Up, Up, Up

Another full turn in the ominously rising spiral of Italian economy was just about completed last week. Successive effects of invading Ethiopia, battling League sanctions, supporting General Franco and building up a huge Army & Navy have upped State expenses, which has increased taxes, which has jacked up prices. As if living costs were not enough already, last fortnight Italy imposed a 2% turnover fee on every commercial transaction. In every case merchants passed it on to consumers; in some cases merchants did better and profiteered on the side.That caused the Italian Government to take some tough measures.

Some 32,410 persons have been brought into Italian courts since the outbreak of the war charged with contributing directly or indirectly to rising prices--in the main either by selling food above the State-fixed prices or by buying it in hoarding quantities. Eight of these defendants received prison terms, five were placed on probation, 7,578 erring shopkeepers were punished by temporary closing of their shops, 15,089 offenders were fined--and the rest were let off with warnings.

Mildly booming as a middleman for the warring nations, Italy nevertheless now pays $1.25 per gallon for gasoline. More important, the State-fixed price of bread has been raised from 7.9-c- to 8.1-c- per pound; spaghetti from 7-c- to 8-c-; olive oil from 49-c- to 57-c-per quart; sugar from14 1/2-c- to 16 1/2-c- per pound; butter from 42 1/2-c- to 45-c-. Rome housewives guessed that living costs have risen 25% since break of war.

To help compensate for this rise, badly-needed wage increases of from 5% to 10% were enforced throughout Italian industry last March and a further wage rise is again needed to keep the Italian worker even on the bare subsistence level.

Meanwhile, Italian air, rail and water transport is touching new highs handling war goods of all sorts, with transatlantic fares jacked up 100%. The trade boom at first got ahead of stock prices. But in November nearly all sectors of the market in Rome began a steady rise. This slacked off last week because the great Italian textile trust Snia Viscosa, known to have fat profiteering spoils, declared only its ordinary dividend. The State was said to be "persuading" all Italy's great corporations to carry war profits as "reserves"--with likelihood that the State may later take most of these by a special tax. Bouncingest Italian war baby stocks are mercury shares which have trebled since September.

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