The Italian Panama

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The article “The Italian Panama“ was prompted by the debate in the Italian parliament in December 1892-January 1893 on the transgressions at the Banca Romana. The debate was triggered off by a speech made by deputy Colajanni. The shady transactions which came to light and which involved statesmen, quite a few members of parliament, lawyers, journalists and private persons, were labelled “Panamino“ (“Little Panama”). When working on the article, Engels used the materials (parliamentary reports, the press) sent to him by Antonio Labriola, the Italian socialist philosopher, with whom he was corresponding at the time. Knowing that the correspondence was monitored by the Italian authorities, Engels published the article anonymously since, as he wrote to Wilhelm Liebknecht on January 29, 1893, the signature could have "put the chaps in Rome onto the track of my Italian source " (see present edition, Vol. 50). On the Panama affair see Note 333.

I

“Italia, Italia, you really have canaglia“ runs a German student song on Italian bugs and fleas. But apart from the six-legged canaglia there are the two-legged sort there as well, and la belle Italia insists on showing that in this respect it is not outranked either by la belle France with its Panama Affair, or by that chaste Germania with its piety, sanctimoniousness and the Guelph fund.

Italy has its paper-money turned out by six banks, two Tuscan, one Neapolitan, one Sicilian and two Roman: the Banca Romana and the Banca Nazionale. The banknotes of these six privileged banks have currency as fully valid legal tender under a law which expired some years ago, and was then extended from year to year up to December 31, 1892 and finally for three months up to March 31, 1893.

Back under the Crispi administration in 1889 an investigation was ordered into the management of these banks, in view of the renewal of this bank privilege which had become necessary, and because of the disquieting rumours that were circulating. The Baca Nazionale was investigated by Senator Consiglio, the Banc a Romana by Senator Alvisi, an honourable man, to whom was assigned as expert Biagini, a capable official from the Ministry of Finance. Nothing is known up to the present as to what Consiglio has discovered; after Alvisi’s death a copy of the Alvisi report together with all documentary evidence, came into hands generally described as unauthorised, and this led to the Panamino, the little Panama, as the Italians call it.

At that time the Crispi administration quietly pigeonholed the report. Alvisi referred to the matter in the Senate a few times, threatened a scandal, but always allowed himself to be silenced. He was silent too when Minister Miceli, who had ordered the investigation, presented to the Chamber Commission on the next annual prolongation of the Bank Law an enormously white-washing report on the Banc a Romana; and he implored his friend Alvisi not to compromise him and the credit of his country through disclosures. Crispi fell, Rudini replaced him; Rudini fell, and was succeeded by the Giolitti administration now in power. The definitive bank law, which was to reorganise the banks and extend their privilee for six years, was still up in the air. Nobody wanted to nibble this dangerous bait. As in the children’s game “The spark still lives“ the glowing spill passed from hand to hand, until finally, on December 21, the last spark was crushed out, cruelly and without authorisation.

As recently as December 6, 1892, Giolitti had introduced a bill to prolong the bank privilege for six years. But as a result of the embarrassing rumours unauthorisedly circulating about gross irregularities in bank administration, on December 21 Giolitti was quick to demand only a stay of execution for three months—until March 31. During the debate Deputy Colajanni took the floor and read out, to universal astonishment, various passages from Alvisi’s general report on the Banc a Romana, and from Biagini’s special report on the books and holdings which he had checked. Fine things came to light! Nine million francs in illegally issued excess banknotes; an intermingling, contrary to the statutes, of the bank funds and the gold reserve extremely agreeable to the bank governor and cashier; a portfolio full of totally irredeemable fictitious bills; 73 million from the bank funds advanced to 179 privileged persons; 33^1/2 million of this amount to just 19 persons; amongst the bank debtors there figured Tanlongo, the bank governor, with over one million and Prince Giulio Torlonia, chairman of the board of directors, with 4 million, etc., etc. Colajanni gave no further names, but made it clear that he knew more than he had said, and demanded a parliamentary investigation of the banks.

Another deputy, Gavazzi, then read out a further passage from the report, according to which the Banc a Romana had made large advances to lawyers, journalists and political figures, and that such special clients had received monies up to 12 million, which did not figure in the published balance sheets.

Up jumped Miceli, the ex-minister, who had ordered the investigation under Crispi. Up jumped Giolitti, Crispi, Rudini, one after another, the three prime ministers involved, to declare that these disclosures were fabrications.

And what a depth of moral indignation they displayed! A German commercial traveller, confronted with goods ordered from him on sound samples and then delivered in poor quality, could not have shown more righteous rage.

On the same day deputies exchanged banknotes of the Banca Romana to the value of over 50,000 francs at the bank counter of the Chamber, and the shares (nominal par 1,000 fr.) fell by 100 francs. But after the heroic ministerial speeches, the stock exchange people were on top again that very same evening. Impressions were that the scandal was dead and buried.

II

But every word uttered by Colajanni was true, and it was scarcely one third of what the investigation report contained. Tanlongo the governor, Lazzaroni the chief cashier and Torlonia, chairman of the board of directors, had quite cosily authorised advances up to nine million. According to Tanlongo’s testimony the bank was altogether managed “cosily “ — patriarcalmente; so cosily that the funds which should have guaranteed easier credit for commerce and industry had been loaned on bad and practically irredeemable mortgages, or to persons whose knowledge of industry was confined to a cavalier treatment of every financial obligation, against constantly prolonged bills of exchange, or even on open current account. It was run so cosily that gradually almost all journalists and no fewer than one-hundred-and-fifty members of the current Chamber of Deputies, most of them notoriously insolvent, or even living solely upon debts, were carried on the books of the bank as debtors. A list of these clients was also attached to Alvisi’s report; on this list, apart from only one deputy of the right wing, Arbib, there figured almost all persuasions of the left with sums of 500,000-600,000 fr. per head. The bearer of a name honoured throughout the world is amongst them, as are two current ministers—Grimaldi and Martini; Grimaldi is even one of the legal advisers of the bank with an annual salary of 25,000 fr. That was already quite jolly, but that was in 1889, that was just the beginning, that was not even a Panamino, it was only a Panaminetto, a very very small Panama.

These delicate matters and others, naturally including exagger-ated rumours, spread slowly and bit by bit amongst the public, once Colajanni’s speech had started things off. The public began to withdraw deposits from the Banca Romana—in a few days more than 9 million of the total 14 million deposited—and to regard its notes with distrust. The government felt that action must now be taken. Something which had been shuffled for years from one administration to another—regulation of the banks and paper-money—was now to be accomplished helter-skelter. At the beginning of January negotiations were initiated on the amalgamation of the two Roman and the two Tuscan banks as one large credit institution, and at the same time the administration ordered a new inspection of the banks. The Banca Nazionale, which was to constitute the core of the new institution, naturally declined to take over the sins of the Banca Romana unseen; it made difficulties and low offers. All this got around; distrust grew into panic. The city of Rome withdrew from the Banca Romana its credit balance of over one million, and the Savings Bank also retrieved its deposit of over 500,000 fr. The shares of the Banca Romana, which had fallen after Colajanni’s speech to 670, were quoted on January 15 at just 504 fr. for 1,000 fr. face value. In the north of the country people began refusing to accept the notes of this bank.

And now rumours seeped out to the public about the still more astounding results of the new inspection of the Banca Romana. Admittedly, Prince Giulio Torlonia had paid off his debt: on January 13, 4 million, on the 14th a further 600,000 fr., on the 15th the remaining 2 million. Admittedly, Tanlongo the governor, and Lazzaroni the cashier had made over to the bank their entire large fortunes against their debts. Admittedly, “ a very high -ranking person”—the Corriere di Napoli pointed out with the broadest of hints at the king —had paid the bank debts of Minister Grimaldi and the members of his family. Admittedly, the constitutional-radical Deputy Fortis had issued a declaration that the credit granted him had been sanctioned in his capacity of legal adviser to the bank. But what was all this against the news that the new inspection had revealed that the Banca Romana, which was permitted to issue 70 million in banknotes, had put 133 million in circulation; that, in order to conceal this, fake creditors to the tune of 49 million figured in the books, and that Governor Tanlongo had withdrawn 25 million on a simple receipt dated as recently as January 3, 1893 (Secolo, January 21-22). Further it was whispered that the gold reserves had, it is true, been found to be in order, but only because Baron Michèle Lazzaroni, nephew of the chief cashier, had borrowed from Swiss business friends sundry millions in cash for a few days specially for this purpose, promising he would immediately return them in natura after the inspection had been made; but this will be somewhat difficult, as the government has, in the meantime, impounded all the funds of the Banca Romana. And now disclosures came rattling out here, there and everywhere; now the names of the 150 deputies circulated with greater or lesser accuracy and certainty; now it could no longer be denied that at least the last three administrations had known all about the business. That they had put the money of the bank regularly and in large quantities at the disposal of their supporters for election purposes, that they had frequently discussed the misappropriations in the Council of Ministers and had intentionally kept them secret in full knowledge of the responsibility they thus incurred—that they had thus assented to their continuation.

How pale in contrast was Biagini’s report published in the Corriere di Napoli, January 19-20. The Panamino was there.

Ill

The crisis could no longer be avoided. Amongst the people who had cheated with the bank and blown and blued its funds—by means of honest tick, of course—one section disposed of public power, the other not. It was abundantly clear that as soon as the knife was put to their throats, the first section would sacrifice the second. One accomplice took the lofty decision to be the hangman of the other. Just as in France. There too Rouvier, Floquet, Freycinet and Co. similarly sacrificed Lesseps and Fontane; they and their accomplices had often enough, as Charles Lesseps said, “put the knife to our throats “ to squeeze, from Panama, funds for political purposes. In exactly the same way Giolitti and Grimaldi sacrificed their bosom friend Tanlongo, after they and their predecessors had extracted from him bank money for electoral and pressure purposes for so long that nothing remained but the crash. And when Grimaldi’s debts had been paid off in the familiar secretive way, it was he who called loudest for Tanlongo’s arrest.

But Tanlongo is a thoroughly crafty old Italian who knows all the tricks of the trade, not a greenhorn in swindling like Charles Lesseps and the other puppets, who had to run Panam a for Reinach and Co. Tanlongo is a pious man who went to mass every morning at 4; here he fixed his deals with representatives and middlemen—no scandal on me, dear child —whom he did not want to see on his bank premises. Tanlongo was on excellent terms with the Vatican, and he is said to have conveved into the safety of the Vatican, untouchable to the Italian police, a small casket containing those documents which guarantee him against his powerful friends and patrons, those documents which he does not wish to entrust too nastily to the law. For in Italy with its Panamino, just as in France with its Panama, there are strong suspicions that the domicilary searches by the law sometimes serve not to bring documents to light, but rather to make them disappear. And Tanlongo feels that certain documents which are to defend him and clarify the real state of affairs are not safe with the Italian examining magistrate, but only in the Vatican.

Enough. Scarcely had the ministry concluded the business of the Banca Nazionale, by which the latter takes over the entire assets and liabilities of the Banca Romana and pays the shareholders 450 fr. for each 1,000 fr. share; scarcely did it believe that it had thereby protected from publication the names of the political bank debtors, than worthy Tanlongo met his fate—the ingratitude which is the reward of bourgeois politics. From the evening of January 16 his house was watched; on the nineteenth he and chief cashier Lazzaroni were arrested.

This did not hit him unexpectedly. Earlier he had told a journalist from the Parlamente.

“They may lock me up, but they should consider that they will be playing a bad card.. . if they want to hold me responsible for the sins of other people then I shall be forced to create a scandal.. . They want to ruin me? Then I shall drag into the public eye the names of people who demanded from me million upon million. How often did I say: I cannot provide them, the only reply was: they are necessary (occorrono). And I have the proof of this .. . it is always the same; the more I did, the more they kicked me in the face; but if I fall then I shall be in good company.”

And when the sick old man, who had been held in custody until then in this palace, was taken to Regina Coeli prison on the 25th, he said to the officials who accompanied him: “ I shall come, but I reserve the right to make disclosures, “ and to his family he said: “They would like to see me die in prison, but I have strength enough to take revenge. “

He does not look the man to go to pieces in open court session, like the Paris Panama directors who, instead of crushing their prosecutors with the incriminating facts, ten times as grave, which stood at their disposal, begged in silence for a mild sentence. Palsied as he is, the newspapers describe him as a large boney man, “ a real cuirassier of seventy”, and his whole past vouches that he knows he can only find salvation in violent combat, in the toughest resistance; and so it will surely come that one fine day the notorious cassetta d’oro will find its way from the Vatican to the courtroom, and spread its contents on the court table. Bon appétit!

In the meantime the Chambers went into session again on the 25th, and the scandal has started up there too. Giolitti can only shout to his 150 what Rouvier shouted to his 104: If we had not taken this money, then you would not be seated here. And that is a fact. And Crispi and Rudini can only say the same. But that is not the end of the matter. Further revelations are bound to follow, both in the Chamber and in the courtroom. The Panamino, like the Panama, stands only at the start of its development.

And what is the moral of the story? That the Panama, and the Panamino, and the Guelph funds demonstrate the whole of bourgeois politics, both the pleasing squabble between the bourgeois parties themselves, and their collective resistance to the pressure of the working class, cannot be undertaken without enormous volumes of money; that these volumes of money are used for purposes which cannot be publicly admitted; and that owing to the tight-fistedness of the bourgeoisie governments find themselves increasingly constrained to obtain by unutterable means the cash for these unutterable ends. “We take the money where we find it,” said Bismarck, who must know. And we have just seen “where we find it”.