St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-08-21
ITALIAN FINANCES.
A Deficit of Millions-The None
tary Situation.

Cdry SIUudClOns
ROME, Aug. 20.-The papers are now
declaring that the deficit for the last
fiscal year will prove to be 90,000,OOO
lire (s18, 600, ,OO0) or 2O,O0O,O00 lire (S4,oOo,-
000) more than so far officially reported
The new economies proposed are eX-
pected to restore an equilibrium for the
year 1912. But these are of such
nature as to call forth the remark that
they seem to be attempts to stop an in
finite number of spigot holes, while the
bunk is left wide open, as required by
the engagement of the triple alliance.
The financial situation has become still
more trying because of the recent fall
in Italian bonds and the rise in the
price of gold. Why this has occurred
Just at the present time-When there is
promise of abundant crops; when all
the real conditions of finance, OF the
treasury and economy should warrant
an advance-is puzzle to Italians.
The balance of trade is more favor
able than for years, and yet the pre-
MUM on gold continues to advance.
There are all kinds of specuatlonS as to
the causes of these fluctuations. The
supporters of the government claim that
it is purely the action of bears on the
stock exchange of Paris. The support
els of Crispi allege that it Is because the
government has not made the arrange
mentS that it was accustomed to make
at Berlin when Italian funds were at
tackled in Paris. All parties apparently
fail to realize that France is and has
been for years the natural outlet for q
large proportion of Italian exports, and
that Paris has been the money center
on which Italy has relied and must con-
tinue to rely as market for her bonds.
No one seems to understand why re-
newal of the triple alliance and the
negotiations for the formation of COM
mercial alliance for the express purpose
of isOlating France commercially, as the
former was to isolate her politically,
should have the slightest effect on the
Paris market for Italian bonds.
1t may be a mere coincidence. but 1T
is fact, that the decline in Italian
rentes began at the time announced for
the commencement of the negotiations
at Berne for the formation of the COM
mercial alliance. Competent observers
think that many causes contribute to
the present monetary situation. But it
is certain that lack of confidence at
Paris, the great money center OF Con-
tinental Europe, is one OF the chief
causes, and that this confidence can be
only restored by the policy of those in
power. The currency of Italy is theoret-
ically gold and silver, but really it is
an inconvertible paper currency. Gold
and silver (fve-franc pieces command
premium varying from IL to 2 per
cent. Exchange on Paris commands
about per cent premium. 1t is claimed
that the eagerness of the banks of issue
for gold is the cause of this premium.
Though the Dublic cannot obtain gold,
except by selling bank notes, the banks
(of issue) themselves have but to collect
all the bills of other banks they can find
and then they can demand their own
bills or gold in exchange. This position
has led to a scramble for bills of other
banks. and all means have been en-
ployed to secure them SO as to thereby
secure gold at par, which is worth
premium in the street.