Fascist coinage: between financial stabilization and propaganda
When Benito Mussolini and the Fascist National Party seized power after an armed march on Rome in October 1922, the Italian financial situation was already stabilizing but postwar monetary troubles had not finished. The lira had become an inconvertible paper currency since the beginning of World War I and had lost about 80% of its prewar gold value, a fate shared in different degrees by all its partners in the Latin Monetary Union (LMU), except for Switzerland which had remained neutral and then left the LMU in 1920. Inflation, caused by the monetary financing of three years of war, had already contributed to ruining the middle class and leading a substantial part of it to support the fascists’ violent rise to power.
Recognising the impossibility of issuing silver full weight pieces while the value of the currency was so low, the pre-fascist government had started issuing a small denomination parallel coinage in 1922, in nickel instead of silver, outside the rules of the LMU, as the French and the Belgians did as well. In Italy they were called buoni, good for one lira, and represented an ornate classical allegory of the celebration of victory in WWI (image 1). Limited amounts of smaller denomination nickel coins for fractions of the lira had already began circulating before the war, as the old use of silver was becoming clearly incongruous for tiny sums.
The fascist government changed the Italian coinage in three steps.
While it was initially following a rigid classical liberal economic policy under the Finance Minister De Stefani it did not alter the substance of coinage but began marking the political change in a symbolic manner. It issued in 1923 a 2 lire buono, where the first anniversary of the March on Rome was celebrated by the introduction of the fascist symbol as the central graphical element of the coin (a few 100 and 20 lire gold pieces were also minted, but not for circulation). In fact it was much more than a single one-shot celebratory piece replacing national symbols with party symbols. It was the beginning of the transformation of the nature of the Italian state, despite the fact that the first Mussolini government (1922-24) was still a coalition government in alliance with members of the liberal and catholic parties, without constitutional changes. Mussolini ordered the modification of the Italian crest with the addition of the Fasci to the white cross with red background, under a crown, symbol of the Italian Monarchy. At the elections of 1924 Mussolini boasted that the fascists had restored the value of the currency as well as stopped communist agitations and paralyzing strikes (as illustrated in a campaign postcard issued in 1924 by the National Fascist party). The opposition vandalized some coins to oppose the visual message of the fascio, replacing it with the hammer and sickle or attacking the regime (“fascists are assassins”), but without any visible impact.
The second phase began when the construction of the totalitarian state was advanced in 1926 with the prohibition of all political parties and the cancellation of any opposition space. Mussolini chose to conclude the post-war stabilization of the lira and return to gold convertibility while aiming openly for a re-evaluation of the lira (the so –called “quota 90”, an exchange rate of 90 lire per British pound). The re-evaluation sought by the fascist government was not as strong as that pursued by the British Chancellor of the Exchequer Winston Churchill in 1924. It still created deflation and a persistent loss of output during the Great Depression, larger than the one suffered by countries devaluing their currencies. The search for prestige positioned the lira as a stronger currency than the French franc. The death of the Latin Monetary Union at the end of 1926 was the consequence of the five different levels of gold convertibility chosen by the five former members of the LMU.
On that occasion a set of new silver coins were minted in 1926-27, according to the new purely national monetary system and fascist iconography. On the 20 lire a seated allegory of monarchical Italy, holding a shield with the crest of the Savoy dynasty and a torch, received the fascist salute given by an athletic and naked young man holding a tall fascio, representing the fascist revolution on its 6th anniversary. The 10 lire showed a two horse chariot, driven by Italy with a conspicuous fascio in her arm, while the five lire exhibited the eagle with a fascio in her claws. Gold coins for 100 and 50 lire started being minted only in 1931 in such small quantities as to have no circulation of real economic effect because the monetary standard was a gold exchange standard and gold remained in bars in the vaults of the Bank of Italy to settle international balances only, and not to be dispersed into small household hoards. For 1 lira and smaller denominations pre-fascist coinage continued to be minted.
In 1936-38 a completely new set of coins was produced, for all values, celebrating the creation of the Empire with the conquest of Ethiopia, despite the sanctions of the League of Nations. Its messages were triumphal and referred to the supposed restoration of the greatness of the ancient Roman Empire. In addition to a quadriga, plentiful fasces and eagles, and the prow of a boat announcing victory, the new policy drive for increased fertility to assert the future military power of Italy was represented in the five lire coin, showing a mother breastfeeding, surrounded by three children.
All the pomp of the new currency did nothing, of course, to prevent a new meltdown of the currency during World War II, when the depreciation of the lira brought on by fascist policies was about 96% between 1938 and 1945. In other words the lira preserved 20% of its prewar value in 1919 and only 4% in 1945.
Luca Einaudi, Centre for History and Economics
Centre for History and Economics,
Cambridge CB3 0AG, UK
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