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Italy, in spite of all the disorder, had no mind to establish a socialiststate. Moreover, he attached to himself the powerful industrialistsand financiers of Milan and Rome along with many of the nobles,two of those powerful minorities essential to his general aims. Thushe molded fascism into a powerful weapon to beat down the Redmenace. But it was Italy which molded him to this philosophy, newfor him, the man who, when the factories were occupied, hadapplauded the act of the workers.2. Next Mussolini had denounced "demagogic finance" and promisedto balance the budget. However, he lost little time in turning tothe time-worn favorite of Ministers—the unbalanced budget. Aslate as 1926 he wrote in his autobiography: "The budget of thenation [as he came to power] had a deficit of six and a half billions.It was a terrific figure, impossible for an economic structure to bear.. . . Today we have a balanced budget." The surface facts supportedthat statement. His first budget showed a deficit of 4,914,000,000lire; his second a deficit of only 623,000,000; and his third (1924—25)a surplus of 417,000,000 lire. It is entirely probable that Mussolinibelieved a balanced budget a good thing and consistent with hisother promises. But Mussolini's policies were made for him by thenecessities of power, not by the laws of economics. At the very momenthe was boasting of a balanced budget he was on the eve of ahuge deficit of nine billion, in 1926-27. The year after that he balancedthe budget once more so far as his books showed, and this washis last. From then on Italy was to float upon a sea of deficits, ofspending and ever-rising national debt.But as a matter of fact Mussolini never balanced a budget. Immediatelyon taking office he proceeded to spend more on publicworks than his predecessors. Dr. Villari, fascist apologist, says thatbetween 1922 and 1925, despite drastic economies, Mussolini spent3,500,000,000 lire on public works compared with only 2,288,000,000lire in the previous three years. He also spent more on the army andnavy and continued to increase those expenditures. How Mussolinicould spend more than his predecessors on arms and on public worksand yet balance the budget excited the curiosity of Dr. GaetanoSalvemini, who investigated the subject with surprising results.Dr. Salvemini discovered that Mussolini resorted to a subterfuge5O