ITALY

a country of southern europe and a mem- ber of the league of nations. the additions to the territory of italy under the peace treaties are shown in the attached map (see also st. germain, treaty of). the area was increased by 9,005 sq. m. to a total of 119,624 square miles. the census of 1921 gave a total population of 38,755,576. the population of the new territories at the date of the census was trento venezia tridentina 641,747; fiume, pola, trieste and zara (together constituting venezia giulia) 728,544; making a total access of population of 1,370,291. i. political history the giolitti government.—on the resignation of the luzzatti cabinet (march 18 1911), sig. giolitti formed a government. during the previous few years relations with turkey had be- come strained owing to the restrictions placed by the porte on italian enterprise in tripoli, the only part of north africa where italy italian expansion was still possible. at the same time the policy of germany aroused the suspicion that she was contemplating action in that province. the nationalist movement, created at the florence congress of 1910, and directed towards awakening the country to the necessity of a more vigorous foreign policy, advocated the occupation of tripoli. the success was such that giolitti himself, anxious as he was to avoid foreign complica- tions, could not afford to disregard it. after a series of diplomatic incidents, an ultimatum was pre- sented to turkey on sept. 28 ro1z, and no satisfactory answer being obtained, war was declared on the 29th. except for the socialists, public opinion strongly supported the government, regarding the war not merely as a colonial enterprise, but as a patriotic reaction against the old pusillanimous policy and the petty intrigues of parliament. on nov. 5 italian sovereignty was extended to tripolitania and cyrenaica. foreign powers were not friendly to [taly’s african policy, and while austria placed a veto on the extension of the campaign to the balkans, a serious diplomatic incident arose with france over the searching by italian cruisers of the french steamers “‘ carthage” and ““manouba,” suspected of carrying contraband. although the affair was satisfactorily settled at the hague, it did not im- prove italo-french relations. on oct. 15 19182 the peace pre- liminarics were signed at ouchy, and the treaty on the 18th, the sultan retaining only spiritual authority over the inhabitants of the annexed territories, italy remaining in occupation of rhodes and the dodecanese until turkey had withdrawn all her troops from libya and fulfilled her other treaty undertakings. the total cost of the campaign had been 458 million lire. fight- ing, however, did not end immediately, as the arabs, secretly supported by turkey, continued to resist in the interior. sig. giolitti’s proposals for the extension of the franchise (raising the electorate from three to cight million voters), pay- ment of members and a government monopoly of hfe insurance were voted without much opposition, as parliament did not wish to embarrass the cabinet during the war. at the socialist con- gress of reggio emilia (june 1912) a group of leaders, including leonida bissolati and ivanoe bonomi, who approved of the government’s african policy, were expelled from the party and formed a new group called the reformist socialists, prepared to collaborate with the constitutional parties. the majority styled itself thenceforth the “‘ official ” socialist party. in the field of labour there were strikes at the iat works in turin, and among the agricultural workers of ferrara and a general strike at milan in the summer of 1913. during the balkan wars of 1912-3 italy and austria had agreed to the creation of an independent albanian state, thereby ex- cluding the serbs from durazzo and the grecks from valona. in spite of this settlement and of the marquis di san giuliano’s attempts to arrive at a friendly understanding with austria, relations were strained to breaking-point by austria’s treatment of her italian-speaking subjects and the menaces of the austrian military party against italy. at the elections of oct. 26-nov. 2 1913, under the extended franchise, the socialist group was increased to 79. for the first time a catholic party presented itself to the polls, the pope hav- ing withdrawn the now expedit, and 33 catholics were returned, while 2 number of liberals and democrats owed their success to catholic support. sig. giolitti’s position was somewhat shaken, for, although the socialists were ready to give him tacit support in exchange for concessions to their co-operative socletics and certain measures of a demagogic character, disagreement among his own followers over the question of catholic support, and the threatened railway strike were likely to cause trouble. on march to 1914 he resigned and was succeeded by antonio salandra, a right-wing liberal of high standing. san giuliano remained at the foreign office, but gen. spingardi was succeeded as war minister by gen. grandi. the revolutionary sindacato ferro- vieri now demanded a general increase of wages, but, owing to financial difficulties, the government could offer an increase only to the lowest categories; the sindacato threatened a strike, but eventually gave way. 599 on the national festival of the statuto (june 7 1914) riots broke out at ancona because the authorities had forbidden the holding of an anti-militarist meeting. a general strike ensued in the town and the trouble spread to other parts of the marche, to romagna, and most of the larger citics. ,the movement was ef a mainly revolutionary character; its leader was the anarchist enrico malatesta, and benito mussolini (q.v.), editor of the avanit; played a prominent part init. for a week many towns were under mob rule, until a popular reaction led by the nation- alists cleared the streets of the seditious clements and the troops and police restored order. sig. salandra was criticised for his lack of energy in dealing with the outbreak, while the socialists attacked him for his “‘ reactionary ’’ methods; a group of gio- littian deputies, headed by orlando and schanzer, tried to bring about his fall, but he secured a vote of confidence. the worltp war and the peace the austrian ultimatum was presented to serbia on july 23 tor4. italy co-operated with great britain in trying to avert a catastrophe, and public opinion, although realising that if a casus foederis under the terms of the triple alliance were to arise, italy would be bound to stand by her allies, was hostile to the idea of siding with austria. general relief was caused by italy’s declaration of neutrality on aug. 3 which was based on (1) austria’s failure to co-ordinate with italy before taking action, (2) the fact that italy had not been given time to act in favour of peace, or to make adequate military preparations and (3) the fact that italy was not bound by the terms of the alliance to take part in an aggressive policy. 11 was afterwards announced that no casus foederis could arise for italy in a conflict in which great britain was involved.} neutrality declared, military preparations began. the reor- ganisation and re-arming of the whole army was largely the work of the new chief of the general staff, gen. luigi cadorna (q.1.). the question now was whether italy should remain neutral to the © end of the war. the triplicists, although fairly numerous in conservative and diplomatic circles, and in a part of the army, hardly went so far as to advocate intervention on the side of the central powers, for the invasion of belgium had created a very unfavourable impression, but they advocated neutrality. the catholics were neutralists from dislike of ‘‘ atheist ” france and orthodox russia and from sympathy with catholic austria. the “ official ” socialists were neutralists because they opposed ali war except class-war, but ended by openly espousing the austro-german cause. the nationalists, irredentists and some liberals, realising that this was the last chance for completing italian unity and affirming italy’s position as a great power, favoured intervention, while the democrats, freemasons, re- publicans and reformist socialists were interventionists from sympathy with france. mussolini's little group of syndicalists desired intervention, partly for the same reason as the national- ists, but also in the hope that war would promote social changes. mussolini resigned the editorship of the avanti! and founded a new paper, f/ popolo d'italia, which supported intervention. on oct. 9 1914 gen. grandi resigned on account of a disagree- ment with gen. cadorna, and was succeeded by gen. zupelli. a week later the marquis di san giuliano died, and the prime minister temporarily took over the foreign oflice. on oct. 31 the treasury minister rubini resigned on a question concerning the supply of funds for the army, and the cabinet followed suit. but sig. salandra himself reconstructed it by nov. 5, and selected baron sonnino as foreign minister. owing to the troubles in albania, the departure of prince william of wied and the greek invasion of the southern districts, italy occupied the islet of saseno on oct. 31, and on dec. 26 the town and harbour of valona. 1915 began with a serious earthquake in the abruzzi (jan. 13), which caused the death of 30,000 people. the treaty of london.—mcanwhile the interventionist tend- ency grew stronger. both salandra and sonnino were deter- mined not to let the war end without trying to acquire at least 1 see europe. the treaty of 1882 stated that “‘ the treaty was not in any case directed against england.” 560 a part of the italian districts of austria, and to secure a rectifi- cation of the frontiers of 1866 which left italy open to invasion. in dec. 1914 italy had reminded austria that the invasion of ser- bia, by tending to destroy the balance of power in the balkans, gave italy a right to compensation under the terms of article 7 of the alliance as renewed in 1887. austria began by rejecting the claim, then suggested compensation at the expense of france, and finally offered a part of the trentino to be ceded after the war, but sonnino insisted on immediate cession, and to this austria at last agreed. sonnino demanded all the trentino, the isonzo valley, some of the dalmatian islands, a free hand in al- bania and the formation of trieste and northwestern istria into an independent state, italy in return to remain neutral to the end of the war. as austria continued to give evasive replies, italy opened negotiations with the entente. on april 26 1915 the treaty of london was concluded between italy, britain, france and russia, to be completed by naval and military con- ventions. italy undertook to intervene, and was promised the trentino and upper adige valley to the brenner pass, trieste, gorizia~gradisca, istria and the istrian islands, cherso and lussin, dalmatia as far as cape planka, valona, full possession of rhodes and the dodecanese and in asia minor a zone of influ- ence and eventually a share in its partition. if an independent albania were created, it would be under italian control, while italy would not oppose the cession of the northern and southern districts to serbia and greece if the other signator so desired. the poct d’annunzio by his fiery speeches, and mussolini by his articles, largely influenced public opinion in favour of inter- vention. on may 3 1915 italy denounced the alliance with austria, but prince von billow made a last effort to secure italian neutrality through giolitti. that statesman believed in the necessity for neutrality, as he had no confidence in italy’s powers of resistance, and, although informed by salandra of italy’s engagements with the entente, he continued his neutralist activi- ties in collaboration with von biilow. salandra, knowing that if grolitti declared his opposition, the cabinet must fall, resigned on may 13. it seemed as though giolitti’s triumph were assured, but the voice of the country then made itself heard. huge popu- lar demonstrations in favour of salandra and intervention were made all over italy, and the king refused salandra’s resignation; austria’s final offer, no improvement on the last, communicated by von biilow to giolitti before being communicated to the government, was rejected. italy enters the war—on may 20 1915 the chamber and the senate granted the government full powers. neutralism and germanophilism had apparently disappeared, except among the official socialists. on the 23rd the gencral mobilisation was ordered, and on the 24th war against austria was declared, while diplomatic relations with germany were broken off. owing to the persecution of italian subjects in turkey and turkish assistance to the rebels in libya, where italian occupation was reduced to tripoli and homs and a port of cyrenaica, war was declared against the porte on aug. 21, and against bulgaria in september. on dec. 1 baron sonnino adhered to the london agreement, undcriaking not to conclude a separate peace. an expeditionary force was sent to albania, where it saved the remnants of the serbian army driven from its own country. the initial successes of the italian offensive were satisfactory, but did not lead to definite results. the subsequent defeats sus- tained in the trentino and on the asiago plateau (may 1916) shook the cabinet’s position, and on june ro sig. salandra re- signed. the giolittians regarded this as a victory of theirs, but the new cabinet was in no wise giolittian. sig. paolo boselli, the veteran statesman, respected by all parties, formed a cabinet in which all shades of opinion, except the socialists and neutral- ists, were represented. sonnino remained at the foreign office, while orlando was transferred from the ministry of justice to that of the interior. the austrian trentino offensive had delayed gen. cadorna’s attack on gorizia, but this was now resumed, and on aug. 4 19016 after r1 days’ desperate fighting, the fortress fell and public confidence was thereby restored. that same month an expedi- italy tionary force was sent to macedonia where it played a distin- guished part in the eustern operations. on aug. 27 italy de- clared war on germany, owing to the assistance she had afforded to austria and the seizure of italian property by the imperial government. in april 1917 the british, italian and french pre- micrs concluded a convention at st. jean de maurienne whereby it was agrecd that in a future partition of anatolia the smyrna area was to be assigned to italy. during the operations of 1916 and 1917 the italians achieved some important successes, and above all pinned down austria’s best troops, preventing her from sending rcinforcements to the west. but the protracted struggle, the fearful losses, the col- lapse ef russia, and the grave privations at home had accen- tuated the feeling of depression in italy, to which enemy and neutralist propaganda contributed. the socialists fomented the discontent. claudio treves’s phrase, “ next winter not a man in the trenches,” the german peace offensive, the pope’s allu- sion to “ the useless carnage ” and the defeatist campaign of the giolittians began to affect public opinion and the war-weary troops. there were revolutionary riots in turin (aug. 1017) and signs of a diminished military spirit among certain units at the front. gen. cadorna had repeatedly warned the gov- ernment, and particularly the minister of the interior, orlando, but no attention was paid to him. this state of affairs and cer- tain military errors of generals cadorna, capcllo, badoglio and others resulted in the caporetto disaster (oct. 23 1917). the recovery—after a defeat of these proportions it appeared impossible that the army and people could recover. but by nov. 22 the army had reconstituted its front on the asiago-grappa- piave line, and the encmy’s advance was definitely held up. british and french forces hurried to assist italy, but did not come into action till december. cadorna was relicved of his command and succeeded by gen. diaz. at the rapallo inter- allied conference on nov. 4 the military committee of versailles was formed. in consequence of the caporetto disaster the boselli cabinet resigned (oct. 263, and on the 30th sig. orlando suc- ceeded, he himself becoming prime minister, sonnino remained at the forcign office and nitti became treasury minister. the necessity for relieving the refugees from the invaded arca was a scrious problem, but it was efficiently handled, and the sight of the refugees helped to strengthen the spirit of resistance. the army was rapidly reorganised and the losses in material made good through the enterprise of the italian manufacturers and the technical genius of gen. dalollio, minister of munitions. on jan. 8 r9or8 president wilson published his famous four- teen points. those referring to italy—‘ the rectification of the italian frontiers on clearly recognised national lines,” and “ au- tonomy ”’ for the peoples of austria-hungary —were of a nature to raise anxiety as to his intentions. from april 8 to 10 the con- gress of nationalities oppressed by austria met in rome, and although organised by a private committee, its delegates were received by orlando, to whom they presented the so-called ‘ pact of rome,” this should have been an earnest of mutual good-will between italy and the yugoslavs, but it had no binding force and compromised the solution of the territorial problems in- volved. meanwhile the yugoslavs were conducting a propa- ganda to induce britain and france to rescind the objectionable clauses of the london treaty, and even proposed that, should italy remain obdurate, the allies and america should cut off her supplies of food and fuel, a request which was rejected. the economic situation was becoming worse, but italy submitted to privations greater than those of any other allied country. the shipping losses were serious, the bread ration was reduced to 250 grammes per head per day, meat was sold only twice a week, and many goods were unobtainable. in june tois the austrians launched a powerful new offensive on the asiago-piave front, but after a few initial successes, were driven back with heavy losses. the italian contingent in mace- donia, commanded by gen. mombelli, contributed mate- rially to the victory in the balkans (sept. 15-29). on oct. 24 diaz launched his attack on the austrians from asiago to the sea, and by nov. 3 “ what had been one of the most powerful ivaly armies in the world,” as the victory communique stated, ‘ was annihilated.”” some 600,000 prisoners, 7,000 guns and immense quantities of material were captured. the same day at villa giusti near padua the armistice between the italian and austro-hungarian armies was signed, the enemy under- taking to evacuate all the territories assigned to italy by the london treaty. the armistice came into force on nov. 4, fol- lowed a week later by that with germany; to the latter’s col- lapse the italian victory had contributed, as it had opened the door into the heart of germany. the whole area within the ar- mistice line was rapidly occupied, as well as certain points be- yond it for the maintenance of order. italy’s losses had amounted to well over 600,000 killed and a million seriously wounded, in- cluding 220,000 permanently disabled. the knowledge of these losses created a deep impression in italy, but it was felt that they were not adequately appreciated in allied countries. the peace conference-—on feb. 7 19109 the italian govt. pre- sented a memorandum to the peace conference, embodying and justifying its territorial claims, which corresponded to those agreed upon in london, but fiume was also mentioned, because on oct. 31 1918 the national council of that town had, in the name of the italian majority, applied for annexation to italy. there were no difficulties about the trentino as its population was wholly italian. the alto adige contained a german- speaking population, but it would have been difficult to devise a satisfactory frontier south of the brenner. in the venczia giulia about half the population was italian, but many of the slavs had been recently imported by austria to swell the non-italian percentage; of the natives the majority were italian, including all the more civilised inhabitants. in dalmatia the great major- ity was slav, but the civilisation and traditions of the province were italian. italian public opinion was unanimous in desiring a satisfactory frontier and the protection of the ieelzanztd of the italian communitics east of the adriatic, but was divided as to the details of the settlement. the nationalists demanded the treaty of london territories plus fiume. the rinunciatart were ready to give up dalmatia, part of istria and the trieste hinter- land, because they wanted to conciliate the yugoslavs and disre- garded strategic necessities, but demanded fiume. sig. bissolati, minister without portfolio, wished even to renounce the alto adige. in the italian peace delegation too, opinion was divided; while sonnino stuck to the treaty of london and did not insist on fiume, orlando demanded the latter, but was pre- pared to compromise on dalmatia. the yugoslav counter- claims extended to the old italo-austrian frontier and even beyond it, and this attitude aroused much indignation in italy, the more so as, until the very eve of austria’s collapse, the croats and slovenes had behaved as faithful subjects of the dual monarchy and had fought in the war against italy, whereas now they made their claims posing as allies, and were treated as such by british, french and american statesmen. the government had many internal difficulties to contend with. the army could not yet be demobilised owing to the un- settled conditions on the frontiers and the necessity for keeping forces in albania, bulgaria, etc. in italy itself the socialists and communists, now that the war regime and the censorship were relaxed, took advantage of the general weariness of the people to foment revolutionary agitation, hoping to emulate their com- rades in russia. the financial situation was serious and sig. nitti’s budget statement for 1917-8, presented on nov. 2 1918, showed a deficit of 6,271 millions. sig. bissolati, disagreeing with his colleagues over the alto adige and dalmatia, resigned. on jan. 1 1919 the state of war was declared at an end throughout italy, except in the veneto. on the 3rd, president wilson ar- rived in rome and was received with frenzied enthusiasm as the man who had contributed the most to end the war, but the ministers who discussed politics with him suspected him of little sympathy with the more extreme italian aspirations. the adriatic question—the ministerial crisis initiated by bissolati’s resignation came to a head on jan. 18, and resulted in the resignation of nitti, who wished to prepare the way for assuming the premiership himself, and of four other ministers. 561 the italian peace delegation to the paris conference, which first met on that same day, was composed of sig. orlando, baron sonnino, sig. salandra, sig. barzilai and the ambassador, marquis salvago-raggi. on feb. 17 the debate on the adriatic ques- tion began, but led to no result. in the meanwhile frequent inci- dents between italian and yugoslav soldiers occurred on the fronticr. the adriatic debate in paris was adjourned to give precedence to the treaty with germany; to this the italian dele- gation agreed, accepting all the proposals of the allies, including the partition of the german colonics from which italy was ex- cluded. the delegation was severely blamed in italy on this account. the adriatic discussion was then resumed, and on april 23 wilson published his famous appeal to the italian peo- ple over the heads of their government, setting forth his reascns for opposing certain claims. the message caused wide-spread astonishment as a violation of the rules of secret diplomacy, while in italy it aroused great indignation. orlando started for rome on the 24th to consult parliament and the country, and was received with enthusiastic demonstrations. in the chamber his policy was approved by 382 votes to 40 and found adherents even in the socialist camp. d’annunzio took up the fiume-dalmatia question with fiery eloquence, and the nationalists urged the government to annex both. orlando failed to take advantage of the anxiety of britain and france that italy should sign the treaty with germany, or of wilson’s desire that she should adhere to the league cove- nant, to secure advantages for his country, and on may § he returned to paris without having obtained any guarantees for italy’s claims. he found the german treaty ready and italy’s diplomatic position worse than when he had left. discussions on the adriatic question were resumed, and various proposals for its solution were advanced, including one suggested by m. tardieu, on which agreement would have been possible, if presi- dent wilson had not agreed to rejection by yugo-slavia. orlando returned to rome in june, and on the 19th he was beaten in the chamber and resigned. sig. nitti now formed a new cabinet, with senator tittoni at the foreign office, senator schanzer at the treasury and gen. albricci as war minister. on june 28 the new peace delegation, presided over by senator tittoni, left for paris, and the same day the treaty with germany was signed by baron sonnino and the marquis imperiali. internal troubles.—the internal situation now grew more seri- ous. prices had risen considerably. the government’s measures for limiting them merely made the goods disappear for a time and then reappear at still higher prices. the bread subsidy involved ahuge deficit in the budget, the doles to the unemployed cn- couraged idleness, and the regulations hampering trade rendered production ever more difficult. the workers received high wages, but were discontented because prices were rising, while both they and the war profiteers indulged in an orgy of extravagance. the people with fixed incomes felt the pinch most, but everyone grumbled. the socialists, who now adopted the name of “‘ maxi- malists ” to affirm their dependence on moscow, encouraged the workmen in the belicf that the war had been fought solely to en- rich the capitalists, and that now it was the workers’ right to se- cure all the wealth of the country. ex-neutralists also helped to foment discontent. in jan. rorgthe partito popolare italiano(cath- olic) was formed; it had a more definite programme and a more complete organisation than the old catholic group, and it devel- oped rapidly under the guidance of its political secretary, the sicilian priest, don luigi sturzo. it advocated reforms of a chris- tian-socialist character, including the expropriation of the landed estates for the benefit of the peasants, but with compensation to the landlords. its foreign policy professed to be patriotic, and favoured co-operation between capital and labour. it attracted some peasants and workers who would otherwise have gone red. a series of avowedly revolutionary strikes broke out in every trade, and even in the public services. a postal strike was threat- ened in dec. 1918, fomented by the socialist party, and only called off on the government’s promise of higher wages. dur- ing a bolshevik demonstration on april 13 1919 at milan, a shot was fired at a patriotic cortege, which provoked a reaction in 562 the crowd and the offices of the socialist paper avanti! were wrecked. strikes of tramwaymen, employees of the secondary railways and the merchant seamen followed in quick succession. at the peace conference, during the absence of the italian delegation, mr. lloyd george and m. clemenceau ignored the st. jean de maurienne agreement, and in accord with president wilson decided to send greek troops to smyrna. im- mediately after the greek landing italian troops occupied vari- ous points in southwest anatolia. italian forces co-operated with the british and the french in occupying other parts of turkey, but the italian view was that real peace could only be secured by a more conciliatory attitude towards the turks. at the same time, in order to try to conciliate greece, sig. tittoni concluded an arrangement with m. veniselos in july rorg for the delimitation of their respective spheres of military occupa- tion, leaving the greeks a free hand in southern albania. this last clause had an unfortunate etfect on italo-albanian relations, but the whole agreement was afterwards rescinded, as greece proved unable to carry out her part of the bargain. meanwhile italian steamship companies, banks and business firms showed considerable enterprise in the near east. d'annunszio and fiume.—fresh troubles broke out at fiume (g.v.), where on july 2-§ 1919 the alleged antipathy of the french troops (mostly colonials) to the italians and alleged sympathy with the croats, led to reprisals, in which some french and annamite soldiers were killed or wounded. the peace con- ference thereupon appointed an inter-allicd commission of in- quiry, which proposed the dissolution of the fiume national council, elections to be held under inter-allied control, the dis- banding of the fiume volunteers, the reduction of the italian garrison, and the importation of british or american police. these proposals were about to be carried out when on sept. 12 d’annunzio arrived at fiume from ronchi, at the head of some italian troops, whom he had induced to follow him to save the town for italy, and a number of volunteers. most of the italian troops and seamen in the town and port joined him, and he set up a government of his own. the allied troops departed, and nitti stigmatised the poct’s conduct in the most violent terms, calling on the workmen and peasants of italy to back him up against the pueriotards. but a large part of italian opinion sup- ported d’annunzio, and volunteers, including men of the high- est character and also many adventurers, flocked to his standard. riots against high prices broke out in the summer of 1919 in various parts of italy, and agents of the chambers of labour illegally requisitioned foodstuffs and other goods for which they paid prices far below the market rates. the government did nothing. the socialists and communists then organised a gen- eral protest strike for july 20-1 against the policy of the bour- gcols governments towards sovict russia and ilungary. but there was no revolutionary outbreak, and the strike was only partial, largely owing to the beginnings of reaction on the part of public opinion voiced by the various citizen commitices, rather than to government action. the iascist movement, under benito mussolini now began to arise as a patriotic reaction (see fascism). strikes and disorders continued in various parts of italy, but sig. nitti expressed the belief that the only remedy was to let the spirit of unrest wear itself out, regardless of the immediate danger to the country. he had created a new police force, the guardia regia, which, however, proved costly and unequal to its duties. the premicr’s treatment of the army caused much dissatisfaction. in his desire to restore the ‘‘ peace spirit,” he failed to protect the soldiers from outrage and insult, and advised them to go about in mufti and disarmed when off duty. a decree of the minister of war, issued at the instance of sig. nitti, grant- ed an amnesty to deserters, thereby placing them on an equal footing with those who had done their duty in the war. in con- sequence of the findings of the committee of inquiry on capo- retto, cadorna and other generals were put on the retired list. on sept. 10 r919 the peace treaty with austria was signed at st. germain-en-laye (see st. germain, treaty of), whereby italy definitely acquired the frontiers assigned to her by the treaty of london on the north and northcast, plus the sexton italy valley and tarvis. the german inhabitants of the alto adige were dissatisfied with this decision, but their treatment at that time gave no reason for discontent. on nov. 12 senator tittoni resigned from the foreign office and the peace dele- gation, and was succeeded by the eminent jurist, senator vittorio scialoja. industrial and potitical unrest in spite of, or because of, the government’s restrictive meas- ures, prices had more than doubled. the government had made the wheat trade a state monopoly. while it requisitioned domes- tic wheat at a price below the cost of production, it had to buy forcign wheat at the market price. thus wheat-growing was discouraged at home, and bread was sold below cost thereby increasing the deficit by six milliards. transport was disorgan- ised. while the traffic had decreased, the staff, for demagogic reasons, had been increased from 154,000 to 180,000, and after- wards to 240,000; the railwaymen had become more and more idle and insubordinate and were wholly under the influence of the revolutionary syndicate, and thefts of goods on the railways had reached unheard-of proportions. phe extremists—by the electoral law of sept.ro19 the propor- tional system, whereby the voter voted not for a candidate but for alist, was adopted to please the socialists and the popolari, who, as the only two mass parties hoped to derive bencfit from it. the socialists at the bologna congress decided to present a maxi- malist programme demanding the abolition of capital and the institution of a soviet republic, but the extremist group pro- posed abstention from the polls and an armed rising. the popo- lari decided to present their own candidates instead of co-operat- ing with other parties; an extreme wing, led by sig. miglioli, promoted strikes and disorders and differed little from the social- ists. the constitutional groups were split up and were without a programme or organisation. the government was discredited and unpopular. the elections were held on nov. 16 1919: 156 socialists, ror popolari and 30 combatants were returned, but none of the fascist candidates. on the opening of parliament by the king on dee. 1 the socialist deputies withdrew from the chamber, and as a protest against this insult a patriotic demon- stration was held outside, in which some socialist deputics were injured. <a general strike was proclaimed in consequence, and at mantua there were serious riots, the anarchists committing sev- eral murders, breaking open the prisons and pillaging the shops. fresh incidents occurred on the adriatic coast, and at spa- lato (split) the yugoslav mob attacked the italian inhabitants under the eyes of the american admiral. early in oct. senator tittoni had proposed a modus vivendi to d’annunzio, whereby italian troops would occupy fiume pending a settlement in paris, italy undertaking not to permit the annexation of fiume to yugoslavia; but d’annunzio refused to agree. at the peace conference various proposals were suggested, but the allies ani the united states reached no settlement. the socialist successes at the election resulted in further dis- orders. on jan. 13 1920 the postal employees went on strike because their demands for higher wages were not instantly com- plied with; volunteers replaced the strikers, in spite of official discouragement, and this broke the back of the agitation. but on the 22nd the railwaymen struck, and although here too vol- untcers enabled the management to maintain a reduced service, on the 29th sig. nitti came forward with concessions and under- took not to punish a single striker, in spite of the explicit pro- visions of the regulations. the strike ended in a triumph for the revolutionists. in the spring there was a two months’ strike of the secondary railways of lombardy, and one at the mazzonis cotton mills in piedmont, where the government legitimised the arbitrary seizure of the factories by the workmen. the railway- men in general refused to run trains conveying soldicrs or police to places where there were disorders; there was a railway strike at cremona and elsewhere because the station-master, who had dared to dispatch a train supposed to be conveying war material to poland, then at war with soviet russia, was not dismissed. sig. nitti, finding himself unable to conduct the government italy in the face of the growing opposition, had resigned a first time on march 12 1920, but as no one else was prepared to assume office in these difficult conditions, he reconstructed his cabinet with a few changes. on april 17 the supreme council met at san remo to prepare the peace with turkey, the adriatic problem was also to be discussed, but at the request of m. trumbich, the yugo- slav foreign minister, direct negotiations were instituted at pallanza a few days later. on may 12 the cabinet, having been defeated in the chamber, resigned, and the crisis broke up the pallanza conference. no other combination having proved pos- sible, sig. nitti was again asked to reconstruct his cabinet, which he accomplished by may 21, but even in its third reincarnation it proved stillborn. the prime minister’s failure to solve the adriatic problem and the indignation aroused by the arrest of the dalmatians and fiumani in rome on account of an alleged plot, made his position untenable. on june 4 he enacted a de- cree reducing the bread subsidy, but yielding to the threats of the socialists, he withdrew it five days later and resigned without waiting for a vote. giolitti’s difficulties sig. giolitti now appeared the only man capable of forming a government, and this he achieved by june 16. count sforza was chosen minister for foreign aflairs. the budget statement for 1920-1, presented on june 27 1920, showed a deficit of 14 milliards. troubles now broke out in albania. in 1917 gen. ferrero had proclaimed an italian protectorate over albania, but the subse- quent agreements whereby italy undertook to allow yugoslavia and greece to occupy parts of the country aroused much dissatisfaction among albanians. an albanian govt. had been formed at tirana and the italian garrisons were greatly reduced; in the spring of 1920 albanian bands began to disturb the italian troops, and on june 5 they attacked and captured some of the outposts. an attack on valona was repulsed with loss to the enemy, but on june 24 sig. giolitti, alarmed at a mutiny which had broken out as a result of anarchist propaganda at ancona, and yielding to the socialist demands, announced that italy would withdraw her troops from albania and negotiate with the tirana govt. an agreement was arrived at on aug. 3, and on sept. 2 the last italian troops departed, only the islet of saseno being retained. . at the spa conference (july 5-16 1920) italy succeeded in getting her share of the german indemnity raised to 10%, and that of the austrian, hungarian and bulgarian indemnities to 25%. on aug. 6 the tittoni-veniselos agreement was rescinded, and on the roth the treaty with turkey was signed at sevres; by the terms of the tripartite agreement italy obtained “ economic priority ’’ over a wide zone of anatolia south and east of the greek zone (smyrna) and aconcession for exploiting the heraclea coal-ficlds. by aseparate agreement with grecce,' italy under- took to cede to the latter the dodecanese minus charki and cas- tellorizo, which together with rhodes were to remain italian for 15 years, and then, if britain ceded cyprus to greece, a plebis- cite was to decide the fate of rhodes. the rapalle conference—~serious anti-italian disorders oc- curred on july 11 at spalato, where the croat mob murdered the commander of the cruiser ‘‘ puglie ” and wounded several officers and men; protest demonstrations were held at trieste, and shots having been fired from one of the yugoslav institutions, several of them were sct on fire. at fiume the national council resigned and d’annunzio proclaimed the reggenza del carnaro, for which he drafted a curious, mystical, semi-medieval statute. as president wilson's term of office was nearly up, the yugoslavs felt that a direct understanding with italy would be the best solution. the italian govt. communicated its proposals to those of britain and france, which advised yugoslavia to accept them. a conference was held at rapallo on nov. 8, italy being repre- sented by sig. giolitti, count sforza, sig. bonomi, gen. bade- glioand admiral acton; yugoslavia by mm. vesnich, trumbich, kosta, stoyanovich and col. kalafatovich. on the rath the treaty was signed. italy waived her rights over dalmatia, except for the town of zara, and the following frontier was agreed upon: 1denounced by italy, oct 8. 1922. 563 mount pec, mount yalovets, the watershed between the isonzo and the wurzen see and the wocheiner save, northeast slope of mount mezik, cast slope of mount porzen, west slope of mount blegos, zelse, cabranska, east of mount trstenik, east of griza, east of mattuglie, frontier of the fiume state on the fiume-castua road; the islands of cherso, lussin, lagosta and pelagosa were assigned to italy, while both powers recognised the independence of fiume; the italian-speaking inhabitants of the territories assigned to yugoslavia were entitled to opt for italian citizenship without having to leave the country, and full freedom of language, culture and religion were granted to yugo- slavs in italian territory. by a secret clause, which soon became public property, al- though count sforza denied its existence, porto baros, an integral part of the port of fiume, was promised to yugoslavia. d’an- nunzio, however, refused to recognise the treaty, and his /egio- art occupied castua and the islands of vegli and arbe (assigned to yugoslavia) and tried to invade dalmatia. but the govern- ment, determined to enforce the treaty, established a blockade round fiume; on dec. 23, as d’annunzio refused to obey gen. caviglia’s summons to submit, military operations were com- menced. there was some fighting, but on the 30th d’annunzio authorised his plenipotentiaries to accept the conditions im- posed. fiume was to be placed under its own town council, with alocal volunteer force to maintain order, assisted by italian cara- binieri, until after the elections for the constituent assembly. d’annunzio left fiume on jan. 18 1921. but the elections in the spring of that year led to disorders necessitating the maintenance of italian troops. the evacuation of dalmatia, divided for the purpose into three zones, began in the spring of 1921. industrial disturbances.—the internal troubles reached their zenithin the autumn of 1920. ‘there were industrial, agricultural and railway strikes in various parts of the country, and in sept. a very serious agitation broke out in the metal trades. vyhese industries had earned large profits during the war and were paying high wages. but the cost of production was increas- ing, and there were signs of a coming slump, so that it was im- possible to grant the still higher wages which the workmen now demanded. the workmen of the romeo works in milan now adopted obstructive tactics and sabotage, and the management retorted by a lock-out on aug. 20. thereupon the f.1.0.m. (federasione ttuliana operai metallurgici) ordered all the metal workers in milan to remain in permanence at the mills without working. the federation of mechanical industries then extended the lock-out to the whole of italy on the grst, and the workmen, many of them armed, seized a number of factories in lombardy, picdmont and elsewhere, | encouraged by the passive attitude of the authorities, they kidnapped owners and managers and tried to force them to run the works exclusively for the workers; armed ‘‘ red guards ” were organised, revolutionary tribunals set up and persons ap- proaching the factories were shot at. at turin the factory councils attempted to sell the goods manufactured during the occupation, allhough the owners warned the public of the nullity of such sales. but the workmen found themselves incapable of running the factories unaided, and the occupation ended by becoming mercly an occasion for orgies. on sept. 6 the general confederation of labour expressed its approval of the occupa- tion, but declared that the movement must be placed under its own guidance in order to secure “ collective management,” and forbade any further extension of the seizures for the present. nevertheless the extremists became more truculent, and at turin a nationalist student and a prison warder who happened to be passing near an “ occupied ” factory were brutally mur- dered by “ red guards,” and in many works the safes were broken open and the contents pocketed by the leaders. sig. giolitti at last felt that he must do something. he sum- moned the representatives of the owners and the workers to meet him on sept. 19 in rome. at this meeting an agreement was ar- rived at; wages were to be raised and a form of workmen’s con- trol over industry, which the government undertook to embody in a bill, was agreed to. the owners also agreed to pay for the 564 work performed during the occupation, with deductions for damage done to the plant, but they refused to readmit all the workmen as the government demanded, and only did so at last under protest against this imposition. the factories were evacu- ated on the 27th and work was resumed on oct. 4. asa practical attempt to cstablish communism, as the group by bombacci hoped, the agitation had failed, and giolitti claimed that by proving to the workmen that they could not run industry with- out the capitalist and the expert, they had bcen taught a useful lesson. but the premicr’s real motive was probably the fear of provoking revolution and distrust of the nation’s patriotism and courage. incidentally the “occupation” wrought serious injury to italian credit at home and abroad. the fascists —about this time agrarian troubles had also broken out in various parts of italy, notably in the veneto, the provinces of bergamo and cremona, the lazio, tuscany and sicily. the peasants demanded contracts which, if accepted, would have left the landlords without enough income to pay the taxes. in this agitation socialist and left-wing popolari vied with each other in revolutionary methods. the public mcan- while was beginning to weary of these constant disorders and of the tyranny of a factious minority, and the middle classes set to work to organise resistance. the agrarian association of bologna was particularly active, but it was the fasci, now arising all over italy, under mussolini’s leadership, which organised the national reaction. the first attempt at resistance at bologna, the hotbed of revolution, was on sept. 20, when, as the result of a communist attack on a patriotic procession, a kiosk where sedi- tious papers were sold was destroyed. at a strike demonstra- tion in the same city in oct. 14 1920 against the “‘ white terror ” in hungary, the anarchist, malatesta, incited the mob to vio- lence, and a police inspector and a guardia regia were murdered. small groups of nationalists and fascists thereupon paraded the strcets; in an instant the tricolour flag appeared everywhere and the strike ceased. the municipal elections in oct. and nov. registered a decline in socialist influence in rome, naples, turin, genoa, venice and florence, but at milan and bologna revolutionary majorities were again returned. the assumption to ofhce of the red administrations was to offer occasion for fresh outbreaks of violence. in bologna the communist deputy, bucco, secretary of the local chamber of labour who had been the red tyrant of the province, now began to fear for his own safety and applied for police protection against the fascists; he was spirited out of the city and after his depar- ture a deficit of a quarter of a million was found in the accounts of the chamber of labour. on nov. 21 1920 the first mecting of the new bologna town council was intended to be the occa- sion for an armed rising organised by the communists, with the help of the municipal guards and the fire brigade. there were anti-socialist demonstrations in the streets organised by the nationalists and fascists, supported by other citizens, but in the town hall two councillors of the constitutional minority, giordani, a disabled ex-officer, and colliva were murdered by communists. the upheaval of public opinion was now irre- sistible; the red leaders had to fly for their lives and the whole fabric of bolshevik organisation in bologna crashed. the town council never met again and was eventually dissolved, while the fascists wrecked or burned down various socialist institutions. at modena a fascist was murdered and several others shared a like fate while attending their comrades’ funcral; this led to a gencral anti-socialist uprising there also, and similar cpisodes occurred at ferrara. throughout the po valley the fascists pro- ceeded to break the tyranny of the ‘f red baronics”’; the revolu- tionary /eghe which had dominated labour in that area, were dis- solved, and one red town council after another resigned or was dissolved by the prefects, while ever increasing masses of work- ers, industrial and agricultural, went over to fascism and thus formed the basis of the fascist labour movement. socialist dissensions.—during the last months the maxi- malist socialist party had begun to show signs of dissension. the extremist group led by bombacci and gennari advocated an immediate revolution, while the turati-treves group opposed italy the idea; at the reggio emilia congress nofri and ponzani, who had returned from russia, proceeded to condemn the soviet system. the russian leaders demanded the absolute submission of the italian party to the orders of moscow and the expulsion of all socialists tainted with the reformist heresy. at the gen- eral congress of the party in leghorn (jan. 13-22) a resolution in favour of a middle tendency, supported by turati, treves, buozzi, baldesi, d’aragona and the g.c.l., who called them- selves unitari and were prepared to collaborate with bourgeois governments, was adopted. the communists (represented by 18 deputies) thereupon broke away and formed a party of their own. the new party now tried to aflirm itself by a series of ter- rorist outrages in the hope of promoting revolution. bombs were thrown in florence on feb. 27, killing and wounding several per- sons, whereupon the fascists retaliated by murdering lavagnini, a notorious communist railway organiser; the railwaymen and electricians went on strike and various affrays between commu- nists and fascists occurred, until the troops intervened and restored order. at empoli a number of unarmed sailors were mur- dered by communists, and the fascists, summoned from various parts of the country, inflicted severe reprisals. similar occur- rences took place at foiano della chiana and other places. but everywhere the popular reaction, guided by fascists and na- tionalisis, was vigorous and unmistakable. the government, unable to tackle the situation, itself, left the fascists a free hand to fight the reds. sig. giolitti now had the courage to propose the abolition of the bread subsidy, and presented a bill to that effect, which was voted by a large majority on march 1, in spite of socialist ob- struction. phe bill in favour of syndicalist control over industry, presented by the premicr in accordance with the agreement of the preceding sept., encountered much opposition in parlia- ment and was finally dropped. giolitti resigns —the parliamentary position was becoming insecure, and a hostile motion on foreign policy proposed by sig. amendola was rejected only by a small majority. on april 7 1920 sig. giolitti dissolved the chamber, and on may 15 the elections were held. out of 535 seats (27 had been added for the new provinces) the liberals and democrats of various shades secured 275, the popolari rose from 1or to 107, the socialists fell from 156 to 122 unitari and 16 communists; there were in addi- tion four germans for the alto adige and five slavs for the vene- zia giulia. the fascists were 38 and the nationalists 10. al- though the composition of the new chamber was not very differ- ent from that of the old, the socialists and communists were now faced by a vigorous fascist-nationalist group supported by sympathisers belonging to other partics. on june 11 parliament opened, and in the debate on the speech from the throne, the nationalist federzoni (g.v.) delivered a strong attack on count sforza’s forcign policy. on june 26 the cabinet secured only a small majority on a vote of confidence on forcign policy, and sig. giolittt resigned. sig. bonomi formed an administration composed as follows: bonomi (presidency and interior), marquis tomasi della tor- retta (foreign affairs), giradini (colonies), rodine (justice), soleri (finance), de nava (treasury), micheli (public works), belotti (industry and trade), bergamasco (marine), corbino (education), mauri (agriculture), beneduce (labour), giuffrida (post office), ranieri (liberated territories), the cabinet comprised members of many parties, but the popolari were predominant and don sturzo ruled sig. bonomi with a rod of iron. under popolare influence, strengthened by that of thesemi- socialists giuffrida and beneduce, further advanced lcgislation was enacted. a bill enabling any public body to expropriate jand which in its opinion was inadequately cultivated, the owners to be indemnified with land bonds of uncertain value paid for by the whole community was introduced but aroused violent oppo- sition and never became law. sig. bonomi had the merit of deciding that the celebration of the ceremony for the unknown soldier should at last be held; it took place on nov. 4 1921. two days later the fascist congress was opened in rome, and fascism was definitely constituted into ppaly a political party. on the roth the communists and socialists proclaimed a gencral strike as a protest against the presence of the fascists in rome; disorders ensued, in which five persons were killed and several wounded. the troubles had ceased by the rath, after which the fascist congress broke up. the debate in the chamber on the eligibility of the deserter misiano, who had been returned for turin and naples, led to violent scenes, until on dec. 20 his election was annulled. during this same month the banco di sconto failed, and the government was se- verely blamed for not having prevented the collapse of so impor- tant an institution, whose actual condition was by no means hopeless; as was proved at the subsequent legal proceedings be- fore the senate,! the failure caused serious prejudice to the general financial and economic situation of the country. the publication by a french journalist of an account of an imaginary insult attributed to m. briand against the italian army at the washington disarmament conference led to anti- french demonstrations at turin and elsewhere, until the mis- understanding was cleared up. the attempt to conclude a commercial treaty with russia failed, as the soviet govt. refused to ratify the agreement. in jan. 1922 sig. bonomi attended the cannes meeting of the supreme council, where it was decided to hold an economic conference in genoa in the spring. the facta govt—the bonomi cabinet was now attacked on all sides, and when on feb. 2 1922 the democrats, 16 of whom were in the government, went over to the opposition, sig. bonomi resigned. the king, however, asked him to go before parliament, in order that by its vote it might give some indication for a solution. this bonomi did, and the cabinet having been beaten on the 17th resigned definitely. it was not until the 25th that a new cabinet was formed by sig. luigi facta. he was a thoroughly honest man, and his acceptance of office in these circumstances was proof of his patriotism, but he was not a first-class statesman. he selected senator schanzer for the foreign office, while the other ministers were of respecta- ble mediocrity. on march 15 the premier communicated to the chamber the government’s programme, based on the restora- tion of order, and secured a vote of confidence. in 1922 the reconquest of tripolitania was commenced with the reoccupation of the port of misurata at the end of january. after a serics of operations lasting through 1922 and 1923 the whole colony was reoccupied. the governor in this period was count giuseppi volpi, afterwards finance minister. trouble now broke out in the port of naples between the red dockers’ union, which wished to retain its labour monopoly, and the new fascist dockers’ union, created to combat the pre- vailing conditions of anarchy and graft brought about by the reds. the red union proclaimed a strike in all the italian ports on march 18 as a protest against the existence of the fascist union, and the government referred the solution of the conflict to the enti-autonomi of the ports, a decision which caused much dissatisiaclion in non-socialist circles, as those bodies were notoriously under socialist influence. but the fascists eventually succecded in breaking the red monopoly and restoring order and freedom of labour in the ports, to the great apes of the maritime trade of italy. the genoa conference was inaugurated on april ro. sig. facta presided with dignity, but the hardest work was accom- plished by sig. schanzer, who often succeeded in composing differences between the british and the french and between the french and the germans and russians. the russian delegation was at first alarmed at the possibility of an unfriendly reception by the fascists, but the fascist party directorate assured the bolsheviks that if they abstained from interference in italian internal affairs they would not be molested; this they undertook to do, and they carried out their undertaking. : the railway syndicate at bologna issued an order that all traflic was to be held up on may 1, and although the managc- ment was able to secure an almost complete service, many rail- waymen did cease work, thereby causing inconvenience and ! the case was tried by the senate because ee were senators among the accused. ae 565 delay. this time the government did indict the members of the executive committee of the syndicate, and some of the leaders were punished. on may 24 the funcral procession escorting the body of the war hero enrico totitothe cemetery in rome was fired on by communists in the san lorenzo quarter, with the result that two persons were killed and several wounded. the next day the committee of proletarian defence and the alleanza del la- voro, a newly formed coalition of the communist, socialist and republican parties and the g.o.l., ordered a gencral strike in | rome; the fascists tried to organise a counter-demonstration, but were dispersed by the police. this strike, which ended on may 26, intensified the sean of all law-abiding citizens against agitators. the bologna reds.—in the province of bologna the red unions had lost much of their influence, but the leaders managed to maintain authority with the acquiescence of the govern- ment. while locally there was a scarcity of labour and very high wages, in the neighbouring provinces there was uncmploy- ment, but the bologna union leaders were determined to prevent the migration of these “ forcign ’’ workers, lest their own monop- oly should be menaced, and they induced the prefect to forbid it. the prefect’s action was z#ifra vires as it violated the rights of individuals in the interest of a privileged class, and the fascists, voicing the general indignation which it aroused, concentrated on bologna in military formation and demanded the revocation of the decree and the removal of the prefect. sig. mussolini, having obtained satisfactory assurances from the government, ordered the black shirts to demobilise and evacuate the city, which they did on june 2; the decree was then revoked, and the prefect transferred. there were now rumours of a new cabinet crisis, and the social- ists were divided on the question of collaborating with a bour- geois government. the fascists, nationalists and the right were opposed to any sort of socialist infiltration, which would involve unlimited extravagance and more advanced legislation. on july 12 1922 sig. peano, the treasury minister, issued his financial statement for 1921-2, which showed a deficit of 4,500 million lire, while experts estimated it at 6,500 million; public opinion was scriously alarmed, but in parliament the deputies were too busy over lobby intrigue in view of the expected crisis to worry about finance. there were disorders at cremona, provoked by the left wing popolari led by miglioli and the socialists: the fascists mobilised and wrecked several socialist institutions and miglio- li’s own law offices. the democrats in the chamber seized-the occasion to contract an alliance with the popolart, and on july 19 sig. facta was outvoted and resigned. but it proved impos- sible to form a new cabinet, and after various unsuccessful at- tempts by bonomi, orlando and meda, during which even the socialist turati was summoned to the quirinal for consultation, the king sent for facta once more, and the old cabinet was recon- structed, with bensioe taddei, prefect of turin, as minister of the interior. the general sir ike =. naw: ia ceteeal strike throughout italy was suddenly proclaimed by the alleanza del lavoro, as the result of a communist initiative, supported by the socialists, who were disappointed at having failed to secure a democratic- socialist cabinet, and turati proclaimed it a ‘ legalist ”’ strike, because its professed object was to affirm the authority of the state against the fascists. work was suspended in many fac- tories and a part of the railwaymen struck; but the fascists and nationalists ordered a general mobilisation, and the fascist directorate issued a manifesto calling on the public servants and the workers “ to shake off the yoke of the politicians by whom they were jed,” and giving the government 48 hours within which to prove that it possessed authority over its own employees and those who were attempting todestroy thenation. ‘‘ onthe expiry of this delay fascism will assume full freedom to supplant the state.”’ serious conflicts between fascists and communists occurred at milan, ancona and other places, but the strike rap- idly collapsed, and on the 2nd the alleanza del lavoro ordered it to cease; by the 4th all disturbances were over. during the strike agitation the fascists delivered an attack on the communist- 566 socialist municipality of milan, which had for years ruled the city, bringing it to the verge of ruin and indulging in the most scandalous graft; the deficit was 375,000,000, there were bills for 101,000,000 lire overdue, and the richest city in italy could ob- tain no credit anywhere. the liberal corriere della sera, as well as the fascist press, had been conducting a very vigorous campaign against the ad- ministration, but the government did not interfere. on aug. 1 the tramwaymen, electricians, sweepers, employees of the water- works and firemen of the city, all struck, but the fascists and other citizens took their places; on the 3rd the fascists succeeded in getting into the town hall and expelling the few assessors present, and for the first time since 1914 the tricolour was raised on palazzo marino amid scenes of great popular enthusiasm. the fascists withdrew on the 4th and handed over the building to the prefect’s commissioner. on the 27th, after the disastrous results of the inquiry into its financial administration, the coun- cil was dissolved and a royal commissioner placed in charge. at genoa the fascists led a similar operation against the port consortium, which was largely under the influence of the red dockers’ union. under fascist pressure the consortium was dissolved and a royal commissioner appointed. the fascists ex- tended their action against a number of socialist, communist and popolare town councils and institutions, forcing the adminis- trators to resign; sometimes violence was resorted to, but in most cases the administrations resigned from sheer fright; very fre- quently evidence of embezzlement was discovered. another operation was carried out against the provincial administration of trento, and the governor, sig. credaro, accused of being under the influence of the anti-italian pan-german elements of bolzano, was recalled by the government on the initiative of the fascists. all these actions were of course illegal, but public opinion approved of them because it considered that the fas- cists were doing what the government should have done before. the fascist programme.—facta’s position was daily weaken- ing, and indeed the whole machinery of government was obvi- ously breaking down. at the socialist congress held on oct. 3 the party split into two groups, the unuitari or collaborationists and the uncompromising afassimalisti; as a result of this split the g.c.l. broke off its alliance with the socialist party and declared itself a non-political body, but many of its adherents had already gone over to fascism. the partito popolare was also divided by conflicting tendencies, and the pope enjoined on the bishops and clergy to abstain from partisan political activity. the moment was now ripe for a bold fascist move. sig. musso- lini considered that it was not enough to crush bolshevism, and that if italy was to become a really great nation the whole body politic must be reformed on fascist lines, and the national finances re-established by eliminating extremist legislation and extravagance. although many liberals approved of the fascist programme, the fascists themselves were convinced that it could not be car- ried out under normal parliamentary conditions. they now demanded of the government either a dissolution or the resigna- tion of facta and the formation of a new cabinet comprising five fascist ministers; but the premier rejected both alternatives. at a fascist gathering at udine on sept. 29 mussolini made an important declaration in favour of the monarchy, thereby secur- ing the support of many non-fascists. his hints at a revolution, however, were still regarded as figures of specch, but he was now entrusted by the party directorate with a mandate to conduct a political and even military action to bring fascism into power. on oct. 24 another fascist congress was held at naples, where 40,000 fascists in military formation paraded the streets. in his speech at the san carlo theatre mussolini said that ‘‘ what we have in view is the introduction into the liberal state, which has fulfilled its functions . . . of all the forces of the new gener- ation which has emerged from the war and the victory.” in another speech he declared that “ either the government will be given to us or we shall seize it by marching on rome.” march on rome.—that same evening the fascist quadrum- virate was formed, composed of michele bianchi, general secre- italy tary of the party, italo balbo, commander of the armed squadre, gen. de bono (ex-commander of the ix. corps), who had organised them, and the deputy c. m. de vecchi, while dino grandi, an authority on labour problems, was entrusted with the political functions of the enterprise. the congress broke up and salandra and orlando, acting on behalf of the quadrumvirate, called on facta to resign, which, after some hesitation, he did on the 27th. in the meanwhile the general mobilisation of the fas- cists had been ordered, and they proceeded to concentrate on rome in four columns. both the fascist leaders and the army officers were anxious to avoid any conflict between the squadre and the troops, and the news that martial law had been pro- claimed caused deep consternation. facta had indeed drafted and issued the decree, but the king refused to sign it as it would have meant civil war, and it was immediately withdrawn. sig. salandra was now entrusted with the formation of a cabinet, and he offered portfolios to de vecchi and grandi; but mussolini on being consulted rejected the proposal, for the formation of a cabinet of the old parliamentary type was now impossible. on salandra’s advice the king sent for mussolini. the fascist col- umns began to enter rome on the morning of oct. 30 1922 and the'city was peacefully occupied; the only regrettable incidents were the murder of a fascist at valmontone by communists and the murder of some communists by fascists in the san lorenzo quarter of rome. mussolini reached rome from milan the same day, and at once presented himself to the king, with his cabinet list already prepared, which the king at once accepted. as the presence of the sguadrc in rome was no longer necessary, and might lead to trouble, mussolini ordered them to depart; this they began to do on oct. 31, after paying a tribute of honour to the tomb of the unknown soldier and homage to the king; by nov. 2 all had left the capital. the new cabinet was composed as follows: mussolini, premier and minister of foreign affairs and the interior; gen. diaz (war), adm. thaon di revel (marine), prof. alberto de ste- fani (finance), prof. tangorra (treasury), duke di cesard (post office), federzoni (colonies), prof. gentile (education), de capitani (agriculture), carnazza (public works), count teofilo rossi (inclustry), cavazzoni (labour), de vecchi (un- der-secretary for pensions). although predominantly fascist, the cabinet comprised members of all the chief groups except the anti-national parties; rossi was a giolittian, cesared a social democrat, gentile! and de capitani liberals, tangorra and cavazzoni popolari. sig. mussolini did not have a parlia- mentary majority, but he was supported by the mass of public opinion even outside fascist circles. he gave stringent orders for the cessation of all acts of violence, and for the reinstate- ment of the town councils which had been forced by the fascists to resign after nov. 1. occasional conflicts still occurred, but on the whole order was restored with surprising rapidity. on nov. 16 the premier informed the chamber that for the second time the italian people had given themselves a govern- ment independent of any parliamentary designation,? that he might have closed parliament and formed a purely fascist cabi- net, but that he preferred, at all events in the first phase, to form a coalition with all the national parties. he undertook to balance the budget, provide for the working classes, but not in accordance with any extravagant theories, and conduct the foreign policy of italy with firmness and dignity. he finally asked for full powers for a year to carry out the necessary reforms, and these were granted by 275 votes to 90. the nationalists were now absorbed into the fascist party. the deficitt.—the most urgent problem before the new gov- ernment was finance. the estimated deficit for 192 2-3 was 6,500 million lire and sig. de stefani at once proceeded to adopt drastic economies, reorganise taxation and encourage economic activity without hindrances to production. prof. tangorra having died on dec. 21 de stefani took charge of the treasury as well. the ministry of the liberated territories and several under-secretary- ships were abolished, and by the decree of jan. 23 1923 the gov- 1 gentile afterwards became a fascist. 2 the first was in may i9gi5. italy ernment was enabled during one year to place on the retired list all officials who were too old or otherwise incapable of fulfilling their duties, and to revise all appointments made under special war legislation since may ro15. the guardia regia, which had not answered its purpose on account of defective discipline and organisation, was disbanded. the fascist and other armed squadre were also disbanded, and the milizia volontaria per la sicurezza nazionale (see fascism), composed of ex-squadristi and officered by ex-army officers, was created in jan. 1923 to assist in the maintenance of order. in the administration of justice the four courts of cassation were reduced to one, and many minor courts suppressed. the railway staff, which amounted to 225,000 when the fascists came into power, was reduced to 170,000. a large number of abuses were eliminated; the eight hours’ day, which had been reduced to five or six hours of real work, was restored; railway thefts and damage to property were brought down to trifling proportions, the system of equalising wages, so that a linesman or engine-driver was paid as highly as, or more than, an important official, was done away with; the free passes issued to the leaders of the revolutionary sindacato ferroviert and many other persons were withdrawn, discipline was re-estab- lished and bonuses for economy reintroduced. these reforms, which were largely the work of the special high commissioner for the railways, sig. edoardo torre, resulted in improving the service out of all recognition, and converting the railway deficit, which in 1921-2 amounted to 1,400 million lire, into a surplus of 176,000,000 for 1924-5. a similar transformation was effected in the postal and telegraph services, where insubordination and disorganisation had reached incredible proportions under the previous governments; here too a deficit of some 500,000,000 was converted into a surplus of 43,000,000. originally the govern- ment intended to restore the railways and some of the postal serv- ices to private enterprise; this has been done for the telephones from july 1 1925, but not for the railways. reforms of a similar nature were introduced into many other departments, and every- where the number of officials was reduced. the yannina murders.—soon after coming into power sig. mussolini attended the opening of the lausanne conference on the peace with turkey, and there he first came into contact with his british and french colleagues. on aug. 27 1923 the italian general tellini, president of the inter-allied commission for the delimitation of the graeco-albanian frontier, and four of his staff were murdered by epirote bands near yannina on greek territory, as a result of a violent campaign in the greek press against tellini, who was accused of unduly favouring the albanian claims. on the 2oth the italian govt. presented an ultimatum to greece demanding immediate satisfaction and an indemnity of 50,000,000 lire. as the greek govt. rejected some of the conditions, and denied responsibility for the crime, an italian fleet was sent to corfu to occupy the island. the greek commander having refused to lower the flag a few shots were fired on the fort, one of which killed or wounded a number of refugees,! who, unknown to the italian admiral, were lodged in it. the island was then occupied. on sept. 1 greece appealed to the league of nations council, but as the conference of am- bassadors had also been invested with the conflict, the italian delegate to the league council, sig. salandra, maintained that the conference alone was competent to deal with the matter, whereas the british delegate, lord robert (now viscount) ce- cil; the greek delegate, m. politis; and the delegates of the small powers insisted on the league’s right to intervene. after ar- ranging that an inquiry should be conducted by the four great powers? the conference of ambassadors finally decided that greece should make full satisfaction in the most solemn form to italy and pay the indemnity of 50,000,000 lire. italy declared that the occupation of corfu had no other object than that of 1 colonel lowe, of the near east relief organisation, deposed that the casualties amounted to 100, including 20 dead, of whom 16 were children. 2 for full details of the incident see the article by ‘“‘ verax"’ in la vita ttaliana for dec. 15 1923; and for text of report see the janina murders and the occupation of corfu, george glasgow (london, 1923). 567 obtaining satisfaction for its demands. on the 13th the confer- ence announced greece’s acceptance of its decision and italy’s undertaking to evacuate corfu by the 27th, which was done. as a result of the conflict italo-greek relations were much im- proved, but there were controversies in the league council between sig. salandra and lord robert ceciland the delegates of sweden and norway. the next important action of the fascist govt. in the field of foreign affairs was the settlement with yugoslavia. as sig. mussolini had long recognised the difficulty of fully carrying out the rapallo and santa margherita agreements, he had suggested, as early as nov. 1922, to m. ninchich the advisability of a more complete agreement. the santa margherita convention was ratified on feb. 21 1923, and italy proceeded to evacuate the third dalmatian zone,’ but the existence of the fiume free state was the chief obstacle to a real understanding. sig. depoli, head of the government, had resigned, as he could not continue to rule the town, which was threatened with starvation, and sig. mussolini sent gen. giardino to fiume in sept. 1923 to take charge of the administration, and provided him with adequate funds. negotiations with yugoslavia were then resumed, and on jan. 27 1924 the various agreements were signed in rome. by the first of these the two powers undertook to collaborate in maintaining the conditions established by the peace treaties and to assist each other politically and diplomatically in case of a conflict. by a second convention italy recognised yugoslavia’s full sovereignty over porto baros and the delta, while yugo- slavia recognised that of italy over fiume; a free customs zone was also established comprising fiume and castua (the latter ceded to yugoslavia). ratifications were exchanged on feb. 22, and subsequently a series of commercial agreements was concluded. mussolini and parliament.—one of the main considerations of the fascist party was the relation of the executive to the legis- lature. parliament in italy had long been degenerating, and after the war conditions had become worse than ever. sig. mussolini was determined not only to eliminate certain evils, but to prevent their recurrence, and above all to give stability to the govern- ment. in the summer of 1923 he drafted a bill whereby the country was divided into 15 constituencies, each voter to vote for the party list which he preferred, the party securing relatively the largest number of votes to be entitled to two-thirds of the seats in the chamber, while the remaining third was divided among the other parties on a proportional basis. the bill encountered much opposition among the socialists and the popolari, and also among some sections of the liberals, but it was admittedly only a tem- porary and tentative measure, and it was voted by a large ma- jority in the chamber in july and by the senate in nov. 1923. at a cabinet council on dec. 31 the government renounced the full powers granted to it by parliament a year previously, and on jan. 25 1924 parliament was dissolved. sig. mussolini stated that he now wished to appeal to the country for a verdict on the work accomplished, but that, while recognising the value of the elective chamber, it must not be accorded absolute predominance over the other organs of the state—the crown, the senate, the executive—all of which have their allotted functions. he rejected the idea of electoral and political alliances with other parties, but decided to include in the government electoral list men of all parties or no party who might be counted on to render services to the country. he ap- proached certain leading liberal and democratic statesmen of southern italy, where fascism had less hold than in the north, in order to include them in the government list. salandra, or- lando, de nicola and de nava accepted. the duke of cesaro, minister of posts and telegraphs, having quarrelled with the premier over the latter’s refusal to contract an alliance with the social democratic party, and also because he disapproved of certain influential fascists, resigned and presented an opposition list of his own, chiefly in sicily. the government list was prepared by the fascist representa- ? the port of dalmatia assigned to italy by the treaty of london and ceded by her to yugoslavia at rapallo had been divided for the purpose of evacuation into three zones. 568 tives in each constituency, passed by the “ pentarchy ” (finzi michele bianchi, giunta, acerbo and cesare rossi) and finally submitted to mussolini for approval. in four constituencies there were extra lists for government supporters for whom there was no room in the government list proper. the government candidates comprised 200 ex-combatants, and a number of men eminent in science, literature, business, agriculture and industry. the opposition groups competed for the 179 seats reserved for the minorities. the elections were held on april 6, and, except in a very few cases, went off without disturbances. in all 7,628,- 859 votes were recorded (73% of the registered voters, a larger percentage than at any previous election). of these 4,693,690 were for the government, 7.€., 65-25% of the recorded voics, not including those in favour of minority candidates who had de- clared themselves supporters of the government; the govern- ment thus would have been entitled to two-thirds of the seats independently of the new law. the supporters of the govern- ment were 355 (sig. de nava having died), of whom 260 were fascists and 114 members of other groups. the opposition groups were distributed as follows: constitutional opposition 12, lib- eral democrats 17, social democrats 11, popolari 40, massimal- ists 22, unitari socialists 27, communists 17, republicans seven. of the ex-premiers, bonomi was not returned; nitti and facta did not stand, but facta was raised to the senate soon afterwards. the mutteotti murder.—parliament was opened by the king on may 241924. after his overwhelming victory at the polls sig. mussolini held out the olive branch to the opposition parties, and everything seemed to point to a return to normal political conditions; on june 7 the chamber gave the cabinet a vote of confidence by 361 to 107. but on june 10 the socialist deputy giacomo matteotti, secretary of the unitario group, mysteriously disappeared, and a day or two later it was discovered that he had been kidnapped in a motor-car by dumini, volpi and other fascists of shady antecedents and carried off to an unknown destination. the kidnappers, suspected of complicity in attacks on other anti-fascist leaders, were caught at once, and four prominent fascists—marinelli, the administrative secretary of the party; filippelli, editor of the corriere italiano; cesare rossi, head of the official press bureau; and naldi, the editor of the nuovo paese—were also arrested as accomplices. the body of matteotti was discovered on june 13 buried in a lonely see 20 km. from rome. the affair created a sensation, and the onpeation ajenaties and press seized on it to indulge in the gravest accusations against all the leading fascists. on june 15 the opposition depu- ties withdrew from the chamber, stating that they would not return until the matteotti mystery and the so-called ‘‘ moral question ’’—that is, the supposed complicity of the government in the affair—had been cleared up. the opposition by this so- called ‘‘ withdrawal on to the aventine ”! thus hoped to render parliamentary business impossible and to exploit the consterna- tion aroused by the crime to upset the fascist government. among the persons more directly accused was aldo finzi, under- secretary for the interior; he immediately resigned, and his res- ignation was accepted by the premier as he had not proved equal to his duties, but when he brought libel actions against his accusers they were unable to prove their case by evidence. - the chamber was now adjourned, and on the 16th gen. de bono, whose activities as chief of police had appeared faulty, was replaced by sig. crispo moncada, prefect of trieste. the same day sig. federzont was transferred from the colonial ministry to that of the interior: he immediately cleared the department of the doubtful elements who had taken advantage of their connection with it for purposes of their own. on the 3oth all the ministers placed their portfolios in the premiecr’s hands, and he effected the following changes: federzoni, who had become minister of the interior, was replaced at the colonial ministry by prince di scalea, gentile (education) by count “1 after the withdrawal of the roman plebs on to the aventine hill as a protest against the aristocracy, opposition deputies did not, as has often been reported in the roreige prete. ea meet on the aventine. 3% res eat = wel.c! te trs: 2 italy | alessandro casati, carnazza (public works) by gino sarrocchi, corbino (national economy) by cesare nava. most of the under-secretaries were also changed, and many undesirables expelled from the fascist party. opposition tactics-—the opposition saw in the matteotti affair a chance of mobilising a part of the nation against the government, and secured the support of many who had adhered to fascism only as long as they had believed it to be invincible, and were ready to abandon it the moment they thought that its days were numbered. orlando, who had been elected on the government list, and giolitti, who had declared himself benevo- lently independent, joined the opposition, professedly on con- stitutional grounds, but did not withdraw from the chamber. the ‘‘ aventine ” groups on june 27 confirmed their abstention from parliamentary activity, demanded the disbanding of the milizia nazionale, the repression of all acts of violence by fas- cists (without mentioning those committed by non-fascists) and formed a committee for joint action; their unofficial leader was giovanni amendola. the conduct of the constitutional opposition, in allying itself with the revolutionary socialists and the popolari extremists, was much criticised even in non- fascist circles. various new opposition associations were now formed, such as the lega italica, the italia libera (with which gen. peppino garibaldi was connected), the unione nazionale, etc. the directorate of the ex-combatants’ association also assumed an attitude of veiled hostility to the government, and as this created a sharp division within its ranks the government dissolved the directorate and placed a temporary board in charge. the press campaign now reached an unparalleled degree of violence, don sturzo’s popole vying with the socialist avanti! and amendola’s mondo, and was a direct incitement to many acts of violence committed against fascists.2 sig. mussolini therefore decided on july 8 to call into force the decree of july 12 1923 drafted by the duke of cesard, and the prefects were ordered to apply art. 3 of the communal and provincial law, whereby in the interests of public order they were empowered to confiscate issues of papers containing seditious matter or incitements to violence, and in the case of repeated offences temporarily to suspend their publication. this measure was afterwards completed by the royal decree of march 4 1926. several libera] and democratic organs which systematically attacked the government were acquired by pro-fascists. the crespi family, who were the chief sharcholders of the milan corriere della sera, bought out senator albertini and his brothers, who had for many years edited the paper; it then became more favourable to the government in its outlook. the milan secolo, the rome giornale d’fialia and the naples matiinoa, as well as some other papers, have undergone a similar transfor- mation; many of the members of the staff remained with their respective papers under the new conditions, while those who refused to do so received large indemnities under the very liberal provisions of the italian law on journalistic contracts. several opposition papers continued to exist, including the democratic mondo, the voce republicana, the avasiz!, etc., but can exercise little iniluence. these measures were admittedly of a tempo- rary character, enacted in view of the transition from the old to the new regime. an important reform was carried out in the milizia nazionale; the decree of aug. 4 provided that its members should swear allegiance to the mane on oct. 28 the milizia took the oath. in the field of (orci ities, a frenty was concluded th britain whereby the transjuba territory was ceded to italy. there had been’ a previous agreement to that effect, but the british foreign office had raised difficulties, claiming that the question should be settled together with that of the dodecanese; the italian govt. persuaded mr. ramsay macdonald that the two questions were wholly unconnected, and the treaty was signed on july 15 1924, whereby italy secured a larger area than had been at first contemplated. ratifications were exx- changed on may 1 1925. 2since the matteotti murder 65 fascists ave hea eee a by their opponents; among the victims was the deputy casalini. italy mussolini’s skill—-the goverriment’s position had been_ undoubtedly shaken by the matteotti affair, but no evidence was produced implicating any of its members in it, and sig. mussolini parried the attack with consummate skill. the fas- cist party, except for an insignificant number of defections, rallied round him solidly, and after the first bewilderment non- party opinion continued its support of him. ‘the country tended to calm down, in spite of occasional regrettable incidents pro- voked by both sides, of which the most serious was the murder of the fascist deputy casalini by a communist on sept. 12 1924. the chamber opened on nov. 12, orlando and the communists being present, while later giolitti’s attack on the government for its unconstitutional methods caused some surprise as coming from a statesman who while in office had proved a past-master in the art of violating the constitution. the premier had come to the conclusion that the electoral law enacted in 1923 had not proved satisfactory, and on dec. 20 he presented a bill to parlia- ment providing for the re-establishment of the old one-member constituency system, eventually passed by 307 votes to 33, and approved by the senate on feb. 10 1925. this measure divided the “‘ aventine,” as the democrats and liberals were in favour of it while the socialists and popolari were proportionalists. in his speech in the chamber on jan. 3 1925, mussolini reaffirmed the uncompromising policy of fascism, rejecting all alliances, and stated that the government was determined to fascisitiz- zare the state, and that if the opposition did not abstain from factious violence severe repressive measures would be resorted to. these declarations induced salandra to withdraw his sup- port, although, like orlando and giolitti, he did not retire on to the “ aventine;” a part of his group (the liberal right) broke away and formed the pro-fascist national liberals. in march sig. roberto farinacci was appointed general secretary of the fascist party, which he proceeded to reorganise, giving it a rigidly intransigent character. his speeches and articles represent the extremist attitude of fascism. national defence.—the bill presented by the minister of war, gen. di giorgio, for reorganising the army on the basis of a reduction of the peace-time effectives, the sums thus econo- mised to be devoted to material, encountered much opposition in military circles and in the senate. on april 1 the premier proposed the adjournment of the debate and appealed to the generals in the senate to collaborate in improving the nation’s defences. gen: di giorgio felt called upon to resign, and sig. mussolini himself took charge of the war ministry ad interim, with gen. cavallero as under-secretary; gen. badoglio was appointed chief of the staff and entrusted with the co-ordination of the army, navy and air force. on may 5s adml. thaon di revel resigned, and sig. mussolini took over the ministry of marine and the newly created air ministry as well, with adml. sirianni and gen. bonzani as under-secretaries. this arrange- ment 1s regarded as leading the way to a future ministry of national defence. a great manifestation in honour of the king’s jubilee was held on june 7. it was generally recognised that the prestige of the monarchy had been greatly strengthened by the fascist regime. the government was rapidly regaining the ground it had lost in consequence of the matteotti affair. the decision of the senate judicial committee, rendered on june 12 1925, on sig. donati’s charges against gen. de bono, acquitted the latter of guilt in connection with the matteotti affair and of the other more serious accusations, only certain minor counts being de- clared not proven. at the municipal elections of palermo on aug. 2 1925 the anti-fascist list was supported by orlando, who had mobilised his adherents in its favour, but the fascist list secured a large majority. in consequence orlando resigned his seat, declaring that there was no longer a place for him in italian political life. his withdrawal from politics made very little impression, as he had already to a very large extent lost his political influence. the findings of the prosccuting section of the court of appeal on the matteotti case in dee. 1925, while committing dumini and four accomplices to trial for mur- der, excluded premeditation and exonerated members of the 569 goverriment and officials from eomplicity. cesare rossi, ae nelli and filippelli were consequently set free. the trial of the five men accused of having caused he enti of sig. matteotti was ended on march 24 1926, at chieti. du- mini, volpi and poveromo were found guilty of non-premedi- tated unintentional homicide extenuated by the subnormal physical resistance of sig. matteotti and by other circumstances; viola and malacria were found not guilty. the sentence on dumini, volpi and poveromo was 5 years 11 months and 20 days penal servitude of which 4 years are remitted under the recent amnesty and one year and 9 months were already served in awaiting trial. they had therefore to serve only 2 months and 20 days imprisonment. financial reform —lin the spring of 1925 financial difficulties had arisen resulting in the serious depreciation of the lira, which fell from a little over roo to the £ to close on 150; this was partly due to the heavy excess of imports over exports in consequence of the bad harvest of 1924, but also to speculation initially pro- moted by certain members of the opposition who hoped to break fascism through a financial disaster and the consequent panic in a part of the public, which believed that the govern- ment intended to reduce the currency to zero after the example of germany. the measures enacted to restrain speculation aroused much opposition in stock exchange circles and caused a temporary suspension of operations. prof. de stefani subse- quently modified the regulations, but the premier felt that a bold treasury policy was now necessary, requiring the services of a practical financier. de stefani’s great task in reorganising the fiscal system and balancing the budget was accomplished; for ig24-5 a surplus of 209 millions was announced, which even- tually rose to 417 millions. in july he resigned and was replaced by count giuseppe volpi, governor of tripoli, and formerly a business man of wide experience. | the american debt.—after enacting new regulations,w hich effectively restrained illicit speculation and improved the cur- rency (the lira rose to 120 to the §) he undertook the settle- ment of the war debt to the u.s., which was weighing heavily on italian finance. on oct. 22 he sailed for washington, accom- panied by dino grandi, under-secretary for foreign affairs, the manufacturer pirelli, the banker alberti and the diplomat count bonin longare; on nov. 14 an agreement was concluded whereby italy’s debt, originally $2,148,000,000, was reduced to $2,042,000,000 to be spread over 62 years, which, calculating the interest at 5%, teduces the actual value of the debt to $360,- 000,000 (a reduction of 82%); as the interest to be paid amounts to $73 600,000 the total to-day (1926) 1s $433,000,000. five millions were to be repaid in each of the first five years, there- after $20,000,000 till the z3oth year, and $50,000,000 for the re- mainder. the agreement was ratified by the u.s. senate on april 21. a loan floated by the american banks for $100,000,000 to enable the government to stabilise the exchange was sub- scribed several times over, while other loans for public works and the railways were also successfully floated in new york. on jan. 27 1926 count volpi signed with mr. churchill an agree- ment in settlement of the italian war debt of £610,000,000, whereby italy contracted to pay an annual sum of £4,500,000, slightly reduced at first, over a period of 62 years. the first payment of £2,000,c00 was made in march 1926. the government undertook several important reforms in the field of internal legislation with the object of giving a more essentially fascist character to the state. in order to bring southern italy up to the standard of the more progressive north a series of measures were enacted for co-ordinating agricultural land reclamation, drainage, the building of roads and railways, etc., for which adequate funds were provided and a suitable civil service organisation created. the wheat crop of 1925 had beaten all records, amounting to 64,000,000 quintals (the pre- war average was 49,000,000), but mussolini was determined to spare no efforts to increase the output until the 75,000,000 alinually required by the population could be grown at home, thereby avoiding heavy payments abroad; all forms of encour- agement to producers were adopted and various agricultural 579 measures enacted, constituting what was known as “ the battle for wheat.” fascist legislation.—of the political fascist measures the follow- ing are the most important :— in order to eliminate the influence of freemasonry in the ad- ministrative and political life of the country often inspired by foreign interests, a law was enacted in dec. 1925 whereby all! asso- ciations are obliged to communicate their statutes and their member- ship lists to the authorities, and, should secret societies continue nevertheless to exist, civil servants are forbidden to belong to them on pain of dismissal. the law of jan. 31 1926 provides that italians living abroad who commit acts calculated to promote sedition in italy or injure italian interests shall be deprived of italian citizenship, and in the graver cases even of their property. the government is empowered up to dec. 31 1926 by the law of nov. 1925 to dismiss from the public service officials who commit overt acts against the state and existing institutions or attempt to prevent the enforcement of the laws or to frustrate its policy. the conditions of certain municipalities also called for reform. that of rome, owing to the heavy charges entailed by the fact that it is the capital, could not defray expenditure out of the local revenues alone and constantly had to call upon the government to make up the deficit; moreover it appeared desirable that the city should not be the scene of political wrangles and party conflicts. consequently by the law of oct. 28 1925, instead of an elective mayor aad town council, a governor of rome was created, to be appointed by royal decree, assisted by two vice-governors, 10 reffort and an advisory council of 80 consultort to be selected from lists presented by the various economic, professional and educational bodies and certain other associations. the law of feb. 4 1926 provides that communes of less than 5,000 inhabitants, where municipal affairs were often run for the benefit of the mayor and assessors and their families, shall be administered by a podesta appointed by royal decree, assisted by an advisory council of consuliori; a podesta can also be appointed for five years in larger communes where the elective council has been dissolved twice in two years. the authority of the prefects is strengthened with a view to co- ordinating the various provincial services (law of march 1926), while the advisory provincial economic councils are created (law of march 1926) to assist the prefects and the government in all matters of an economic character composed partly of ex-officio and partly of elective members. the law of dec. 24 1925 conferred greater power of parliamentary initiative on the prime minister and otherwise extended his authority; it also provides for the infliction of penalties for committing offences against him. labour tribunals.—the most important measure of all is the law of april 3 1926, whereby the labour corporations are recog- nised and invested with the right of legally representing the various categories (employers, workers, employees, professional men, landlords, peasants, experts, etc.), and all labour conflicts are referred to the labour tribunals attached to courts of appeal; strikes and lock-outs are declared illegal and persons promoting them or participating in them are liable to penalties; the original draft of the bill provided that recourse to these tribunals should be voluntary in industrial conflicts, and obligatory only in those concerning agriculture, and sig. benni, president of the indus- trial confederation, supported this distinction, whereas sig. rossoni, president of the labour syndicates, insisted that such re- course should be obligatory in both cases. sig. mussolini in- tervened in the debate with a powerful speech. after he had taken a day for reflection, he decided in favour of rossoni’s view, which was then accepted even by benni himself, who withdrew his objections. although most of the ‘‘ aventinians ” continued to remain absent from the chamber, the groups led by salandra and gio- litti were present, together with orlando’s followers and the communists and a few stray aventinians who had begun to drift back and the communists; the latter took part in the debates and an amendment proposed by one of them was adopted. the unity of the aventiniani was gradually breaking up through internal dissensions and personal jealousy. the general internal situation continued to improve, although affrays between fas- cists and anti-fascists occurred from time to time. the most serious of these was the attack on sig. amendoli, (g.v.) near montecatini, in the summer of 1925, and the outbreak in florence on oct. 3, when as the result of the murder of the fascist pro- vincial secretary luporini by a leading freemason, the latter and two communists were murdered by fascists, and the shops ttaly and offices of several persons supposed to be freemasons were wrecked. the affair was most regrettable, but it had been pro- voked by the anti-fascists, and the persons responsible, whether fascists, or opponents, were all apprehended, and while those charged with murder were awaiting trial before the assizes, the lesser offenders had already been tried and condemned. the prosperity of the country and the absence of unemployment have greatly weakened the oppositions, many of whose members as well as many dissident fascists have shown a tendency to abandon their uncompromising attitude, and not a few are applying for the fascist tessera, but the party directorate are rigid in their refusal to readmit them. in march 1926 farinacci, who had been counsel for the defence of dumini in the matteotti trial, resigned from the secretaryship of the fascist party, and was succeeded by augusto turati; the party directorate was also changed at the same time, and on april 23 it decided to admit no new recruits to the party until 1927. the object of these various measures and of the general policy of the government is to give an essentially fascist character to the state and its institutions, so that the main principles of fascism, notably the idea of the duty of all citizens toward the state and the necessity that all should co-operate under the guidance of the government and of the men best suited for the task in every field of activity, for the common good and the dignity, prosperity and greatness of italy, should come to be taken for granted by the nation. it is a policy similar to that of the men of the risorgimento who succeeded in getting the then novel ideas of the unity and independence of italy accepted by the mass of the people, who had until that time been indif- ferent or opposed to them. the gradual elimination of the opposition was based on the view that an opposition in the sense of a reasoned criticism of the government’s policy, which the government itself would have welcomed, did not exist; there were only the survivors of groups belonging to a dead past, who hoped by a policy of factious scandalmongering, in alliance with the avowedly anti-national groups, to reconquer their old pre- dominance. hence the lack of interest on the part of the mass of the public at their disappearance. the plot against mussolini.ma sensation was caused on nov. § 1925 when it was announced that a plot had been discovered to murder sig. mussolini. the socialist ex-deputy zaniboni, was arrested in a room in a hotel commanding the palazzo chigi, armed with a rifle with which he intended to shoot the premier while he was taking the salute during the march past of the patriotic societies on armistice day (nov. 4). gen. capello (q.v.) ex-commander of the ii. army, an active freemason and a bitter opponent of the government, was arrested for com- plicity in the attempt. mussolini was greeted with enthusiastic demonstrations in consequence of his escape. another attempt on his life was made by the hon. violet gibson, an apparently demented irishwoman, on april 7 1926, on the eve of his depar- ture for tripoli. the premier was slightly wounded in the nose, but proceeded nevertheless on his journey to visit italy’s north african colony. in the field of foreign affairs a treaty with egypt was con- cluded, whereby the jaghbub oasis was ceded to italy, who in exchange ceded to egypt es sollum. the oasis is important both as the headquarters of the senussi sect and because it dominates the caravan routes between egypt and cyrenaica; by possessing it italy will be able to prevent the contraband of arms from egypt to the rebel tribes. the question had been long debated between britain and italy, and although jaghbub had been promised to italy, lord milner had informed senator scialoja in april 1920 that, as in the case of transjuba, the agree- ment would only become effective after a general settlement of all the problems before the peace conference, thus coupling the jaghbub question with that of the dodecanese. as we have seen, this connection was rejected by italy, and britain had ended by accepting the italian view, but with the conces- sion of independence to egypt in 1922 negotiations had had to be renewed with that country, and were concluded on dec. 6 1925. italy the policy of the fascist govt. to enforce the teaching of italian in the schools of the alto adige, and otherwise to give an italian character to this district inhabited by 180,000 to 200,000 germans, aroused irritation in germany, and the pan- german elements voiced by herr held, the bavarian premier, promoted an agitation against italy, advocating a boycott of italian goods, and accusing the italian authorities of terrorising the population. sig. mussolini on feb. 6 1926 delivered a vig- orous speech in the chamber denouncing this campaign and warning the german govt. that unless it ceased italy would not hesitate to adopt strong measures. this outburst caused wide- spread excitement abroad, but it achieved its object. herr stresemann replied in a very minor tone, admitting that the charges of persecution and terrorism were untrue, and this was confirmed by a part of the german press, although the italian- isation of the district was deplored. in italy sig. mussolini’s conduct received general approval, as it was believed that he had spoken to the germans in the only language which they understood. the anti-italian agitation in germany in fact died down, and relations between the two countries had become better than they had been for a long time. the italian govt. attached particular importance to a good understanding with the balkan states, and on the occasion of the visit to rome of m. ninchich in feb. 1926 the question of italo-yugoslav relations was gone into once more, the conclu- sion arrived at being that in view of the general state of europe, a yet closer collaboration between the two countries than had heretofore been realised was desirable. the visit to rome of the greek minister m. roufos, while not leading to any definite result, was an indication of the cordial sentiments of greece towards italy. the year 1925 was proclaimed by pope pius xi., an anno sanio, and over 1,000,000 pilgrims flocked to rome from all parts of the world. the italian govt. and the rome munici- pality collaborated with the vatican in organising the transport of the pilgrims and in making arrangements for their stay. im- posing ceremonies were held in st. peter’s and the other churches, undisturbed by any untoward incident, in spite of the attempts of the anti-clericals and the freemasons to discourage the pilgrimages. relations between the church and the state con- tinued to improve in spite of occasional misunderstandings, the facsist govt. attaching particular importance to con- ciliating the vatican. ! ,; bibliography.—u. angeli, guerra vinta, pace perduta. scrittt politici, 1910-20 (rome, 1921); f. meda, jf partito socialista italiano, dalla prima alla terza internazionale (milan, 1921); b. mussolini, discorsi politici, etc. (milan, 1921); and la pace sociale et l’avvenire d'italia. discorsit pronunciati dall’ ottobre 1923 all’ aprile, 1924 (rome, 1924); j. alazard, communisme et ‘‘ fascio"” en italte, etc. (paris, 1922); u. foscanelli, d’annunszio e il fascismo (milan, 1922); g. gallavresi, italia e austria 1859-1914 (milan, 1922); p. gorgolini, il fascismo nella vita italiano. con prefazione di benito mussolint (torino, 1922); the fascist movement in italian life, trans. by m. d. petre (london, 1923); and la rivoluzione fascista ... dtscorst olitict di benito mussolini (torino, 1923); v. grasso, i? fascismo e *nuomo-mussolant(palermo, 1922); g herron, the revival of italy (london, 1922); a. rudman, mazzint, patriot and prophet (lon- don, 1922); g. salvemini, i! partito popolare e la questione romana (florence, 1922); t. tittoni, modern italy: its intellectual, cultural and financial aspects (williams college publications, london-new york, 1922); g. d’annunzio, perl’ italia degli italiani (milan, 1923); l. bis- 1in the autumn of 1925 mussolini made speeches of an unmis- takably imperial nature. after the locarno conference he said in the chamber at rome that ‘* while the words of peace glisten on the horizon i must recognise that the skies have become populated with prodigious airplanes and that new and deadly weapons are appearing within the sea.”’ early in 1926 he went to tripoli, where he addressed the colonial agricultural congress, saying “‘ we are hungry for land because we are prolific and intend to remain so. there is no doubt that my journey is destined to have profound repercussions on_the spirit of the italian people, repercussions which will be beneficial since that is our indestructible will.’’ on july 23 he delivered another speech, breathing the same spirit. although mussolini has thus been very outspoken in his addresses to his own people, he has been conciliatory in his relations with other european powers, and is very ready to deny any thought of aggression by force, trusting rather to friendly agreement to secure his ends. (ep. e. b.) o/t solati, la politica estera dell’ italia dal 1897 al 1920. scritti e discorst (milan, 1923); e. corradini, discorsi politict, 1902-1923 (florence, 1923); p. hazard, l'italie vivante (paris, 1923); o. por, fascism, tr. by e. townshend (london, 1923); e. ciccotti, crondche quadriennali dt politica ed estera, 1919-1923, etc., 2 vol., (milan, 1924); g. ferrero, four years of fascism... tr. from da fiume a rome, by e. w. dickes (london, 1924); l. gangemi, la politica economica e finan- ziaria del governo fascista nel periodo dei pient poteri (bologna, 1924); h. joly, les crises sociales de i’italie (paris, 1924); c. pellizzi, problemt e realta del fascismo (florence, 1924); f. schotthoefer, j/ fascio. sinn und wirklichkett des italienischen fascismus (frankfurt, 1924); count c. sforza, pensiero e aztone di una politica estera italiana, discorst e scrittt (bari, 1924); l. villari, the awakening of italy. the fascista regeneration (london, 1924); m. g. sarfatti, the life of bentto mussolini, trans. and abridged by f. white (london, 1925); and a. solmi, the making of modern italy (il risorgimento italiano) (london, 1925). see also annual almanacci italiano ben- parad (florence). (l. v.*) il. the problem of defence no country, with the exception of india, is protected by nature in the way that italy is protected by the formidable barrier of the alps, which not only affords a defence against invasion by land, but also protects her, to a great extent, from attack from the air. by the treaty of peace signed at vienna in 1866 italy was denied the full advantage of her natural strategic frontier and austria was allowed to retain a foothold south of the alps in the north and east of the province of venice; throughout the great war italy was never able to overcome the advantage which this adjustment conferred on austria. as the result of the treaty of st. germain italy, for the first time in modern history, has secured as her political frontier the line that must always be her strategic frontier. the italian frontier now follows the high alps from end to end. this fron- tier, fixed by nature, has been strengthened by diplomacy, for one-third of it is bounded by the neutral and buffer state of switzerland. the ethnographical frontier, however, is not identical with the strategic frontier, and italy now suffers the disadvantage of including within her boundaries about 250,000 austrians in the trentino and 250,000 slovenes in istria. as an offset to her strong land frontier italy suffers strategically from a very extend- ed coastline, though with the former great austrian naval base of pola now in her hands the adriatic may almost be considered as a purely italian sea. the military forces.—the importance which ey attaches to her military forces ts best indicated by her military budget, which for 1924-§ and 1925-6 in millions of lire were as follows:— 1924-5 1925-6 army 1,990 2,130 inany 925 980 air force 399 449 colonial troops 195 252 the above forces are under a minister of war, a minister of marine and a minister of air. after the world war, italy followed the brit- ish example in establishing an air force distinct from the army and navy; at first this was under an under secretary responsible to the minister of the interior, but in 1925 a minister for air was created on an equality with the minister for war and the minister of marine. the three offices were, however, temporarily in the hands of sig. mussolini, the prime minister. in 1925 also the appointment of a chief of the general staff was created: this officer, who will be a marshal or general of army, will be responsible to the minister for war for the army and to the president of the supreme commission of defence (prime minister) for everything relating to the execution of the supreme commission of defence and for the eventual operations of war of the three services. | the regular army.—the army is now organised in 10 army corps stationed as follows: i. turin, it. milan, ih{. verona, 1v. bologna, v. trieste, vi. florence, vii. rome, viii. naples, ix. bari, x. sicily. it will be seen that five of these army corps are stationed in or about the valley of the po. these 10 army corps consist of 30 divisions, three of three brigades each, 16 of two brigades each, and rt of one brigade each, making a total of 52 brigades. in addition to the 30 divisions there are three cavalry brigades, three groups of alpini, each of nine battalions, 12 regiments of bersaglieri, a tank corps. the length of service in the army is for 18 months. the numbers called up each year are about 180,000. the recruits are called up in may; so between may and sept. there are therefore o/2 two classes with the colours, less the number dismissed after 12 months’ service (about 60,000); the maximum strength in these months is therefore about 300,000. the colonial army.—the colonial army consists of both italian and native units, the latter with italian officers and a proportion of native n. c. o.s. in 1925 the colonial garrisons consisted of 12,350 italians and 23,000 native troops, of which all except 8,500 were in tripolitania and cyrenaica. | the national militia.—the national militia is the development of the fascisti militia. in oct. 1924 this force by decree was declared to be part of the armed forces of the state, took the oath of allegiance to the king, and became subject to the same disciplinary and penal regulations as the regular army. in peace the national militia is directly under the orders of the prime minister; on mobilisation such members as are liable to join as reservists are drafted into the army, navy or air force; other militiamen come under the control of the minister of war. the members of the national militia are all volunteers, the functions of this force embrace co-operation with the army and public security services in the maintenance of internal order and the defence of italian interests throughout the world. the militia is divided into two battalions. in 1925 the strength of the ist battalion was 175,000 and of the 2nd battalion 120,000; the ist battalion is composed of men who by reason of their occupa- tion or domicile are liable to be called up at any moment. a general calling up of the national militia can only be ordered by the prime minister himself, | the air force.—this force, which is under a minister for air, is subdivided into four portions: an independent air force, which will consist of 78 squadrons; the army air force, which will consist of 57 squadrons; the naval air force, which will consist of 35 squadrons and six airships; the colonial air force, which will consist of 12 squadrons. these auxiliary air forces, although working under the orders of the other services, will depend on the air force in regard to technical matters, administration and promotion. munition factories.—during the world war italy was handi- capped to an extent unknown by other powers by her lack of raw materials and by the limited capacity of her munition fac- tories, and was largely dependent on the allies. her home resources in coal and oil are extremely limited (see ecoonomic history, below), and she has only very limited quantities of iron ore. during the war she developed her metallurgical indus- try with great energy and determination; the great works of ansaldo and fiat are a remarkable testimony of this develop- ment. in the manufacture of aeroplanes, airships and mechan- ical transport italy is now in the forefront of manufacturing nations, whilst in regard to armament she is now self-supporting. although her lack of raw materials must always present an almost insuperable difficulty to italy, she has remedied this deficiency as far as is possible by exploiting her limited resources and by the development of electrical power. in regard to man power, italy has no difficulties; her population of 40,000,000, which increases at a rate of 500,000 a year, 1s ample for her purposes. (j.:du;) ill. economic and financial history '! population.—a remarkable increase of the italian popula- tion took place between 1910 and 1925. the losses due to the war, to epidemics and disasters and to the decrease of births in the years 1916-9, failed to check the increase, since they were balanced by the return of a number of emigrants (estimated at about 1,000,000) while comparatively few, about 363,000 have since left the country. thus, it is estimated that the 34,600,000 enumerated in the rg11i census, giving a density of 121 to the sq. km. had increased at the end of 1925 to 40,500,000 or 131 to the sq. km. (including the restored territories, which are more sparsely populated than the peninsula), and this in a country two-thirds mountainous or very hilly, poor in minerals and with a soil exploited by some 3,000 years of cultivation. the birth-rate, like that of most countries, shows a continuous decline since the ’seventies, but infantile mortality has also _ 1 note should be taken of the varying value of the lire. expressed in lire the annual average value of sterling was: tou 4. ow ee we 25535 po20 «s&h. 4 34. 2o0k79 tots 4 4 22 - “2790 eq2t 4: <. 32 <-> ee ~“orloi toig: cg a see. 22 fir? 19022: 3. sh es qi. 86 igi7. 26 s/\aete & 186203 veq23: 2° <6. ae om. ~ oor75 1918 - oe ak ee. &. u3zorsi 1924 3 <e. & te. oo . poz8t4 i9i9g 50.08 1925 s:. a ey ow, the parity value of the lire is 25 are % italy diminished. the increase in the number of marriages has com- pensated for the decrease during the war, but the birth-rate pet marriage is only at the pre-war level. : _ * this rapid increase has resulted in the flooding of the labour market. the number of workers between the ages of 16 and 25 is probably about 24,000,000 as against about 20,500,000 in 1o1t. the difficulty of absorbing this mass of labour would have been even greater than it has becn were it not for improve- ments in industrial equipment, factory organisation, agricul- tural technique and also the extension of italian territory. the pressure, however, is increased by the great number of war vic- tims, who are unable to contribute their full share of work. . marriages! births deaths s ae 4 period per 1000). ver 1000, |. er 1000'|. 32 rene. | of pop. of pop. of pop. of pop. 1908-10, 8-01 30 20:07 i1-40 normal pre-war! me ‘ : period 7°53 31:86 19:61 12°14 war period 2 32-43 20°53 22-99 1:83 post-war period? 10'31 30-00 17-60 12-60 average of years iqii-24 . 7-40 27:80 19-60 8-25 1 1909-15 for births, 1909-14 for all other columns. 2 1916-19 for births, 1915-8 for all other columns. 3 1919-24 for births, 1920-4 for all other columns. 4 excess of live births over deaths. emigration.—in 1911 the italians abroad numbered 5,500,000, including those who had emigrated long before that date but had retained their nationality, and whose children had declared themselves italians. as the result of a special investigation, savorgnan found that in the go years 1872-1913 emigration had effected a reduction of at least 3,800,000 persons in the natural increase of the population of italy. during the war the movement naturally slackened. conscription, and the intense demand for manpower at home removed alike the possibility of anc the incentive to migration. the total number of emigrants in the four years was, in fact, barely three-fifths of the pre-war annual average. with the return of peace began a feverish race abroad, which was at its height in 1920 when those who had returned from the united states during the war realised that if they delayed they might not be able to get back at all. the numbers of those repatriated since 1921 have amounted annually to about half the total number of emigrants. in all probability the proportion was formerly greater, since nearly all of those in europe and about 55° of those overseas returned for the winter. nevertheless, when a census of italians abroad was taken in 1921, it was found that there were 7,500,000 of them scattered about the world. for statistics of the movement of population and the restriction of migration to the united states see migration. | the present stream of emigrants differs considerably from that of 1909-13 in respect of quantity and quality, countries of destination and districts of origin. the restrictions introduced by the united states and other countries have not only reduced the total number of emigrants, but have tended especially to exclude the southern italians, whose need for an outlet is great- est. the average of italian emigrants to north america was about 200,0c0 for the years 1919 and 1920, and for the years 1921-5 about 50,000; whereas the yearly quota allowed in 1926 was under 4,000. 3 | : | percentage distribution of italian emigration from south italy from cen- tral italy from n. destination italy 1909-13! 1922-4 1909-13] 1922-4 |1909-13] 1922-4 europe and the mediter- m ranean basin} 30 46 7 6 4 6 countries , : : —- overseas ttaly in 1924 france took 201,715 italians, mainly from north italy, and since the armistice the annual average has been 126,- 000, or nearly double the number employed there in 1914. this state of things is, however, unlikely to continue; the reconstruc- tion of the invaded districts is practically complete, and the demand for agricultural workers in the gironde and the garonne has now been almost satisfied. in the near future italians will only be wanted in the industrial regions of northern france. after france, the largest market for their labour is the argen- tine republic; switzerland, germany and austria will assuredly not need them as they did in the past. this slackening in the flow of emigration has not, however, checked the tendency to an increase in the proportion of skilled workers among the emi- grants, and a lessening of the former dieponeriance of agricul- out labourers. percentage of emigrants indus- | agri- i a f . other : | wa- | brick- | trial tic period cul- lhourers layers | work-| ser- | cccup@- turists oes sante tions 1909-13 32 30 12 12 2 ii i9gig_ .. ; 16 13 9 17 17 21 1920. 26 20 10 22 12 9 | production and industry | agriculiure—despite considerable fluctuations from 1911 onwards agriculture has afforded a profitable occupation to 52 per cent of the population, z.¢., to 11 millions over ro years of age. besides food for direct consumption, the products included the raw materials of more than half the total of the country’s manufactures, indirectly providing occupation for 27:8% of those employed in industry. in the years immediately preced- ing the war the average annual production was valued at about 7,800 million lire. soil and conditions vary greatly, ranging from the rich fertility of some parts of campania and sicily, which will grow all kinds of luxury produce, to the moorlands of the north or the chalk-hills of tuscany and the lucan clays; from the plains of lombardy and venetia, where the “ special ” crops (tomatoes, sugar-bect, hemp, rice, vegetables, fruit) give a good return to energetic and prudent cultivators, to bare pas- tures scorched by the sun all through the rainless summers, and marshy lands where the farmer is handicapped by malaria and the poverty of the soil. regions of the most intensive and ex- tensive cultivation border on one another; the large estates situated on the gentle slopes which rise from the sea shore to the hills adjoin land divided into thousands of tiny holdings. next to miserable marshlands with neither houses, trees, shade nor water, may be seen fertile oases with olives, oranges and lemons. these various agricultural regions do not all permit of the util- isation of large capital in the form of machinery, selectecl seeds, pedigree stocks, proper buildings and skilled workers. where climate and soil are favourable the owner can create a garden; elsewhere the struggle is long and hard and the return extremely small. in such areas capital is not the chief need, but the gov- ernment can do valuable work in preventing the damage done 573 by erosion in the eicuneainous regions and by making roads anc aqueducts., . progress in these divectiohs ig slow being made. though it suffered a set-back during the four years of war, when, owing to the requirements of the army, labour, fertilisers, machinery and means of transport, were all difficult to obtain, and produce was requisitioned at fixed prices which were far too low to com- pensate for the many months of laborious toil. faced by all these difficulties and by the necessity of slaughtering large num- bers of cattle and cutting down the forests for military require- ments, italian agriculturists have achieved a great feat in sur- mounting this troubled period without experiencing an excessive diminution of crops, cattle and forests. the greatest difficulties, however, came in the next years, 1910-22, when the effects of the great deterioration of the soil during the war period were felt; the supply of fertilisers was still very scarce, and cultivators suffered from the uncertainty of prices, the constant disputes with the wage-earners, and the high costs of transport. but these troubles ended at last, and the abundant harvests of 1923 and 1925 made ample amends for the former privations. the increase in production has been obtained with scarcely any increase in the area under cultivation. much is due to the intensification of effort, to a more generous use of fertilisers. the efforts and sacrifices of the small proprietors, above all the new settlers, were specially meritorious, for the acquisition of the land had often deprived them of most of their savings, with the result that they had to reduce their standard of living to a very low level in order to scrape together their working capital. superphosphates, nitrates, basic slag, potash and other ferti- lisers, supplies of which were heavily reduced during the war, are all now being used in greater quantities than in 1913. the import figures of agricultural machinery do not, owing to the changes in the tariff, give a correct index of the increase or decrease in the purchase of farm machinery; it is certain that the home manufacture increased after the war. irrigation is also making progress, and year by year new schemes are being started; at the same time water-logged areas are being drained by means of electrical power with the result of abolishing malaria as well as improving the fertility of the land. in soir italy was nearly self-supporting as regards agricul- tural produce, except in wheat and timber, and the amounts of these imported were almost entirely paid for by the exports of other agricultural products, so that the agricultural balance is really about even. morcover, the industry is highly profitable; at the average prices current, the gross value of the total produce of the soil is estimated at 41,700 million lire. the total value would probably have to be increased by several hundred million lire if the whole of the peasant production could be brought into the account, for it must be remembered that no less than 87% of the rural proprietors cultivate very small holdings, most of which are less than half a hectare, though 6/7ths of the total agricultural land is being held by 214,000 “ large ” and ‘*‘ medium sized ”’ and 500,000 “‘ small” owners. but even excluding this supplementary amount, the figure of 41,700 million lire repre- sents an average of 3,180 lire contributed by each agricultural worker over ten years of age; and an average value of 1,467 lire principal agricultural products (in thousands of quintals) annual annual | annual average ei average i nt average 1909-14 oe \) po rs—8 2nos || -fo19—38 wheat 49,270 ico 45,510 y2 45,400 maize 25,680 100 23,000 go 21,800 rice 4,870 100 5,320 109 4,700 potatoes 16,560 | 100 14,310 87 13,650 sugar-beet 17240 100 12,580 73, 16,800 grapes . 70,420 100 55,400 7 56,600 wine 45,520 100 35,800 7 36,200 olives. 10,770 100 12,980 120 11,300 olive oil 1,810 100 2,180 120 1,900 oranges and lem- 7 ons or citrons 2s | and other fruits 7,890 100 7,330 93 6,430 hemp _ 850 100 880 103 815 nos] 1923 | ngs g2 61,190 i2 85 22,660 53 of 5:240 107 83 17,960 108 97 26,990 156 79 83,340 119 79 531950 118 105 11,420 106 105 1,850 104 80 6,186 78 574 of heavy produce for each hectare of agricultural or forest land, the lowest regional average being sardinia with 460 lire and the highest, lombardy with 2,580 lire. indusiry.—of the 5,000,c00 adults shown by the census of 1911 as occupied in industry, probably not less than a third were not employed in factories; and it must not be forgotten that anum- ber of women and children entered as domestic workers actually help in the manufacture of articles of daily use or in making the numerous local products which reflect italian artistic traditions, good taste and native skill, and which enter largely into the export trade. such wares are embroidery, lace, carved furniture and terra cottas, wrought iron and chased metal work, decora- tive glass, spun glass and mosaics, stamped leather and illumi- nated vellum, all of which give ample opportunity to skilled workers and are mainly fashioned in small workshops. the multiplicity of such workshops and the extent of the sales to the public show the importance of these crafts. evidence of industrial development is generally sought for in the progress of large undertakings where thousands of workers are massed together, and certain branches of heavy industry are usually looked on as providing the best indices of the aggre- gate national activity. in italy, however, the scarcity of fuel and of minerals, the difficulties of land transport due to the mountainous nature of the country, and also the special qualities of the working classes, who are not excessively robust, though quick, industrious and intelligent, have led to a preference for the working up of food products, textiles of various kinds, deli- cate machinery and housing accessories. the census of industries which was taken on jan. 10 ror1 showed a very large number of undertakings (243,926), distrib- uted throughout the country, the larger units being concen- trated in north italy, the smaller spread over the other parts of the peninsula. the larger units were comparatively few (only one-tenth of the total number—22,413 to be exact— employed more than 10 persons each), but this tenth pos- sessed three-quarters of the aggregate mechanical and labour power. the distribution of the women, who constituted a third of the total number of persons employed, indicates the impor- tance of the textile industries. these have been traditional for centuries in italy, and were to be found in every valley, while domestic production had not yet disappeared. next in impor- tance, in respect of numbers of undertakings and employees, came food manufactures, while the steel and engineering indus- tries were making but slow progress. the war stimulated nearly every branch of industry, and the introduction of the shift system led to the expansion of plant and to new kinds of manufacture in which by-products, formerly neglected, could be utilised. the extraction of iron ore, pig- iron production and steel showed great increases. in addition to arms and munitions the requirements of the army included a vast number of commodities ranging from cloth to canvas, from shoes to motor-cars, from rubber to paper and from chem- icals to naval dockyards. all these shared in the boom which followed the cessation of hostilities. employment.—after the armistice a crisis was brought about by the necessity of substituting other industries for those of the war period, and the difficulties of forecasting demands were intensified by the shortage of raw materials, and by a fierce struggle for the control of associated or subsidiary products. with the assistance of industrial exhibitions organised at milan, padua and naples, and of vertical combines which were formed on an extensive scale, the very difficult period of 1919-20 was at length surmounted. the workers’ desire for a “ new order ”’ which should give them control of the factories, provoked a number of vast conflicts and strikes. in the first year after the armistice 1,600,000 workers ‘‘ downed tools,”’ and 2,300,000 in the following year. in the two succeeding years the world crisis made itself felt, and the effects were intensified because, owing to the bad harvests, the spending power of the poorer classes was greatly reduced and the demand for manufactured goods thereby lessened. but in 1922 conditions began to improve; in that year there were less than 448,000 strikers, and the number italy of unemployed, which in jan. 1922 had reached the maximum of 607,000, fell in the summer to half that figure and did not rise to any very great extent in the following winter. at the end of 1925, the number of unemployed was still reduced to the very small figure of 122,000. certain undertakings which had been over-capitalised failed, and this directed attention to the neces- sity of reducing costs of production, which became of vital importance when active competition was renewed. price level —the recovery was brought about by the closing of the gap between internal and foreign price levels during 1924 and by the diminution in the violence of fluctuations. prospec- tive costs and profits could then be estimated with less uncer- tainty. another contributory cause was the halt in the upward course of wages; in 1921 these were five and a half times higher than the pre-war level, but they fell in 1922, and throughout 1923 and in 1924 remained at barely five times the pre-war figure, i.e., the rise was a little less than that in the cost of living, which was nearly six times the pre-war level. but in 1925 statistics show a very marked upward trend of the level of wages, caused by the ever-increasing cost of living. imports of raw materials increased, and the mining industry almost entirely recovered. heavy industry —the production of pig-iron rose to only about a tenth below the 1910-4 average, and less was imported, since scrap was being more and more utilised for the manufac- ture of steel, both by the martin and electric processes. imports of principal raw materials (thousands of metric tons) national production (thousands of metric tons) ron and stecl annual i a still greater expansion of the steel industries was hindered by the scarcity of minerals and of coal, the inferior physique of the workers and the difficulties both of organising vertical com- binations and of maintaining their efficiency. hence the pref- erence of the italians for industries where these drawbacks are not felt in the same degree; such are the building industry, the making of cement blocks and the preparation of foodstuffs for which there is abundant demand. tanneries and stocking fac- tories have greatly increased in number and capacity, and their products, like those of automobile works, are very largely ex- ported. the film and armament industries have fallen to a very low level, the results of which are especially felt in the redeemed provinces where they were formerly of great importance. on the other hand, beet sugar is being produced in 53 factories as against a little over 30 in 1911, and the production, which aver- aged 1,700,000 quintals in the five years preceding the war, has lately reached 2,750,000 quintals; it is true that in rg25 the amount fell to the rg10 level, but the set-back is merely tempo- rary. as soon as the stocks accumulated during the boom period have been sold off, the beet area will certainly be extended both in emilia and the veneto, where four-fifths both of the cultiva- tion and of the manufacture are carried on. in campania about half of the preserved vegetable foodstuffs are made, of which the annual value is about 368,000,000 lire, and three-fifths are exported. texttles.—as regards textiles, the woollen branches of the industry seem on the whole to have made most progress; larger quantities of raw material are being consumed, and certain processes are being undertaken which were formerly not at- tempted in italy. washing and combing are no longer done almost entirely abroad, thanks to the improvements in machinery and equipment which have been made since 1915, especially in italy ot . a mmr mmr mm mm mem mmm erm | erm ee eee exports ‘annual raw silk of of average production raw eitle? cotton, spun and woven (kilogrammes) | (kilogrammes) (quintals) i9t0-4 4,780,000 7,193,400 538,800 1915-8 2,492,000 4,720,000 586,000 i9ig-2i 3,600,000 4,740,000 575,000 1922 3,990,000 4,410,000 390,600 1923 5,233,000 5,180,000 587,900 5:440,000 775,500 5,563,000 6,370,000 800,000 1 the whole year. production imports | of of of f petroleum, electric lienit e t benzene and power ‘ceed oe residual products eee (tons) (tons) (quintals) 2,300 654,000 9,940,000 1,387,006 3,200 1,540,000 682,000 2,260,000 4,100 1,335,000 645,000 2,310,000 4,300 946,000 8,838,000 2,911,000 5,400 1,133,000 9,134,000 3,489,000 6,000 11,221,000 3,767,000 1,048,000 7,600 10,500,000 4,250,000 2 considerable quantities of cocoons are imported—hence the excess of export over home production. piedmont and the vicentino. the silk and cotton manufactures are also expanding; better qualities of raw materials are being used (e.g., egyptian cotton) and equipment and processes have been modernised and improved. in fine, owing to the cheapness of female labour the textile industries have passed beyond the stage of catering for the home demand and for the poorest of the foreign markets, and the exports are no longer confined to the coarser kinds of fabrics, but include grades of medium fineness. the manufacture of mixed fabrics has been greatly facilitated . by the increasing development of artificial silk, for which until a few years ago italy depended largely upon foreign countries. motive power.—an index of the manufacturing capacity of italy is afforded by the figures of consumption of fuel and motive power; although the italian mines yield only one-twentieth of the country’s industrial requirements, the amount of hycro- electric energy (leaving out of account the periods of interrup- tion due to the exceptional drought) is almost three times as great as in 1913 and takes the place of at least 7,000,000 tons of coal. in addition, the imports of coal are about the same as in 1913, while those of petroleum and benzene have nearly trebled in quantity. savings.—during the i5 years i1g11-25 savings have experienced various set-backs, especially in the form of deposits in savings in- stitutions and investments at fixed rates of interest. the effects of monetary depreciation have been felt by those who did not wish or did not know how to transfer their holdings of fixed interest bearing securities into industrial shares or real estate. the rate of interest on bonds has risen from 4°% to 6% and over. it is questionable whether the 35:7 milliard lire deposited in various credit and savings institutions in the middle of 1924 represented an equivalent purchas- ing power to the 7-6 milliard lire similarly deposited in june 1914. in view of the rise of prices and diminution in the purchasing power of the lira, the deposits in the middle of 1924 were probably equiva- lent to about §-5 milliard lire (pre-war values), bile it should be observed that current savings.are more often invested directly in- stead of through the medium of credit institutions. the issue of both long and short dated treasury bonds, the total of which rose from a few hundred millions in 1914 to 30 milliard lire over a period when the consolidated public debt also trebled in amount, indicates one of the many new avenues for savings which formerly found their way into banks and savings institutions. {a still larger field is now offered by industry, for example, the resumption of building after the war has absorbed. a considerable amount of savings.) it has been estimated that new savings in 1925 amounted to 1§ milliard lire, equivalent to about 23 milliard lire (pre-war values). the accompanying tables show the amount deposited in savings and credit institutions, the official discount rate, and the number and capitali- ‘sation of joint stock companies:— number and amount of capital of the princtpal jotnt stock companies at the beginning of each year aggregate capital, calculated on the basis of 1913 purchasing power of the lira (million lire) mount per society illion jire) total capital a (million lire) (m year | number 5,506 79257 20,249 21,293 23,421 28,261 36,278 1,870 2,090 31340 3,160 3,020 8,946 3,160 10,515 31459 stock-exchange quotations of securities reflect the judgment of the market as to the resources, prospective profits, etc., of each under- taking. when grouped together for each industry the figures pro- vide an index of the general financial forces influencing the different branches of economic activity. 2,951 3,463 6,075 6,734 7,782 index numbers of stock-exchange quotations for the principal joint stock companies and state securities cal- culated by riccardo bachi. basis 100 for 1913 1918 194 dec. 1922 credit institutions . inland transport maritime transport cotton ‘ mining. : tron and steel engineering automobile electricity chemical . sugar. food . : real estate general average state securities bankruptcies.—the number of bankruptcies, after falling to one- third during the war period and to less than one-seventh in the following three years, rose in 1924 to the level of 10 years previously. as the population has become denser and those engaged in industry and ee more numerous, this figure may be regarded as normal, amounts deposited in the postal and other savings institutions, banks, credit banks and peoples’ banks, monti di pieta, etc. . « (in millions of lire) 7,595 12,231 official rate of discount . ; ; 5-5°50 5-5:50 rate of interest on the public debt (from annual averages) : 3°62 5:66 index numbers of wholesale prices of commodities (r. bachi) (from annual average) . . . 100 409 20,659 28,316 32,334 35,698 36,000 5-6 6-5:50 5°50 5:50 5°50-7 6-62 6°55 5°97 5:28 5°44 624 562 575 585 690 576 sales of property.—the sales of fixed property, which increased in the period of social upheaval and threats of expropriation, continue to be somewhat numerous, owing to the profitability of small hold- ings and to the break up of the large estates. the very smal! valucs of the average transfer indicate a new reduction in size of properties transferred. allowing for a certain amount of evasion it is possible that this reflects an increase in the number of transfers of small properties for building purposes. aa nace transfers of fixed property average bank- financial | millions ruptcies year number of lire 1912-4 7,170 i9i 4-5 343,332 1,006 1915-8 2,520 1920-1 508,433 4,158 1919-21 1,007 1921-2 498,700 4,781 1922 3,562 1922-3 465,367 5:4990 1923 5,691 1923-4 452,700 5,064 1924 fiee ad es 1925 7 ots trade and transport _ the development of italy’s foreign trade has been affected both by the depreciation of the currency and by the increase of her population; allowing for the reduced purchasing power of money, the average value per head of the population was less in 1925 than in the period immediately preceding the war, but was tending to increase. directions of trade—the directions of both imports and exports show considerable changes, compared with pre-war. imports from the united states and the argentine increased by 10 times, only surpassed by switzerland with a 12-fold increase, while imports from france, england and germany increased only from three to five times. the extension of italian exports has been greatest to england, france and switzerland, followed by germany, the argentine and the united states. balance.—the adverse annual balance of trade, which was 1-1 milliard lire in 1909-13, rose in 1925 to about 8 milliard lire; against this must be set the expenditure of foreign visitors and the remittances of italian emigrants, the former being probably of the larger importance. movements in the values of total im- ports and exports are given in the following table:— ‘foreign trade roro-25 (special trade) imports exports : amount amount year total per head total per head millions of of pop millions of po of lire in lire of lire in lite . a d. a b iq1o-i4 3,381 97 97 2,281 65 65 1919-21 20,123 546 105 8,700 236 45 1922 15,765 404 72 9,302 238 42 1923 17,189 436 76 11,086 281 49 1924 19,388 456 83.) 14,318 359 oi 1925} 26,254 648 73.| 18,277 451 48 1the whole year, | . (a) in lire. (6) in lire on the basis of purchasing power. © transport.—the demands made by the war on both railway lines and rolling stock were very heavy; the length of railways was in- creased by 1,000 km., while another 1,000 km. were taken over in the restored provinces. on the state-operated lines the number of passengers increased during the last decade by 7°, and since 1922 the volume of goods carried has shown a considerable increase, following on the improvement in railway material and greater secur- ity of delivery. the charges both for passengers and for goods have been increased, while the personnel has been reduced and the price of coal has fallen from the excessive level of 1921, hence the deficit which arose during the years immediately succeeding the war has disappeared, the net tonnage of the mercantile marine registered in italian ports doubled between 1912 and 1924. the losses from submarines and mines were more than replaced by the shipping taken over in trieste and istria, and the ships as a whole are faster and more modern than before the war. though the total weight of goods carried to and from italy shows no appreciable increase compared to pre-war, a larger proportion is carried in jtalian vessels, in spite of the obvious preference of importers from overseas to employ their own vessels. | all this economic development and also the emergence of milan as a centre of importance in international trade could not fail to be italy reflected in the figures of the credit clearing-houses. the clearings, which in 1913 amounted to 63 milliard lire, rose in 1925 to 1,030 milliards or by 16 times. . shipping railways a sp 2 | credit length ton goods loaded ; of ite railway nage ol! and unloaded clear- year rlys traffic mer- |at italian ports 1 ake 1g) cantley ue pas- | goode | fatine| italian | foreign figures sengers| 720cs flag | flags (mil- | (uln. | (min (mln. | (mln. | (mids. lions) | tons) | tons) tons) | tons) | of lire) 1913 | 17,649 94 37 0-87 | 16-4 | 15-4 61 1918 | 19,066 65 29 0-70 74 9-4 188 1922 | 20,904 95 36 i-50 13:8 9-7 588 1923 | 20,907 100 45 1-63 15-4 10-2 830 1924 | 20,907 100 57 1-63 18-2 13-4 o14 1925 | 20,907 | iio 4 me 21-0 13-2 1030 national finance.—the revenues of the state were about 2,400 million lire in 1910-1. this was the last of a series of years, begin- ning 1898-9, in which there was a continual surplus of revenue over expenditure; from then onwards, first the libyan war and then the world war occasioned a long succession of financial deficits. the period 1911-25 falls naturally into four divisions. i. ig9%%-2 to 1913-4.—owing to the libyan war expenditure rose by 152 million in i911-2, by 250 million in 1912-3, and by 181 million in 1913-4, resulting in deficits for the three years of 111-8, 257:5 and 163:9 million lire respectively. these deficits do not in- clude sums borrowed by the treasury, as a result of which the . national debt increased from 15,746:5 milliard lire to 17,080-2 milliard lire. | 7 2. 1014-5 to r918-9.—the war years thus began with a budget which could have been balanced with a very slight effort, and witha public debt of about 17-5 milliard lire. the following table shows the increase in public expenditure due to the war:— military) civil war | year | expen- | expen- | pen- total | revenue| deficit diture | diture sions mill mill. mill mill mill, mill. | lire lire lire lire lire lire 1914-5 | 3,296 2,099 = 5,395 2,560 | 2,835 68,104 the expenditure during the war years would have appeared much greater had it not been that many items remained in suspense and burdened the budgets of subsequent years. the increase of civil expenditure was due partly to the rapid rise in the cost of living, which necessitated increased salaries and bonuses, partly to allow- ances to the families of soldiers and to the refugees from invaded districts, partly to the taking over by the state of the administra- tion of the mercantile marine, and partly to the interest on the national debt, which rose from 530 millions in 1913-4 to 2,624 millions in 1918-9. it was impossible to raise revenue to within measurable distance of such expenditure. a part of the increase in revenue was automatic, arising as it did from the depreciation of money, and the consequent increase in the receipts from indirect taxation. the resources of the financial ad- ministration were greatly strained by the withdrawal of men for the army, by the dislocation caused through inflation, and by the task of collecting the new taxation imposed during the war, such as new monopolies (matches, playing cards, coffee); a 5 %o tax on the letting of houses; the war cefesimo on incomes above 10,000 lire; the tax - on war profits, etc. none of these new taxes brought in any con- siderable sums to the exchequer, with the exception of the tax on war profits. framed on lines somewhat similar to those of the excess profits duties of the united kingdom and the united states, this tax was at first levied by the royal decree of nov. 21 1915 on all profits of the war years in excess of 8°, the rates varying from 10 to 30%, this latter rate being applicable to a!) profits in excess of 20° on the capital invested in the undertaking. the growing feeling against war profiteers caused the rates to be raised to from 12 to 35% (decree of aug. 31 1916), and shortly afterwards to 20 to 60% (decree of nov. 9 1916). the yield of the tax increased from 108:2 million in 1916-7 to 451-6 million in 1917-8, and 805:8 million in 1918-9. 3. 1919-20 to 192t-2.—the following table shows that the highest expenditure was reached, not during the war, but during the period of liquidation immediately after the war. aus tealy military| civil | war | total expen- ; [-xpen- ! pensions} pxpen- | revenue} deficit diture | diture eel icaee eee (eel le ee ncn nnn et eens es null. lire | mill. lire | mill. lire mill. lire | mull. hire : null. lire | 1919-20! 8,085 | 13,851 1,155 23,093 | 15,207 7,885 [1920-1 9,212 | 25,760 1,236 36,229 | 18,820 pees 6,798 | 27,114 1,549 35,401 19,701 total | for 3 ! 1 years{| 24,095 | 66,745 | 3,943 | 94,783 | 53, of the civil expenditure 13 milliards were required for the service of the debt, 5-1 milliards for exchange transactions, cte., 3-5 milliards for the cost of the merchant shipping services, 5-3 milliards for food supplies, 3-1 milliards for deficits on the state railways, 3-9 milliards for war pensions, and 6-8 milliards for the reconstruction of invaded or restored territories. the costs of all these services were greatly enhanced by the depreciation of the currency. fortunately, the fall in the value of the lira also increased the public revenue, which during the war had varied from 2-6 ta 9-7 milliards, and which rose in 1921-2 to 19-7 milliards. part of this increase was due to confiscatory legislation passed under the in- fluence of the socialistic and demazogic tendencies which prevailed after the war. a levy was imposed on increments in the values of property, which ranged from io to 80% of the war gain remaining to the taxpaper after the payment of the war profits tax. before this had come into foree it was increased by the law of sept. 24.1920, which involved a tax of 100% on all the war profits of industrialist and traders. in no country was so hich a rate imposed, an during the three years of hquidation the yield of the tax reached over 4,796 raillion lire. further, an extraordinary levy on property was 17 | this has been developed by signor de stefani with the result that fizures are now published relating to all the various aspects of the economic life of the country. it has not merely been necessary to cut down expenditure, but also to make provision against the disap- pearance of abnormal war revenues, in particular the tax on war profits and on property. many relatively unproductive war-taxes were abolished in 1923 and 1924, and the remainder were simplified and given a permanent place in the tax system. being convinced that certain taxes had been raised to an excessive height, he carricd through important modifications and reductions: thus he abolished the inheritance tax on property passing within the family, and re- duced it largely in other cases. again, he reduced to half or less the taxes on land and on factories, and decreed a gradual modification of the rates of tax on incomes from other sources. but at the same time he instituted investigations into taxable incomes in such a way as to bring the taxpayers’ returns nearer to the real incomes and to reduce evasion to a minimum. jt may be noted that in 1918 the manufacturers, traders and professional persons subject to tax numbered 543,154, and that the aggregate revenue from this source was over 704 milion lire, while in 1924 the number rese to 762,137, and the tax yield to about 2,793 million lire. there were also added to the number of direct taxpayers 1,260,090 agriculturists, propric- tors, cultivators, and metayers, who in 1923, for the first time in the history of italv, were subjected to an income tax, the resulting yield being 2,081 million lire. — public debt.—the series of heavy deficits during the 10 years 1914-23 inevitably affected the public debt of the state; moreover, the method of partly mecting the deficit by the issue of paper money was, in its turn, a powerful cause of the increase of expenditure and of indebtedness, much of which would not have existed but for the disturbing influence of the issue of paner money. below is a sum- mary statement of the movements of the italian state debt since igil, in mefons of ere: — tislian state debt (in millions of lire) yal ~ “<s ; j | june 30 | june 3¢ | june 39 | june 30 | june 30 june 30 dee. 31 ioit =| oiqty | tor. |) 31922 | 1923 | 1925 1ql5 | seria ree (aaa mains ninied (a “op if “1 ‘ t : . : ~ * “ ~“ ~ ~7 - perpetual and long termdebt . 13,833 p4,8jo , 28,581 | 49.366 | -adst7 | 50,847 20,901 yreasury bonds 3,5, 7and9gyears. . : 2 : ae ; 9835 ! $3232 1o,7tg | f2,411 12,223 treasury bills 3, 6, 9 and 12 months 2 380 (| 15,054 1 25.417 24,535 17,583 18,307 current accounts bearing interest. e p : 27 ol } 450 | ats 35! 832 q.42 total interest bearing debt : : : ‘ : 13,972 15,231 49,920 82,432 55,221 | 81,673 $2,373 | notes issued by the government or on government ! account. oy er! we a a om os 436 490 10,293 10,316 10,192 9,168 9,163 | loreizn debt at par. a : 19,206 21,615, 22,187 23,404 imposed, which was desizned to be a progressive tax on capital, levied at rates varying from § to §0°%, but owing to the impossibility of collecting the whole tax in a single year, it was necessary to spread it over a period of years, fixed, first at 30 and then at 10 to 20 years. among taxes already in existence the succession duty especially appealed to the new sociai theorists, and by means of various techi- nical modifications and by changes in the method of assessment, this was raised to 30, 50, 80, and, ineredibie as it may seem, to 103''> of the amount inherited. at the same time it must not be forgotten that credit is due for the abolition, on the initiative of signor giolitti, of the disastrous policy of regulating the price ef bread, which for political reascns was sokl below cost and threatened to senj the italian lira into the abyss after the german mark. 4. 1922-3 to 1924-5.— expenditure and receipts and the eventual balancing of the budget are shown in the following table: jdiffer- ence be- rey: “42 ’ rl 4 tween military |. “civil war total | reecipts | year |expend-|expend-| vpen- | expend-| receipts wae | iture ture sions iture pendi- { — ture (-+ or—) aa ae ea aera | ania ll. lee au: |b cagere ee aillay roger se 7 | mill. ere} mul. dire | mill. lire | mill. lire | mill. lire | mill. lire 1922-3 245 16,979 1,608 21,832 18,803 | —3,029 1923-4 | 3,704 15,820 1,475 21,000 | 20,5381 | — 418 1924-5 |_ 3,286 | 15,284 | 1.453 | 20,023 | 20,440 | + 417 except for the frst four months, the period of transition from large deficits to the budget equilibrium of 1924-5 took place under the control of signor de stefani, head of the combined “linistry of finance and the treasury. he contrived to restrict expenditure within the limits of revenue by gradually eliminating abnormal expenditure and by a return to the sound conditions of treasury control and supervision of accounts which had been largely abrogated during the troubled war years. the italian treasury has always been accustomed to publish monthly statements of its position, but oy the foreign debt is not comparable with the internal debt, as it was contracted in dollars and sterling, and is here converted into lire at par, z.e., gold lire, which are very different from the paper lire of the rest of the debt. the internal debt reached its maximum on june 30 1923, which marked the end of extraordinary war expenditure. from then on- ward the amount decreased, and by dec. 31 1925 the internal debt had contracted by 2-85 milliard lire. this affords the most significant proof of the improvement in economic conditions, of the growing yield of the ordinary taxes, and of the restriction of expenditure which characterised the long period of signor de stefani’s control of finance. elis successor, signor volpi, continued the process of financial recon- struction, and in particular settled the war debts with united states and (sreat britain. the agreement concluded with the united states in nov. 1925 reduced the debt froma nominal value of $2,042,000,000 to a present value at 5% of $430,000,co0, distributed over 62 annuities rising from an initial minimum of $5,000,000 to a final maximum of $82,000,c0c. the agreement concluded with great britain in jan. 27 1926 was set on payments distributed in 62 ycars, with yearly payments from £4,c00,0co and £4,250,000 in the first six years, to £4,500,000 a year from 1931 to 1987. considering that the national wealth of italy was estimated at the beginning of the war at 100 mulliards lire, and the national income at 20 milllards, it has involved a tremendous burden to maintain war expenditure which in the heaviest vears reached 35 milliards, though reckoned in a currency which was continually decreasing in purchasing power. currency.—it is not surprising that the italian economy should still bear the marks of this economic effort, of which the deepest is the decline in the value of money. the table on p. 578 shows the note circulation, the average circulation per head, and the average ralue of the lira in terms of gold. ; during the period of actual fighting, when there was a deficit of 62-5 million lire, which could not be covered by internal loans amounting to 34-6 milliards, and foreign loans of 19-2 inilliards, the state was forced to obtain advances from the banks, to the sum of 10-3 milliards, and the lira in consequence depreciated. in 1970 the value of the lira had fallen to 22 gold cevtesznriz, and the total circula- tion had attained its maximum of 22 milliards. in terms of gold the circulation per head of the population increased only from 76-18 to circulation ivory coast—izvolsky rate of exchange of the paper lire in gold centesimi gold lire paper lire (in millions of lire) per head | (average of the six months] per head of pop. preceding and six months of pop. bank state total following dec. 31) dec. 31 1911. , : 2519374. 485-3 2,678-7 76-94 99 76°18 dec. 31 1912. ’ : 2,212°4 499-0 ene ue | 76-94 99 76°18 dec. 31 1913. . , : : 2,283°5 499°1 2,782°6 78-17 99 77-39 dec. 31 1914. : : ; : 2,936-0 657-2 3,593 °2 99-48 2-5 92-02 dec. 31 1915. 3,968 -1 i,082°1 5,050°2 38-19 80 110-55 dec. 31 1916 : 5,012°3 13073 6,329°6 17319 74:5 128-89 dec. 31 1917 8425-0 | arr ae | 10,172°8 276-89 59°5 160°75 dec. 31 1918 11,750°3 2,124-0 13,874°3 377-63 ri 272-67 dec. 31 1919 16,281 -3 2,270°3 18,551 °6 51505 34 175-11 dec. 31 1920 19,731-6 2,208-4 22,000°0 606-02 22 33°32 dec. 31 1921 19,208-9 2,267°0 21,475°9 582-02 24 139-68 dec. 34 1922 18,012-0 2,267-0 20,279-0 544-01 24 130°56 dec. 311923. : . : : 17,246-6 2,427°8 19,67 4-4 495°20 23 il4-o1 dec. 31 1924. : , : ; 18,114-2 2,400-0 20,5142 510-76 22 112°37 2 dec. 31 1925. ; : : 19,468 +2 2,100-0 21,568:8 532°23 se a 112-37 lire or not more than 50% of the increase in countries remain- ing on a gold standard; but the increase in the per capita circulation of paper money was the cause of a profound alteration in incomes and in the burden of taxation. it is estimated that the pre-war national income of 20 milliard gold lire had increased to 100 milliard paper lire in 1924-5. on the former income, the burden of taxation, both cen- tral and local, amounted to 2-5 milliards, or 12°5° of the national income, while in 1925, on the same basis, the tax burden rose to 20 milliards, or 20 °% of the national income of 100 milliards. these two proportions, 12°5°% and 20%, reflect the changes in the burden of taxation resulting from the war. when it is considered that this increase in taxation was borne by a population whose average income per head before the war was about 500 to §50 gold lire a year ({20 to {22 sterling), and in 1925 was about 2,500 paper lire (£21 sterling), it is clear that if it was hard to pay 12°55 in taxation of an income of 500 to 550 gold lire, it is exceedingly hard to pay in taxes 20%) of incomes of 2,500 paper lire. we may well speak of the heroic efforts of the italian taxpaper, which have been the product of the war,