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1867 - PRESTITO NAZIONALE CARTELLA...

1867 - PRESTITO NAZIONALE CARTELLA PER OBBLIGAZIONE LIRE 10.000 N. 100 ISCRIZ. - REGNO D'ITALIA - TORINO

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1867 - PRESTITO NAZIONALE CARTELLA PER OBBLIGAZIONE LIRE 10.000 N. 100 ISCRIZ. - REGNO D'ITALIA - TORINO 

The birth of the Italian public debt can be linked to the period of the political unification of the country. The Kingdom of Italy was proclaimed on 17 March 1861 and the first of the unifying laws concerned the establishment of the Great Book of Public Debt into which the debts of the pre-unification states converged. The enactment of these unifying laws was necessary to respond to political needs; the recognition by the Kingdom of Italy of the debts of the pre-unification states, strengthened the process of national unity and increased the confidence of foreign states.

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In addition, there were economic-financial requirements because the state budget was in disarray. The Government was forced to issue the first loan of 500 million lire.

The debts of the pre-unification states that were entered in the Great Book of Public Debt came from the Kingdom of Sardinia for a share equal to 57.22%, from the Kingdom of Naples and Sicily to 29.40% and from all the other States for the rest quote. Analyzing Italian public finance from 1861 to 1914, it is possible to identify three phases: the period of the Government of the Historical Right until 1876 characterized by the pursuit of a balanced budget, the period up to 1897 characterized by budgets initially in deficit and subsequently characterized by fluctuations between surpluses and deficits and finally the period from 1897 to 1914 where there is the economic take-off of the country and there is a very high income growth rate. There will be a turnaround in the financial years 1912-13 and 1913-14 due to military expenses incurred for the war in Libya.

In the first full financial year of 1862 current revenues covered only 57.8% of current expenditure and up to 1864 there were current account deficits exceeding 300 million lire. The current account deficit peaked in 1866 with a value of 543 million. These years put a strain on the new state and to tackle the situation various programs were implemented for financial recovery, which, however, proved to be ineffective. The State was forced to ratify the cessation of the convertibility in gold of paper money and starting from 1867 there was a slow improvement in the public budget thanks to the decrease in military expenses and the increase in revenue. The financial recovery was made possible through the transfer of assets, the increase in debt and the increase in taxation that particularly affected the poorer classes. In 1864 the tax on mobile wealth was introduced and the land tax was reorganized. Furthermore, in 1868 the tax on the ground and the income tax from public debt securities was established. Despite this, between 1861 and 1876 the public debt increased by more than three times for the following reasons: structural budget deficits, military expenses, debts absorbed by annexed territories, financing of public works and railways and redemption of the Alta Italia railways. From 1861 to 1870 the public debt / GDP ratio went from 45% to 96% while in the following three years there was a decrease in the ratio that stabilized at 70% but from 1874 there was a new growth which brought the ratio to 95% in the 18761. With the government of the Historical Right the public debt registered a new strong increase followed by a diversification of the sources of financing and by a strong recourse to the monetary channel. In fact, the last operation carried out by the Historical Right was precisely the opening of a financing channel at the Cassa Depositi e Prestiti (founded in 1863) which gave the possibility of providing funds to the indebtedness of local authorities and also created a channel institutional placement of government securities alternative to that of the issuing banks. In 1876 the government passed to the Left and the current public expenditure underwent a notable increase which was however balanced by an increase in revenue. Between 1876 and 1880 the public debt underwent a slower growth that brought it to 90% of the GDP but then in the following years there was a rapid growth again. In 1889 the ratio reached 116% and in 1897 it reached 120% 2. The most significant financial operation in this period was the abolition of the forced course in 1883 which caused an increase in the public debt due to the stipulation of the international loan in gold of 600 million lire plus another 44 million for the payment of a mortgage in gold granted by the National Bank to the State for the redemption of the Alta Italia railways. However, the most significant increase in debt from a quantitative point of view was caused by the costs of publicizing and building the railways. Also in these years the expenses voted in favor of Rome in 1881 and those in support of the finances of the Municipality of Naples contributed to the increase in public debt.

Product Details

Place of issue
Torino
Year of issue
1867
Nation of issue
Regno d'Italia
Rarity Index
R6
Quotation Index
S4

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