According to Transporthint, the hope of a resumption of international collaboration failed with the London World Conference of June 1933 and the antagonistic positions of the countries of the so-called gold bloc and of those anchored to the dollar and sterling and fluctuating with them became more rigid, economic nationalism was accentuated everywhere, affecting the already critical situation of the world economy with new tariff increases, restrictions and bans. Italian foreign trade was naturally also affected and contracted further. On the other hand, however, the work of adjusting our production and credit equipment proceeded (regulation of compulsory and voluntary consortiums and industrial plants, activities of IMI and IRI, development of collective agreements and contracts), the efforts aimed at enlarging the internal market and reducing costs began to make their fruits felt, and the corporative order, overcoming the purely trade union phase with the constitution of the corporations, in February 1934, began to implement a concrete unitary discipline of production. The same abundance of cash and cash equivalents, deriving not only from the formation of new savings, but also from the prudence of savers in the face of the scarce convenience of loans, resulting in a significant attenuation of the rates of money, ended up indirectly favoring the productive forces; the state then provided to stimulate the flow of savings to industry, both by issuing bonds by special institutions, and by reducing the interest on its securities. In the spring of 1934 the conversion of approximately 60 billion of a 5% consolidated loan into a redeemable 3.50%; an operation which, while aggravating the budget deficit of 3.5 milliards of 1933-34 due to the appropriation relating to the difference in interest and other expenses, should have considerably alleviated the annual burden of interest on the public debt. Overall, the symptoms of resumption of activity already visible in 1933, materialized in 1934 in an increase in production (despite the unfavorable agricultural year) and, thanks also to a constant and extensive public works policy, in a contraction in unemployment., while the steady behavior of the lira and the gradual contraction of circulation allowed wholesale prices to settle around the general average.
In the meantime, however, our balance of payments, which in 1933 could be considered balanced, had become largely in deficit, essentially as a result of the trade deficit which increased from about 1.5 milliard in the years 1931, 1932 and 1933 to 2.4 in 1934, and the reserves of the Issuing Institute – which since 1928 had been contracting above all following investment operations abroad carried out by the Italian market attracted by the higher net yield of Italian bonds issued abroad and many foreign bonds – suffered a accentuated drainage. From 49.94% at the end of 1933 the coverage of the sight commitments of the Bank of Italy dropped to 41.27% at the end of 1934 and it was therefore necessary to resort to the vigorous measures of the 8 December 1934 (obligation for all Italian citizens to report their credits towards foreign countries and for legal persons to transfer the credits themselves to the National Institute for Foreign Exchange) and those of February 16 and March 1 1935 (import quotas and discipline of private compensations), natural integration of the control imposed on foreign exchange transfers. In May 1935, a political-economic body, the Superintendence for the exchange of currencies, was created to coordinate purchases abroad and to distribute the available currencies, and finally the assignment of foreign credits was made compulsory for all (28 August 1935) and established (November 14, 1935) the monopoly of gold purchases from abroad; on 29 December 1935 the creation of the Undersecretariat of state for exchanges and currencies (elevated to ministry from 20 November 1937) took place, which assumed all the functions of the Superintendency and also those pertaining in the matter to the Ministry of Corporations and to whose dependencies they naturally passed the ‘National Fascist Institute for Foreign Exchange and the National Institute for Foreign Exchange. It was thus realized in the delicate sector of economic relations with foreign countries (largely governed by agreements of clearing) that control and command unit that was now absolutely necessary.
In fact, while the world economic situation, despite the various symptoms of recovery manifested in 1935, was still remarkably unstable, especially as a result of the growing monetary tension, the international political situation had become increasingly complicated and Italy, now engaged in the Ethiopian campaign, he also had to face the economic siege. The sanctions and the consequent counter-sanctions, imposing a drastic contraction of exchanges, however, led to a more complete and rational exploitation of national resources and to strengthen and direct our production structure in order to achieve the greatest possible independence from abroad (see autarchy, App.). As a consequence of this new direction, as well as the needs of war, activity developed rapidly in every field of economic life, with the reabsorption of unemployment and an upward trend in prices. Development, of course, directed and controlled by the state, which had already collected the control levers of production (especially industrial) and foreign trade in its hands and which in March 1936 integrated its power of maneuver by adopting a series of measures in credit sector declared to be of public interest: creation of a single control body, the Inspectorate for the defense of savings and for the exercise of credit, directed by the governor of the Bank of Italy and placed under the authority of a committee of ministers chaired by the head of government; transformation of the Bank of Italy into a “bank of banks” and a public law institution; enlargement of IMI’s sphere of action, of which the Consortium for subsidies on industrial values becomes an autonomous section; and suppression of the financing section of the IRI, while in the disinvestments section of the same, the management of considerable industrial and financial holdings of the state, etc. This led to a harmonious discipline of all forms of collection and use of savings such as to allow them to be channeled towards the most appropriate investments, and to reduce the dangers of competition, speculation and lack of coincidence between active and passive.