Evening star., 1922-04-09
BANK SETTLEMENT
ST|RS UP ITALIANS
U. S. Diplomats Also Unable
to Get Funds on Deposit
With DefunCt Firm.
BY EDGAR ANsEL MOwREB.

BY Wireless TO The Star and Chicago Daily
News. Copyright, 1922.
ROME. April S-The governments
method of handling the affairs of the
Banca Italiana Disconto. which met
with financial disaster some months
ago, has aroused the surprise and
Indignation of a large part of the
Italian public. Yet its attitude to-
ward foreign creditors is still stranG-
er, amounting in the case of dipIo-
mats and consuls to depriving them
OF their legal nights. American. Brit
ish and French diplomats all had
deposits in the bank. The Americans
had deposited government funds to
the extent of about $4,000. The
French funds ran into the millions,
but the British deposits were small.
American consuls and diplomatic
officers are held responsible by the
state for all the funds in their hands
wherever deposited or however lost.
When. some years ago, the consulate
burned with its safe the government
held the consul responsible on the
grounds that the funds should have
been deposited in a bank. Now 1t
blames the Disconto losers on the
ground that the funds should have
been in the consular and embassy
safes.
$IO7 100000 I'm Liabilities.
Investigations by legal authorities
show that the Disconto failure WAS
the greatest recorded in many years.
The liabilities Will amount possibly TO
:, 900, 000, 900 lire ($101. 100000 at the
present rate of eXchange). The loss
falls upon some 900, 900 creditors. \
scheme ofF settlement was arranged
by government experts, the old board
of directors and a Self-constItuted
committee of creditors which failed
to represent any large number OF ac-
tual depoSitors.
The conduct of the directors as re-
Tealed is considered to have been
candalouS. Of the 5000 n00.o"o Ire
Of assets more than l.000o00,0o9 lire
we're admittedly lost. OF the remain
der 5000, 900 900 lire represent indus
trial enterprises of dubious value, re-
quiring longtime for realization
1t has been proved that 900.000.0oo
lire were loaned without any secur-
ity whatever. The claim of the old
board that such advances We're mad"
in aid of the war industrial output
fails to hold. because it has been
shown that during the three years
following the armistice the banks ad-
vanced zoo. 100000 lire to the Ansaldo
Company. the plants of which were
admittedly running at constant loss.
The new scheme proposes TO the cred
itors the restitution in two years Of
So per cent of the capital. 81 per cent
in bond issue to be paid by newly
formed bank whenever possible, and
per cent as stock IN the new bank.
1t is objected that such operations
are illegal even If the Italian bank
ing laws appear to permit them.
No Legal Action Allowed.
The fact could be determined by the
Italian or foreign creditors. who are
at liberty to bring suit. But foreign
consular or diplomatic agents are eX-
preSsly forbidden to bring legal ac-
tion against the government to which
they are accredited. The Italian gov
ernment by proclaiming d moratorium
has expressly taken the matter into
its own hands. This moratorium.
proclaimed by ministrial decree apd
without parliamentary discussion.
was issued, the people say. to prevent
the board of directors from saving
the stockholders at the expense of
the depositorS by transferring the
stock to an artifcially created credi-
tor concern.
The claim that the Banca Discouto
was really solvent is refuted by the
proven facts. The action of the
Italian government, it is alleged.
| lends itself to the suspicion of con-
F! stituting interested protection OF
frenzied speculators against the de-
! positors. whom the present CONNER
cial code fails to protect. The failure
to consult the foreign creditors be-
fore reaching a decision to form a
| new bank, or office, the optional with
drawal of their funds has deprived
the foreign consular and diplomatic
agents of the legal rights which they
would normally possess against an
institution in bankruptcy and in the
case of American consuls may result
in their being held responsible for
financial loss many of them will not
be able to meet.