Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-23
GOLD BASIS
MOVE GIVEN PRAISE
Envoy Here Says It Indicates
Fascist Success and Aids
European Trade.

Details Of the monetary reform just
decided upon by Italy. providing for
a return OF the Ira to gold standard,
were outlined today by the italian
Ambassador, Giacomo de MARITIME.
In telegram to The Star. Ambas.
:,ador de MARITIME gave q summary OF
the provisions upon which the change
was based and concluded by express
ing the belief that the return of Italy
TO the gold standard in a step Of great
importance in the economic develop.
ment OF his country under the Fas.
cist government and IL an indication
of the rehabilitation of the continent
Of Europe.
His message read in part as follows
Federal Reserve Consulted.
1.-THE measure was decided in full
cooperation with the Bank Of Eng
land and the Federal Reserve Bank,
which have acted for IS banks OF
issue In Europe and other continents
on the gold basis.
1.-THE Italian monetary reform was
the subject Of careful and prolonged
study and Is based upon the following
factors:
Il. Balanced state budget. which
has shown a substantial surplus for
the last three fiscal years.
"2. Adjustment Of war debts owed
the United States and Great Britain
on very favorable basis and organi-
Zation Of an autonomous amortization
fund for administration of war debts
and reparations.
-. Stern control OF foreign ex-
change trade.
Il. Concentration of the issue privi-
lege exclusively to the Bank of Italy
and replacement Of treasury notes for
small denominations issued by the
state with silver coin fully covered
Policy Of Defiation.
as. Stern policy of defiation by the
withdrawal without substitution OF
4, 000. 900 900 lire in state notes of %
lire and reimbursement to the Bank
Of Italy Of $500 900 900 lire issued for
war needs by the transfer to said
bank OF net proceeds Of the Morgan
loan Of 1925. The defiationary policy
was continued so as to reach the pres
ent volume of 1880. 100000 lire
against a record level of $4,000. 900 900
in 1920.
IS. Careful supervision over ma
tional banking system.
az. Conversion of the floating debt
into funded obligations, which has
completely eliminated floating indebt-
edness. leaving only the nine-year
Treasury bonds due 1891.
IS. Floating of foreign loans to
italian industries in the American and
British markets within safe limits and
the proceeds of which were put at the
disposal Of the State Treasury.
80. Creation of a new sinking fund
for the internal national debt, which
has already bought and destroyed 300
million lire OF public debt bonds dur
ing the first quarter of activity and
buying during the fourth month ad-
ditional 450.000.000. which are being
destroyed.
Control Of All Prices.
40. Supervision and control OF all
wholesale and retail prices.
THE Bank OF Italy. as n result OF
the credit arrangements made with
the Bank Of England and with the
Federal Reserve Bank for total
amount OF $4,000. 900 and with n
banking syndicate headed by J. p.
Morgan & Co for an additional $50.
900 900. has at its disposal for the
defense OF the new gold Ira a total
Of 16. 497 900 900. against a total actual
circulation Of 1850. 000. 900 that Is a
covering Of "a per cent for defense
purposes.
THE main characteristics OF none
tary reform are the following:
81. Bank of Italy will convert
against presentation to It's Rome CEN
trail office its own paper currency in
gold or foreign exchange OF those
countries which are on gold standard.
80 The new gold parity Is fixed in
the ratio OF a weight Of fine gold
Of grams 1919 for each 100 Ira CORE
spending 10 10 lire per 81. 9e.46 per
pound sterling and 3.76 per gold franc.
Status Of Paper Currency.
- All paper currency issued by the
Bank OF Italy and Treasury notes of
small denominations will possess full
legal tender power until withdrawn
from circulation. The same power
will DO enjoyed by silver. nickel and
copper coins to an extent equal to
that enjoyed previous to the monetary
reform.
~. Bank OF italy il authorized TO
include In its assets expressed In gold
lire on the basis indicated In No .. all
Its reserves. allocating resulting sur
plus TO reduction Of state debt toward
the bank OF issue.
rs. Bank Of Italy la obliged 10 keep
reserve In gold or foreign exchange
IA indicated In No. !. for an amount
not lower than 40 per cent OF the total
paper In circulation or any other side
obligation.
THE return OF Italy 10 the gold
standard represents a step OF capital
Importance toward the rapid economic
development Of the country brought
! about by the sound and courageous
policies Of tho Fascist government and
offers another indication Of the reha.
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