applied to goods which cannot be made in Italy; hardly anything comes in duty free, even such articles as second-hand furniture paying duty, unless within six months of the date at which the importer has declared domicile in Italy. The applicati0 n, too, is somewhat rigorous, e.g. the tax on electric light is applied to foreign ships generating their own electricity while lying in Italian ports. The annual consumption per inhabitant of certain kinds of food and drink has considerably increased, e g grain from 270 Ib per head in 1884~1885 to 32 1 lb in 1901~1902 (maize remains almost stationary at 158 lb); wine from 13 to 125 litres per head; oil from 12 to 13 lb per head (sugar is almost stationary at 7% Tb per head, and coffee at about 1 lb); salt from 14 to 16 lb per head. Tobacco slightly diminished in weight at a little over 1 lb per head, while the gross receipts are considerably increased-by over 27 millions sterling since 1884-1885-showing that the quality consumed is much better. The annual expenditure on tobacco was 5s. per inhabitant in 1902-1903, and is increasing.

The annual surpluses are largely accounted for by the heavy taxation on almost everything imported into the country, 1 and by the monopolies on tobacco and on salt; and are as a rule spent, and well spent, in other ways. Thus, that of 1907-1908 was devoted mainly to raising the salaries of government officials and university professors; even then the maximum for both (in the former class, for an under-secretary of state) was only £500 per annum. The case is frequent, too, in which a project is sanctioned by law, but is then not carried into execution, or only partly so, owing to the lack of funds. Additional stamp duties and taxes were imposed in 1909 to meet the expenditure necessitated by the disastrous earthquake at the end of 1908.

The way in which the taxes press on the poor may be shown by the number of small proprietors sold up owing to inability to pay the land and other taxes. In 1882 the number of landed proprietors was 14-52 % of the population, in IQOZ only 12-66, with an actual diminution of some 30,000 Had the percentage of 1882 been kept up there would have been in IQOZ 600,000 more proprietors than there were. Between 1884 and 1902 no fewer than 220,616 sales were effected for failure to pay taxes, while, from 1886 to 1902, 79,208 expropriations were effected for other debts not due to the state. In 1884 there were 20,422 sales, of which 35-28% were for debts of 4s. or less, and 51-95 for debts between 4s. and £2; in 1902 there were 4857 sales, but only II'OI % for debts under 4s. (the treasury having given up proceeding in cases where the property is a tiny piece of ground, sometimes hardly capable of cultivation), and 55-69 % for debts between 4s. and £2. The expropriations deal as a rule with properties of higher value; of these there were 3217 in 1886, 5993 in 1892 (a period of agricultural depression), 3910 in 1902. About 22% of them are for debts under £40, about 49% from £40 to £200, about 26 % from £200 to

Of the expenditure a large amount is absor ed by interest on debt. Debt has continually increased with the development of the state. expend# The sum paid in interest on debt amounted to £17,640,000 we in 1871, £19,440,000 in 1881, £25,600,000 in 1891-1892 and £27,560, oo0 in 1899-1900; but had been reduced to £23,100,409 by the 30th of June 1906. The public debt at that date The debt per head of population was, in 1905, £I4, 10s. 3d., and the interest 13s. 5d.

In July 1906 the 5% gross (4% net), and 4% net rente were successfully converted into 32 % stock (to be reduced to 3% % after five years), to a total amount of £324,017,393. The demands for reimbursement at par represented a sum of only £187,588 and the market value of the stock was hardly affected; while the saving to the Treasury was to be £800,000 per annum for the first five years and about double the amount afterwards.

Currency.-The lim (plural lire) of 100 centesimi (centimes) is equal in value to the French franc. The total coinage (exclusive of Eritrean currency) from the 1st of January 1862 to the end of 1907 was 1,104,667,116 lire (exclusive of re coinage), divided as follows: gold, 427,516,970 lire; silver, 570,097,025 lire; nickel, 23,417,000 lire; bronze, 83,636,121 lire. The forced paper currency, instituted in 1866, was abolished in 1881, in which year were dissolved the Union of Banks of Issue created in 1874 to furnish to the state treasury a milliard of lire in notes, guaranteed collectively by the banks. Part of the Union notes were redeemed, part replaced by 10 lire and 5 lire state notes, payable at sight in metallic legal tender by certain state banks. Nevertheless the law of 1881 did not succeed in maintaining the value of the state notes at a par with the metallic currency, and from 1885 onwards there reappeared a gold premium, which during 1899 and 1900 remained at about 7 %, but subsequently fell to about 3 % and has since 1902 practically disappeared. The paper circulation to the debit of the state and the paper currency issued by the authorized state banks is shown below:-

was composed as follows:-

Part I.-Funded Debt.

Grand LivreAmount.

Consolidated 5 % . £3I6, I4I,802

»» 3 % - ~ ~ 6,404,335

4% % net 28,872,511

41 , , 7,375,592

3; /, ,, , 37,689,880

Total . £396,984,120

Debts to be transferred to the Grand Livre . 60,868 Perpetual annuity to the Holy See . . 2,580,000 Perpetual debts (Modena, Sicily, Naples) 2,591,807 Total . . . £402,2 1 6, 795

Part II.-Unfunded Debt. Y

Debts separately inscribed in the Grand Livre . 10,042,027 Various railway obligations, redeemable, &c. . 56,375,351 Sicilian indemnities ...... IQ5,348

Capital value of annual payment to South

Austrian Company .... . . 37,102,908

Long date Treasury warrants, law of July 7, 1901 1,416,200 Railway certificates (3-65 % net), Art. 6 of law, June 25, 1905, No. 261 ..... 14,220,000

Total £IIQ,35I,834

Part I. . £402,216,795

Grand Total . £521,568,629

For example, wheat, the price of which was in 1902 26 lire cwt., pays a tax of 7% lire; sugar pays four times its wholesale value in tax; coffee twice its wholesale value.

Direct Liability oi State. Notes issued Aggregate Date. by State Paper

State Notes. Bons de Caisse.1 Banks. Currency. Lire. Lire. Lire. Lire.

31st December 1881 940,000,000 . 735,579,197 1,675,579,197 1886 446,655,535 1,031,869,712 1,478,535,247 1891 341,949,237 . 1,121,661,079 1,463,550,316 1896 400,000,000 110,000,000 I, O6Q,233,376 1,579,233,376 1899 451,431,780 42,138,152 I,180, IIO,33O 1,673,580,262 1905 441,304,780 1,874,184 1,406,474,500 1,848,657,764 1 These ceased to have legal currency at the end of 1901; they were notes oi 1 and 2 lire.

Banks.-Until 1893 the juridical status of the Banks of Issue was regulated by the laws of the 30th of April 1874 on paper currency and of the 7th of April 1881 on the abolition of forced currency. At that time four limited companies were authorized to issue bank notes, namely, the National Bank, the National Bank of Tuscany, the Roman Bank and the Tuscan Credit Bank; and two banking corporations, the Bank of Naples and the Bank of Sicily. In 1893 the Roman Bank was put into liquidation, and the other three limited companies were fused, so as to create the Bank of Italy, the rivilege of issuing bank notes being thenceforward confined to the Bank of Italy, the Bank of Naples and the Bank of Sicily. The gold reserve in the possession of the Banca d'Italia on September 30th 1907 amounted to £32,240,984, and the silver reserve to £4,767,861; the foreign treasury bonds, &c. amounted to £3,324,074, making the total reserve £40,332,919; while the circulation amounted to £S4,612,234. The figures were on the 31st of December 1906;

Paper

Circulation. Reserve-Banca

d'I1a1ia, £47,504,352 £36,979,235

Banca di Napoli 13,893,152 9,756,284

Banca di Sicilia . 2,813,692 2,060,481

Total . . £64,2II,196 £48,796,000

This is considerably in excess of the circulation, £40,404,000, fixed by royal decree of 1900; but the issue of additional notes was allowed, provided they were entirely covered by a metallic reserve, whereas up to the fixed limit a 40% reserve only was necessary. These notes are of 50, 100, 500 and 1000 lire; while the state issues notes for 5, IO and 25 lire, the currency of these at the end of October 1906 being £17,546,967; with a total guarantee of £15,636,000 held against them. They were in January 1908 equal in value to the metallic currency of gold and silver.

The price of Italian consolidated 5% (gross, 4% net, allowing for the 20% income tax) stock, which is the security most largely negotiated abroad, and used in settling differences between large financial institutions, has steadily risen during recent years. After being depressed between 1885 and 1894, the prices in Italy and abroad reached, in 1899, on the Rome Stock Exchange, the average of IOO-83 and of 94-8 on the Paris Bourse. By the end of 1901 the price of Italian stock on the Paris Bourse had, however, risen to par or thereabouts. The average price of Italian 4% in 1905 was 105'29; since the conversion to 3% % net (to be further reduced to 3% in five more years), the price has been about 103- 5. Rates of exchange, or, in other words the gold premium, favoured Ital during the years immediately following the abolition of the forced, currency in 1881. In 1885, however, rates tended to rise, and though they fell in 1886 they subsequently increased to such an extent as to reach IIO%

at the end of August 1894. For the next four years they continued