The Waterbury Democrat., 1935-09-10
Poor Sales Prospects

others-has been increased during the last six months. Mussolini is said to have claimed that he has sufficient iron and steel in hand to meet the needs of his African ad- venture.
 AS for coal - the dictator has sought to increase Italy's coal production and supplement 1t with substitute fuel - hydro-elec- tric power and petroleum. But he still must have coal. We could undoubtedly sell him some, and he would buy from other countries. He has, in fact, already laid up immense stores.
 But all these commodities would not be immense. Italy buys from us about 60 to GA million dol- lars of good a year. In the last six months this buying has not been speeded up, though it has changed character a little. What would hap pen in the event of war Is that Italy would buy but very little from us, but would make It's pur- chase of those goods most needed for the war and buy less of those goods which make up the bulk Of her peacetime purchases.
 But if she were to double her purchases 1t would not amount to a great deal. Last year she bought from us $64,000,000 of products. This means that each Italian is good for $1.45 of buying from us in year, compared with $5.4O from every Belgian, 70 from every Hollander and more from each Englishman.
 Italy Not Good Risk
 Italy cannot buy more from us or any country because she can not sell more. The balance or trade has been persistently against her. In 1928 she sold 16 billion lire of goods abroad. In 1884 It was only a little over billion. She has had to cut her own purchases therefore. And even then the bal- ance remains heavily against her. She has had to pay the differences in gold. Thus her central bank gold reserves have dropped from 1'loO million lire to $500 million ire last year. She dare not drain on more of her gold: Her currency, as it is, is already in constant danger. She has sustained heavy ioss III her invisible imports-chiefiy tour ists' expenditures and remittances from immigrants. She cannot puy from us in larger quantities pe- cause she has not the goods to pay for her purchases. ,,,
 It is inconceivable that we VIII sell her on credit. She simply is moi q. good risk. This Is not said in any spirit of antagonism. ! am simply trying to make plain pusi- ness report on her financial stand- ing.
 Her budget has been continu- ously out of balance since 1SSo. For four years she has had deii- cits ranging from three to SIX nii- lion lire. This year 1t Will De two billion, according to her finance minister. It will probably be more' and this does not include the costs of the Ethiopian enterprise.
 Mussolini cannot balance his budget save by cutting expenses or increasing taxes. He dare not cut expenditures. He keeps afloat by his large payments to labor' unemployed. subsidies to indus try. etc. If he were to cut them his economic system would col- lapse, Instead of cutting he pro- poses to increase them-by making war. Debt a 15O Billion 7.
 He is expanding expenditures. He cannot tax sufficient. Can hc borrow? The external debt Is small for the simple reason that Mussolini has repudiated 1t. But the internal debt Is enormous. In 1880 1t was 88 billion lire. Now 1t is 105 billion lire. It has in- creased at an average of nearly g Ia billions of lire Q year. It will doubtless increase at least as much this year. The interest on it Is a staggering sum for the poor Ital- ian. .@..
 As a matter of fact. the debt ia larger than this-perhaps 50 per cent larger. The government has guaranteed the bonds of the Pub lic Utility Institute and of the Gre dit Consortium, which along with certain other deferred payments makes the debt at least 162 billion lire.
 s x M 2 ss.