, boot & shoe industry 60% and chemical production 50%.

As to the budget, Il Duce boldly ordered the then Finance Minister, Antonio Mosconi, to state last June that “for the present and during the economic crisis the Government cannot balance the budget.” The Cabinet has released a provisional budget for this year carrying an estimated deficit of 3,087,500,000 lire.*

As 1933 opened some 950,000 Italians were unemployed, but Il Duce’s program of public works continues on a nationwide scale, new jobs are being constantly created and the State’s direct dole expenditure was kept down to just under $1,000,000 last year.

“Simplified, strengthened, deflated and purified,” Il Duce said, “Italian business holds itself ready to withstand yet further trials.” The withstanding machinery consists in part of decrees protecting the worker from either wage cuts or upping of retail prices, except in specific cases by assent of the State. Italian farm prices have thus far been supported by import quota restrictions. Tuberculin tests are invoked to exclude much foreign cattle. The Fascist Press ceaselessly thunders, “Buy Italian!” Speculation on Italian stock exchanges is now checked with such rigor that prices and trading have long been stagnant.

On his 1933 agenda sheet Dictator Mussolini has written large the enforcing of new laws (TIME, Jan. 9) to protect and extend essential enterprises while “pruning too exuberant branches of industry.”

The metal trades have proved intractable. Creatures whom Il Duce considers “socalled business men” have exceeded metal quotas approved by the State in speculative efforts to cut each other’s throats. The silk trade, on the other hand, reached a pass of despair last year in which honest worm raisers began to burn their mulberry trees. The State stopped that with a bounty of one lira per kilogram of cocoons, but the silk, metal and several other trades must be thoroughly overhauled. Such jobs take money. Hence last week the $50,000,000 loan.

It was issued by a corporation launched & christened only three weeks ago; the Istituto Ricostruzione Industriale. On the one hand I. R. I. will avowedly “pump oxygen” (i. e. credit) into worthy industries, much as does Washington’s R. F. C. On the other hand, Rome’s I. R. I. will further the State’s liquidation of non-self-supporting industries, “pruning” them out of Italian industrial life.

To raise the necessary $50,000,000 the bonds sold last week had attached to them certain peculiar features. Holders of bonds with serial numbers which turn out to be lucky will receive, during the next five years, prizes totaling $6,500,000 and each year there will be a grand prize of $50,000. Nominally 4½% bonds, they were offered and oversubscribed at 91, thus making them 5% bonds in effect.

Recalling that he is fiercely opposed to human birth control, critics of Il Duce have asked how he justifies his “pruning” of industries which are yet alive though judged by the State unworthy. Hotly convinced that his policy is neither business, birth control nor nationalization, the Dictator explains that he is directing Italian business “towards a system which respects the principle of private property and individual enterprise, but desires to see them brought within the purview of the State which alone can safeguard, supervise and vivify!”

* $158,080,000 or $3.75 per capita, compared to the current French deficit of $9.80 per capita and the U. S. per capita deficit of $12.22.