N. 51 - Marzo 2012
(LXXXII)
quota "90"
economy of italy in the twenties
di Antonio Anelli
The Fascist era economic system was characterized by structural elements of a permanent nature such as a low level of income per capita, a high elasticity of labor supply, a strong international outlook, a strong duality both sectoral and territorial.
The
complementarity
between
the
constant
structural
and
economic
variables
does
not
establish
the
initial
years
of
economic
policy
as
Fascist
years
of
hiatus,
since
the
organization
of
the
production
system
and
the
economic
policies
of
the
regime
followed,
at
least
until
the
1933-34
biennium,
the
tendency
of
other
countries.
In
fact,
the
event's
monetary
"quota
90"
or
the
price
of
ninety
dollars
for
a
pound
was
similar
to
the
stabilization
processes
put
in
place
in
other
European
countries
and
as
such
is
not
included
elements
of
originality,
as
the
methods
used
to
impose
deflation
the
country,
set
a
fairly
high
level
of
exchange
control
and
implement
labor
market
as
part
of a
policy
of
social
stabilization,
implemented
alongside
that
of
monetary
stabilization.
The
economy
of
Fascist
Italy
was
hardly
revealing
dynamic
oriented
economy
to
stagnation.
After
the
brief
boom
in
the
1919-20
biennium,
tied
to a
strong
expansion
of
credit
granted
by
banks
to
the
private
sector,
and
particularly
from
the
Commercial
Bank,
Bank
Discount
Italian,
Italian
Credito
and
Banco
di
Roma,
came
the
year
1921,
known
well
as
the
year
of
bank
failures
and
industrial.
This
situation
arose
from
the
excessive
indebtedness
of
many
companies
which
recorded
serious
difficulties
in
the
face
of
falling
demand
and
relative
price
stability,
after
the
great
wave
of
inflation
that
had
made
it
look
very
easy
and
convenient
use
of
credit.
The
period
1922-25
was
characterized
by:
a
decrease
in
the
presence
of
the
public
sector
in
the
capital
market,
due
to a
fiscal
policy
aimed
at
balancing
the
state
budget,
the
central
banks
as
financial
intermediaries
and
as
creators
of
money
and
a
vibrant
As
ephemeral
vitality
of
Stock
Exchange.
From
1922
to
1925,
the
pound
remained
fairly
stable
compared
to
an
underestimation
of
its
purchasing
power
parity
with
the
dollar.
In
the
year
1925,
mainly
through
drastic
cuts
in
expenditure,
the
actual
deficit
was
reduced
to
1%
of
national
income
and
was
totally
eliminated
the
following
year.
On
the
monetary
front
we
can
say
that
the
speculative
use
that
was
made
of
the
available
funding
probably
contributed
to
the
weakening
of
the
pound
in
1925
and
again
in
1926,
resulting
in
undesirable
increases
in
the
prices
of
raw
materials
and
thereby
contributing
to
the
inflationary
spiral.
But
the
crux
of
the
problem
remained
in
the
banks
and
the
ease
with
which
it
was
obtained
or
granted
the
credit
it
did
anything
but
solid
businesses
thrive,
contributing
to
the
next
wave
of
bankruptcies.
The
banks
had
created
a
situation
developing
that
caused
some
difficulty
to
foreign
competition,
but
it
was
hopeless
to
continue
without
their
generous
support.
The
same
bank
balance
sheets
were
heavy
with
items
immobilized
so
large
an
extent
as
to
be
incompatible
with
the
same
management
of
an
investment
bank.
The
year
1925
is
nationally
outstanding
crop
year.
The
process
of
import
substitution
was
documented
by a
rise
in
domestic
demand
and
production
of
wheat,
respectively
by
3.8
and
14.2%
a
year.
However,
there
occurred
a
massive
reallocation
of
resources
for
agriculture
rich,
many
had
suggested,
that
would
create
a
natural
effect
of
the
abolition
of
duty
on
wheat.
In
the
South
there
was
some
reduction
in
area
under
wheat
and
drew
short-term
benefits
determined
by
the
exceptional
increase
in
the
price
of
wine
and
oil
in
the
north
while
production
increases
were
due
to
better
yields,
greater
mechanization
and
increased
use
of
fertilizers
produced
by
the
chemical
industry
had
a
strong
impetus
from
the
war.
As
for
products
for
which
Italy
was
traditionally
exporting,
they
endeavored
to
farmers
and
the
country
good
earnings
in
foreign
currency,
given
the
trend
in
international
prices
and
exchange
rate,
but
not
stimulated
an
increase
of
its
productions.
This
period,
on
the
whole,
was
characterized
by
the
rapid
expansion
of
demand
generated
by
growth
in
the
industrial
sector
and
in
turn
supported
by
the
supply
of
investible
funds,
there
being
no
evidence
of a
strong
performance
of
investment
in
agriculture.
The
year
1925
is
considered
to
hinge
on
the
result
of
replacing
the
Ministry
of
Finance
of
the
liberal
De
'Stefani
with
the
financier
Volpi.
He
felt
the
need
to
promote
more
ambitious
programs
and
outside
national
borders,
which
called
for
negotiations
for
which
De
'Stefani
did
not
seem
to
experience
and
knowledge
the
right
person.
The
index
of
stock
prices
fell
in
1925
the
highest
level
of
the
interwar
period
and
no
doubt
was
shared
that
it
was
a
boom
in
speculative
caused
by
excess
liquidity
in
the
existing
system
and
the
behavior
of
banks.
Operators
with
a
measure
of
28
February,
were
forced
to
cover,
with
a
cash
payment,
at
least
25%
of
the
securities
purchased
in
the
end.
Another
activity,
though
of
considerable
notoriety,
is
the
law
for
the
regulation
of
public
control
over
the
bags.
These
and
other
measures
of
De
'Stefani
of
that
year
were
strongly
criticized
by
the
world
of
credit
and
high
finance,
and
it
was
believed
that
the
falling
stock
price
and
the
external
value
of
the
pound
will
be a
direct
consequence,
instead
of
ignoring
these
phenomena
were
the
result
of
deeper
causes.
In
June
1925
De
'Stefani,
before
a
further
depreciation
of
the
lira
showed
himself
hostile
to
protectionism
and,
once
again,
this
conduct
was
strongly
criticized.
Mussolini,
in
the
circumstances,
he
asked
the
Minister
De
'Stefani
to
resign,
thus
favoring
also
the
demands
of
the
Confederation
who
has
long
called
for
the
replacement.
The
new
finance
minister
Volpi
promoted
a
new
course
in
the
Italian
economy,
the
first
important
measure
was
the
restoration
of
the
duty
on
wheat
on
coarse
grains
and
their
derivatives.
Just
restored
the
duty
on
wheat
to
this
product
guaranteed
protection
equal
to
15%
ad
valorem,
and
as
such
amounted
to
about
half
that
age
Giolitti.
On
the
other
hand
were
expected
to
be
granted
successive
increases
in
parallel
with
measures
in
favor
of
big
business
that
took
place
on
time,
to
reach
for
common
level
of
protection
equal
to
about
75%.
Volpi
doubled
the
duty
on
sugar,
reintroduced
on
11
February
1925,
earning
the
acclaim
of
the
agrarian
and
industrial
class
in
perfect
opposition
to
what
he
had
done
his
predecessor.
The
year
1925
marks
the
new
direction
of
agricultural
policy
with
fascist
so-called
battle
of
the
grain
whose
objective
was
the
country's
grain
self-sufficiency
to
be
achieved
through
higher
yields
per
hectare
rather
than
cultivated
area.
Another
important
element
that
gives
character
to
the
year
1925,
the
hinge
between
the
two
periods
of
economic
history
of
fascist
Italy,
was
formed
by
the
Palazzo
Vidoni
Pact,
signed
in
October
of
that
year.
It
included
the
recognition
of
only
fascist
union
representing
the
employees
and,
therefore,
the
authority
to
sign
employment
contracts.
The
signing
of
the
Pact
Vidoni
Palace,
ensuring
the
regime
in
control
of
the
labor
market,
formed
an
essential
prerequisite
for
the
kind
of
economic
policy
that
they
wanted
to
pursue
and
who
went
by
the
nom
de
guerre
of
the
lira.
In
the
mid-twenties
appeared
the
difficulties
and
the
inherent
weakness
of
the
mechanism
of
development
that
had
marked
the
Italian
economy
in
the
early
years
of
Fascism.
In
1924
Italian
exports
were
to
grow
considerably
and
our
country
had
succeeded
in
penetrating
international
markets
due
to
the
stability
of
domestic
prices
accompanied
by
the
undervaluation
of
the
exchange,
but
now,
imports
had
increased
faster
than
exports
and
this
is
to
the
absence
of
factors
that
had
previously
incurred
due
to
the
strong
domestic
demand.
Faced
with
these
circumstances,
the
solutions
were:
internal
deflation
or
devaluation
of
the
currency
value,
in
the
absence
of
corrective
policies,
the
Italian
economic
system
adopted
the
second
package.
Between
December
1924
and
August
1925
the
lira
lost
15%
of
its
value
so,
what
was
the
virtuous
circle
in
recent
years
became
an
inflationary
spiral.
To
support
external
accounts
needed
a
devaluation
of
the
exchange
that
produced
an
increase
in
domestic
prices
and
in
turn
created
the
conditions
for
a
new
devaluation.
Emerged
in
this
period
a
speculative
component
which
became
the
main
mechanism
for
the
operation
of
the
system
and,
even
in
these
years,
the
Italian
industry
depended
largely
on
the
world
of
credit
and
banks
were
willing,
in
inflationary
conditions,
to
extend
lines
credit
as
long
as
property
values
received
as
collateral
for
loans
would
suffer
a
good
appreciation
in
stock
price.
Then,
the
stock
market
crash
began
in
spring
1925
put
in
difficulty
not
only
banks
but
also
the
great
industries
they
financed
and
pushed
to
revise
the
mechanism
of
growth
that
had
sustained
the
economy
for
years.
In
fact,
the
Confindustria,
in
April
1925,
officially
warned
that
inflation
and
fluctuating
exchange
rates
certainly
avvantaggiavano
speculators
but
not
businesses.
His
proposal
was
to
implement
a
deflationary
policy
that
stabilize
the
purchasing
power
of
the
pound
and
lowered
production
costs,
aware,
moreover,
that
such
conduct
could
result
in
recession.
A
first
experiment
in
these
terms
was
initiated
by
Volpi
and
what
was
new
in
regard
to
the
policy
of
De
'Stefani.
Thanks
to
Volpi
was
introduced
the
supervision
of
the
Treasury
on
the
foreign
exchange
market
that
became
a
reality
in
the
<<
prohibition
of
banks
to
open
credits
or
pay
bills
for
abroad,
to
purchase
their
own
foreign
currency
to
purchase
on
behalf
of
customers
without
the
simultaneous
provision
of
lire
to
carry
over
divided
by
providing
lire
in
favor
of
foreign
banks>>
in
order
to
curb
speculation.
The
foreign
exchange
market
operations
were
concentrated
in
the
hands
of
the
Foxes
after
the
Bank
of
Italy
had
unsuccessfully
burned
part
of a
loan
of $
50
million
granted
by
the
bank
Morgan
to
settle
its
war
debts.
At
the
end
of
1925
Volpi
abolished
the
autonomy
of
the
National
Institute
of
exchange
rates
and
devoted
himself
to
the
arrangement
of
the
war
debt
to
England
and
the
United
States.
The
payment
proposal
was
put
forward
by
Italy
to
defer
the
repayment
in
ninety
years,
however,
was
quickly
rejected
by
Washington,
was
asked
to
send
a
delegation
to
Mussolini
expert
in
the
field.
Foxes
took
advantage
of
this
opportunity
to
highlight
their
skills
both
as
Minister
of
Finance
and
as a
man
of
diplomacy.
The
Foxes
November
14
signed
an
agreement
very
favorable
to
our
country:
Italy
pledged
to
pay
2,042
million
dollars
in
62
years
at a
variable
rate
which
reached
a
maximum
of
2%
after
the
fiftieth
year.
Volpi
Then
he
went
to
London
where
he
negotiated
the
arrangement
of
the
debt
of
war
with
Great
Britain
and
the
British
being
willing
to
trading,
the
results
were
better
than
those
achieved
in
the
U.S.
and
the
amount
of
the
initial
debt
was
reduced
by
85%.
In
May
1926,
the
domestic
prices
grew,
the
deficit
in
international
payments
was
high
and
increased
the
money
supply
on
the
initiative
of
the
big
commercial
banks
to
meet
the
needs
of
enterprises.
Central
bankers
wished,
deflationary
measures
that
the
Italian
government
did
not
adopt,
given
the
strong
performance
of
the
production
and
the
low
level
of
unemployment.
Foxes
tried
a
new
process
of
stabilization
to
be
achieved
through
structural
interventions
to
facilitate
the
effort
to
bring
Italy
to
fixed
parities.
This
line
culminated
on
August
22
in
recognition
of
the
Bank
of
Italy's
monopoly
of
the
currency.
The
same
law
revoking
the
right
to
issue
the
Banco
di
Napoli
and
Banco
di
Sicilia,
which
were
forced
to
shift
their
concerns
to
the
Bank
of
Italy.
In
addition,
the
Bank
of
Italy
also
had
the
responsibility
to
collect
the
notes
of
the
southern
benches
that
were
in
circulation.
The
bankers
of
other
countries
is
not
frowned
upon
the
centralization
of
the
direction
of
monetary
policy
appeared,
among
other
things,
unable
to
effectively
monitor
the
commercial
banks.
Became
a
priority
in
the
fascist
policy
of
deflation
to
restore
parity
in
purchasing
power
relative
to
the
pound
and
the
consolidation
of
the
floating
debt
was
used
to
reduce
the
liquidity
of
banks.
On
November
6,
was
officially
launched
on
Littorio
loan
which
envisaged
the
conversion
of
public
debt
securities
with
maturities
of
less
than
seven
years
in
the
securities
of
the
Littorio.
At
the
end
of
1926,
a
reduction
of
10.4%
in
wholesale
prices
could
not
offset
the
exchange
rate
appreciation
and
practiced
industrial
wage
cuts
and
the
protective
measures
adopted.
The
small
industries
put
into
effect
automatically
and
without
directives
from
a
reduction
in
wages
and
salaries
of
its
employees.
From
then
until
1927
he
continued
to
wage
cuts
unofficial
but
tolerated
by
the
government.
The
deflationary
maneuver
was
not
carried
out
only
with
the
instruments
of
monetary
and
fiscal
policy
but
also
by
direct
government
intervention
in
the
reduction
of
wages
and
prices.
The
objectives
proposed
the
savage
deflation
of
1927
were
successfully
achieved.
The
years
1926-27
marked
the
return
to
gold
policy
to
enter
Italy
in
international
capitalism
in
the
new
Gold
Standard
was
the
symbol.
Along
with
deflation
maneuvers
to
help
ensure
the
stabilization,
we
must
not
forget
the
role
of
the
Bank
of
Italy
who
sold
lira
against
the
currency
to
maintain
exchange
rate
at
the
desired
altitude.
In
January
1927
the
Italian
stock
of
foreign
exchange
reserves
amounted
to
only
$
10.4
million.
In
December
it
had
risen
to
180
million,
87%
of
which
was
accumulated
after
the
decision
in
May
to
maintain
a
stable
exchange
rate
to
around
90
pounds
sterling
and
that
is
to a
level
slightly
lower
than
that
required
by
international
speculation.
By a
decree
published
on
G.U.
the
Bank
of
Italy
was
forced
to
convert
their
notes
in
gold.
Equal
to
92.46
pounds
sterling
was
fixed
to
allow
the
payment
of
any
debt
of
the
Treasury
to
the
Bank
of
Italy.
In
addition,
the
Bank
of
Italy
was
forced
to
keep
a
reserve
in
gold
equal
to
40%
of
its
notes
in
circulation.
The
governors
of
central
banks
of
European
countries
were
concerned
about
the
level
of
stabilization
adopted,
providing
for
such
difficult
times
for
our
country.
The
year
1925
marks
the
split
between
two
different
periods
of
economic
history
of
our
country.
The
end
of
the
1922-25
period
was
characterized
by
the
growth
of
production
and
private
investment,
a
fiscal
policy
can
provide
the
State
with
the
financial
resources
to
productive
uses,
the
devaluation
of
the
currency
that
helped
exports
and
an
inflation
rate
high.
In
early
1925,
the
Italian
economy
began
to
show
signs
of
weakening,
Italy
saw
shrinking
spaces
for
exports
in
the
Balkan
area
in
front
of
the
progressive
advance
of
Germany
on
the
competitive
scene.
In
this
new
context,
to
support
exports
through
the
devaluation
of
the
lira
in
Italy
became
more
difficult
and
more
expensive
in
terms
of
inflation.
In
March
1925
there
was
a
sharp
fall
of
stock
market
indices
as a
symptom
of a
new
course
in
the
real
economy.
Between
March
and
December
of
that
year,
the
stock
index
was
reduced
by
more
than
25%,
and
really,
when
banks
were
burdened
with
fixed
assets
of
an
industrial
character.
The
portfolio
of
the
banks
was
loaded
with
equity
values
acquired
not
only
as a
guarantee
of
loans
made,
but
also
for
speculation.
This
situation
created
difficulties
for
banks
generating
assets
and
also
a
crisis
of
liquidity.
The
main
case
that
reflects
this
phenomenon
is
the
Italian
commercial
bank.
Toeplitz,
managing
director
of
the
bank,
attributed
the
low
liquidity
of
the
bank
only
in
part
with
loans
needed
to
support
equity
prices
and
high
demand
for
long-term
credit
by
firms.
He
believed
instead
that
the
main
cause
of
the
poor
liquidity
of
the
most
important
financial
institution
resident
in "artificial
scarcity
of
circulating
medium",
implemented
to
curb
the
currency
devaluation.
The
lack
of
liquidity
forced
the
BCI
in
the
first
half
of
1925,
to
resort
to
the
deferral
of
the
portfolio
at
the
Bank
of
Italy
for
a
figure
that,
at
June
30,
amounted
to
less
than
2
billion
pounds
and
stood
at
over
30%
of
the
collection.
From
this
operation
did
not
reveal
conditions
favorable
rate,
and
among
other
things,
the
effects
rediscounted
possessed
the
canonical
features.
Nevertheless,
the
Italian
Commercial
Bank
was
able
to
quickly
reduce
their
exposure
up
to
remove
it
completely
in
early
1926.
For
this
reason,
instead
of
talking
about
saving
real
was
better
identify
the
operation
of
the
BCI
rediscount
at
the
Bank
of
Italy
as a
credit
transaction
of
last
resort,
undoubtedly
large.
The
second
half
of
1925
was
marked
by
the
maneuvers
of
the
Minister
of
Finance,
Volpi,
for
exchange
rate
stability.
After
a
brief
but
violent
devaluation
of
the
lira
began
the
deflationary
policy
which
led
to
“Quota
90”.
Riferimenti
bibliografici:
Baffi
P.,
La
rivalutazione
del
1926-27,
gli
investimenti
sul
mercato
e
l’opinione
pubblica,
Milano,
Giuffrè,
1973;
De
Felice
R.,
Mussolini,
il
duce,
vol.
I,
la
conquista
del
potere,
Torino,
Einaudi,
1989;
Toniolo
G.,
L’economia
dell’Italia
fascista,
Roma-Bari,
Laterza,
1986.
