The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo and The Sun TUESDAY, OCTOBER 1, 1935. ITALY'S FINANCIAL PLIGHT.

Auckland Star, Volume LXVI, Issue 231, 1 October 1935, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo and The Sun

TUESDAY, OCTOBER 1, 1935. ITALY'S FINANCIAL PLIGHT.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that we can do.

There is a growing clamour for the payment of debts clue by Italy. A few weeks ago a group of British coal owners decided that Italy's credit had been stretched to the limit, and now Belgium seems to be taking the same view. So Italy will have to choose between paying up and looking elsewhere. It is an awkward choice. In the first place, hard pressed as Italy was when these debts were contracted, she is doubly hard pressed to-day; in the second, unless she pays up it is of little use to look around for more credit. Coal is only one of the items involved. Another is oil. Rumania, Italy's chief source of petrol, has demanded immediate payrftent or supplies will be stopped. The bill, a little over a million, is not large, but it is enough to trouble a country in financial straits. A Balkan State recently set a limit of 30 days in payment for food supplied to Italy, and there have been still other signs of the gradual shrinkage of Italian credit. If this is the result of preparations for war what, it may be asked, would Italy's position bo under war itself? The Budget for the current year takes no account of the extraordinary expenditures on the Abyssinian expedition, yet it shows a deficit, small but alarming enough for the poor and over-burdened Italian people.

In population Italy is nearly the equal of Britain and France, but in wealth and resources she is a, weak nation. The standard of living is low, and the country has none of ;ho basic materials, such as coal, iron, oil, •übber and cotton, which are essential to liodern industrial progress. The materials of ivar are lacking, which means that they must )e imported and paid for by exports. But ■taly's export trade has fallen off, which adds t> the difficulty. Of course, it has been )ossible to provide for the army by rationing exchango and by licensing imports, but as this amounts to depriving the people of many things they need the process must have a wearing and harmful effect. This dependence of Italy upon outside supplies would be a serious matter in the event of war. Hence the importance of sanctions at this juncture. Signor Mussolini knows that Italy is vulnerable to economic attack. If the world liked it could cut off materials, paralyse his munition factories and reduce the Italian army to impotence in a few weeks. Among the commodities which Italy must have, and can only get from outside, are rubber, chrome, manganese, mica, nickel, tin, tungsten and the basic materials mentioned above. Economic sanctions would therefore be a most effective means of undermining an Italian war campaign. Italy may conjure up visions of rich mineral deposits and virgin areas for colonisation behind the Abyssinian ranges, but the Emperor and his chiefs are wise enough to know that if they could hold an Italian army in check for a few months it would have little hope of conquest.