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men working on short hours. Unemployment was greatest in the metallurgical and mechanical industries.

Cost of living. The rise in prices after the war was very consider- able. Taking the average prices of the various goods in 1901-5 at 100, the increases were as follows:

Cereals

Other food- stuffs

Textiles

Minerals

General

Aug. 1914 Jan. 1918 1919 1920

114 326

370-8 436-5

127-2 264-3 438-7 578-1

116-9

513-8 398-4 937-4

ni-6

869-4

357-3 811-9

115-6 457-6 410-1 634-7

The increased inflation of the paper currency was one of the chief causes of the rise of prices, while the rise itself led to further inflation to meet the increased expenses of the Government. Wages on the whole increased to a greater extent than prices, and in many trades the workmen were paid seven to ten times what they were before the war. But the result was that certain trades, such as building, suffered severely and were indeed almost suspended long before the general trade slump, so that those categories of workmen remained un- employed most of the year, unless they changed their occupation, and thus derived no benefit from the general increase. Professional men were able to increase their earnings in proportion to the rise in prices, and the shop-keeping class sold dearer what they had bought dearer, so that they were not hard hit. People with fixed incomes, on the other hand, found themselves several times poorer, but this had the effect of stimulating many rentiers to seek occupa- tion and go into business to make good the deficit in their budgets. Pensioners and persons incapable of earning were the worst off. Government officials received various increases of salaries, bonuses, allowances for the increased cost of living; but the total rise did not more than double their former earnings, whereas prices were very much more than doubled. During the first half of 1921 whole- sale prices showed a downward tendency, and there were also signs of a slight decline in retail prices.

Finance. In 1913-4 the budget revenue was 2,245 million lire, and there was no deficit. The budget for 1921-2 was estimated as follows: revenue 14,786 million lire; expenditure 24,497 million lire, divided as follows: (a) ordinary recurrent expenditure (interest on the debt, peace-time military expenditure, colonies, civil service, railways, etc.) 11,806 million lire; (b) extraordinary non-recurrent expenditure for the liquidation of the war (military expenditure con- nected with the Armistice, maritime transport, bread subsidy, extra expenses due to the unfavourable exchange) 9,807 million lire; (c) expenditure due to the war, but of a less transitory nature (war pensions, indemnities for war losses, reconstruction in the liberated provinces) 2,884 million lire. A deficit was thus shown of 9,711 million lire; but it was anticipated that, by the dropping of the bread subsidy and other steps, this could be considerably reduced.

The cost of the war, to Nov. 30 1918, amounted to 48,490 million lire, not including certain sums still owing, while the long delay in the settlement of the Adriatic question added very considerably to post-war military expenditure. The public debt rose from 15,705 million lire on Aug. I 1914, to 70,599 on Feb. 28 1919, and 108,072 on Oct. 31 1920. Excluding the paper currency which bears no interest and the 20,600 million lire of foreign debt on which no interest was being paid, the interest-bearing debt amounted to 65,000 million lire, of which the annual service was 3,000 million lire. The foreign debt, mostly held in the United States, was in 1921, owing to the depreciation of the Italian currency, equivalent to 80,000 or 90,000 million lire, with interest accumulating at the rate of about 3,000 per annum. The foreign debt was a much debated problem, and although the Italian Government had repeatedly confirmed its intention of meeting its obligations, public opinion demanded that some arrangement should be agreed to by the creditor Allies, bearing in mind Italy's financial difficulties, the fact that the money was lent when Italian currency was almost at par, whereas if payment were immediately exacted the country would have to disburse nearly four times that amount, and the consideration that a large part of the loans served to pay for war material and supplies at a rate allowing for very large profits. At all events it was expected that Italy would be accorded a long delay so as to allow for an improvement of the currency and other facilities.

In 1914 the lira was at par; during the war its value declined (see EXCHANGES, FOREIGN) ; but after the Armistice the decline was far greater, and the fluctuations in exchange were such as to render the most ordinary commercial transactions with foreign countries highly speculative operations. The depreciation of the lira was due partly to the greatly increased inflation and partly to the unfavour- able trade balance, as well as to the constant strikes and disorders, which diminished public confidence abroad. The reached 106 lire in the autumn of 1920, the Swiss franc 4-53, the French franc 1-90, the dollar 28-58 lire.

The capital invested in Italian limited liability companies (mostly industrial and commercial undertakings) increased very rapidly in 1910-20. In 1911 the amount of new capital invested was 310,800,000 lire, whereas in 1920 the figure was 5,077,583,124^ lire, from which 243,041,168 lire must be deducted for capital withdrawn, leaving a net addition of 4,834,541,956, or about two milliards more than

the average of the two preceding years. In comparing these figures with those of the pre-war period the decreased value of money must be taken into account, but even so the increase is considerable. In all from 1911 to 1920 over I4i milliards of new capital were in- vested, and the net increase was over 13 milliards.

The cooperative movement in Italy greatly developed during 1900-20, and was acquiring ever greater importance. In 1915 there were 7,429 cooperative societies (production and labour 3,022, consumption 2,408, farming 1,142, building 752, insurance 105). The membership was nearly a million, and the capital over 118 million lire, with a turn-over of nearly 650 million lire in one year. The cooperative movement is favoured by all parties Socialist, Catholic and Liberal, while the Government confers many privileges on the societies, including exemption from taxation and preference in the assignment of contracts for public works. Unfortunately, they were also exploited for party purposes; and cases were known in which groups of five or more persons formed themselves into a bogus cooperative society in order to obtain valuable Government contracts on easy terms. The Socialists of Emilia were particularly active in this connexion.

Agriculture. The production of cereals declined during the war years owing to the scarcity of labour, and after the Armistice on account of bad harvests and of the Government requisition of crops at inadequate prices.

Production of Cereals, in 1,000 quintals.

Wheat

Indian Corn

Oats

Rice

Other Cereals

Total

1909-14 (average) 1919 1920

49.2/2

46,204

38,500

25,682 21,806

22,000

5.ii8 5,936

3.500

4,867 4,867 4.300

3436 2,074 2,430

88,375 80,887 70,730

The harvest of 1920 was exceptionally bad; prospects for 1921 were better, as the Government requisitions were gradually ceasing.

The grape-producing area of Italy was in 1909-14 4,400,000 hectares, or nearly half of the world total, but the wine produced 45,5OO,ooo hectolitres was only 3/10 of the whole, as a large part of the land under grapes is cultivated by small farmers for their own use and not with the scientific intensity of the French or Rhenish vineyards. During the war the wine output fell to an average of 35,800,000 hectol. and in 1919 to 35,000,000 hectol.; in 1920 it rose to 42,000,000 hectol., the new provinces excluded. Only a comparatively small part was exported: in 1909-13 the yearly average was 1,410,000 hectol. and 180,000,000 bottles; in 1919 it had fallen to 638,000 hectol. and 87,000,000 bottles.

Olives were cultivated over 2,300,000 hectares before the war, producing 10,769,000 quintals of olives, from which 2,200,000 hectol. of oil were extracted, valued at (including by-products) over 300,000,- ooo lire. The output during the war years was about the same; in 1919 there was a slight diminution of the better qualities. Exports before the war averaged 340,000 hectol. and in 1919 were 86,000, with prospects of improvement.

Fruit is an important item in Italy's agricultural production, and one capable of considerable development, but it has been hampered by want of organization and lack of capital among the producers, the excessive numbers of intermediaries, and insufficient care in packing and preserving. In the period 1909-14 the average crop of agntmi (oranges and lemons) was 7,888,000 quintals; chest- nuts, 6,070,000; apples, pears, quinces, pomegranates, 2,823,000; almonds, nuts and walnuts, 2,333,000. During the war years the averages for these crops were 7,347,000, 6,642,000, 2,468,000 and 1,288,000; in 1919 the decline was further accentuated (6,625,000, 4,900,000, 2,104,000 and 881,000). Prospects for 1920 were better.

The production of silk cocoons in 1909-13 was 41,000,000 kgms. according to Government statistics, or 46,000,000 kgms. according to those of the Silk Association ; but even this figure is said to be an undervaluation, and 50,000,000 appears to be nearer the mark. During the war the output was about 42,000,000; it fell to 23,500,000 in 1919, owing to unfavourable weather conditions, but it rose to 35,500,000 in 1920. The hemp crop improved steadily after 1914, owing to the great demand and increased price of textiles; whereas it was 860,000 quintals in 1909-14, it averaged 880,000 in the war years, rose to 940,000 in 1919 and to 960,000 in 1920. The wool crop, which was 280,000 quintals in 1909-13, rose to 300,000 in 1920 (valued at 500,000,000 lire).

Mining. Italy has no coal-mines and therefore has to import all her coal. Lignite mines, however, exist in various parts of Italy, and the war stimulated their development owing to the urgent need of fuel and the ever-increasing cost of imported coal. Thus, while in 1909 555,000 tons were extracted, in 1918 the amount was 2,171,- ooo tons; in 1919 it fell to 1,158,000, and in the first half of 1920 600,000 tons were extracted. The chief source of the coal supply before the war was Britain; in 1909-13 the average annual imports were 9,820,000 tons, of which 8,810,000 came from Britain alone. During the war, owing to the greatly increased cost and difficulties of transport, the imports fell to 7,420,000 (6,080,000 from Britain), and in 1919 to 6,220,000, of which only 4,690,000 from Britain, while the United States sent 1,160,000 as compared with 80,000 in 1909-13. In the first half of 1920 only 2,800,000 tons were imported (1,880,000 from Britain and 680,000 from the United States).