ITALY'S POSITION.

Auckland Star, Volume LXVI, Issue 269, 13 November 1935, Page 25

ITALY'S POSITION.

TRADE AND INDUSTRY.

RAPIDLY BECOMING CRITICAL.

j How far is Italy dependent on imports? Has she built up substantial- stocks of certain key coiwmodities? What is the present position of Italian trade and industry? These questions (says the London "Economist") are continually being posed to-day. Here some indications are given in reply to them. First, according to the latest figures of the Ministry of Corporations, the index of industrial production in Italy (basis 1928 — 100) has risen from 78.08 in 1932 to 80.49 in 1933, to 88.33 last xear; and the May figure thia year at 113.55 compares with a figure of 89.47 for May last year. The branch of industrial production which shows the steepest rise is that of the metallurgical and mechanical industry, for which the index rose from 75.85 in May of last year to 100.72 in May this year; but the production of textiles and of buildings and construction in general showed almost as great an increase. Wholesale prices have risen- steeply in the past year; the index of the Provincial Office of Corporative Economics at Milan (basis 1913 — 100) shows that, after a falling trend down to July of last year, the index rose from. 272.91 in that month to 319.12 last month. The purchasing power- of the lira during the twelve months has therefore dropped from 36.64 per cent of its pre-war level, to only 31.34 per cent last month—a fall of nearly 15 per cent in a year. In sympathy with wholesale prices, the cost living, as far as it can be ascertained, is also showing a rising tendency. As for necessary imports, Italy needs about 12-lo millioa tons of coal per annum; 60-/0,000 tons of copper; about 200,000 tons of iron ore- about 1,000,000 tons of scrap and other steel; 25,000 tons of lead; 90-1000 000 tons of manganese; 1500 tons of nickel; about 500,000 tons of motor spirit and crude oil; and 15,000 tons of spelter and zinc. In tungsten, tin, nickel, mica and chromium Italy is entirely dependent on imports; and her domestic production of wool, fodder, coal and coke, iron ore, copper, steel, lead, manganese ore, petroleum and motor spirit, cannot nearly suffice for her requirements in peace time. The following table shows how some of Italy's chief imports have been moving:— IMr OUTS INTO ITALY. 1933. Commodity. 1934. Jan.-May S ? U . ed : 5,819 3,963 Barley tons G8,G17 44,-34 Flax ....... quintals 19,487 13,860 Cotton (raw) .quintals 1,871,647. <• 8.364 Copper, Ingots-quintals Srw-T Nickel, ingots.quintals Lead, ingois. .quintals Tin, ingots... quintals 42, 100 Zinc, ingots, .quintals r Coal tons 11.<81,3«j4 *j,07.j,857 Coke .......... tons 952,331 326,072 Italy's imports of wheat and maize have not increased, for domestic production has risen steeply. Her imports of cotton, wool and rubber have not increased despite Italian efforts to make heavier purchases abroad —owing to difficulties over Italy's foreign exchange resources and her securing the necessary credits abroad. Already the London banks are considering if it is safe to keep open their credit lines with Italy; and there is little doubt that the decision will be adverse, /t is more than likely that the New York banks will take a similar view. These indications are enough to show that the way of Italy, as an aggressor, may yet prove hard. It is known that stocks of certain commodities in Italy will need continual replenishments—notably those of armament materials, cotton, jvool, fodder and rubber. The auspices at present are not such as to encourage the belief that Italy will easily be able to secure increased supplies of most of these "vital imports." In the event of American action under tlie neutrality legislation" and of League action in the shape merely of an "economic boycott/' Italy may well find her economic situation rapidly becoming critical.