48 THE AMERICAN JOURNAL OF SOCIOLOGY
I.
The ups and downs of Italian finance, since the proclamation of the kingdom in 1861, are the outward token of the hard struggle fought by the nation for building up a great power out of the ruins of seven tiny states. Think of the magnitude of the task! When the kingdom was formed, in 1861, Italy was indeed in the most discouraging condition of immaturity. Europe regarded her with mistrust and suspicion, the foreigner still held a large area of her territory, while the Pope still ruled at Rome. There was no army, no navy, no civil service ; there were, practically, no railroads and no schools. The rate of illiteracy was as high as 74 per cent. Industry and commerce were almost nil. Agriculture was in a primitive condition. The public debt, resulting from the aggregated debt of the seven states, was more than 2,000,000,000 francs. It is no wonder that in 1862, that is, one year after the proclamation of the kingdom, the deficit between receipts and expenditures should have reached 446,000,000 francs. In 1866, the war with Austria adding to the tremendous difficulties of the situation, the deficit rose to 721,000,000. In 1871, after the occupation of Rome, and in spite of the most drastic measures, it was still 215,000,000. But, even at the darkest moments of this tempestuous period, Italian finance has been fundamentally honest, and Italy has made it a point to meet her financial engagements at all costs. She has never sunk to the condition of bankruptcy that has dis- graced other countries.
After the occupation of Rome, in 1871, the financial situation of Italy began to show signs of positive improvement. It was not, however, until 1876 that Premier Minghetti was able to announce to the Parliament a surplus of 21,000,000. This most gratifying result was due not only to wise statesmanship, but also to the unflinching patriotism of the taxpayers, which alone made it possible to adopt the most vigorous measures in order to save the good name of the country from the blot of insolvency.
With the year 1876 ends what we might call the first period in the history of Italian finance. The deficit had been wiped
