THE NEW SARDINIAN LOAN – THE IMPENDING FRENCH AND INDIAN LOANS

[New-York Daily Tribune, No. 6035, August 28, 1860]

London, August 14, 1860

The new Sardinian loan of £6,000,000 has been concluded, and it is said that three times the amount called for has been subscribed. Thus it appears that the bonds of the new Italian kingdom are rising in the market at the very time when Austria is struggling in vain with a burden of debt whose magnitude should be measured not by the resources of the country, but by the weakness of the government, and when Russia, mighty Russia, driven from the European loan market, has been forced to take refuge once more in its own paper-money machinery. Yet, even in regard to Sardinia, the new loan reminds us of the hateful fact that in modern times the first act in a people’s struggle for freedom or independence, as though by a monstrous fatality, generally seems to consist in contracting a new bondage. Is not every national debt a mortgage laid on the industry of a whole people, and a curtailment of its freedom? Does it not give rise to a new society of invisible tyrants, known under the name of public creditors? Be that as it may, if the French have nearly doubled their national debt in less than a decade in order to remain slaves, the Italians must be allowed to contract the same obligations in order to become free men. Piedmont proper, without the newly added provinces, had to pay £3,813,452 in taxes in 1847, while in this year it will have to pay £6,829,000. English newspapers, for instance *The Economist*, have stated that the trade of Piedmont has greatly expanded in consequence of the liberal changes introduced in its tariff, and to illustrate this increase the following figures are given:

In 1854 the imports only amounted to  
£12,497,160  
in 1857 they rose to  
£19,123,040

In 1854 the exports amounted to  
£8,595,280  
in 1857 they rose to  
£19,050,040

I take the liberty of remarking, however, that the increase is more apparent than real. The leading articles of Sardinian export are silk, silk manufactures, twist, spirits and oil; but it is well known that during the first three quarters of 1857 the prices of all these articles were extremely inflated, and therefore greatly swelled the total amount of the Sardinian trade returns. The official statistics of the kingdom, moreover, give only the values and not the quantities of the exported and imported articles, so that the figures for 1857 may be altogether exceptional. As no official reports for the years 1858-60 have as yet been published, it remains to be seen whether the commercial crisis of 1858 and the Italian war of 1859 have checked the industrial advance of the country or not. The following tabular statements, showing the official estimate of the revenue and expenditure of Sardinia proper for the current year (1860), bear witness that a part of the new loan will be used to cover the deficit, while another part will be employed for new war preparations:

Sardinia’s Revenue, 1860  
£  

Customs  2,411,824  
Land and house taxes, stamps, etc.  2,940,284  
Railways and telegraphs  699,400  
Post  242,000  
Fees received by the Foreign Ministry  12,400  
Fees received by the Home Ministry  21,136  
Receipts from certain branches of public education  580  
Mint  6,876  
Sundries  193,888  
Extraordinary resources  301,440  
Total  6,829,738

Sardinia’s Expenditure, 1860  
£  

Finance Department  4,331,676  
Public Justice  243,816  
Foreign Affairs  70,028  
Public Education  117,744  
Home Ministry  407,152  
Public Works  854,080  
Military expenditure  2,229,464  
Naval expenditure  310,360  
Extraordinary expenditure  1,453,268  
Total  10,017,588

Comparing the expenditure, amounting to £10,017,588, with the revenue of £6,829,738, we find a deficit of £3,187,850. On the other hand, the newly acquired provinces are estimated to yield an annual revenue of £3,435,552, with annual expenses of £1,855,984, thus leaving a clear surplus of £1,600,000. According to this calculation, the deficit of the whole Kingdom of Sardinia, including the newly acquired provinces, would be reduced to £1,608,282. It would be only just that Lombardy and the Duchies should pay a part of the expenses which Piedmont incurred in the Italian war; but in the course of time it may prove a most dangerous experiment to impose upon the new provinces taxes almost double what their administrative costs require, with the sole object of supporting the exchequer of the old provinces.

People familiar with the game behind the scenes of the Paris money market continue to spread the rumour that a new French loan is looming in the not too distant future. The only thing still needed is a special occasion to launch this affair. The *emprunt de la paix* (peace loan) has, as you know, proved a failure. *Partant pour la Syrie* has as yet been practised too little to justify a new appeal to the enthusiasm of the *grande nation* (great nation). It is therefore conjectured that, if nothing new turns up and the corn prices continue to rise, a loan will be issued under the pretext of making provision against the possible calamity of a famine.

In connection with French finances, it may be mentioned as a curious fact that M. Jules Favre, who ventured, in the midst of the Corps Législatif, to predict the impending collapse of the imperial treasury, has been elected Bâtonnier of the Paris Bar. The French advocates, as you know, have preserved from the times of the old monarchy some shreds of their ancient feudal constitution. They still form a sort of corporation, called the Barreau, whose annually elected head, the Bâtonnier, represents them in their relations with the courts and the government, while at the same time he watches over their internal discipline. Under the Restoration and the subsequent regime of the Citizen King (Louis-Philippe), the election of the Paris Bâtonnier was always regarded as a great political act, involving a demonstration for or against the ministry of the day. M. Jules Favre’s election must, I think, be regarded as the first anti-Bonapartist demonstration ventured by the Paris Bar, and therefore deserves to be recorded among the events of the day.

In yesterday’s sitting of the House of Commons, before a House that was scarcely large enough to form a quorum, Sir Charles Wood, that true model of a genuine Whig place-hunter, introduced a resolution empowering him to put a new loan of three millions sterling on behalf of the Indian Treasury. According to his statement, the Indian deficit in 1858-59 (the financial year always begins and ends with April) amounted to £14,187,000, in 1859-60 to £9,981,000, and is estimated for 1860-61 at £7,400,000. A part of the deficit he promised to cover from the proceeds of the new taxes introduced by Mr. Wilson — a very questionable prospect, indeed — while the other part is to be raised by the new loan of three millions. The national debt, which in 1856-57, the year before the Rebellion, amounted to £59,442,000, has now risen to £97,851,000. The interest on the debt has grown at a still more rapid rate. From £2,525,000 in 1856-57 it has risen to £4,461,000 in 1859-60. Although the public revenue has been forcibly increased by the imposition of new taxes, it has not yet been able to keep pace with the expenditure, which, even according to Mr. Charles Wood’s statements, has increased in every respect, except that for public works. In order to raise the cost of three millions for fortified barracks, there has occurred during this year “an almost complete cessation of public works and public buildings of a civil character”, and it will continue in the following year. This “complete cessation” Sir Charles seems to regard as one of the beauties of the system. Instead of 40,000, as in 1856-57, 80,000 European soldiers are now kept in India, and instead of a native army of barely 200,000, one of more than 300,000 men.