The Cost of the War

«The Economist»,18 novembre 1911, p. 1051

Sir, – My letters on the causes of the Italian expedition to Tripoli have been misconstrued by some Italian newspapers, and were denounced as an act of treachery in time of war. As, in common with all Italians, now that the expedition has been decided, and is carried on by our Government, I wish for victory to our Army and Navy, and say that all Italians must be prepared to every sacrifice of blood and money, for the sake of avoiding a termination similar to the peace with the Abyssinian negro King, so I can disregard such criticisms of treachery. As a student, I had only drawn an objective picture of the various forces which have led to the expedition. These forces are, at the present, undiminished, and, so to say, merged in a general wave of patriotism, which urges the Government to go on to the end, and triumph over the Turkish and Arabian troops. The extraordinary levy of the classes of 1888 and 1889 has been easily accomplished; subscriptions for the wounded soldiers at Tripoli are pouring in to the leading newspaper. The public is indignant at the misrepresentations in the foreign Press of the alleged murder of Arabians by the Italian soldiery. Our war correspondents, some of whom are of the highest standing and are veterans in the war field, deny the butchery, and reduce the fact to a natural reaction against the rebels of the Tripoli oasis, during which some women may have been shot by error, or as a consequence of their having been surprised firing at our soldiers. The fact certain is that our soldiers are not bloody veterans, but conscripts of from 20 to 23 years, and of a good and mild character, trained to patience in our country in all cases of riots and strikes, who must have been driven by desperation to revenge.

It is also certain that the difficulties of the expedition, however unforeseen by most people, are exciting the public opinion to more vigorous action. Now, what as to the social and financial effects of a prolonged colonial war? In the last issue of the Economist you predict failures, fall of the Italian credit, banking difficulties, unemployment, and a terrible reaction. As I do not know the future, I may say that much will depend on the cost in men and money of the war. The estimates of the money cost are varying. The first estimate of the Government was 100 million lire; later the figures were changed, by a newspaper inspired by the Premier, to 40-45 million lire per month (£ 1,600,000 to £ 1,800,000 sterling). The Government denied, on the basis of the above figures, that a loan is necessary, even if the war had to be continued for a year. The Italian Treasury possess at present a liquid fund of about 300 million lire, can oblige the banks of issue to issue 125 million lire of paper currency, and can, without having recourse to Parliamentary sanction, issue Exchequer bills up to 300 million lire, of which only 80 million lire are at present outstanding. If the Government think it convenient to having recourse to these means, the issue of a loan may be postponed for a long time. One may observe that the issue of 125 million lire paper currency is a perilous measure with the change at 101, that the Exchequer bills are disguised loans, and that the Treasury fund of 300 million lire cannot be completely depleted, as some monetary fund is necessary for the financial administration of a great State. It appears, however, that if the total cost of the war will not exceed some 500 million lire, the Government can well dispense for the moment with a public loan. The loans will be made in after-time, when it will be possible to float at a convenient price. The price will be probably lower than par, but, as I said in my last letter, the effects will not be bad. The loan can be floated also in France, which is well disposed towards us, and the taxpayers will not feel greatly the pinch of the war, especially if the workmen and peasants can be spared from taxes. Some classes will be crying, those classes which feed on the Budget, and find that all the spare sums go at present to Tripoli. A curious incident has been prominent in the Milanese Press of the last week – a protest against the lamentations of a professor in the secondary schools, who was grieved at the prospect of an indefinite postponement of a rise in the salaries of professors, owing to war expenditure. Public opinion and the greatest part of the professors themselves declared that all were ready to renounce advances for the sake of the country.

I do not know if the cost of the war will rise above 500 million lire, or like sum, and I am unable to say if the present enthusiasm will survive so great a burden. Then the consequences will be more serious; then, perhaps, the Italian Rentes would fall more than a few lire. But the hypothesis is, at present, somewhat distant.

Italicus

Milan, November 13^th, 1911.