Last week the Italian Government made the unexpected but welcome
announcement of the return of Italy to the gold standard. The lira is now stabilized at 92.46 lire to the pound sterling. France is the only Great Power which has not returned to the gold standard. Signor Mussolini has kept financial orthodoxy steadily in view, and he has reached his objective much sooner_ than was thought possible two or three years ago. The problem which Fascist Italy faced from the beginning was a very curious one. No Government was more intent upon rapid industrial expansion, but this expansion obviously could not be achieved without large credits. The credits inevitably inflated the currency—the very thing which Signor Mussolini wished to avoid. While the inflation was in progress Italy, as always happens in such circumstances, had all the outward signs of prosperity. There was virtually no unemployment. Signor Mussolini, however, understood perfectly well the nature of the chasm which lay at the foot of that slippery slope.
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