CHAPTER XLIII

STATES OF SOUTHERN EUROPE

=529. Condition of Italy in the first half of the century.=—Of the

countries of southern Europe none has gained so rapidly as Italy in the

latter part of the nineteenth century. The explanation, however, must

be sought largely in the fact that none was sunk so low as Italy in the

first part of the century. Conditions of an earlier period, described

in the previous chapter on Italy, lasted far into recent times. Here

is the description given by an English author, writing in 1878:

“Before 1848, Italy, all except Piedmont, seemed hopelessly crushed.

Austria, the Pope, and the Bourbons held her in their grasp. Even the

comparatively native sovereigns of Tuscany had turned oppressor, and

all Italy groaned like a man in the grasp of the torturer. Commerce

languished, divergent fiscal laws and arbitrary raids on private wealth

choked up the channels of intercourse between one part of the kingdom

and another; without shipping, without manufactures or foreign trade

of a solid kind, possessed of no political security, Italy was, thirty

years ago, more insignificant in the eyes of neighboring nations

than Greece or Spain is now.” In southern Italy the government was

incompetent to perform the first of its public duties, the protection

of its citizens. It could not withstand even the half-civilized

corsairs of Tripoli, who pillaged the Neapolitan ships, and finally,

long after the United States had shown the proper way to deal with such

pirates, bought from them a disgraceful peace.

=530. Lack of political and commercial union.=—The peninsula was

divided among seven independent states, so stratified as to cut the

natural lines of trade, and to prevent effectually the development of

any national commercial life. Of these states six had the protective

tariffs characteristic of the prohibitive period, and toll stations

existed even inside the frontiers. A Milan manufacturer, shipping

silks to Florence (about 1840), had to pass eight customs stations in

150 miles; a merchant on his way from Bologna to Lucca was stopped

at seven stations in the stretch of about 125 miles. Commerce would

have been in desperate straits except that all but two of the states

touched the sea, and hence could find some opening for trade. It is

noteworthy, however, that the leading commercial city of Italy in

this period was one which many people now would be puzzled to place

on the map, Leghorn. It owed its commercial importance, not to the

advantages of situation or to the productive resources of surrounding

territory; it stood, about 1900, sixth in the list of Italian ports,

and had but a fraction of the trade going to Naples or Genoa. It gained

its prosperity at this time simply by “the comparative security and

freedom” which foreigners found there, and which they were denied in

other parts of Italy.

=531. Establishment of Italian unity.=—The example of Germany, in

extricating herself from a somewhat similar situation by the formation

of customs unions, made, naturally, an impression in Italy, and led

in 1847 to an attempt there to form a similar union. The attempt was

paralyzed by the opposition of Austria, who saw in it a blow aimed at

her political influence in the peninsula. The Italian states, unlike

the German, could secure commercial union only as a result of national

unity, not as a means of preparation for it. National unity was in

preparation, nevertheless, in the brain of a great statesman, Cavour,

and was obtained through his far-sighted plans and the cooperation of

the king whom he served, Victor Emanuel, ruler of Piedmont. In the few

years following 1859 a real kingdom of Italy was established, and the

country, which for nearly fifteen hundred years had formed the prey

of rival powers, became at last a power herself, worthy to rank with

the other great states of Europe. The old barriers to internal trade

disappeared, and the whole country accepted the customs tariff of

Piedmont, which was extremely liberal. Rarely, if ever, in the history

of commerce, have changes of such sweeping importance taken place so

quickly. The tariff of the Kingdom of the Two Sicilies, to choose

an extreme example, which levied a duty of over $2,500 on a centner

of silk goods, gave place to a tariff of United Italy, in which the

corresponding duty reached a minimum of $10.

=532. Survey of Italian commerce since 1860.=—The effect on commerce of

this great political upheaval was instantaneous. Contrasting the two

years, 1859 and 1861, we find that in this brief interval the value

of imports into Italy more than doubled. It will be convenient to

insert here figures giving the total value (exports plus imports) of

the special trade of Italy, at ten year intervals from 1860 to 1910.

Reduced to dollars and given in round figures of millions they are as

follows: 130, 320, 440, 440, 590, 1,020. The reader will note that

trade grew at a rapid rate from 1860 to 1870, and more slowly to 1880.

Then came a stoppage; in some years there was an actual decline, and

the value of exports was considerably less at the end of the decade

than at its beginning. There was a recovery in the ten years closing

in 1900, and a rapid advance thereafter. The figures show, however,

that Italian commerce advanced but slowly in the latter part of the

century, and a study of conditions at its close would show that Italy

had a commerce then far from commensurate with the country’s large

population. The average share of each Italian in the annual movement

of commerce was much less than that falling to the inhabitants of most

of the other states of Europe. Among the great states only Spain and

Russia ranked lower, in this respect.

This survey suggests the topics which demand discussion in the

following sections. We must know the reasons for the rapid development

of Italian commerce till about 1880, and for the check to progress

after that date; we want an explanation of the comparatively slight

share which the average Italian has had in the world’s commerce.

=533. Development of agriculture and commerce after 1860.=—When Italy

secured national unity, about 1860, the country was almost purely

agricultural. The ordinary trades, of course, were exercised to satisfy

local needs, and the silk manufacture had not altogether perished, but,

to use the phrase of a modern writer, though there were industries in

Italy there was no Italian industry. Restrictive taxes and tariffs

had prevented the development of any considerable manufacture. When,

therefore, comparative freedom of trade was introduced, the people made

full use of the opportunity to purchase the cheap wares of the factory

industry of other countries; they imported manufactures in increasing

amount, and paid for them by exporting their surplus agricultural

products. The railroad system, which grew from 800 to 5,000 miles

in the period 1860-1880, gave greatly improved facilities for the

marketing of wares, and affected distinctly the course of foreign

trade; the proportion of commerce carried on across the land frontier

rose in this period from a third to nearly a half of the total.

=534. Increase of customs duties; protection; tariff war.=—The Italians

realized at once the benefits of the movement which led to national

unity, but ever since they have been carrying its burdens. The expense

of the national movement was enormous, especially in view of the

poverty of the country; it weighted the government with debt, and

required a constant increase in taxes. The treasury, reaching out in

every direction for money, and forced to some fiscal devices which seem

now positively iniquitous, did not spare commerce. Duties were raised

from time to time, and a general revision of the tariff in 1878, while

it reformed some old abuses, tended still to raise the general level of

duties, and introduced a distinct element of protection. The revised

tariff, however, did not go far enough to satisfy the demands either of

the treasury or of the protectionists, and was altered again in 1887.

Commerce labored henceforth under high revenue duties, under increased

duties designed to protect Italian manufactures, and, furthermore,

under new or increased duties on agricultural products.

One disastrous result of the new tariff appeared quickly in the

outbreak of a tariff war between Italy and France. France had been

Italy’s best customer, taking at one time nearly half of her total

exports and furnishing about a quarter of her imports. Trouble between

the two countries had, however, been brewing for years; they were

following different lines in foreign politics, and the protectionists

on both sides of the frontier viewed with jealousy a commerce which

stimulated the development of international rather than national

industries. The tariff of 1887 called forth a reply in kind from

France; this was met by a rejoinder from Italy; and so the duties grew

rapidly on either side, and had soon reduced the commerce between the

countries to a small part of its former dimensions. The most important

export industries of Italy (wine, raw silk, fruits, live stock, eggs)

suffered severely, and many producers were absolutely ruined.

=535. Italian agriculture; poverty of the people.=—The course of tariff

policy explains, in large part, the check which Italian commerce had

experienced in the last decades of the century. Reasons why this

commerce was so small in proportion to the population will appear as we

review now some features of the Italian productive organization.

Few of the large states of Europe showed so large a proportion of the

people engaged in agriculture, so small a proportion in manufactures,

as were found in modern Italy. Considerably more than half the people

lived directly from the land. Not only did Italy show backwardness

in this respect; the character of Italian agriculture was itself

backward. The land was worked largely “on shares,” a system which

does not encourage improvement or stimulate efficiency. A government

commission reported in 1881 that production depended almost entirely

on mere labor, and that capital and intelligence contributed only a

minimum. Antiquated implements and wasteful and careless methods of

treating the crop, went far to nullify the natural advantages of soil

and climate. When we consider that, of the small surplus which the

agriculturist obtained, the government demanded a good share for taxes,

we can understand why the mass of the people were wretchedly poor, and

must content themselves with a bare living. It is worth noting that

about 1900 the consumption of sugar in Italy was only about six pounds

per head, less, even, than in Turkey, while in most European countries

people consumed from 20 to 50 pounds or even more. Salt itself was a

luxury, which was heavily taxed. The protective tariff appeared to

extend favors to farmers as well as to manufacturers, but the people

who gained by it were chiefly the great landlords, while the mass of

the people simply paid more for bread because of it.

=536. Manufactures.=—As agriculture was the strongest branch of

production in Italy, it was bound to suffer more than any other from

the protective tariff. Italian agriculturists did not need protection

for most of their products, and they did need the chance to market

their products in free exchange for industrial wares imported from

abroad. We have now to see what success the Italian tariff had in

building up the native industry on which the people were forced, in

large part, to rely.

Italian manufactures, in 1880, had scarcely advanced beyond the meager

beginnings which we found in 1860. Nearly all conditions were adverse.

Capital was scanty. Of important raw materials the country lacked all

but silk and hemp. Coal, the mainstay of modern manufacturing, had to

be imported at an expense which nearly doubled its price. Most serious,

perhaps, of all difficulties was the lack of a class of industrial

leaders, men of technical knowledge and business energy. We may take

as typical the case of a macaroni manufacturer in Naples, who declined

some important foreign orders, for no other reason than that he had,

as it was, enough business to make both ends meet, and saw no reason

for adding a new worry to life. The single important advantage which

Italian manufacturers enjoyed was that of cheap labor. The government

was lax in its factory legislation, and allowed employers to secure

their labor supply from women and children, at an extremely low rate.

The great development, therefore, which Italian manufacturers have

shown in the last decades of the century has been due not to any

natural fitness of the country, but solely to the tariff, which has

raised prices paid by consumers enough to counterbalance natural

disadvantages, and to attract men into manufacturing industry. The

artificial character of Italian manufactures is shown strikingly by the

fact that at the very close of the century not one of the protected

manufactures was strong enough to contribute in any considerable degree

to the exports of the country.

=537. Shipping; colonies.=—Some of the most unfortunate features of

Italian policy seem to have been the result of national vanity, of the

desire on the part of Italians, now that they had made for themselves

a great state, to make their state resemble the other great powers

in all respects. This feeling was certainly responsible in part for

their determination to build up a system of national manufactures,

regardless of expense. It led them to profuse expenditures for the

encouragement of shipping, which resulted, indeed, in a growth of the

merchant marine, but created in it merely a costly luxury. The Italian

navigation companies charged high freight rates, and included in their

fleets many antiquated vessels.

The instinct of imitation, finally, led the Italians to follow the lead

of other powers in colonial expansion. They did not escape the colonial

fever prevalent in the eighties, and spent money and lives lavishly, in

the attempt to build up a dominion on the African side of the Red Sea.

Their attempt ended in disastrous failure (Adowa, 1896), and popular

opposition to such enterprises grew so strong that the government did

not dare to carry out a later project for the establishment of an

Italian station on the coast of China (San Mun, 1899).

=538. Recent progress of Italy.=—The preceding sections have been

avowedly critical in tone, and are designed to make clear the great

gap which separates Italy from the leaders in the world’s industry and

commerce. It is important, however, that the reader should distinguish

Italy, on the other side, from such backward countries as Spain and

Portugal. Though Italy was poor it was not so poor as they, and it

offered vastly richer promises for the future. In the closing years

of the century it showed marked advances in many lines. Italian

agriculturists awakened to the possibilities of their profession; they

showed an eagerness to improve their methods, and by various forms of

association and cooperation they scored great advances. The exports of

dairy and poultry products doubled in about ten years, and became more

important than the export of wine. Italian manufacturers secured now

from natives the technical assistance for which they formerly depended

entirely on foreigners. They emancipated themselves, in part, from

coal, by their skilful management of water power, and have come to

enjoy a high reputation for electrical appliances for the transmission

of power and other purposes. The tariff has been made more liberal by

treaties with other states and by a reconciliation with France; and

commerce in the period before 1914 gave evidence of the capacity for

healthy growth.

=539. Spain.=—Spain, with an area much larger than that of Italy, and

with a population more than half as large, had in 1912 a commerce less

than half that of the Italian. The fault lay not with the country,

which in mineral resources is perhaps the richest in Europe, and which

under the skilful agriculture of the Moors was made to bloom like

a garden, but with the people who have neglected or misused their

opportunities. Spain furnishes a striking example of the evil that bad

politics can work in economic development. The personal absolutism of

the period before 1800 has been shaken off in the nineteenth century,

but experiments in constitutional government under monarchs of various

families and even under a republic, have not succeeded in bettering

conditions greatly. The mass of the people remained ignorant, and

most of their leaders were inefficient and corrupt. There can be no

wholesome economic life under these conditions. Shrewd politicians used

economic enterprises merely as a means to draw money from the public

treasury or from the pockets of consumers, while the investor or worker

without political influence was deterred from enterprise by the heavy

taxes which were heaped upon him.

=540. Spanish commerce in the first half of the century.=—A partial

reform of the Spanish colonial system toward the close of the

eighteenth century led to a growth of trade with the colonies, so

that it formed, if the figures can be trusted, a considerable part of

the total Spanish commerce, which was small at best. The promise of

commercial development inside the Spanish Empire was of short duration.

While Spain was still harassed by the Napoleonic wars, revolutions

began among the Spanish colonies on the American continent; and as

soon as they had achieved their independence they used it to trade

with states like England rather than with the country which had asked

so much of them and could offer them so little. The commerce of Spain

with other countries was hampered by the Spanish commercial policy,

which an Englishman of the time called “one of the most pernicious

and restrictive of all the systems of trading exclusion.” Duties were

levied both on imports and on exports, and included not only rates

of 50 to 100 per cent but also many absolute prohibitions. Spanish

commerce would have been starved out of existence if the government

which set these rules had not, by its inefficiency and corruption,

furnished the means of evading them. A veritable army, including, it is

said, 300,000 persons, of whom one third were armed, found its chief

occupation in smuggling; Spanish manufacturers maintained factories

only to mask the sale of contraband goods, and even members of the

government engaged in the contraband trade.

=541. Recent commerce of Spain.=—The turning-point in the recent

history of Spanish commerce came about the middle of the century, when

the worst abuses of the old tariff were shorn off. The reform was

followed by a rapid increase in the country’s trade, which grew to

more than fourfold in the forty years following. Especially noteworthy

was the increase in this period of the importation of the implements

and raw materials of industry (coal, machinery, textile fibers, etc.),

showing that Spain was at last beginning to seek a place for herself

among modern commercial nations. Such indications of progress must not,

however, blind our eyes to the fact that it was attained by a colonial

and commercial policy which retained many of the old restrictive

features. The loss of the remaining important colonies to the United

States in the war of 1898 was a severe blow to Spanish industries, and

they have been supported since then by a protective tariff which bore

heavily on many producers as well as on all the consumers in Spain. The

considerable development in mining (iron, copper, quicksilver, etc.)

has been due to foreign energy and capital, and the native Spaniards

offered as exports to other countries little more than dessert for

their dinner tables: wine, fruit, nuts, and raisins. It is noteworthy

and significant that Spain suffered seriously from the competition of

California in the sale of fruit in Europe; this most perishable of

wares, in which a nearby country ought to control the market without

effort, was packed and transported in such a slovenly fashion by the

Spaniards that a people 6,000 miles distant could excel them in the

quality they offered to the consumer in Paris or London. In the period

from 1890 to 1910 the figures showing the value of Spanish commerce

remained almost stationary.

=542. Portugal.=—In all the respects which concern a student of recent

commerce Portugal is but a miniature of Spain, with the faults of

Spain exaggerated rather than lessened by the weakness and smaller

size of the country. “It is scarcely credible, but it is nevertheless

a fact, that agriculture is nearly in the same condition as it was

some hundreds of years since”; these words of an English author would

apply now nearly as well as when they were written in 1843. Few of the

inhabitants were engaged in occupations other than agriculture; rich

mines remained unworked, and manufacturing has remained insignificant

throughout the century. After 1850 it could still be said of the

Portuguese that “their entire faith is reposed in protectionism,

monopolies, restrictions, and high duties.” Portuguese trade, nearly

ruined already, received a further blow by the separation of Brazil

about 1820; and though considerable colonial possessions in Africa and

the East were retained, the Portuguese have shown no capacity to base

on them commerce of any importance. By exports, of which wine and cork

were the most important, the Portuguese were able to satisfy their most

pressing necessities; but the backwardness of commerce can be seen when

it is realized that the trade of this country, approximately equal in

population to the Netherlands, was in 1911 less than one twentieth of

Dutch trade.

QUESTIONS AND TOPICS

1. Social and economic conditions in Italy after 1800. [King, Hist.,

vol. 1, chaps. 3-5.]

2. Formation of United Italy. [Seignobos, chap. 11, middle part.]

3. Commerce of Italy about 1850. [Homans, Cyclopedia, p. 1114 ff.]

4. Burden of debt and taxes. [King and Okey, p. 270 ff., chap. 15;

Villari, chap. 4; W. Calkins, Taxation and business in Italy, Forum,

1902, 33: 333-345.]

5. Italian agriculture. [King and Okey, chap. 8; Villari, chap. 11.]

6. Life of the agricultural classes. [Phillipps, Peasants of Romagna,

Fortnightly Review, 1897, 68: 407-417.]

7. Poverty of the people. [King and Okey, chap. 6; Villari, chap. 4;

Strutt, Monthly Review, 1901, 4: August, 62 ff.]

8. Emigration. [King and Okey, chap. 17; Schuyler, Italian immigration

into the United States, Polit. Science Quarterly, 1889, 4: 480-495.]

9. Italian manufactures. [King and Okey, chap. 7: Villari, chap. 12.]

10. The Italian colonial venture. [Edwards in Westminster Review,

1897, 148: 477-489; Keller, 517-531.]

11. Recent commerce of Italy. [Statesman’s Year-Book; treat exports,

imports, countries traded with, etc., as has been already suggested.]

12. Commerce of Italy with the United States. [Luzzatti, in North

Amer. Review, 1903, 177: 247-259.]

13. Recent development of agriculture. [King and Okey, chap. 9.]

14. Political conditions in Spain. [Dillon in Contemporary Review,

1898, 73: 876-907, 74: 305-334; Foreman in National Review, 1897, 29:

721-734, 30: 547-560.]

15. Commerce of Spain about 1850. [Homans, Cyclopedia, p. 1739 ff.]

16. The recent commerce of Spain. [Statesman’s Year-Book.]

17. Resources and industries of Spain. [E. D. Jones in North Amer.

Review, 1898, 167: 39-47.]

18. Recent commerce of Portugal. [Statesman’s Year-Book; see Homans,

Cyclopedia, for conditions about 1850.]

BIBLIOGRAPHY

For the general history of Italy, see besides Seignobos, Bolton

King, History of Italian unity, N. Y., Scribner, 1899, 2 vols., with

bibliography. The book by the same author in collaboration with Thomas

Okey, **Italy to-day, London (N. Y., Scribner), 1901, is excellent for

recent conditions, and has a full classified bibliography. Villari,

*Italian life, N. Y., Putnam, 1902, is more popular and depends in

part on King and Okey, but still is good. Orsi’s book in Story of the

Nations Series is mainly political.

On Spain good reading in English is as scarce as on Italy it is

plentiful. Seignobos is dull, and Hume’s histories are almost entirely

political. There is, however, a good book in the series of British

Colonies and Foreign Countries, W. Webster, *Spain, London, 1882; and

Higgin, Spanish life, N. Y., Putnam, 1902, has some material of value.

The U. S. Monthly Summary, Commerce and Finance, published several

reviews of Spanish commerce at the time of the Spanish war (March,

June, 1898, April, 1899), and a considerable amount of material on

various aspects of Spain appeared about that time in the periodicals.

The close commercial relations between Portugal and England have

given rise to two excellent books on the condition of Portugal in the

nineteenth century, J. J. Forrester, *Portugal and its capabilities,

third ed., London, 1856; Oswald Crawfurd, *Portugal, old and new,

London, 1880.

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