The French Ministry of Finance have no plan or policy whatever for meeting this prodigious deficit, except the expectation of receipts from Germany on a scale which the French officials themselves know to be baseless.

In the meantime they are helped by sales of war material and surplus American stocks and do not scruple, even in the latter half of 1919, to meet the deficit by the yet further expansion of the note issue of the Bank of France.[153] The budgetary position of Italy is perhaps a little superior to that of France.

Italian finance throughout the war was more enterprising than the French, and far greater efforts were made to impose taxation and pay for the war.

Nevertheless Signor Nitti, the Prime Minister, in a letter addressed to the electorate on the eve of the General Election (Oct., 1919), thought it necessary to make public the following desperate analysis of the situation:--( 1) The State expenditure amounts to about three times the revenue.

(2) All the industrial undertakings of the State, including the railways, telegraphs, and telephones, are being run at a loss.