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There two wheat-saving measures were decreed: 1) wheat consumption in the army will be cut down by substituting rice several times a week for the army ration of macaroni; 2) consumption by the nation will be cut down by forcing the people to eat, instead of their familiar white wheat bread, uniformly baked and priced whole wheat loaves, adulterated with 10% corn flour. This week Italian bakers started hauling the new loaves from their ovens and housewives scornfully labeled it "grey bread." Since the decree, a great propaganda campaign has been staged to convince Italians that the new bread is better for them. Three weeks ago Il Duce's own newsorgan, 77 Popolo d' Italia, keynoted: "The new bread is better for a virile nation like Italy because it stimulates man's procreative qualities and is better suited for the nursing mother whose milk is thereby enriched, than the old-fashioned bread of the democracies, of the snobs, of the fashionables."
The wheat problem, however, is only one of Premier Mussolini's many headaches. Italian gold reserves, drained by the Ethiopian campaign, have fallen to $212,000,000. Italy's adverse trade balance of $300,000,000 last year was the highest since 1930. This year's is still mounting. Exports have not fallen off materially, but the value of the lira has declined and as a consequence Italy has to pay more for the raw materials, such as coal, oil, which she cannot get at home. On the surface, her industry is prosperous. Heavy industry is making high profits from armaments but, on the other hand, last year's capital levy has resulted in the bankruptcy of thousands of small firms.
Although the Government nine months ago decreed a 10% to 20% raise in wages, food prices have skyrocketed out of proportion. The ''Battle of the Grain," while it substantially upped production, has benefited the large landowners who could make use of Government cultivation aids. These landowners annually sell their surplus stocks to the Government at a high price but the average peasant produces only enough for his own needs, has nothing left to sell. Despite frequent cash doles to the peasants, their standard of living has declined so that, especially in the areas south of Naples, some are clothed in tattered rags, live in hovels no better than pigsties.
Thus, although Italy has recently scorned rumors that she is in the market for foreign credits, the thing Mussolini needs most is a headache powder in the form of a big foreign loan. Most likely place to get it is in London and observers believe that when British Prime Minister Neville Chamberlain sees his cherished Anglo-Italian pact go into effect with the withdrawal of Italian troops from Spain, the British pocketbook will be invitingly opened.