FINANCIAL AND INDUSTRIAL OUTLOOK OF ITALY 49
out, and the beginning of better times for the country at large seemed to be in sight.
But we were a young nation, with all the exuberance of life and the nonchalance of a reckless youth. Having got out of the woods safely, having succeeded in overcoming the tremen- dous difficulty of facing a disastrous deficit without going into bankruptcy, we began to think that we could do almost anything. We set out at once to build new railroads, to improve our civil service, to develop our educational system, to strengthen our army and navy, while, at the same time, we were trying to relieve the burden imposed upon the taxpayers by abolishing some of the heaviest taxes. The result of this policy could not fail to be disastrous. After various ominous oscillations, the surplus reached in 1876 disappeared in 1885, when we found ourselves again confronted by a deficit of 23,000,000 francs.
From 1885-86 to 1896-97 the deficit was constant. Owing to the general economic depression, to the increase in the mili- tary expenses, and to the colonial enterprises, it reached as high as 234,000,000 francs in 1888-89. But here again, by dint of sacrifices and through rigid economy, we found a way of re-establishing the financial equilibrium without becoming bank- rupt. The men of the younger generation were as equal to the task as those great leaders who had faced the previous crisis. The most stringent measures were adopted in 1894, until we arrived at a surplus of 9,000,000 in 1897-98. Had it not been for the Abyssinian war, a surplus would have been reached a year earlier.
II.
This second financial crisis, which lasted for over ten years and greatly hampered our movements, had at least the merit of teaching us a valuable lesson. We learned through it that the corner-stone of a sound financial policy is that no expenditure be permitted, even for the purpose of creating instruments of production or of increasing the value of the government's prop- erty, as by the building of railroads, without a corresponding receipt due to a real source of revenue and not to debt. It is because we did not observe this golden rule of financial wisdom
