Italy's Capacity to Pay

November 2, 1925

Report Outline
The Economic Position of Italy
Italy's Balanced Budget
The Italian and French Debt Problems
Special Focus

The Italian debt to the United States, the refunding of which is now under consideration by the Italian and American war debt commissions, amounted on May 15, 1925 to $2,138,543,852.77, according to the figures of the United States Treasury. Of this amount $l,647,869,197.96 represents principal, and $490,674,654.81 interest.

The attitude taken by the American commission in the negotiations with France, when it held the basic consideration to be the capacity of the debtor nation to pay, will be maintained in the negotiations with the Italian commission. This attitude was definitely set forth in the reply to the French proposal for settlement in which it was said, “We believe it is fully recognized by both commissions that the only basis of negotiation fair to both peoples is the principle of the capacity of France to pay.”

In determining Italy's capacity to pay the outstanding factor is the trade balance, which, owing to the economic structure of the Italian nation, is highly unfavorable. Italy's imports have exceeded her exports in every year since her unification in 1861. The unfavorable trade balance is partially offset, however, by certain important items such as the money spent by tourists in Italy and remittances from Italian emigrants.

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Nov. 02, 1925  Italy's Capacity to Pay
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