Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-04
ITALIAN IS OUSTED
IN LOAN SCANDAL
New York Bank Favored in
Milan Transactions, Com
mittee Reports.
N N. Associated Pres.

By the Associated Press.
ROME, August 3.-Italy ~reverberated
today with its greatest public scandal in
years, involving Ernesto Belloni. former
mayor Of Milan and italian financial
expert at Versailles and the reparations
and debt conferences, and unnamed adj
vtSors.
Belloni was removed summarily late
yesterday by Premier Mussolini from all
public and political activity, and vari-
outs Of his advisors, whose identity has
not been made known, were imprisoned.
The action followed report of a COM
mittee into Belloni's activities as podeata
(mayor) of Milan.
The charges provoking the inveSti-
cation we're leveled by Roberto Fari-
narci, former secretary of the Fascist
party and now provincial secretary at
Cremona. Farinacci claimed Belloni
favored the New York bankers, Dillon,
Read g. Co., in return for a large money
compensation in allotting a loan OF
3 $1,000, 900 to the city of Milan in 1927.
Exonerated by Committee.
The committee exonerated Belloni of
this charge. but found he had used his
Office to increase greatly his private for
tune. He was subjected to scathing
criticism by the premier, who said:
The head of the government deplores
in most forceful manner the action of
Attorney Farinacci, deputy in Parlia-
ment and member of the grand coun-
ell. for having brought publicity and
grave defamatOry accusations touching
dircctly the Fascist party and a great
banking institution Of the United
STATES,
..s, Lnsz aaousa4;on. r,h;nh 49, 49,
mittee has ascertained are wholly with
out foundation, have furnished to re-
mains of anti-Fascists. to radical Ma
sonic elements of Milan, italian and
foreign, pretext for comments to dam
& the kingdom"
The committees report on the Dillon
Read loan was that the loan itself was
regular, but that the negotiations were
carried on by Belloni irregularly.
But, said the committee, "Signor Bel
loni has excited criticism and comments
by the o~stentation which he made dur
ing his period of m~ayoralty. Above all
one notices an extraordinary change in
the term of his life while mayor of
Milan. To Judge from the facts pre-
sented his high station has been. If
not the sole cause, at least one of the
factors, however indirect, of his pri-
vate wealth.
Facts Brought to Light.
Dispositions and declarations Of re-
sponsible administrators have brought
to light a terrible spectacle Of men who
had office and took a noteworthy part
in various public services, particularly
in those of the municipal question. The
former Podesta did not know how to
resist. perhaps because of attendant
circumstances, the deleteriouS influence
of these men, who frequently hid under
the banner of Fascism their Illicit per-
sonal interests. Some of them were sent
today to prison.
His CBellonis) figure appears always
the same in the personal field as in the
political field. He brought into the ad-
ministration of public affairs that spirit
of legerdemain and Neutrality-suspicious.
and sometimes of criminal complacency
which characterized him In private life
and through which he intended to in
sure himself in any event the greatest
or clients, and enlarged through the
municipality his own sphere OF IN
fiuence."
Belloni was examined by the COM
: mittee during its inquiry. His plea
was he undertook extraordinary ex-
penses and contracts for the CITY !
order to- elevate it to splendor In ac-
cordance with directions of the v
eminent and of Premier Mussolinl. the
committee answered:
"But it is evident that dn his pro-
gram he gave excessive n
Interpretation to propositions OF the
duce since, as is natural, every admin
istrative activity, no ma'ter nov - he
portant and noteworthy, ougnC 10 DC
on within the limits OF the laws
and with caution for public FUNDS.
Relloni was president of the Fascist
Congress held in Rome in 192l before
the party came into power. FarInaecl
once occupied the post Q neio py
Augusta Turati, secretary OF the FSscist
party, and as such was premier MUS
solini's r%ight-hand man. A..
Roth men we're Deputies IN the
italian Chamber. and Farlnacco YVES d
member of the Fascist grand councu:
The committee conducting the m
ouiry was composed OF Senator Derlo'
president of the council OF state: Sena@
tor Longhi, president OF the courC VI
cessation, and Gen. Ferrari.
Paving Contracts Involved.
Mentioned in the committees report
as specifc activities OF Bellonl WERE
for instance, paving, repaving. unpaV-
ing and repaving OF Meravlgh streeC,
each time giving the contract to a
in which he was interested
He also was executive In a gas COM
pany which secured favorable gas con-
tracts from the city. ,l
line DllIOI1, FOCdu " W. AOoh
to in the charges was made April. 1927,
and was for SIS per cent interest at
$3.50 lire in the hundred, payable IN
IS years. The Banca Commercials
Italiano made what many considered
a better offer, but was turned down..
other banks bidding for the loan were
J. P. Morgan Co., Blair & Co, Harris
Forbes g. Co., the Guaranty Trust Co.
and the Bankers Trust Co.
The committees report said: "Judg-
ing from documents existing in the city
hall one cannot hide the impression
the procedure followed by the city adj
ministration in the preliminary phases
of the contracting loan was not fol-
lowed with regularity and rigorous eau
ton which the importance of the oper-.
atoms should have demanded. More
over, documents of the negotiations are
missing from the archives"