Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-10-29
ITALIANS MAY ASK
FOR MORATORIUM
Debt Mission Likely to Ex-
plain That Present Capacity
to Pay Is Very Small.

| II lS possible, on hlSh ltallan au-
| thority. to outline the attitude To be
taken by the Italian debt commits
sion which will come to Washington
| 4 week To fund Italy's s. 900
100000 debt to the United States.
| Count Nolpi, Mussolini's finance min
lister, and his colleagues, are expected
| to reach New York on October 81
| Their negotiations with Secretary Mel
| Ion and the American debt funding
commission are scheduled to begin not
later than November 3. In both
American and Italian quarters the ne
| gotiations will be initiated in the belief
that speedy results will ensue. Pre-
mier Mussolini's commissioners are
under instructions to come to conclu-
Sions with America and not to waste
time on any provisional arrangement
Such makeshift arrangement, for ex-
ample. as the United States finally
offered to France five-year plan
does not appeal to Italy. The Italians
are coming to Washington to do def
mite business. They want TO get the
American debt out of the way, once
| for all.
Little Capacity to Pay.
The Volpi delegation has one other
inviolable instruction from the Rome
government That is, to enter into no
settlement with the United States that
Italy is not absolutely certain it can
! live up to. The Italians will not, for
the sake of appearances, or for the
sake of merely meeting American eX-
pectations, pledge themselves TO pay
any certain number of millions OF dol
lars a year, knowing when so pledglng
that it would be beyond Italy's capac-
ity to pay.
AT this moment Italy's capacity to
pay is virtually nil. That is so because
payments would have to be made IN
gold. Italy has no gold. Payments
moreover would have TO he made IN
dollars. TO secure those dollars Italy
would have to go into the world money
market and buy them at 50 high rates
| that the operation would play havoc
with the Italian Ira. The Ira already
| is at q heavy discount. II It We're to
! be further depressed, in order to buy
| gold dollars, Italian exchange would
| be shattered disa strously. Count Folpl
| will lay good deal of stress on this
| phase of Italys economic position
next week.
Balance of Trade.
The Italians will ask the United
| States to bear in mind that nowadays
nations can pay debts to one another
only when balances of trade are favor
Bile. As between the United States
heavily unfavorable to Italy. She buys
enormously of Usher imports from
America are larger than from any
other country-but Italian sales TO the
| United States are wholly dispropor-
tionate. America tariff and emigra
ton policy is largely responsible for
that condition. Prohibition has af-
fected the Italian wine trade disad-
vantageously, too. When 200, 900 or
q ion or rfS O
to the United StateS-instead of the
5000 or 1000 the quota now permits
there was a large and steady dema nd
for Italian home produCtS-cheeSe
macaroni vermicelli. etc. With fewer
sons and daughters of Italy here, the
demand has radically decrea sed.
1t is we'll within the range of proba-
bilities that the Italians will ask for Il
moratorium of as long as five years.
In that interval they think the bal
ance of trade might right itself. or ut
least take so much Of turn for the
better that Italy would have some
thing of a trade balance in America
on which to draw for gold payments
to the United States Treasury. Fur
Their taxes in Italy are declared to be
out OF the question. When MuSsolini
and his Fascist government began
revising the national budget three
years ago. the tax screws were put
upon the people about as heavily as
they can stand. The Italian delega-
ton will point out to Secretary Mel
Ion and his colleagues that as the
question Of transfers." in the case of
Germany'S reparation payments. was
based mainly on Germany's capacity
to export goods, that underlying prin-
ciple Of the Dawes plan must he ap-
piled to Italy'S present necessities.
Italy has great hope Of successful
negotiations in Washington because
Of the character of the negotiators
she is sending here. Her three lead
ing delegates are business men. like
Secretary Mellon himself Count Volpi
is one of his country's leading indus
trial magnates. Signor Pirelli is the
rubber king" of Italy. with immense
interests throughout the country. He
was Italy's expert on the Dawes re-
parations commission Signor Albert.
Milanese banker, also brings practi-
cal business knowledge and expert.