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to pay contractors without increasing his budget. He would make acontract with a private firm to build certain roads or buildings. Hewould pay no money but sign an agreement to pay for the work ona yearly installment plan. No money was paid out by the government.And hence nothing showed up in the budget. Actually thegovernment had contracted a debt just as much as if it had issueda bond. But because no money passed, the whole transaction wasomitted from the Treasury's books. However, after making such acontract, each year the government had to find the money to paythe yearly installments which ran from ten to fifty years. In time,as the number of such contracts increased, the number and amountof the yearly payments grew. By 1932 he had obligated the state for75 billion lire of such contracts. The yearly payments ran to billions.What he did by this means was to conceal from the people the factthat he was plunging the nation ever deeper into debt. If these sumswere added to the national debt as revealed in the Treasury admissions,the actual debt was staggering ten years after Mussolini's ascentto power on a promise to balance the budget. According to Dr.Salvemini's calculations, the debt of 93 billion lire, when Mussolinitook office, had grown to 148,646,000,000 lire in 1934. To whatbreath-taking sum it has now risen no one knows. 2 But an AssociatedPress dispatch to the New York Times (August 8,1943) announcedthat the Italian debt was then 405,823,000,000 lire, and the deficitfor the year was 86,314,000,000 lire.Mussolini made no secret of the fact that he was spending. Whathe concealed was that he was loading the state with debt. The essenceof all this is that the fascist architect discovered that, with all hispromises, he had no formula for creating employment and goodtimes save by spending public funds and getting those funds byborrowing in one form or another—doing, in short, precisely whatÐepretis and Crispi and Giolitti had been doing, following the longsettledpractice of Italian governments. Thus spending became a settledpart of the policy of fascism to create national income, exceptthat the fascist state spent upon a scale unimaginable to the old'For a full and interesting discussion of this weird chapter in fiscal policy see "TwelveYears of Fascist Finance," by Dr. Gaetano Salvemini, Foreign Affairs, April 193$, VoL 13,No. 3, p. 463.51