The Kingdom of Two Sicilies and the Italian unification – Finance

The monetary system of the Kingdom was reformed in 1818, the unit of currency was the duchy (ducato) that in 1861 was equivalent to 4.25 pounds; with all the limits on the assessment of purchasing power over long periods of time, we could you can say that a duchy corresponded to about € 16.00 today.
Unfortunately, the cost of money was quite high, between 20% and 23% (to be compared with 6% in Paris), due to the still insufficient development of the banking system.
At the time the coin was really made out of gold or at least had to be covered by gold reserves, which in fact in the Two Sicilies were equal to the monetary base, that was 100% covered, while in Piedmont gold reserves ensured only a third of working capital.
Data collected from Francesco Saverio Nitti (Public Finance, 1903) show us that the gold reserves of the Two Sicilies were equal to 445.2 million liras out of 670.4 for the whole Italy; the “gold of Banco di Napoli” was necessary to cover, at least in part, the heavy debt of the new Kingdom of Italy;
However, it was not enough, in 1866 was necessary the introduction of forced currency, which eliminated the convertibility of currency into gold. Forced currency was maintained until 1883.


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