Italy. Cabinet crisis. Socialists and government. Commodity and share prices[1]

«The Economist», 19 agosto 1922, pp. 325-326

Turin, August 2

While I write, a general strike is being proclaimed by the Labour organisations as a protest against the assault and burning down of co-operative and Labour houses in Cremona and Ravenna at the hands of Fascisti.

The result of the strike may be slight, but the air is full of bad temper and uncertainties. The Cabinet crisis has been patched up, after twelve days of negotiations, by a revision of the Facta Ministry. On the eye of the Genoa Conference, a Government was constitued in a hurry under the presidency of Signor Facta, for the sole purpose of having a Government when the assembly of nations met on Italian soil. Anyone who tried to form a Government was welcome. To-day the same story is being repeated, Signors Orlando, Bonomi, Meda, De Nava, De Nicola being offered the premiership in turn. The political groups of the Chamber are unable to agree. The proportional representation system has split the Chamber into 12 groups, which cannot be moulded into a stable majority. The Liberal-Conservatives are split into three groups (Liberals, Nationalists, and Fascisti), the Democrats into five. Besides them, there are the Communists, the Socialists, and the Catholic Populars. As the Populars number 105 and Socialists 125 out of a total membership of 535, it follows that no Government can be formed in which one of these parties does not partecipate. Hither to the Populars alone were willing to go into office. But now a new development has occurred: 70 members out of 125 of the Socialists party have declared themselves willing to take office. Their leader, Signor Turati, after 40 years of fight against monarchy and so-called capitalistic constitution, has been received by the King, and has officially given him the advice of the Socialist group on the political situation. The Socialist Labour party is transforming itself from a revolutionary into a constitutional party.

Signor Giolitti says that the change was prompted, not by a change in ideas, but by the fear of the Fascisti. Socialists hope to use the Government weapons – Royal Constabulary (guardia regia) and the army – to repress the aggressions of the Fascisti on Labour organisations. If the accession of the Socialist party to office merely signified better public order, it would be generally welcomed. Many fear, however, that the economic policy of the Socialist in office would be dangerous – public works for unemployed, doles out of public purse to Labour organisations, and a new vast army of followers to be satisfied at public expense.

Professor Bachi’s commodity index number (based upon the average price for 1920, equals 100) shows an increase for June:

The rise is due partly to the rise in the staple prices in foreign markets, but perhaps more to the rise in Italian exchanges, and it is to be feared that July figures will be worse than those for June.

Figures on the cost of living of a working-man’s family of five in Turin show that the improvement reaches its climax in April. Since April, every month marked an increase in retail prices:

Financial markets are not so bad as they might be; the general index number which Professor Bachi publishes for share prices (price of December, 1918, 100) fell from 63.84 at the end of last year to 56.70 at the end of March, but has since recovered to 60.54 at the end of June. The most favoured group has been the textile, which has been encouraged by the rising prices of the raw materials and by the expanding consumption. Stocks have been reduced to a very low ebb, and want replenishing. Motor cars, chemicals, sugar, and food shares are also better. After the long-drawn-out crisis of the Banca Italiana di Sconto, the leading banking shares show some signs of vitality. Rent restriction laws keep shares of building companies low. Generally speaking, the most noticeable fact about share prices is that the depreciation of the lira has not resulted in a great rise in share quotations. «Valuta» booms are ignored in Italy. Limitation by decree of dividends during the war, taxation or confiscation of war profits after the war, fear of new taxation and of compulsory registration of shares, are perhaps the most potent causes of this interesting phenomenon.