Italy's Finances It would not be reasonable to cite the
Daily Herald as an entirely dispassionate commentator on the affairs of Fascist Italy. None the less an article by that paper's City Editor on Wednesday, on Italian public finance, well deserves attention. No one has ever understood how Italy proposed to stand the strain of the new armament race, coupled with the cost of her adventures in Abyssinia and Spain. The ordinary budget balances approximately, though there is usually a small deficit, and last year a to per cent. capital levy was found necessary. But it is computed—the estimate is, no doubt, open to challenge—that between Li so,000,000 and 8o,000,000 has to be borrowed annually for such purposes as Spanish and Abyssinian expenses. Against this is to be set the computation of statisticians that Italy's annual national savings are about £8o,000,000. If these figures even approach accuracy (the Daily Herald's City Editor is an Oxford econo- mist of some repute) the financial situation in Italy must in fact be what there has for the last three years been every indication that it would be. No loan can be raised abroad, and the internal borrowing necessary appears to exceed the total volume of national savings. The only outcome of that must be perpetually increasing inflation, with its disastrous effect on the cost of living. The alternative is a disarmament agreement to lighten a burden which some States can bear with varying degrees of effort but others must soon find utterly intolerable.
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