The complete interest of the state on above obligations was on 30 June 1' I., 48,372,648.60 lire on a capital of 1,416,575,607.4 ($283,315,121 approximately').
Of equal importance with the Italian are the railroad obligations which are directly contracted by the state, or guaranteed by the state, to provide for the construction and for repairs or to complete the railroads.
A railroad debt (or bond) to the amount of 1,468,814,140.00 lire (about $293,762,828) was authorized for that purpose, but the capital actually realized was less than that amount.
These shares were issued at the following terms: 500 lire and 250 lire, redeemable in 50, 60 and 90 years. The first attempt at redemp tion was made in 1891 by the Minister of the Treasury, Louis Luzzatti, who instituted serious economies; especially by suspending the emis sion of bonds for construction of railways.
During 1894 and 1895 another and more effi cient impulsion to this economy was created by the Minister of the Treasury, Sidney Sonnino, forming two new types of consolidated 4.50 and 4 per cent net.
The various attempts at a reduction of the Italian national indebtedness and particularly of the high interest charges on the same culmi nated in the successful conversion studied and prepared by Louis Luzzatti while Minister of the Treasury in, the cabinet of Sonnino, and presented 29 June 1906 by Minister of the Treasury, A. Majorana of the Giolitti cabinet.
The conversion was in reference to the con solidated 5 per cent gross, and to the consoli dated 4 per cent net. Tht first; of 30 June 1906, amounted to a capital of 7903,545,040, and the other, to the sum of 196,889,800. Both capitals amounted to 8,100,434,800.
By the said law of 29 June 1906 (No. 262; the Ministry of the Treasury was authorized to abolish the '5 per cent gross, and the 4 per cent net, offering to the holders thereof 100 lire or the payment of the entire certificate at a loss of two lire, on 1 Jan. 1907, and the ex change of the old bonds' of 5 per cent gross and 4 per cent net, for a new emission of securities with interest at the annual rate of 3.75 per cent payable semi-annually, to be ex empt from any present or future tax from 1 July 1907 to 1 July 1912, and to pay 3.50 per
cent per year, with the same exemption, from 1 July 1912.
The result was a complete success. The payments on exchange amounted only to the sum of 4,689,700. Of this amount 3,027,800 was on the exterior, and 1,661,900 on the interior, for the capital to be converted only on the ratio of 0.056 per cent. As for the total cost of the refunding operation, including general charges, commissions, and all other expenses, it totaled only 9,637,153.62 lire, which was less than 12 centimes for every 100 lire of nominal capital to be refunded, and was only 0.87% per cent of the amount placed at the command of the two syndicates for the purpose of meeting every possible contingency. On the other hand the profit for the national finances, because of the reduction of the interest, was very con siderable. In fact from 1 July 1907 until 1 July 1912 there was a saving of 20,254,017 lire each year. From 1 July 1912 until the year 1920 a double saving will be obtained, and in the 13 years taken together the total saving to the treasury in interest charges will exceed 400,000,000 lire (nearly $80,000,000).
The public expenditures are naturally largely influenced by the receipts from taxes. These are chiefly the tax on real estate, on buildings and on rents. There is also a considerable tax on the transfer of real estate, and a tax on commerce, as well as on insurance and other commercial transactions.
Besides the contributions direct and indirect on business, real estate, rents, etc., there are the various well-known forms of taxes, i.e., the taxes of succession, taxes of registration, taxes on loans, custom house receipts, profits on sale of salt, profits of the tobacco and lottery mo nopolies, etc.
In accordance with this, the national receipts of the year 1905-06 were 1,945,955,181.73 lire and the expenses were 1,860,514,249.31; the dif ference between the two entries showing a sur plus of 85,440,932.42. The budget for 1915-16 showed revenue 3,007,027,827 lire ($601,405,565 approximately) and expenditure 2,960,545,029 lire ($592,109,005 approximately).