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Abstract
The Italian joint-stock banking system has faced three main crises: in 1897, with the demise of Società Generale Italiana di Credito Mobiliare (Pantaleoni, 1936); in 1921–1923, with the crisis of two of the four main joint-stock banks, Banca Italiana di Sconto (Falchero, 1990) and Banco di Roma (De'; Stefani, 1960; De Rosa, 1982–1983); and, in 1931–1933, with the disappearance of both the renewed Banco di Roma and the remaining two joint-stock banks, Banca Commerciale Italiana and Credito Italiano (De Rosa, 1982–1983; Confalonieri, 1994).
After a brief examination of the nature of the Italian banking system on the eve of the First World War and the post-war economic situation, this paper examines in detail the crisis of the ‘mixed’ banking system in Italy of 1921–1923. The problems faced by the Banca Italiana di Sconto and the Banco di Roma are interpreted from the perspectives of oligopoly theory and the influence of politics. This approach is informed by a new reading of the documentary evidence, integrated with unpublished or neglected material. The paper also considers the role of the State, in relation to special legislation, and the macroeconomic costs suffered by the Treasury, together with the problems of the equilibria of joint-stock banking, banking liquidity, inter-bank competition, and monetary politics, both during and after the crises. The paper concludes with some lessons that can be learnt from the crises in terms of economic policy, primarily in the banking and monetary fields, in the light of the interactions with the political world.
Notes
1. Giovanni Giolitti (1842–1928) was MP from 1882 to 1928. Originally a left-liberal with Depretis in 1882, he then opposed Depretis, becoming Minister of the Treasury under the nationalist Crispi (1889), subsequently opposing Crispi and becoming prime minister with the left in 1892; he was involved in the scandal of Banca Romana; prime minister again 1903–5 with the extreme left; prime minister 1907–1909, and once more in 1911; headed the neutralists in 1914; and prime minister again in 1920–1921.
2. The failures of Banca Generale (1893) and Società Generale di Credito Mobiliare (est. 1863, failed 1893) originated the seminal essay by Pantaleoni (1926).
3. During the war years, a major problem had been the financing of firms manufacturing goods for the army and therefore, by extension, for the government. This had led to the formation of Consorzio Sovvenzioni su Valori Industriali (Consortium for financial backing secured by financial paper)—CSVI, 50 per cent of which was later taken on (1921) by Cassa Depositi e Prestiti, the State Agency devoted to financing municipalities and state activities in the field of economics and also to raising deposits. CSVI was to make a comeback in the crises affecting the Banca Italiana di Sconto, Banco di Roma and others.
4. Within the Orlando cabinet (October 1917–June 1919), F. S. Nitti, Minister of the Treasury, was dismissed in favour of B. Stringher, who was seconded from the position of general manager of the Bank of Italy and became Minister from January to June 1919. Two Nitti cabinets then followed (June 1919–June 1920), in the second of which the Finance Minister, De Nava, also took as an interim measure the Industry and Trade portfolio; according to Nitti’s Memoirs, this latter cabinet was forced to disband as a result of pressure from big business, in particular, COMIT; a Giolitti cabinet followed (June 1920–July 1921), in which I. Bonomi was Minister of the Treasury from April to July 1921; this was succeeded by a Bonomi cabinet (July 1921–February 1922), with B. Belotti as Minister for Industry and Trade.
5. In 1915 the majority of the members of its board were foreigners, in particular, Germans.
6. For the English reader the main source on this point is Sraffa Citation(1922) but, unfortunately, this lively written article is generally tendentious and, in certain respects, factually incorrect. BIS was a ‘new bank’ only in so far as it derived from the merger in July 1915 between Banca di Busto Arsizio and Società Bancaria Italiana; both these banks, however, had long histories (Galli della Loggia, Citation1970; Falchero, Citation2000).
7. Ansaldo’s production was spread across more than 40 industrial plants, with roughly 110,000 employees.
8. In 1918 a new minister for War Supplies was appointed: Silvio Crespi, the chief executive officer of COMIT. Likewise a new high commissar for Arms, Munitions and Aeronautics was appointed in 1918 (and up to 1920), Ettore Conti, deputy chairman of COMIT.
9. The new minister, who chose not to renew the Nava decree, was Belotti, the personal lawyer of Silvio Crespi, the chief executive officer of COMIT.
10. See correspondence between B. Stringher and G. Toeplitz in November–December 1921 (Ivone, Citation2005: pp. 12–30).
11. The institution of the moratorium had been introduced in the commercial code of 1882 in order to safeguard the insolvent merchant who, with debts within the limits of his patrimony, was forced to stop payments due to sudden difficulties, consequently delaying collection (arts. 819–829). ‘In these cases, a moratorium, in other words a favourable respite that frees him from the isolated and collective enforcement of creditors, can be instrumental in saving him and the market from a series of failures’ (Longhi, Citation1930: p. 359). This, in effect, allowed the merchant to personally sell his assets in the interest of creditors under the surveillance of a special commission (sect. 823). Once permitted, the moratorium interrupted the bankruptcy for 6 months maximum (sect. 824): it substantially represented a voluntary liquidation of assets. The whole of sections 819–829 were subsequently abolished by the Law of 24 May 1903, n. 197, but resurrected during the war permitting all firms whose payments were influenced by the war, once approved by the Court, to postpone them until 60 days after the end of the war (Decreto Luogotenenziale 27 May 1915).
12. In particular the appointment of Vittorio Carlo Vitali (1877), lawyer and manager of Credito Commerciale (Cremona), who was a member of the board of BdR from 9 February 1923 to 15 March 1940 (managing director 1923–1928, deputy chairman, 1928–1940). He was also deputy chairman of the Associazione Bancaria Italiana, 1919–1926, and a member of the board of various Fascist Banking Associations, 1926–1944.
13. This section is largely drawn from the unpublished ‘Relazione sulle gestioni assunte dall’Istituto di Liquidazioni a norma del Regio Decreto 6 novembre 1926, n° 1832’, in Archivio Storico IRI / Numerazione Nera / Istituto di Liquidazioni / s2.1-f3-p2; additional data are taken from Sezione Speciale Autonoma del Consorzio per Sovvenzioni su Valori Industriali Citation(1926).