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Problems of French Investment in Italian Railways: A Document of 1868
Published online by Cambridge University Press: 24 July 2012
Abstract
French investors, their undertakings in Italy oppressed by “an unbelievable mixture of ignorance, government anarchy, and bad faith,” appealed for intervention by their government. The controversy gave rise to a remarkable report depicting the condition of Italian railroads and giving vital evidence about government-business relationships of the day.
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- Copyright © The President and Fellows of Harvard College 1961
References
1 “Chemin de fer de Naples à Nocera et à Castelamar,” Prospectus (Paris, 1837)Google Scholar.
2 Cavour, Camillo Benso di, “Des chemins de fer en Italie,” Revue nouvelle, vol. VIII (1846)Google Scholar; reprinted in Zanichelli, Domenico, ed., Gli scritti del Conte de Cavour (2 vols.; Bologna, 1892)Google Scholar.
3 Cameron, Rondo E., France and the Economic Development of Europe, 1800–1914 (Princeton, 1961)Google Scholar, chap. 10. This work provides the background and more extensive details on the subject of this introductory note.
4 Marquis d'Audiffret to Minister of Public Works, Paris, Jan. 31, 1868: Archives Nationales (Paris), F 14. 8599.
5 Moustier to Minister of Public Works, Paris, March 4, 1868: AN. F 14. 8599.
6 One lira was the equivalent of one French franc, worth approximately 20 cents at the pre-1914 par.
7 The total budget for 1868 amounted to more than a billion lire with a deficit of almost 25 per cent.
8 In 1866 the 5 per cent Italian rente fell to 36 per cent of par on the Paris Bourse, its principal market; in 1867 and 1868 the average course was less than 50 per cent.
9 Italian banknotes were given legal tender status and their redemption in specie prohibited as an emergency measure in 1866. Convertibility was not resumed until 1881.
10 Presumably the statement regarding Italian “revenge” refers to the humiliation of selling the lines in Piedmont to Rothschild's Upper Italian in 1865, required by financial necessity; but it may also be intended to call to mind the efforts of the French government to prevent the Italian occupation of Rome.
11 This appears to be the only serious misstatement of fact in the entire note. By the treaties sanctioned in the law of 1865 the state ceded to the company the line then in construction between the French frontier and Massa along the Ligurian coast, in return for which the company agreed to reimburse the state for the expenditures already made, less 38 million francs contributed by the state as a subsidy. But the company was unable to fulfill its obligations, and by the Convention of 1866 the state once more took over construction of the line. In order to do this it issued new government securities and deducted from its subsidy to the company a sum equivalent to the interest on them. Under the Convention of 1868, to which this note was a prelude, the company retroceded to the state full title to the line in return for restitution of the sums withheld for interest payments.
12 To which should be added roughly 500 million of the more than 700 million invested in the Upper Italian Railway. At the end of 1881 Italy possessed approximately 9,000 kilometers of operating railways, the capital cost of which amounted to about 2.2 billion francs. Of this sum Frenchmen contributed more than 1.3 billion, or roughly 60 per cent, virtually all of it before 1868. For further details see Cameron, France and the Economic Development of Europe.