, 1876-03-29
FINANCES OF ITALY.
italian GrcenbaCks--.Strnggle to In
provo or Redeem Them.
Imitation a Necessary Evil-~-Popular
Anxiety for Resumption.
Interesting Review Of italian
Finances.

4 lAw passcd hy tile Italian C9lhMpofa on ths
p9th Of Arril 1874, ITO regulate the paros-cir-
culatiun during tho susrennon OF spocto.pay-
peonts," made 1t tho duty of the a1ln!stors of
Flnn,cc hnd Commotco to proacnt a report upon
tho forced currency, and upon tho best measures
10 DO adopted for fts extinction. The Ministers
1lipghotti aud FINAL accordingly praaontsd such
a aropor. iu tho aprng Of 1875 which has recent
" bern published.
Tim report itsof ID not = long document bnk
appended 10 1t, md forming tbs largest part Of
sho votnmo, Is an historical mamor OF great
length, prepared by aignor Romanetli, Secretary
Of tho Council OF Commerce and industry, upon
tho "Forced Currency tCorso Forxogo] ia Italy,
aud TIA Efrccts Oil Public Economy and tho FL
nauccr, from May /, 1866, to Juno 30, 1871" It
il, In effect, financial history Of Italy durlng
that period. Taken sltogothor, Tho report aud
tho memoir constitute ono of tho
HOST VALUABLE REGENT CONTRIBUTIONS
to tho history Of paper-money and to tho gen-
eral currency dscuBaiou., .
Epocio-paymonts woro suspended In Italy Oh
tho 1st Of May. 1sCG. Tile Immediate occasion
was tho war by Pruss1a againat Austria, in
which Italy took part a. tho ally OF Prussia
but tho remoter ca,lsea nro to be traced to tho
political revolution fl Italy, by which tn dtsor-
ont sectlous were united under tho bardinlan
Grown. ThiH revolution onthilod unon tho Gov,
wrousht oauaiiy Important cs,nnQes in tho
industry and trade Of tho country. From
1861 to 1865 repeated deficits had ocear~
OO0,o0O two convert the Italian Ira INTO our
money at tho ratio Of five lire To tbs dollar). 10
meet those deficits. tho Government had con-
sdos selling tho State railways. alternating aud
mortgnging the public domains. and fhrgely ill.,
creaslng tnxcs Public expenditures lad risen
from eio2; 900, 900 to s2lt,ooo, ,ooo Z yoer; and
from G5, II tho beginning Of lsGG. to "a It lilo
end Of April.., Tho. eifocting Of now loans
was practically impossible. Tue s:ste
Of commercial affair. wa equally 1asr unsats-
factory; In tho fonr years. 1902 to 1866. tho tnl-
ports lad o1ceetled the oxportB. War-expensea
works Of informal improvement undertaken by
Tho uoverntncnt, tho Comnuncs, and tho Prov
iuces, and great snoroaso IL sA industrial plant
ToBented by public stuoka and tho bonds and
khares Of railways Rnd othor compauica. Tho
intotost payablo abrond incroased from e7,00Q-
900 III 1861 to s16, ,Uu0, 900 in 1854.
In tho carly part Of 1866 the Atatc of credit fn
Europe grow rapidly woryc, eliminating in May
In tho mnmorahlo English cEiae Of that goar.
Tle general etringonoy fell soyeroly upon Italy,
pArrEp TIE youxTA1Ss OF HER CREDIT IN Fong1oN
Tier public neeuritics, which had boon before
largely hold In Franco, returned to tho country,
mud foli az . now burden upon On overloaded
market. Tho banks Wexc drawn nron heavily,
aud rcsortnl 10 all tho customary c1pcdients for
resiAttng dram OF their resources. Dut ia
spite Of every precan;to, They stee,dily 9st
nwaY. The larger banks Of Sardinia md
Tuscany imported specie, md got sss'Ht.
ance from tho Rotlaschilds; but thcse
shieh impenasd, @ 's and uheh tes ~eud haso
been powesIoss to prevent. WAen war booamo
imminent, and military preparations wcro be-
Enn, tho Goyornmcnt could no longer romaH
lxn. AFsE,{~k fAuiA nj ~ A1
though opposing tho suspension Of speco.psy--
monts up to tho last moment, bccame satisfied
that, on tho ero OF q war Of Which it waa Im-
possible TO foresoo either tho ylcsstuflos,
tho DURATION or tho cost, 10 other alternative
remained. 4 bill was aeoortlil.Kly introduced
mud passed on tho 30tl. Of april, nuthorszlng tle
Government 70 provide hy extraordinary meas s
liz dofeuae aud, On tic following DAY specie
payments wero Suspended by loyal dacrco,
10 show tho ofrect Of tl1ls moasuro, Bignos
nou,auelIl has aa!ootnd
rom, PRINCIPAL DATA,
which la prcsents In IN elfnCttro mRnnor BY a
statistical chart: ~ Tho prloc Of aRht-hl!ls in
guild as Gcnoa on Paris; t2) tho price OF tho
consolidated + por cont bonds (.ento) On the
pAEiH lsonrBo t3) tho promlun on gold az donoa /;
and ~ tho circulation of pnrer. .moncy in Italy.
Whilo tho foreign exchanges hayo generally baon
nEainat Italy, they hRyo occasionally ruled in her
favor. The exsrorncs OF tll1otuntion haye been
from as poF cent discount to ~ per cent pro,
m1um. Tic prico Of rento bonds has varied
much moro widely. !. stoud At IS, May l, 1861,
vixen enesia-rnymonta wore suspended y fol!
il roaoa!ed sdioniy to III IL September, in % con-
sequence OF tho treaty OF poaco and tho ceHHion
Of tho Lo,nbartln-Venotian Kingdom to Italy.
III January. l8Gs 1t foil again to 43I, In
consequence OF the expedition OF Garibaldi md
tho FrencL rooccupAt!on Of Rome. From that
pofut It rose, Nth eomo fluctuations to 10 In tlo
summer Of 1870, but foil suddenly t1 4os IN July
slan War. iY 'tlo ond of 1871 It lad riaon to 10.
siiaEiug the general buoyancy which succeeded
the Fronch peace but IN ta73-thnt year OF
"nad memories" " aa bgpor 1!olnhaclll calls II
II fell again TO 60: Since tAon II lag psonsed by
tho tranquility OF Europe, and the latust qun.a-
kion ou tue Paris Iourro IL II.
In tho Experimentation thoro laa been
STEADY EXPANSION,
Slight reductions Ia iss amount have occurred
trotn time 10 tMe. aud thore have been conssd.
ernble stationary perlods. lut in scnera! ata
course hsa boen upward. This circulation In
ces OF bank pspor serving tho purposea Of mon-
ey {"E4ie 1T credt1 potirts ctl ari tit0t e7Mipa-
lerll tnoneta") Uaginolng with t60. .00o, 600 In
May. 1885, y had rlsen to 1910, o10. .o0 iu August
last ftwo-thIEd OF which was borrowed hy the
Government. Which cannot repay II nor fund The
tnt}atlUn].
Tho pTco Of gold has shown much loss occon.
t11eity than might have eeen expected IN tace
Of those very considerable ol,angea In bondt
and in the volume Of paper-monoJ.. Bearing Z
premium from the mumens ans sreclo.i,syn,euttI
Ns!o suspended May l, 1a6il u toao Huddcnl,
to 1851 tn juno, eftor tho patto OF Cuatozza
with which tho war opened. aud which was dis
hhtsoua 70 the Italian arms. Tho war rractio
ally endcd With tho German battlo Of Badowa
on tho I'd os. July, aud tue troaty OF poaco
which was signed At Prague on the 23a o
Auguat, cauaea tha 9od-prenum 10 1tal]
TO fall to per cont. From that time till 1877
though uoyos reachng what would be con
hidered In thia country ligh figure, Il under
wont .Escat fluctuations. rtHing and falling In
yGrsely With tho ttao and fall Of re,ue and sub
3ect lo the HaHle Influences.
THE RxTnEIEs OT FLuCTuATIoH
In 1867, U8 'G9, 70, and II, wete 141< per cen
~ January 1BGa. and por cont in juno. la7u
ny tAe end Of ls7a it had riHon to IL. At tho on
Of 1878 to 10, aud Il is now in the uoghbor
hood Of ~ per cout ltefersinR to III
"a" laid down by Ricardo, that, Jus
In tho ratio that papes-money oxceeds I'll
wants OF country for circulating medium
Ioaca proportion OF its yaluo, "a shown by th
premium on gold, Hlgnor Kom.neili conclude
that the price Of gold In Italy waa not aontibl
Affected by tho cxpAuaion Of tho uurrouoy, unit
II came u exceed the metallIa circulation, Hlto