Abyssinian War Stimulates Italy's Road Transport
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Some Aspects of the RoadRail Situation in Italy, Showing How Commercialmotor Operators are Penalized to Make Good Deficits of State-owned Railways
I N studying road-rail, competition, as all other economic questions, Italy is now, in many respects, a land of mystery, of half-hidden truths and half revealed difficulties. It is a country lacking essential statistics, many statistical publications having been stopped by the order of Mussolini, on account of sanctions.
This lack is even more sharply felt because relations between the (mostly State-owned) Italian railways and roadtransport operators underwent incisive changes by a law promulgated on June 20, 1935, and by tax regulations 'Which became effective On Jatruary 1, • 10343. A general outline of the situation will be helpful in understanding all sides of this intricate problem— intricate partly because of, and partly • in spite of, the Abyssinian campaign.
Rail Debt to Motor Makers. Up to 1935, road-rail competition seemed to be not so keen in Italy as in most other countries. The State railways—obviously a not-uninterested party—estimated the loss caused to them by road competition, at 8 per cent, of their total receipts in February, 1932, and at 10 per cent., equalling 400,000,000 lire annually, in August,
• 1932. On the other hand, the railways transported largequantities of petrol, parts and machinery for motor vehicles and motor manufacturers, and thereby derived freight receipts reaching about 50,000,000 lire annually.
Both accounts have much increased since that time, but the deficit of the Italian State railways increased at a much more rapid pace. The balancesheet of these railways closed with a deficit of 840,300,000 lire in 1934-35 —the last available figures—against a surplus of 378,100,000 lire in 1925-28. Road competition, although not a negligible factor, cannot be held responsible for more than half this disastrous decline.
A Powerful Rival.
It must be taken into consideration, however, that the potential development of road transport is indeed a serious threat to the Italian railways. Much of the goods to be transported within and across the borders of the country are perishable, such as fruit, vegetables, cheese, etc. The railways are thus handicapped by the natural superiority of door-to-door road service in this field.
Furthermore, the network of motor highways has been much enlarged and improved during recent years, particularly in the industrial northern part of Italy.
A third and not-inconsiderable factor making for rapid development of the Italian road-transport industry is the Abyssinian conquest. Lorries were found to be most useful for the B12
Italian strategic operations in East Africa, where railways were not available and could be constructed only by spending much time and even more money. The bulk of vehicles acquired or hired by the State for this occasion is still fully and profitably engaged in Italian East .Africa in transporting workers or hauling constructional materials.
But repercussions are already making themselves felt in Italy. Many operators are looking out for new business chances in their home country for -the time after the cessation of the Ethiopian boom ; many shippers have come to realize by this war how reliably and quickly road transport may work.
How Road Legislation Operates.
In this situation, the new Italian legislation on road transport is put at once to severe tests. On May 15, 1935, the Italian Minister of Communications, Signor Benni, stated in a speech before the Chamber of Deputies that only a few road-transport organizations acted co-operatively, but that most lorry operators were engaged in keen competition against the railways and against each other, mainly at unprofitable rates.
In order to remedy this state of affairs, the law of June 20, 1935, instituted a licensing system for common and contract carriers, whilst leaving free all private carriers. The General Inspectorate for Railways, Tramways and Automobiles at the Ministry of Communications has to decide in each case, when an applicant wishes to enter the road-transport industry, whether the new enterprise is technically, financially and morally sound, and whether the applicant has joined the pertinent Fascist corporation.
A concession may be given either preliminarily for a year, after which it may be prolonged for another year, or definitively for a maximum period of nine years. Common carriers have to deposit a security of 1,000-20,000 lire. All commercial carriers have to paint a diagonal strip, 7 ins, broad, on the radiator shells and at the rear of their vehicles, the colour of the strips being white, blue, green or red and thereby marking the bearer as. a con
tract, Short-distance, common or private carrier.
Heavy fines are provided for all contraventions of the law ; besides, the licence may be withdrawn, in such cases, for one to six months and, in the event of repetition, for three months to a year.
Although this law was an effective means, in the hand of the State, for. bringing, the budding road-transport industry and road-rail competition into orderly channels, the railway deficit was not lowered and the railway.
finances did not recover. More forcible means were needed for this purpose, and they were found in a marked increase of taxes on road transport. By the regulations of December 2 and 9, 1935, there was introduced a special tax on the transport of goods by motor vehicles, amounting to 0.012 lire per cwt, and kilom. for common and contract carriers and to 0.008 lire per cwt. and kilom. for private carriers. Moreover, all goods-transport tariffs—for rail as well as for road— were increased by 20-35 per cent., except in respect of the transport of passengers' luggage, of export goods, etc.
Saving the Railways; It is expected that these measures will restore the financial balance of the
Italian railways. At the same time, they constitute a grave menace to road transport, as they are additional to other measures burdening all motor traffic, such as considerable increases of the prices of and taxes on motor fuels, lubricating oils, etc.
The devaluation of the lire is another step in the same direction, because motor fuels have to be imported and must be paid for in more of the devaluated lire. On the other hand, electricity for the daily increasing number of electrified railway lines may be obtained cheaply in Italy itself and coal for the other lines is less costly, as expressed in terms of foreign currency.
Nevertheless, it may be assumed that road transport in Italy will not only withstand railway competition, but will even come at last to co-operation with the railways, along the same lines that begin to make themselves apparent in other countries. The raipsys will renounce unprofitable branch lines and will reserve only trunk lines, leaving all unremunerative operation to a State-regulated road-transport industry.
Bright Future Despite Restriction.
Minister Benni intimated this course of events in his speech, and subsequent events have at least not contradicted him. Italian public life is dominated at present, and will be for years to come, by plans to develop the new Empire, the East African territory now rounded off by the occupation of Abyssinia. It is characteristic that these projects, although providing for railway lines from Mogadiscio to Dolo, Addis Ababa, Lake Tana and Gondar, from Assab to Dessie and from Massaua to Addis Ababa, still leave large outlets for building up an efficient and widespread road-transport network.