50 Lire – Italy

In 1910, Italy's currency was firmly embedded within the Latin Monetary Union (LMU), a 19th-century European system akin to a forerunner of a monetary union. The country operated on a bimetallic standard based on the lira, which was legally defined as equivalent to the French franc. Coins in gold (marengo) and silver were minted to LMU specifications, ensuring they circulated freely alongside French, Belgian, and Swiss coins. This system provided a degree of monetary stability and facilitated international trade, but it also tied Italy's economic fortunes closely to its partners, particularly France.

However, this stability was somewhat superficial. Italy's public finances were chronically strained due to heavy military spending, colonial adventures, and ambitious infrastructure projects. The government ran persistent budget deficits, financing them through borrowing from the Bank of Italy and foreign lenders. This led to a growing disconnect between the value of the gold-backed lira in international circles and the inflated paper currency (biglietti di stato and banknotes) circulating domestically. Consequently, while Italy was officially on the gold standard, the convertibility of notes into gold was often suspended in practice, creating a system economists call a "gold exchange standard."

The situation was therefore one of fragile duality. Externally, Italy maintained the facade of a sound, union-backed currency crucial for its credibility. Internally, however, the economy was plagued by inflation, a burdensome public debt, and a vulnerable banking sector. This precarious balance made the Italian lira susceptible to speculative attacks and reliant on the tolerance of the LMU members. The underlying weaknesses would be dramatically exposed by the fiscal pressures of World War I, which ultimately ended Italy's adherence to the gold standard and the LMU.