Nor should it be surprising that the revaluation movement began even before the effect of the new financial measures could be produced (November 6, the day on which the issuance of the Littorio loan was authorized, which served to consolidate 15 billion Treasury bills, the exchange rate with the dollar had already dropped to 23.44), since the Pesaro speech had impacted with prudent energy on a preordained plan in full development and the necessary and sufficient conditions for the recovery of the Italian currency were already substantially in place when the expression of the firm will of the government was able to instill in the nation that element of moral certainty which was decisive for its success.
On 21 December 1927, after 6 months of factual stability, obtained by the Bank of Italy the opening of two guarantee credits for a duration of 1 year (one of 75 million dollars by the main foreign issuers and one of 50 million by the firm Morgan and some English banks ) the paper lira was declared convertible into gold or currencies equivalent to gold, at the fixed rate of 3.66 in relation to the gold lira, of 92.46 in relation to the pound sterling and of 19 in relation to the dollar, subject to the arising differences from the so-called gold points. The regime of gold exchange standard, now generally applied in the various states that emerged from the post-war monetary crisis, thus also replaced the fiat currency in Italy, giving the notes in circulation the fixed value and subtracting them from fluctuations in exchange rates with foreign countries. As a consequence of the accreditation to the state of the capital gains emerging from the revaluation of the reserves of the Bank of Italy, on the basis of the new gold parity, the Treasury was also definitively released from the debt contracted with the bank itself, and the notes issued on behalf of the state remained, subject to the necessary coverage, paid by the bank: unification of the banking circulation which was an indispensable condition for the stabilization of the exchange rate. Monetary reform,
However, the revaluation movement of the lira subjected the national economy to a severe test and imposed severe compressions (which affected above all wages and salaries) for the necessary adjustment of costs to the fall in prices. When the stabilization law was promulgated, the most violent phase of the deflation crisis could however be said to be over and great and decisive steps were taken during 1928 on the arduous path of reorganizing Italian economic life in accordance with the new monetary position, so much so that at the end of the same year the Bank of Italy and the Treasury believed that the endorsement granted by central banks and large banking firms at the time of stabilization was no longer necessary and renounced the continuation of the guarantee loans. Instead, it was only in 1928 that the effects of deflation on the trade balance (increase in imports and reduction in exports) were fully manifested, both due to the tardiness with which economic phenomena always spread, and as a consequence of the crisis of many productive activities that he had contracted the purchase of raw materials in the last months of 1926 and 1927; and the imbalance in the trade balance (and therefore also, due to the diminished size of some compensating items, of the balance of payments) which resulted affected the stock of foreign currencies owned by the Bank of Italy, accentuating the decrease that was already verifying following the authorization granted to the bank itself, in June 1928, to transform part of its equivalent reserves into gold.
More than in 1926-27, the repercussions on the state finances were also significant in subsequent years and in order to face the consequent contraction in revenues, a rigorous revision of budget allocations and a severe economy were necessary, especially since the urgent need for some non-postponable expenses, not only to replenish the stocks of military materials not reconstituted until then, but also for the indispensable execution of public works and to facilitate the economic development of the nation with a series of initiatives culminating in the battle of the grain and in the works of remediation. Progressive tariff increases on discretionary consumption and an increasingly rigorous application of taxes were implemented with regard to income, while the simplification of administrative bodies, the establishment of some state services in autonomous companies and the transfer to industry primta of certain public businesses of an industrial nature, had useful effects on the management of expenses. The balance of the budget was therefore not shaken, but thanks to the adaptation of expenses to the trend of actual revenues, the financial years 1927-28 and 1928-29 also closed with an active surplus of 497 and 555 million, which flowed, like that of previous years, to the Fund for the amortization of public debt, established in August 1927.
According to Health-Beauty-Guides, the world economic crisis was, however, at the gates and already in 1929-30 the situation, still extremely sensitive, of production and trade began to be disturbed and the first repercussions were also had on the budget trend (actual surplus of only 170 million). Then manifested in all its violence and complicated in the first months of 1931 with serious disturbances in the monetary and credit field, the whole economic organism suffered painfully and still suffers from it, despite the complex series of measures adopted by the government to increase its power to resistence.
