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 ITALY

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ITALY

states, but also bore those of the debt incurred on account of the wars and of the expense of maintaining the army on a war footing, so that the first budget (1862) was closed with a deficit of nearly $9O,OOO,OO0, which in ISOti, on account of the war for the acqui- sition of Venice, was increased to $144,000,000. From that time the financial policy of Italy has had no other purpose than to balance its budget, and consequently new taxes were imposed upon the people, e. g. by the taxation of the grinding of cereals and by an increase of one-tenth on all direct taxation, while the expense of the civil adminiNl ration was reduced from $6,300,- 000 to a little more than $4,000,t)00, notwithstand- ing the annexation of Venice; antl the military ex- penses were reduced from $116,000,000 to little more than $37,000,000. As, notwithstanding these meas- ures, the deficit continued, the law of 11 .August, 1S70, increased existing taxations and created new taxes, till finally, in 1S75, the budget closed with a surplus of nearly .$3,000,000; nevertheless the former deficits still weighed upon the treasury: 50 jier cent of the receipts was disbursed in the payment of interest on delit, and the compulsory accejjtance of paper currency encum- bered circulation and maintained money at a high price, impeding the development of national progress. Under these conditions the parliamentary revolution of 8 March, 1876, was accomplishetl, and the party of Cavour (the right) fell from power. The party of the opposition, having assumed the administration of pub- lic affairs, directed its financial policy towards the equalization of taxes by reducing some of them and by increasing others; in 1884 it abolished the odious tax on the grinding of cereals, which brought over $16,000,000 to the treasury. To this great loss of revenue was added an increase of 83'18 per cent to the expenses of administration and defence, besides the interest on the debt caused by the suppression of compulsory accei)t:iiicr of jiaper currency; and, in the fiscal year of lss,"i-sii ihire reappeareil the defi- cit, which in 1SSS-S(I reached the sum of S.50,000,- 000. The Government then bethought itself of put- ting a stop to the increase of burdens upon the budget and of eliminating all unnecessary expense; as, how- ever, the finances remained unbalanced and the debt was increased by the war in the colony of Eritrea, further economies and new taxes were devised; so that, in the fiscal year 1895-96, when Italy celebrated the twenty-fifth anniversary of the taking of Rome, it was possible to foresee financial equilibrium; but, owing to the war with Abyssinia, that expectation was not realized until the fiscal year 1897-98. Then, however, the position of the treasury being more fa- vourable and circulation having become more free, there were three objects towards which financial policy could tend: the immediate lightening of taxation, the improvement of the public service, and the prepara- tion for the conversion of the debt; and the econom- ical awakening of the nation and the improvement of financial conditions made it possible to seek the at- tainment of these three ends almost simultaneously; thus, while the expense for the army and for the navy wasincreased, the law of 23 January, 1902, abolished the internal taxes on farinaceous products; by the law of 22 April, 1905, the State assumed control of the rail- roads, and by the law of 29 June, 1906, was effected the conversion of the Rente, the 5 per cent gross and the 4 percent net, into 3-5 percent net. In the period from 1862 to 1907-1908 the receipts amounte.l to $12,- 260,000,000, the expenses to $12. ss:;, (100, 0(10, with a total deficit of $1,623,000,000. The Tnmsurv receipts for the yearl907-190S amouiitrdto nearh- .8100,(100,- 000, the expenditure for the .same pericidbeiiig.SiUO,- 000,000. Theextraoi-dinarv cash expenses for the same year amounted to $41,OO0.O(J0. The intangible ex- penses, which, in 1868, represented 50-28 per cent of the total of extraordinarv expenses, amounted only to 39-85 per cent for 1907-1908. The greater portion of

these disbursements is connected with the payment of interest on the debts and with the payment of civil ami of military pensions. From the establislmient of the kingdom to the last nameil fiscal year, the State has paid more than .«;.'i, (1(1(1, (1(1(1, 000 in interest on debts. From 1868 to 1!I(I7- I'.IOS this expense has been increased by $32,0(1(1,000,:'.9-8 per cent. This increase is due to the suppression of compulsory paper money in 1882, to the expense for the war in Abys- sinia, to the redemption of the Adriatic railways, and to the provision of funds for the operation of the state railways. The expenses for pensions in the same period of time increased by 76-09 per cent; gen- eral expenses of civil administration, which in 1886 were $3,750,000, are now more than $8,000,000, hav- ing increased 221-49 per cent, while those of the pub- lic service have increased about 219-55 per cent. The increase of $35,500,000 between 1S6S and 1907-1908 in the ordinary military expenses is the result of an increase in the war budget of $17,200,000 and of $18,300,000 for the navy. The nominal capital of the public debt on 30 June, 1908, was $2,655,000,000. The law on the administration of the property of the State and on the general accounts, and the corre- sponding rules and regulations, establishes the meth- ods for all accounting, whether in regard to economi- cal or to propertv matters or in regard to the budget.

Defence of It.vly. — The Alps and the sea, the natural boundaries of Italy, constitute the best frontiers that a nation could desire, while they do not isolate the country from the neighbouring states. But the many political vicissitudes that Italy has undergone have left consideral^le portions of the Alpine region in foreign hands; consequently the northern barrier is partially nullified for defensive purposes; and with a view to strengthening the weak- ened points of the western frontier, many fortifica- tions were built, as those of Zuccarello, St. Bernard, Tenda, Fenestrelle, Assietta, Cenisio, and others. The River Po constitutes the second line of defence, pro- tected along its western portion by the fortresses of Genoa and of Alessandria; at the centre, by those of Piacenza and Pizzighettone, and on the east, by the Quadrilateral and by Venice. The Northern Apen- nines constitute the third line of defence; it is not as strong as the former two, but is none the less import- ant I5ecau.se it is oblique to the line of invasion; on the west it has the fortresses of Genoa and of Piacenza, and the fortifications of Bologna at the centre. Penin- sular Italy has no lack of good positions for defence, but they are of little value if the army be not sup- ported by a powerful fleet. It should be noted, as history shows, that the determining events of war in Italy always take place — or thus far have done so — on the Continental portion of the territory. The present parliamentary committee of inquiry for the army, in order to correct the serious defects in the defence of the frontier, has proposed the establishment of new defensive works costing approximatelv $28,000,000 for the land frontiers, and $10,000,000 for the coasts.

(1) Army. — The army is divided into the perma- nent army, the movable militia, and the territorial militia. All citizens capable of bearing arms are obliged to serve in the army or in the navy (law of 6 August. 1888); this compulsory service extends from 20 to 39 years of age, partly in the ranks and partly underunlimited leave; while service in the ranks should be three years, a new law has reduced the length of service to two years. After the eighth or ninth year of compulsory service, the citizen is transferred from the permanent army to the movable militia, where he remains registered until 31 Deccmlier of the twelfth year of compulsory service, and during the last seven years of it he is in the territorial militia. The recruiting IS done under the mixed system, that is, national, with movable posts, in time of peace, to strengthen the sentiment of union; and territorial in the case of