With July 25, 1943, the curves of economic phenomena are amply affected by the consequences of a political upheaval, the continuation of the war on the whole territory with intensified destructive actions, the double occupation and the political division of the territory. The fabric of legislative provisions, which had been tightened up in 1940-43 and which, although progressively clinging, managed to veil the economic consequences of the conflict, was provisionally but imperfectly torn and reassembled in the North. When the air raids became more frequent and harmful, the apparent national order of the legislative framework was replaced by the almost general disobedience to the shouts that multiplied the penalties imposed; the intolerance for growing deprivation grew, hand in hand with the general mistrust, and the size of the black market made the controlled area of consumption and production less and less. The direction of economic policy was proving increasingly weak, just when the conduct of the war would have demanded it more rigid. The gradual drying up of sources of income, the growing mistrust of money, the progressive rusting of production tools, the boycott operated for political purposes, the unhinging of the entire transport system, the formation of small clandestine markets, the upheaval and contraction of currents of exchange: this is the picture of the gradual and progressive involution, where the general non-observance of the tumultuously stratified laws and the administrative chaos appear predominant, with the waning of state authority.
According to THEMEPARKTOUR, the financial year 1942-43, the last one involving the entire national territory, closed with a deficit of 87 billion lire and the circulation of money at the end of July 1943 had reached about 97 billion. Public debt had risen to 406 billion, of which 169 billion of floating debt, excluding annuities of deferred payments and residual liabilities amounting to at least another 100 billion. By the end of 1944, the public debt had more than tripled compared to 1939 and circulation (including notes issued in the North and am-lira introduced in the South by the American occupation authorities) was more than 11 times that of the pre-war period., while the gold reserve (see in this App.) was reduced to about one sixth. This in the face of the drastic fall in production and national income: the consequences on prices were evidently alleviated by the corrective of the hoarding, which private estimates then estimated at the order of 150 billion. The cost of living index by early 1945 had risen to 210, equal to 100 by 1938.
The serious cash problem was initially faced by the legitimate Italian government with treasury means, that is, with the issue of ordinary treasury bills and interest-bearing bonds and current accounts, as well as with the liquid assets existing at the banks, quite considerable as a consequence of the general paralysis of the demand for financing for production purposes. This stagnation – which reflected the typical aspect of the general economic situation – did not seem to diminish even with the reduction of the official discount rate from 4.50 per cent to 4 per cent, arranged in September 1944.
Only in March 1945, when in the liberated territories there were the first signs of productive recovery also due to the effect of the first supplies of raw materials through American aid (supplies through the military authority and transitional program) a loan was launched for anti -inflationary to allow the Treasury to meet its cash needs, without worsening the monetary situation. The subscriptions – largely modest – collected in central-southern Italy reached the figure of 32,471 million, and led Minister Soleri to extend it to the North immediately after the reunification of the national territory. The total revenue thus reached 106 billion; a remarkable result that perhaps could have also allowed a more far-reaching maneuver,