We did not stop with the central government. The state, now self-assured, with its finances reordered, was able, by the strength of its example, to give precise rules for the restoration of the finances of the self-governing units in communes and provinces. But even that was not enough; we had to review the financial situation of many a corporation and industry. Generally, this included all those industries which were quoted on the stock exchange.
By one of those phenomena of national and international speculations, which are not infrequent in modern life, many of our industrial stocks and even government bonds had risen to figures which were hyperbolical and inconceivable, if one considered the relation that should exist between the value of our lira and its purchasing power in regard to gold.
Even in Italy, a wise and honest country, in which excessive speculation was never rampant, and in which the stock exchange was never the object of excessive and unchecked interest from any class of citizens, there arose a madness for stock exchange gambling. Many people, naturally, lost their heads. They shattered patrimonies, caused scandals, provoked bankruptcies; but this was not sufficient to stop the sudden craze for speculation. The Minister of Finance then decided to take steps to watch and to limit the activities of the exchanges. It was necessary to take really serious measures, which of course would run counter to old and rooted business traditions. Perhaps they were too sudden and too unexpected. They provoked in the middle and financial class an opposition which created a disturbance in all markets.
I was following the course of these events. This sudden opposition created by economic and not by political causes might, as was shown afterward, become a real danger, but it gave me a very important field for experience and observations. I brought a counter offensive and tamed those who made the attacks. A more rational policy was instituted but we conceded nothing to the speculators. After a while De Stefani resigned. Volpi succeeded him. In the meantime, after this first difficulty had been dealt with, I concentrated my attention on the war debts.
After settling the state budget and balancing it, I knew that I had come to the task of making an agreement with the United States of America and with England on the reduction of our war debt. I sent a delegation to Washington. The leaders were Count Volpi and the Undersecretary of Foreign Affairs, Grandi. I feel that the negotiations were carried on with great ability. We arrived, I believe, at an agreement that satisfied the American public and safeguarded the interests of Italy.
On January 27th, 1926, by an analogous agreement, with slight modifications due to the different relations that existed between us and England, we were able to settle also our English debts. America and England ratified the agreements; and so did we, with pride, because it is our constant, firm rule, in all our private or public affairs, to keep faith with our given word and to pay to our full ability the last cent we owe, without wailing or complaint.
Then came a gesture of spontaneous national patriotism: our people by public subscription and without the help of the state paid the first installment due the government of the United States!
I believed then that the security of the budget and the agreements of Washington and London would be sufficient evidence to reassure our industrial, commercial and banking classes as to the soundness of the financial policy of the government. I hoped that it would lead to a gradual revaluation of all our currency and credit in national and international markets.
Unfortunately, all which appeared to me to grow out of convincing logic did not follow. In the first six months of 1926, we were losing an average of ten points in relation to the pound. The pound sterling naturally was towing all the other privileged currencies in such a way that, at a time when our credit should have been on the upgrade, we were witnessing an opposite phenomenon. Our private economic life was getting thinner and less stable; it was becoming fickle and inconstant, through a gradual inflation which might delude many industrial centres of northern Italy, but was certainly not satisfying to the middle class and to the Italians who saved money.
It was necessary to give a point of support to this gay finance. It was inconceivable that an orderly, quiet, disciplined state, which had no public agitation as a liability and which worked with tenacity, faith and pride, should abandon these wholesome forces and assets to the mercy of shark speculators and parasites, eager to enrich themselves on the depreciation of the lira, ready to accept willingly or even to quicken a general bankruptcy so as not to be obliged to settle their private debts, or to face their obligations toward depositors in their banks. A betrayal of the Italian people was being plotted by a class of unworthy citizens. It was a serious betrayal and an injury to moral character, because a ruined people cannot readily be born again in the credit of the world.