22 OCTOBER 1937, Page 2

Desperate Remedies Signor Mussolini expects to raise £65,000,000 by the

10 per cent. levy on the capital of joint stock undertakings, and the new taxes which were announced this week ; the levy, to be paid in 15 instalments by 1940, will be applied to balancing the. Budget. Italy's finances have been shrouded in mystery since the beginning of the Abyssinian campaign ; all that is known is that they are hopelessly unbalanced by the cost of the Abyssinian war (estimated at kr50,00o,000), of intervention in Spain, and of military preparations. The normal financial resources are exhausted ; but, what is perhaps even more serious, the money to be raised by this desperate method is needed to pay for enterprises from which no return can be expected ; Abyssinia will be productive, if ever, only at the cost of heavy capital investment, and it is difficult to see that Italy has any sufficient resources at her command. The Italian people are paying heavily for a policy directed purely at military prestige ; prestige is the only return it can give. Since one half of the levy can be paid by the issue of stock to the Government, the State will become directly interested in industrial enterprises, acquiring 5 per cent. of the capital of innumerable undertakings. And since most companies will only be able to pay with the assistance of bank loans, the levy will have a further infla- tionary effect on the Italian price level which, despite great effects to control the prices of such essential commodities as olive oil, is already estimated to have risen by at least 20 per cent. this year.

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