ABYSSINIAN WAR

Dominion, Volume 30, Issue 266, 6 August 1937, Page 11

ABYSSINIAN WAR

The Price Disclosed HEAVY COST TO ITALY Having given the Italian people the vivid, realisation that they now had an Empire by bringing to Rome a few thousand native troops from East Africa and by placing the Lion of Judah, one of the war trophies taken from Addis Ababa, at the foot of a war memorial in the capital, Signor Mussolini has disclosed the price he had to pay for his conquest of Ethiopia, says the Rome correspondent of the “Christian Science Monitor.” The bill is a heavy one, but Italy appears to have found the means of meeting fully the cost of the war. Italy has already sunk in the Ethiopian adventure a capital of 12,111,000,000 lire, or £128,000.000 at current rates. Many more millions will have to be spent before the Empire will begin paying a dividend, but the Italians are not discouraged and look with confidence toward the future. They have been assured by the Duce that the Empire possesses exceptional resources, and they seem to be willing to work “25 hours a day” to exploit it. Appeals for War Funds. The Fascist Government did not have sufficient financial means at its disposal to embark upon a colonial war and the Duce had to appeal for funds to his people, who responded readily to his call. Finance Minister, Paolo Thaon di Revel, told the Chamber of Deputies recently that as a result of compulsory' loans, voluntary contributions and other financial measures, the Italian Treasury had collected in the last 24 years extraordinary revenue totalling 25.288,009,000 lire, or £262,000,000. This huge sum has been used to cover the cost of the Ethiopian War, the budget deficits of the last two fiscal years and Italy’s heavy armament programme. The sources from which this fresh money has been drawn are the following: The issue of a 5 per cent. Government loan ami the reconversion of a 31 per cent, loan into 5 per cent., having the subscribers make a cash payment of 15 lire for each 100 lire of nominal capital converted—this operation brought the Treasury over 6,800,000,000 lire in fresh cash; the compulsory 5 per cent, loan on real estate, which has already yielded 5,500,000,000 lire; the issue of ordinary Treasury bills in the market; the compulsory surrender to the Treasury of foreign securities and foreign currencies against the delivery of Treasury bonds; other minor financial operations. Italy’s Public Debt Italv’s public debt had risen from 91.997.000.000 lire <m June 30, 1934, to 101.241.000.000 lire on April 30, 1937, while the floating ?febt had increased from 12.300,000.000 to 23,200,000.000 lire. There bad thus been a rise of 20.000.000.000 lire in the Italian Government’s indebtedness offset by the acquisition of an Empire. The Italians have been kept in the dark for over two years on the conditions of their national finances, but now the veil of mystery is being gradually lifted. The financial year 1935-36 closed with ir deficit of 12,686,000,000 lire (the biggest yet incurred by the Fascist Administration), 11.136,000.000 of which were due to the East African campaign. The original estimates for 1936-37, apart from expenditure in East Africa, had shown a surplus of some 20.000,000 lire, but owing to various developments, such as the increased expenditure on armaments, public works and other items, this estimate lias had to be modified. This year’s budget is expected also to end in a deficit. War-created Deficit. This deficit, however, would be, if not entirely extinguished, reduced to a negligible sum by other important entries of an exceptional character, such as further revenue produced by the realisation of the gold and currencies offered to the State by the Italian people, supplementary to the first figures of the previous budget, and the sums accruing to the Treasury through tlie revaluation of the reserves of the Bank of Italy after the devaluation of the lira in October of last year. Altogether, the fiscal year 1936-37, which closed on June 30 last, showed a surplus of over 1,000.000,000 lire. For the financial year 1937-38, the estimated revenue was 20,597,000,000 lire. The expenditure is calculated to exceed revenue by 3,173,000,000 lire, a

deficit due largely to the expenditure of 1,200,000.000 lire upon Italian East Africa. This deficit, however, would be eliminated by two factors, which should appreciably increase the estimated revenue, namely, an improvement in the general economic situation, which is bound to affect favourably the taxation returns, and the tightening up of the system of taxation.

No new taxes are in contemplation, but it is hoped to put an end to tax •

evasion by compiling a special register of taxpayers. The local Fascist authorities will help the Central Government in its effort to see that every citizen pays his contribution to the State.