Italy. Restriction of rents to end. Foreign trade. Great Britain’s share[1]

«The Economist», 3 febbraio 1923, p. 211

Turin, January 29

There is probably no Italian family whose daily talk is not about house rents. This is the universal topic of discussion. By a Royal legislative decree of January 7, 1923, Signor Mussolini attempted to cut the Gordian knot which had grown about the Restriction of Rents Acts. A recent decree of October 23, 1922, the last days of the Facta Government, had prolonged for a year from July 1, 1923, to June, 1924, the war Restriction of Rents Acts, with fixed increases uniform all over the country. After June 30, 1924, till June 30, 1926, rents were to be determined, in case of disagreement, by an arbitration court. After June 30, 1926, absolute freedom was to return.

Public opinion interpreted the Facta-Alessio decree in the sense that after the first year a new lease of life would be conceded to the restriction system, and so on indefinitely. Nobody was troubled about the prospect of restitution of freedom to house landlords. The decree of January 7th, by the Mussolini Government, took the country by surprise. This decree provided that the restriction system was to be abolished at once, as from July 1, 1923.

Freedom of contract was the only remedy to the numerous grievances which had arisen out of the restrictions; uneconomic rents much below the market level; ruin of landlords crushed between fixed rents and high expenses; lack of encouragement to building; the retention of large flats by small families who could not move to other quarters owing to the absolute impossibility of finding vacant houses; the tragic position of new families of public employees and other people obliged to move by reason of their unemployment from town to town, & c. The new freedom is, however, not to be an absolute one. For an intermediate period of three years, from July 1, 1923, to June, 1926, the rents, in case of disagreement, will be fixed by an arbitration court of three members, a landlord, a tenant, and a judiciary umpire as president. Signor Mussolini solemnly admonished landlords not to abuse their restored freedom, as, in the event of excessive increases, restrictions would be re-established. In many cities general agreements have taken place between unions of landlords and tenants. For instance, at Turin the two unions agreed to recommend that, taking as a basis the rents paid in 1914, rents up to 1,000 lire per year should be increased 70 per cent. for yearly leases and 120 per cent. for three-year leases. Rents from 1,001 to 1,600 lire to be increased respectively 80 and 130 per cent. for one and three years’ leases; rents from 1,601 to 2,400 to be increased 100 and 150 per cent.; rents from 2,401 to 4,000 respectively 130 and 220 per cent. Rents above 4,000 to be freely discussed by two parties without any general recommendations. All over Italy agreements more or less similar are taking place. It will be very interesting to follow the results of the courageous experiment made by the Government. Just as Signor Giolitti had the courage to abolish the ruinous bread subsidy which caused a loss of billions yearly and doomed the lira to the fate of the mark, and was not afraid to incur unpopularity among the Socialist masses on that score, so Signor Mussolini has not hesitated to arouse discontent among the working and the middle classes by the abolition of Restriction of Rents Acts. He paved the way to complete freedom by the method of the arbitration courts; but, none the less, his decision is bold and creditable.

The publication of statistics of foreign commerce is belated in Italy. The latest volume published refers to June, 1922, and from this volume we can extract the following figures on the direction of trade for five principal countries. The figures for Germany are exclusive of Reparation payments:

On the import side, the share of the United States, though less than during the war, is greatly in excess of the pre-war share. Germany has not yet recovered her 1913 position. Great Britain is sending us less, especially coal. On the export side, we have almost recovered the old position, in the German markets; France, Switzerland, and Great Britain are better customers for us, while the United States have put up high walls against our exports. It is very unfortunate that Great Britain has abandoned the good practice of admitting our goods free, and is subjecting herself to obloquy by Safeguarding of Industries Acts and other protectionist measures, which are daily quoted by our protectionists as a proof that Great Britain is greatly obstructing our export trade.