There has been an actual surplus in recent years, a solid evidence of the prosperous con ditions of the Italian finances.
Popular Discount Banks.— A study of the Italian system of banking is of importance for the reason that its financial methods enable the institutions to employ an uncommonly large portion, or proportion of the capital in order to assist commercial operations. But otherwise and in general, the Italian system of banking has no marked difference from the various sys tems of the European continent, especially from the French and Spanish standpoint. Let us compare it to a pyramid. The popular banks are at its base, and various institutions of less import; the societies of credit are higher, terminating with the Bank of Italy, superior to all, aided by two institutions: the Bank of Naples and the Bank of Sicily. The Societies of Stockholders maintain the popular banks, and have only a limited responsibility. Their system is one of co-operation, loaning money to members only and sharing profits among themselves.
In 1902 there were 163 banks with a capital of 255,000,000 lire.
The emission institutions, the Bank of Italy, Bank of Naples, and Bank of Sicily, the first of which is a society with a capital of 240,000,000 lire, form the main body of this system of banking; their notes in circulation being supported by or based upon the guar anty of the circulation by a metallic reserve, as provided by law. The maximum and normal
limit of the circulation of the above institutions is fixed at 1,010,000,000 lire — of these 732,000, 000 at the Bank of Italy, 226,000,000 at the Bank of Naples, 51,700,000 at the Bank of Sicily; the reserve being 4 per cent of the note circulation.
The emissionary institutions are subject to supervision of the government, which proceeds by ordinary and extraordinary inspections. The director of the Bank of Italy is confirmed in his charge by the government. Those of the Banks of Naples and Sicily are directly appointed by hint TQ complete this brief account we may state that the circulation of bank notes payable to bearer was, in 1905, for the Bank of Italy, 929,990,560,416 lire; Bank of Naples, 29,824, 979,722 lire; for the Bank of Sicily, 67,480,711.11. The metallic reserve was on 31 Dec. 1905, for the three institutes, 1,076,418,372 lire in gold; 805,877,224 in silver; 108,208,903 on foreign se curity and 133,241,062 on Italian securities.
In 1916 the total debt of Italy was given as $2,610,000,000, but this certainly does not in clude large items added in 1915-16. And the total money circulation of the state and banks in 1916 was $1,265,926,694, an average of $34.64 per inhabitant.