DEVALUATION OF THE LIRA

Press, Volume LXXII, Issue 21907, 7 October 1936, Page 9

DEVALUATION OF THE LIRA

RIGID PRICE CONTROL IN ITALY

IMPORT DUTIES REDUCED

(tnmmo iuii auociatios— corauoar.)

(Received October 6, 10.30 a.m.)

ROME, October 5,

The devaluation of the lira is .announced. The new lira contains approximately 40 per cent, gold content, 4.677 grammes for every 100 grammes, compared with the previous ratio of 7.91 for every 100 NANKING, October 5. (grammes.

Signor Mussolini’s announcement of this decision was made after a meeting of the Cabinet. A communique announces wholesale reductions in customs duties on primary necessaries, including foodstuffs and coal.

It adds: “In order to prevent increased cor*, of living, prices of certain articles will be established at the present level, and fluctuations in others will be rigorously controlled in relation to world prices. The import duty on wheat has been reduced from 75 to 45 lire a quintal. Duties on frozen meat and live cattle have been reduced respectively by 65 and 60 per cent.” The communique announces that there will be no changes in the banknotes or currency at present in circulation. Additional taxes will be imposed on companies, excluding colonial companies. The policy of aiming at the maximum of economic self-sufficiency will be continued, as it is essential to military requirements and national defence. The' financial measures include a practically compulsory loan to which the owners of fixed property will subscribe to the extent of 5 per cent, of the value of their property. They will abo pay a special annual tax of 3.50 lire on every 1000 lire worth of property possessed. Thus owners will be forced to buy bonds and then taxed ip order to pay themselves interest on them.

Dr. Gayda describes the objects of the loan as the balancing of the budget without disturbing the money market with another state loan, and second to pay for the Abyssinian war.

ITALY'S ACTION WELCOMED

APPROVAL OF EUROPEAN DEVALUATION IN U.S.

(Received October 6, 10.40 p.m.)

WASHINGTON. October 5,

Mr Cordell Hull, Secretary of State, expressed approval of the action of France, Switzerland, and the Netherlands in devaluing their currencies, also , lowering import duties as a “move towards rebuilding international commerce.” He said it showed that other countries recognised that the extreme restrictions imposed on the trade of the world created a common injury, and that they were ready to move tpward rebuilding international commerce. The only comment of the Secretary to the Treasury (Mr Henry Morgenthau, jun.) on stabilisation was that “everything seemed to be going extremely well.” Italy’s devaluation is welcomed by bankers and economists as a contribution to the general readjustment of parities preceding stabilisation and the revaluation of the lira.

NO DEVALUATION BY POLAND

(Received October 6, 5.5 p.m.)

WARSAW, October 5

The Cabinet has decided that it is not necessary for Poland to devalue the zlbty.