| Paper Circulation. | Reserve. | |
| Banca d’Italia | £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 | £64,211,196 | £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, 10 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 100.83 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 3¾% net (to be further reduced to 3½ in five more years), the price has been about 103.5. Rates of exchange, or, in other words the gold premium, favoured Italy 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 110% at the end of August 1894. For the next four years they continued low, but rose again in 1898 and 1899. In 1900 the maximum rate was 107.32, and the minimum 105.40, but in 1901 rates fell considerably, and were at par in 1902-1909.
There are in Italy six clearing houses, namely, the ancient one at Leghorn, and those of Genoa, Milan, Rome, Florence and Turin, founded since 1882.
The number of ordinary banks, which diminished between 1889 and 1894, increased in the following years, and was 158 in 1898. At the same time the capital employed in banking decreased by nearly one-half, namely, from about £12,360,000 in 1880 to about £6,520,000 in 1898. This decrease was due to the liquidation of a number of large and small banks, amongst others the Bank of Genoa, the General Bank, and the Società di Credito Mobiliare Italiano of Rome, and the Genoa Discount Bank—establishments which alone represented £4,840,000 of paid-up capital. Ordinary credit operations are also carried on by the co-operative credit societies, of which there are some 700.
Certain banks make a special business of lending money to owners of land or buildings (credito fondiario). Loans are repayable by instalments, and are guaranteed by first mortgages not greater in amount than half the value of the hypothecated Agrarian Credit Banks. property. The banks may buy up mortgages and advance money on current account on the security of land or buildings. The development of the large cities has induced these banks to turn their attention rather to building enterprise than to mortgages on rural property. The value of their land certificates or cartelle fondiarie (representing capital in circulation) rose from £10,420,000 in 1881 to £15,560,000 in 1886, and to £30,720,000 in 1891, but fell to £29,320,000 in 1896, to £27,360,000 in 1898, and to £24,360,000 in 1907; the amount of money lent increased from £10,440,000 in 1881 to £15,600,000 in 1886, and £30,800,000 in 1891, but fell to £29,320,000 in 1896, to £27,360,000 in 1899, and to £21,720,000 in 1907. The diminution was due to the law of the 10th of April 1893 upon the banks of issue, by which they were obliged to liquidate the loan and mortgage business they had previously carried on.
Various laws have been passed to facilitate agrarian credit. The law of the 23rd of January 1887 (still in force) extended the dispositions of the Civil Code with regard to “privileges,”[9] and established special “privileges” in regard to harvested produce, produce stored in barns and farm buildings, and in regard to agricultural implements. Loans on mortgage may also be granted to landowners and agricultural unions, with a view to the introduction of agricultural improvements. These loans are regulated by special disposition, and are guaranteed by a share of the increased value of the land after the improvements have been carried out. Agrarian credit banks may, with the permission of the government, issue cartelle agrarie, or agrarian bonds, repayable by instalments and bearing interest.
Internal Administration.—It was not till 1865 that the administrative unity of Italy was realized. Up to that year some of the regions of the kingdom, such as Tuscany, continued to have a kind of autonomy; but by the laws of the 20th of March the whole country was divided into 69 provinces and 8545 communes. The extent to which communal independence had been maintained in Italy through all the centuries of its political disintegration was strongly in its favour. The syndic (sindaco) or chief magistrate of the commune was appointed by the king for three years, and he was assisted by a “municipal junta.”
Local government was modified by the law of the 10th of February 1889 and by posterior enactments. The syndics (or mayors) are now elected by a secret ballot of the communal council, though they are still government officials. In the provincial administrations the functions of the prefects have been curtailed. Each province has a prefect, responsible to and appointed by the Ministry of the Interior, while each of the regions (called variously circondarii and distretti) has its sub-prefect. Whereas the prefect was formerly ex-officio president of the provincial deputation or executive committee of the provincial council, his duties under the present law are reduced to mere participation in the management of provincial affairs, the president of the provincial deputation being chosen among and elected by the members of the deputation. The most important change introduced by the new law has been the creation in every province of a provincial administrative junta entrusted with the supervision of communal administrations, a function previously discharged by the provincial deputation. Each provincial administrative junta is composed, in part, of government nominees, and in larger part of elective elements, elected by the provincial council for four years, half of whom require to be elected every two years. The acts of communal administration requiring the sanction of the provincial administrative junta are chiefly financial. Both communal councils and prefects may appeal to the government against the decision of the provincial administrative juntas, the government being guided by the opinion of the Council of State. Besides possessing competence in regard to local government elections, which previously came within the jurisdiction of the provincial deputations, the provincial administrative juntas discharge magisterial functions in administrative affairs, and deal with appeals presented by private persons against acts of the communal and provincial administrations. The juntas are in this respect organs of the administrative jurisprudence created in Italy by the law of the 1st of May 1890, in order to provide juridical protection for those rights and interests outside the competence of the ordinary tribunals. The provincial council only meets once a year in ordinary session.
The former qualifications for electorship in local government elections have been modified, and it is now sufficient to pay five lire annually in direct taxes, five lire of certain communal taxes, or a certain rental (which varies according to the population of a commune), instead of being obliged to pay, as previously, at least five lire annually of direct taxes to the state. In consequence of this change the number of local electors increased by more than one-third between 1887-1889; it decreased, however, as a result of an extraordinary revision of the registers in 1894. The period for which both communal and provincial councils are elected is six years, one-half being renewed every three years.