ABSTRACT
The financial crisis of 1873, which spread from Berlin to other important European stock markets, marked the beginning of that great depression which, according to many scholars, lasted for the following two decades in most of the European economies. Given both the economic and political importance of the agricultural producers, free trade soon gave way to a protectionist mood almost everywhere in Europe: import duties began to protect the domestic production of grain. During the agricultural crisis there was a flowering of industrial production, at least in the period 1880-7. Monetary and fiscal policies in the early years of the Left were a continuation of those of previous governments, which had aimed at gradual reduction of the deficit and return to the gold standard. The creation of the Terni works in 1884 forged the first links between industry, finance, and state, which were to be an important feature of Italy's economic development.
