In March 1907 the Italian navy contained, excluding ships of no fighting value:—
| Effective. | Completing. | Projected. | |
| Modern battleships | 4 | 4 | 3 |
| Old battleships | 10 | .. | .. |
| Armoured cruisers | 6 | 2 | .. |
| Protected cruisers | 14 | .. | .. |
| Torpedo gunboats | 13 | .. | .. |
| Destroyers | 13 | 4 | 10 |
| Modern torpedo boats | 34 | .. | 15 |
| Submarines | 1 | 4 | 2 |
The four modern ships—the “Vittorio Emanuele” class, laid down in 1897—have a tonnage of 12,625, two 12-in. and twelve 8-in. guns, an I.H.P. of 19,000, and a designed speed of 22 knots, being intended to avoid any battleship and to carry enough guns to destroy any cruiser.
The personnel on active service consisted of 1799 officers and 25,000 men, the former being doubled and the latter trebled since 1882.
Naval expenditure has enormously increased since 1871, the total for 1871 having been about £900,000, and the total for 1905–1906 over £5,100,000. Violent fluctuations have, however, taken place from year to year, according to the state of Italian finances. To permit the steady execution of a normal programme of shipbuilding, the Italian Chamber, in May 1901, adopted a resolution limiting naval expenditure, inclusive of naval pensions and of premiums on mercantile shipbuilding, to the sum of £4,840,000 for the following six years, i.e. from 1st July 1901 until 30th June 1907. This sum consists of £4,240,000 of naval expenditure proper, £220,000 for naval pensions and £380,000 for premiums upon mercantile shipbuilding. During the financial year ending on the 30th of June 1901 these figures were slightly exceeded.
Finance.—The volume of the Italian budget has considerably increased as regards both income and expenditure. The income of £60,741,418 in 1881 rose in 1899–1900 to £69,917,126; while the expenditure increased from £58,705,929 in 1881 to £69,708,706 in 1899–1900, an increase of £9,175,708 in income and £11,002,777 in expenditure, while there has been a still further increase since, the figures for 1905–1906 showing (excluding items which figure on both sides of the account) an increase of £8,766,995 in income and £5,434,560 in expenditure over 1899–1900. These figures include not only the categories of “income and expenditure” proper, but also those known as “movement of capital,” “railway constructions” and “partite di giro” which do not constitute real income and expenditure.[1] Considering only income and expenditure proper, the approximate totals are:—
| Financial Year. | Revenue. | Expenditure. | Surpluses or Deficits. |
| 1882 | £52,064,800 | £51,904,800 | £+ 160,000 |
| 1885–1886 | 56,364,000 | 57,304,400 | − 940,000 |
| 1890–1891 | 61,600,000 | 64,601,600 | −3,001,600 |
| 1895–1896 | 65,344,000 | 67,962,800 | −2,618,800 |
| 1898–1899 | 66,352,800 | 65,046,400 | +1,306,400 |
| 1899–1900 | 66,860,800 | 65,323,600 | +1,537,200 |
| 1900–1901 | 68,829,200 | 66,094,400 | +2,734,800 |
| 1905–1906 | 77,684,100 | 75,143,300 | +2,540,900 |
The financial year 1862 closed with a deficit of more than £16,000,000, which increased in 1866 to £28,840,000 on account of the preparations for the war against Austria. Excepting the increases of deficit in 1868 and 1870, the annual deficits tended thenceforward to decrease, until in 1875 equilibrium between expenditure and revenue was attained, and was maintained until 1881. Advantage was taken of the equilibrium to abolish certain imposts, amongst them the grist tax, which prior to its gradual repeal produced more than £3,200,000 a year. From 1885–1886 onwards, outlay on public works, military and colonial expenditure, and especially the commercial and financial crises, contributed to produce annual deficits; but owing to drastic reforms introduced in 1894–1895 and to careful management the year 1898–1899 marked a return of surpluses (nearly £1,306,400).
The revenue in the Italian financial year 1905–1906 (July 1, 1905 to June 30, 1906) was £102,486,108, and the expenditure £99,945,253, or, subtracting the partite di giro, £99,684,121 and £97,143,266, leaving a surplus of £2,540,855.[2] The surplus was made up by contributions from every branch of the effective revenue, except the “contributions and repayments from local authorities.” The railways showed an increase of £351,685; registration transfer and succession, £295,560; direct taxation, £42,136 (mainly from income tax, which more than made up for the remission of the house tax in the districts of Calabria visited by the earthquake of 1906); customs and excise, £1,036,742; government monopolies, £291,027; posts, £41,310; telegraphs, £23,364; telephones, £65,771. Of the surplus £1,000,000 was allocated to the improvement of posts, telegraphs and telephones; £1,000,000 to public works (£720,000 for harbour improvement and £280,000 for internal navigation); £200,000 to the navy (£132,000 for a second dry dock at Taranto and £68,000 for coal purchase); and £200,000 as a nucleus of a fund for the purchase of valuable works of art which are in danger of exportation.
The state therefore draws its principal revenues from the imposts, the taxes and the monopolies. According to the Italian tributary system, “imposts,” properly so called are those upon land, buildings and personal estate. The impost upon land is based upon the cadastral survey independently of the vicissitudes of Taxation. harvests. In 1869 the main quota to the impost was increased by one-tenth, in addition to the extra two-tenths previously imposed in 1866. Subsequently, it was decided to repeal these additional tenths, the first being abolished in 1886 and the rest in 1887. On account of the inequalities still existing in the cadastral survey, in spite of the law of 1886 (see Agriculture, above), great differences are found in the land tax assessments in various parts of Italy. Land is not so heavily burdened by the government quota as by the additional centimes imposed by the provincial and communal authorities. On an average Italian landowners pay nearly 25% of their revenues from land in government and local land tax. The buildings impost has been assessed since 1866 upon the basis of 12.50% of “taxable revenue.” Taxable revenue corresponds to two-thirds of actual income from factories and to three-fourths of actual income from houses; it is ascertained by the agents of the financial administration. In 1869, however, a third additional tenth was added to the previously existing additional two-tenths, and, unlike the tenths of the land tax, they have not been abolished. At present the main quota with the additional three-tenths amounts to 16.25% of taxable income. The imposts on incomes from personal estate (ricchezza mobile) were introduced in 1866; it applies to incomes derived from investments, industry or personal enterprise, but not to landed revenues. It is proportional, and is collected by deduction from salaries and pensions paid to servants of the state, where it is assessed on three-eighths of the income, and from interest on consolidated stock, where it is assessed on the whole amount; and by register in the cases of private individuals, who pay on three-fourths of their income, professional men, capitalists or manufacturers, who pay on one-half or nine-twentieths of their income. From 1871 to 1894 it was assessed at 13.20% of taxable income, this quota being formed of 12% main quota and 1.20% as an additional tenth. In 1894 the quota, including the additional tenth, was raised to the uniform level of 20%. One-tenth of the tax is paid to the communes as compensation for revenues made over to the state.
Taxes proper are divided into (a) taxes on business transactions and (b) taxes on articles of consumption. The former apply principally to successions, stamps, registrations, mortgages, &c.; the latter to distilleries, breweries, explosives, native sugar and matches, though the customs revenue and octrois upon articles of general consumption, such as corn, wine, spirits, meat, flour, petroleum, butter, tea, coffee and sugar, may be considered as belonging to this class. The monopolies are those of salt, tobacco and the lottery.
Since 1880, while income from the salt and lotto monopolies has remained almost stationary, and that from land tax and octroi has diminished, revenue derived from all other sources has notably increased, especially that from the income tax on personal estate, and the customs, the yield from which has been nearly doubled.
It will be seen that the revenue is swollen by a large number of taxes which can only be justified by necessity; the reduction and, still more, the readjustment of taxation (which now largely falls on articles of primary necessity) is urgently needed. The government in presenting the estimates for 1907–1908 proposed to set aside a sum of nearly £800,000 every year for this express purpose. It must be remembered that the sums realized by the octroi go in the main to the various communes. It is only in Rome and Naples that the octroi is collected directly by the government, which pays over a certain proportion to the respective communes.
The external taxation is not only strongly protectionist, but is
- ↑ “Movement of capital” consists, as regards “income,” of the proceeds of the sale of buildings, Church or Crown lands, old prisons, barracks, &c., or of moneys derived from sale of consolidated stock. Thus “income” really signifies diminution of patrimony or increase of debt. In regard to “expenditure,” “movement of capital” refers to extinction of debt by amortization or otherwise, to purchases of buildings or to advances made by the state. Thus “expenditure” really represents a patrimonial improvement, a creation of credit or a decrease of indebtedness. The items referring to “railway construction” represent, on the one hand, repayments made to the exchequer by the communes and provinces of money disbursed on their account by the State Treasury; and, on the other, the cost of new railways incurred by the Treasury. The items of the “partite di giro” are inscribed both on the credit and debit sides of the budget, and have merely a figurative value.
- ↑ Financial operations (mainly in connexion with railway purchase) figure on each side of the account for about £22,000,000.
