Subsidies to Shipbuilding, and Legislation by Decrees

«The Economist», 17 settembre 1921, pp. 444-445

Turin, September 11

An interesting constitutional and financial problem has been debated this week in the Press and political circles. It is a residue of our D.O.R.A. war methods, which, by the way, were much more arbitrary than in your country. By a law of May 22, 1915, the Government was empowered to legislate and to act freely on the basis of the old dictum salus publica suprema lex. All the governments after May, 1915, freely used the machinery of Royal legislative decrees. Bureaucracy was substituted for Parliament. Not a single budget after 1915 was laid in the ordinary way before Parliament and subjected to a regular debate before the beginning of the financial year. Even today taxes are laid and expenditure effected on a vote of provisional authorisation for the first six months of the financial year, which vote was given by Parliament after a perfunctory general debate. Signor Giolitti promised in his Cabinet programme that he would put an end to the system of legislative decrees, but on the eve of his fall he did not refrain from publishing, on June 30, 1921, a Royal decree enacting a new protectionist custom tariff, thus breaking a solemn promise made to the Chamber that no new tariff would be enacted without the consent of the Parliament.

The slowness with which legislation by Royal decrees is dying is due to its being much more easy thus to impose taxes and make expenditure. Bureaucracy felt supreme during the war and armistice, and is today sorely grieved to renounce any of her privileges. Industries dependent for life on the patronage of the State obtained subsidies and favours without embarrassing public debates. Ministers were satisfied with their almost absolute powers.

The Shipping Subsidies Bill furnished at last a test case. June 30, 1921, was the day after which ceased to be effective the decrees of August 18, 1918, and March 30, 1919, giving new ships various subsidies amounting in all, for a 8,000 D.W. tons ship, to the nice sum of 17,000,000 lire. There were, at the date of June 30, 1921, in course of construction, a number of from 50 to 73 ships which, for various reasons, were not completed before the fatal date, and had not a legal claim to the State subsidies. Shipbuilders began to cry on the damage which would be done if ships remained unfinished on the yard, and if thousands of men were put out of employment. Signor Alessio, who was Minister of Trade in the Giolitti Cabinet, felt that a continuation of the subsidies on the old scale was unbearable. Parliament would not have consented to an expenditure of from 850 to 1,240 million lire merely for the sake of shipbuilders, who were well aware that ships unfinished at June 30, 1921, had not the right to receive a single farthing from the Exchequer. But he believed that on the ground of equity a partial subsidy could be given to those ships which were already laid on the yards at June 30, 1921, and for which constructional materials were already on the spot on April 30, 1921. For this sort of ships it may be assumed that shipbuilders had done all their might for completing the construction at the prefixed date, but were impeded by some external cause. A Bill was accordingly laid by Signor Alessio on the table of the House on June 20, 1921. The subsidies were fixed on a new scale, and for a total sum of 300 million lire.

The fall of the Giolitti Cabinet and the political debates on the programme of Bonomi Cabinet were not favourable to an immediate discussion of the Alessio proposals. Moreover, the new Minister of Industry, Signor Belotti, dropped the Alessio Bill, substituting it with two new Bills, laid on the table of the House on July 26, 1921. Soon afterwards, however, the House rose for recess, and it is not probable that it will meet before November next.

Shipbuilders began again clamouring against the imminent closing of the yards; Socialist deputies insisted that Government should give some aid against unemployment. Signor Belotti took an extraordinary course. As it was impossible to obtain the consent of Parliament before November or December, and as he was afraid to legislate by Royal decrees without some sort of authorisation, he laid the Bills before the two committees of the House, those on finances and on transports, which, according to our legislative methods, are bound to report on Bills to the House as a whole.

Committees of the Italian Chamber of Deputies are composed in exact proportion to the respective importance of various political parties – Liberals, Catholic, and Socialist parties being exactly represented in each committee. If, then, argued Signor Belotti, the special committees of the House give an advice favourable to the Bills, he would be authorised to enact them by Royal decree. The committees, in effect, reported favourably to the first of the Bills, which granted a subsidy of 750 lire per D.W. ton to those ships which, however unfinished at June 30, 1920, had reached at that date a 30 to 40 per cent, stage of completion. The financial burden for the State was estimated at 125 million lire. The decree was accordingly enacted.

On the second Bill, one of the committees felt at first unable to reach a conclusion. The Bill stated that a sum of 200 million lire could be spent by the Ministry of Industry for buying for State account a certain number of ships from among those unfinished at June 30, 1921, if from 500 D.W. tons upwards, and if built to carry men in addition to goods. The Bill was open to various technical objections. Above all, a keen debate arose in the Press about the legitimacy of the new legislative method of enactment after the advice of a House Committee. Committees, it was observed, have not the authority to legislate and of advising Government when Government thinks it urgent to legislate during the recess of Parliament. The legislative authority is only enjoyed by the Chamber as a whole. Moreover, the Italian Parliament is composed of two branches – the elective Chamber of Deputies and the nominated (for life) Senate. Legislation by decree after advice of a Committee of the Chamber of Deputies amounted, in fact, to a practical abolition of the Senate. Grants of sums to be spent are the most jealous privileges of Parliament; they cannot be transferred to a single committee of a single House.

The debate was not without influence on legislators. The Finance Committee of the House re-examined the matter, and after a lengthy debate refused its assent to the Bill. There matters stand at present. It appears that Government has felt the lesson, and that it will abstain in future from legislation by decrees, as everyone is feeling that it is a short cut to absolute government by bureaucracy.