Cabinet Resignation – Political Crisis -Banca Italiana di Sconto

«The Economist», 18 febbraio 1922, pp. 281-282

Turin, February 11

H.M. the King has invited the Premier, Signor Bonomi, and the Cabinet to obtain an open vote from the House of Deputies. This was the end of an extraordinary performance of the numerically strongest party in the House, the democratic party, which, at the eve of the reopening of Parliament, due for February 2^nd, declared by a sudden caucus vote a want of confidence in the Cabinet. Out of a total of 535, the democratic party number about 150 votes, the popular (Catholic) party 110, the Liberal (Conservatives, Nationalists, and Fascisti) party about 70, while the Socialists are 125, the Communists 15, and the other little parties (Agrarian, Social Democrats, & c.) about 65. No Cabinet can live without a coalition between Democratic, Popular, and Liberal parties, or Democratic, Popular, and Socialist, yet no one party is willing to submit to the necessity of a compromise with other parties.

The move of the Democratic party against Signor Bonomi’s Cabinet was engineered, as it appears, by Signor Giolitti’s followers. But, when Signor Bonomi resigned, the Popular (Catholic) party, which were greatly incensed by the rupture of the alliance, pronounced against a Giolitti Cabinet. So it happened that neither Giolitti, nor De Nicola, Speaker of the House, nor Orlando and Meda, have dared to form a new Cabinet. In the end, the King was obliged to refuse the resignation of the Bonomi Cabinet, so that the House can, by an open vote, express its wishes and opinions. General elections would not mend the matter, as the existing proportional system of election does not allow sudden changes in the composition of the House; and the swing of the pendulum is almost without effect.

Discontent against Bonomi’s Cabinet had manifold origins. The conclusions of the Cannes Conference were displeasing to a section of Italian public opinion, which appeared to think that Italy was ignored when Great Britain and France were concluding a pact of alliance between themselves.

Irritation against the popular (Catholic) party, which has obtained the introduction of a Bill purporting to establish the so-called freedom of education, but in reality giving to the private (Catholic) schools the right to be the legal centre of final examination in secondary education. Last, but not least, the Banca di Sconto moratorium. Newspapers and political circles are, after December 29, 1921, full of stories about the cause of the fall of the Banca di Sconto, and the inability of the Government to come to the rescue. The Government has done all in its power to bring the affair to a satisfactory conclusion. The judicial commissioners have circulated a scheme on the following lines: – The Banca Italiana di Sconto is to go into liquidation. A new Banca Nazionale di Sconto is to be formed with a capital of 270 millions lire, of which 150 millions are to be subscribed by creditors of the old Banca di Sconto with 7 per cent, of their credits, and 120 millions by the ex-directors. The capital may be successively raised to 420 millions with an option to creditors to subscribe the increase.

Deposits will be repaid to creditors on the following basis: 1) Creditors up to 1,000 lire will be fully repaid after a month; 2) creditors between 1,001 and 5,000 lire will receive 70 per cent, of their credits not later than December 31, 1922; 3) creditors of upwards of 5,000 lire will receive 60 per cent, in instalments up to December 31, 1923. For the unpaid 30 or 40 per cent., a scrip will be given to creditors, which gives a right to the distribution of the assets of the old Banca eventually remaining after payment of the above instalments. The creditors’ representatives are not satisfied with the scheme, and claim the aid of the Government. Political parties, unmindful of the public interest, have caught up the problem as a weapon against the Government.

But how the creditors of the Banca di Sconto can be given more than the above scheme proposes to give, i.e., all that can be realised from a winding-up of the assets, without laying an unjust burden on taxpayers, is difficult to see. It is, therefore, to be hoped that the Government, which will be formed after the vote of the House of February 16^th, will do nothing prejudicial to the public exchequer.