I had to deal a smashing blow to useless expenditures, and to those who sought tribute from the treasury. I had to rake up tax-slackers. I had to establish severest economy in every branch of state administration. I had to put a brake on the endless increase of employees. Furthermore, the obligation of settling our debts to foreign powers was staring me in the face. Even if our resources were limited, this supreme act of wisdom and honesty had to be performed.
It goes without discussion that for states as for individual citizens, when a debt has been signed and acknowledged it must be paid, and faith must be kept as to obligations undertaken.
For this work I picked a capable man; I appointed as Minister of Finance the Honorable De Stefani, a Fascist and a Doctor of Political Economy. He was able to curtail expenses, repress abuses, and create new sources of revenue and taxes; in this way the budget was almost balanced within two years.
I demobolized all the economic organization left over from war time; I eliminated the useless bureaucracy of the new provinces, still burdened by the debts and indemnities of war. I settled all these with an issue of bonds, quickly subscribed.
Before launching a policy of severe economy, I wanted to do full justice to the invalids of the war. I fixed, with special privileges and without regard to economy, the obligations that the state was to assume in their favor and in favor of the orphans and widows of those who had died in battle. After having repaired in this way a cruel wrong, and fulfilled a duty toward those who had given their life and their blood to the country, it was easy for me to strike at certain forms of exaggerated and sudden wealth derived from war profits. There is no doubt that I have been very harsh in this matter. But why not? These unjust pocketbook privileges represented an offense against those who had suffered for the war, suffered not only in misery or death, but also in loss of money and property.
While striving to eliminate all that burdened the economy and finance of the state, I tried to promote individual production to the greatest degree. I had to respect honestly accumulated wealth, and make everybody understand the value, not only economic but also moral, of inheritance transmittable in families. Because of this, though I had approved a tax reform of great importance, I restored many basic rights, such as the right of succession.
It was made clear that I would never approve subjecting inheritance to a taxation which had almost assumed a socialistic character of expropriation. Interference with succession strikes a blow at the institution of the family. I aroused controversies, but at last my decision was understood and accepted by the people.
Who knows better than I that the discipline displayed by the Italian people has been worthy of my admiration and of the respect of the world. We have no great natural resources. Nevertheless our citizens subjected themselves to the pressure of taxation so thoroughly that toward the end of 1924 minister De Stefani was able not only to announce to the chamber the balancing of our budget, but also to foresee a surplus of one hundred and seventy millions for the fiscal year 1925–26.
I consider that the corner-stone of all governmental policies is a wise and strong financial policy. And now, supported by the soundness of the budget, this policy was an accomplished fact. The state, through able administration and the disciplined patience of Italian taxpayers, was able to face all its obligations, to liquidate its liabilities and, in 1925 and 1926, to discuss with Washington and London the complex problems of war debts.
We were out of the hole.