Evening star., 1933-01-23
FASC|STS TIGHTEN
INDUSTRIAL UNITY
New Reconstruction Program
Brings Business More
Under Control.
BY Cable to The Star.

6y CaDle TO Inc star.
ROME, italy, January 23.-Italian
industry today saw itself transformed
by new law into a still greater like
ness to that of a unified and centrally
controlled department store, which Is
the ideal of the cooperative state. and
resembling still less brawling oriental
bazaar, which the Fascists say is the
essence of individualistic capitalism in
other Western countries.
Under new law adopted by the
Council of Ministers, the government
will set up an institute for industrial
reconstruction" which brings business
more than ever under government con-
troll The institute will extend Is to 20
year loans to industries which promise
to reorganiZe.
Since it is impossible for many in
duStries which need credit to obtain it
from any other source. the government
will be able to shape commerce accord
ing to its own ends. This money will
be used to save industries which may
not be in good enough condition to get
ordinary bank credit, but which the
government considers essential to the
IL
to reorganize.
Strict Curb Possible.
The government will be able to re-
duce the enormous number of unprofi-
table small factories which afiict the
country by withholding credit from
those companies which it wishes to
eliminate-and by intimating to the
banks that such companies securities
are not satisfactory collateral for bank
loans.
The new institute also will help in
dustry to reduce its fixed charges by re-
funding Indebtedness and thereby i'm
prove the liquidity of the banks as well.
1t will tend to put Italian industry in a
position to compete as unit against
the disorganized individual industries
of other countries
To the extent that the institute lends
money to industry it will increase the
ties whereby Fascism has bound busi-
ness to itself More and more industry
IS being so shaped and controlled that
in time it will stand or fall with Fas-
cism.
Even supposing that Is years from
now Italy might wish to revert to in
dividualistic capitalism, if the present
tendency continues, such measure
would cause so violent wrench in the
structure of the national economy that
1t would almost bring down the whole
edifice in ruins.
A recent law gave the government the
power to prevent the establishment of
new industries and extend or withhold
loans up to 10 years duration The
new law enables the government actu-
ally to eliminate present industries
and extend credit from Is to 20 years.
Similar to Chain Store.
BY the consolidation and the strength
ening of Italian industry. which are
hoped for from the new law, business
here will have the same advantages
and disadvantages-over industries of
other nationalities that the chain store
has over the individual shopkeeper in
the United States.
The beginnings of the new institute
are humble. Its initial capital is only
$5,000,000. But. as in the case of the
Italian Share Institute, if the begin
nings are successful, its scale operations
undoubtedly will be increased
BY approximately $4,500,000 yearly
for the next 20 years, the government
will, of course, still further increase
its already enormous stake in business
its investment profitable. And the tax
payers willy-nilly will be called upon to
constitute the new stake as they have
in the past.
The new organization, like the Share
Institute. will issue to its own securities
backed by the assets of borrowing COM
panies and, whenever desirable, by gov
ernment guarantees. 1t will supplement
the functions of the Share Institute
which is authorized to lend only up to
10 years.
Also it takes over the Institute of
Liquidation, which has been acting as
receiver for defunct banks. BY attract
ing funds which are too shell-shocked
to be enticed by private securities, the
obligations of the new institute also
are expected to bring about that flow
of credit into industry which is the
urgent need of all capitalistic economies
today.