Abstract
This survey examines the contribution of the railway to the modernisation of the nineteenth-century Italian economy, with particular attention to industrial growth.
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Notes and References
There is a vast and varied literature on Italy’s railways. The histories by A. Crispo, Le ferrovie italiane (Milan, 1940) and
F. Tajani, Storia delle ferrovie italiane (Milan, 1939) are old but still useful; so too the detailed account in I. Sachs, L’Italie: ses finances et son développement économique (Paris, 1885). The present chronology of railway construction is derived initially from R. Ispettorato generale delle strade ferrate, Relazione sull’esercizio delle strade ferrate italiane (henceforth Relazione SFI), e.g. 1899 pp. 60–90, and subsequently from Direzione generale della statistica, Annuario statistico italiano (henceforth Annuario), e.g. 1913 p. 231.
The rapid growth of the Istat index in the late 1860s and early 1870s was not confirmed by my subsequent index. The indices are described in A. Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge, Mass., 1962) pp. 367–421; Istituto centrale di statistica (Istat), Annali di statistica, series 8, vol. 9: Indagine statistica sullo sviluppo del reddito nazionale dell’Italia dal 1861 al 1956 (Rome, 1957; henceforth Reddito nazionale) pp. 98–9; S. Fenoaltea, ‘Public Policy and Italian Industrial Development, 1861–1913’, unpublished PhD dissertation, Harvard University (Cambridge, Mass., 1967) chs. 1–3. See also S. Fenoaltea ‘Decollo, ciclo, e intervento dello Stato’, in A. Caracciolo (ed), La formazione dell’Italia industriale (Bari, 1969) pp. 96–9, and S. Fenoaltea, ‘Railroads and Italian Industrial Growth, 1861–1913’, Explorations in Economic History, IX (1972) 349. My own effort to extend and improve the available information base is currently under way: see S. Fenoaltea, Italian Industrial Production, 1861–1913: A Statistical Reconstruction (incomplete typescript, 1980; forthcoming, Cambridge University Press).
Gerschenkron, Economic Backwardness; A. Gerschenkron, Continuity in History and Other Essays (Cambridge, Mass., 1968);
R. Romeo, Risorgimento e capitalismo (Bari, 1959);
R. Romeo, Breve storia della grande industria in Italia (Bologna, 1961).
Fenoaltea, ‘Public Policy and Italian Industrial Development’; Fenoaltea, ‘Decollo’; S. Fenoaltea, ‘Riflessioni sull’esperienza industriale italiana dal Risorgimento alla prima guerra mondiale’, in G. Toniolo (ed), Lo sviluppo economico italiano 1861–1940 (Bari, 1973). The popularity of stages-of-growth models peaked with W. W. Rostow, The Stages of Economic Growth (Cambridge, Mass., 1960), as much of the work inspired by that dramatic essay failed to find empirical support for its generalisations.
It has recently been pointed out that the growth of German-style banks came largely at the expense of other financial instruments, so that even their absolute contribution to capital accumulation in industry would be limited to their superiority over existing institutions — a superiority which is typically taken for granted, but the extent and institutional basis of which have yet to be established. See A. M. Biscaini Cotula and P. Ciocca, ‘Le strutture finanziarie: aspetti quantitativi di lungo periodo (1870–1970)’. in F. Vicarelli (ed), Capitale industriale e capitals finanziario: il caso italiano (Bologna, 1979).
Annuario, 1913 p. 46. See also J. D. Gould, ‘European Inter-Continental Emigration. The Road Home: Return Migration from the USA’, Journal of European Economic History, IX (1980) 41–112.
Istituto centrale di statistica (Istat), Sommario di statistiche storiche italiane, 1861–1955 (Roma, 1958; henceforth Sommario). pp. 152, 172.
Over the last few decades, for example, the German and Swiss economies have notoriously been characterised by a flexible resource base, as the number of ‘guest workers’ responded elastically to domestic demand; these economies therefore combined low unemployment figures (even when employment had been falling) with the lack of resource constraints commonly attributed to underemployed economies. See J. C. Lambelet and K. Schiltknecht, On the Importance of an Elastic Supply of Labor and Capital: Simulation Results for the Swiss Economy (Zurich, 1973).
See R. A. Mundell, International Economics (London, 1968), ch. 18 and Fenoaltea, ‘Railroads and Italian Industrial Growth’, to which the reader is referred for a more complete discussion.
Venice, the Netherlands and England are obvious cases in point. For an analysis of a negative example, where the possible density of resources was limited by poor transportation, see D. R. Ringrose, ‘Transportation and Economic Stagnation in Eighteenth-Century Castile’, Journal of Economic History, XXVIII (1968) 51–79.
See e.g. Comitato d’inchiesta industriale, Atti (10 vols, Florence and Rome, 1873–4), Deposizioni orali category 8 sub 1 – 2 – 3 instalments I pp. 2, 8, instalment III pp. 2, 9, instalment VI p. 3; R. Corpo delle miniere, Rivista del servizio minerario (henceforth Rivista mineraria), 1898 p. 238. Coal freight rates suggest that the cost of sea transport from England to Italy was typically equivalent to the cost of rail transport over 300 to 600 kilometres, while the distance from Turin to Naples is nearly 1000 kilometres. See E. A. V. Angier, Fifty Years’ Freights (London, 1920); R. Commissione per lo studio di proposte intorno all’ordinamento delle strade ferrate, Atti (10 vols, Rome, 1903–6; henceforth Atti CSO), vol. 5 parts 1–2 p. 100. The South’s relatively inefficient industry, built up behind the prohibitive tariff walls of the Kingdom of Naples, was thus largely destroyed by foreign competition when the low Piedmontese tariff was extended to the entire peninsula in 1860; what survived does not appear to have been affected by the completion of the first all-rail route to the North in 1866. See G. Luzzatto, L’economia italiana dal 1861 al 1914, vol. 1 (Milan, 1963) pp. 27–35; also E. Sereni, Capitalismo e mercato nazionale in Italia, 2nd edn (Rome, 1974) pp. 71, 93. Sereni’s view that the railways were the means by which Italy’s ruling bourgeoisie welded the local markets into a national one is undermined both by the evidence of limited interregional transportation presented in Table 3.9 and, more directly, by the evidence that the peninsular trunk lines did little or nothing to reduce interregional transport user charges; see Sereni, Capitalismo, pp. 69–76 and note 58 below.
See for instance G. Baglioni, Per la riforma ferroviaria (Milan, 1910);
M. Diegoli, ‘La trazione a vapore’, Ingegneria ferroviaria, XVI (1961) 671–80;
M. Maroni, ‘L’armamento del binario’, Ingegneria ferroviaria, XVI (1961) 595–600. In fact, the incidence of curves and gradients reflects a trade-off between capital and current costs, and therefore expected utilisation levels, just as much as the equipment standard for the existing lines; the only difference is that the construction of the basic right of way involves a relatively longer time horizon. In either case, improvements allow for marginal costs inclusive of additional capital costs lower than marginal costs with the existing track and equipment.
The pruning of off-peak capacity to raise load factors tends to raise costs per unit of capacity, since the variable costs saved by such adjustments are a relatively small part of total costs; the labour force, in particular, remains relatively constant, and is simply underutilised at off-peak times. The superior solution is, of course, the systematic use of discriminatory pricing to offset the fluctuations in demand and ‘flatten the load curve’; but this seems to be a relatively recent development. See J. R. Nelson (ed), Marginal Cost Pricing in Practice (Englewood Cliffs, NJ, 1964).
The 28 per cent-72 per cent revenue split discussed here applied to the main lines of the Rete Mediterranea and Rete Adriatica, on which they earned some 95 per cent of their revenue. On the minor lines, they received a small fixed subsidy per kilometre of line, and operating revenues were shared with the state on a 50–50 basis (equivalent to a 100 per cent excise tax). See Atti CSO, vol. 4 part 2 pp. 8–10; Relazione SFI, 1898 cols 933, 944–5; Sachs, L’Italie, pp. 1061–4. The state could waive its share of revenue to allow special low rates, but this was very rarely done. See R. Ispettorato generale delle strade ferrate, Relazione intorno all’esercizio delle strade ferrate delle reti Mediterranea, Adriatica, e Sicula dal 10luglio 1885 al 1900 (4 parts in 6 vols, Rome, 1901), part 3 pp. 209–29; also Atti CSO, vol. 3 p. 556. In addition to thus sharing revenue, the state levied explicit excise taxes at the rate of 13 per cent on passenger and ‘grande velocità’ freight, and 2 per cent on ‘piccola velocità’ freight; e.g. Annuario, 1904 p. 494.
These arrangements were relatively complex, since they covered construction as well as operation. Taxes on revenue were imposed as a reduction in the construction subsidy, normally on a sliding scale; a 50 per cent marginal rate, equivalent to a 100 per cent excise, seems to have applied to the Romane, the Meridionali and the recent lines of the Alta Italia. The old Piedmontese state lines were instead sold to the Alta Italia, so that the state could immediately obtain the capitalised operating surplus allowed by the fares specified in the act of sale; these fares were in any case the same as those applicable on the lines subject to tax. The railway reorganisation of 1885 was accompanied by a significant reduction in railway rates, apparently on the companies’ initiative; since cost levels changed relatively little, the reduction in fares is plausibly attributed to the lower marginal tax rates introduced by the new conventions. The fiscally optimal fare level was also probably reduced by the elimination of the state’s former interest in the maximisation of expected net revenue on the lines it sold to the Alta Italia, and the consequent generalisation of its interest in the maximisation of the railways’ gross revenues. See Annuario, 1878 part 1 p. 140, 1905–7 p. 669; E. Corbino, Annali dell’economia italiana, vol. 3 (Città di Castello, 1933) p. 305; Raccolta ufficiale della leggi e dei decreti del Regno d’Italia, XI (1865) pp. 696, 765, 768, 819, 855; Sachs, L’Italie, pp. 966–7.
See e.g. Luzzatto, L’economia italiana, pp. 24–6; Tajani, Storia della ferrovie italiane, p. 62; S. J. Woolf, ‘La storia politica e sociale’, in R. Romano and C. Vivante (eds), Storia d’Italia, vol. 3 (Turin, 1973) p. 508. The railway requirements of the military were considered in Atti CIE, part 2 vol. 3 pp. 1237–96 and Atti CSO, vol. 3 pp. 9–38, 63–143.
E.g. Baglioni, Per la riforma ferroviaria, pp. 90–2; Corbino, Annali dell’economia italiana, vol. 3, pp. 218,268, 309, 313, 320–4, 342–3; A. Plebano, Storia della finanza italiana, vol. 2 (Turin, 1900) pp. 162–70.
See e.g. Atti CIE, part 1 vol. 2 pp. 83 and 99, vol. 3 p. 306. Particularly significant is the railways’ 1886 petition, which was denied, for special rates with which to attract traffic from traditional sailing coasters. See R. Ispettorato generale delle strade ferrate, Annali del consiglio delle tariffe delle strade ferrate, 1886 pp. 56–7.
In a similar vein, the varying availability of water-based competition meant that American railroads were attributed a greater ‘social saving’ in short-haul transportation than in long-haul transportation. See R. W. Fogel, Railroads and American Economic Growth: Essays in Econometric History (Baltimore, 1964) pp. 208–19.
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Fenoaltea, S. (1983). Italy. In: O’Brien, P. (eds) Railways and the Economic Development of Western Europe, 1830–1914. St Antony’s/Macmillan Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-06324-6_3
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