Although Italy made some territorial gains at the post-war treaty of Versailles (14,500 square kilometres), this was not the view conveyed to the Italian people. Of the land promised in the Treaty of London, Italy failed to receive Dalmatia and African Colonies. Furthermore they had expected to receive Fiume, even though they weren't promised it. Nationalists promoted the idea that their victory was "mutilated", and held the liberal government responsible. Because Italy did not receive everything it was promised in the treaty of London, Nationalists were able to portray the liberals as weak, and as a result Prime Minister Orlando resigned shortly after the treaty was signed.
The failures of the liberal government in the post-war treaties was highlighted by d'Annunzio's occupation of Fiume. Although Fiume was not mentioned in the Treaty of London, and therefore hadn't been promised to Italy, most of its inhabitants were Italian, although the surrounding suburbs and countryside was mainly Croat. After the war, Nationalist Italians demanded the major Adriatic port became part of Italy, but in 1918 it was occupied by Allied troops. In the Versailles settlement, Italy failed to gain Fiume, becoming an example of the "mutilated victory".
In September 1919 d'Annunzio, with 2000 supporters including 300 war veterans, seized the area and held it for 15 months. The Italian Government did nothing, and thousands of supporters rushed to join him. For the entire occupation d'Annunzio was in the public eye, and he demonstrated how violence and direct action was a viable alternative to the politics of the liberal government. The occupation also highlighted the weaknesses and divisions with the liberal government. Nitti, Prime Minister when d'Annunzio seized Fiume did nothing, but Giolitti, the next Prime Minister drove d'Annunzio out. Further more it to 15 months for the government to act. In addition, Italians could contrast the dynamic leadership and action of d'Annunzio with the poor performance of the liberals at the Versailles treaty.
Between “1918-1920” unions grew in popularity. By 1920, the socialist unions had 2 million members, and the Catholic unions had over 1 million. This resulted in a wave of strikes in industry and agriculture, a major threat to big business and large landowners. Between August and September 1920, over 300 factories were occupied by the workers, and between 1919 and 1920, returning peasant soldiers occupied uncultivated land and landlords' land. The Government legalised these land occupations, and by 1921 over 1 million hectares of land had been transferred to the peasants. All of this action forced employers to improve relations with the workers, improving conditions and wages.
The growth of Fascism
Many historians believe that the difficulties Italy faced after the war led to the rise of fascism because fascist leaders struck Italy when it was most vulnerable and took control from there.
The Fascist movement was founded in March 1919 in Milan by Mussolini. Inspired by right wing revolutionaries like D’Annunzio (although they later became arch enemies) and supported by the masses of war veterans, the movement grew rapidly in areas of the north between 1920 and 1921. Over 2000 people were killed in clashes between Socialists and Fascists between 1919 and 1922, and this growth in support for extremism eventually led to the Fascist March on Rome and seizure of many cities in October 1922.
Overall Italy received much less than they were promised after WWI, and it cost them hugely. Nowadays historians believe Italy got a fair reward, but at the time most Italians felt cheated.
By the end of the war in 1918, 600,000 Italians were dead, 950,000 were wounded and 250,000 were crippled for life. The war cost more than the government had spent in the previous 50 years – and Italy had only been in the war three years. By 1918, the country was hit by very high inflation and unemployment was high. But at least Italy had been on the winning side and could expect her just rewards at Versailles.........
In fact, Italy got very little at Versailles. The Italian public believed that her leaders there had been humiliated as the "Big Three" (Wilson of America, Lloyd George of Britain and Clemenceau of France) all but ignored the Italian delegations that were seen as secondary figures at Versailles. This heaped further humiliation on the government.
The Italians did not get what they felt had been promised at the Treaty of London and that caused resentment especially at the losses Italy had endured fighting for the Allies. The government came over as weak and lacking pride in Italy. For nationalists, the failure of the government to stand up to the "Big Three" at Versailles was unforgivable.