Political instability reigned in the recession that followed the war. The Communists started demonstrating in Milan. To counter them, Mussolini formed the Fascist party. They didn't win a single seat in the senate and the Socialists even created a mock funeral for his party. The progressive Popolare party won the most seats in the senate in 1919. The leader of that party, Giolitti, wanted to gain more power, so he created a union with the Fascists against the Socialists in 1921. With Fascist support, the government unseated Socialists and, consequently, the Fascists won thirty-five out of 535 seats.

Giolitti's moderate coalition was falling apart and Mussolini started talking with the opposition. In August, 1922, the Socialists proclaimed a general strike. Mussolini seized the opportunity to increase support by breaking the strike while the government did nothing.

Mussolini needed seats in the cabinet, but he knew that he could not win them democratically yet. He organized a siege of Rome on October 28. The next day, he was called to the palace to form a new government.

Early on, Mussolini gained further popularity by giving only four cabinet seats to Fascists. This show of restraint triggered a senate vote to give Mussolini full power to reform the government. He still only had thirty-five of the 535 seats in the senate. To gain more later, he passed a law giving the party with the most votes two-thirds of the senate seats; he claimed this law was to create a more stable government, and it passed easily.

When Mussolini heard of the deaths of several Italians in an incident in Greek territory near Albania, he wasted no time in demanding an apology and 50 million lire in restitution. When the Greeks refused, Mussolini dropped bombs on Corfu and landed Italian marines on the island. He soon had the money and the apology; Mussolini was an Italian hero. In 1924, Mussolini won more votes than every other party combined, thus allowing him the two-thirds majority in the senate. In June 1924, a prominent Socialist and outspoken critic of Mussolini named Matteoti was kidnapped. News soon spread and Mussolini was blamed for the kidnapping, and upon discovery of Matteoti's body in August, the murder as well.

Luckily for Mussolini, the Socialists did not seize this opportunity to disrupt his power. In fact, Mussolini grew bolder after a newspaper blamed him for the death. He issued a decree allowing local authorities to censor the newspapers. Mussolini delivered a speech promising swift action to promote peace and calm in Italy. Within two days, he was well on his way to creating a dictatorship. Opposition clubs and offices were closed, newspapers were taken over, houses were randomly searched. Opponents of fascism were punished in the traditional D'Annunzio method; forced consumption of pints of castor oil or a live toad. Between 1925 and 1926, there were three attempts on Mussolini's life; he used the attempts as an excuse to promote more authoritarian reforms.

Local mayors were replaced by appointed officials. The king was stripped of his power to select a successor for the head of state. In 1926, the Fascists passed a bill giving Mussolini the power to issue decrees that would have the full strength of law. During this time, Mussolini became known as Il Duce. At first party membership was very selective, but it slowly grew more and more expected. In 1932, civil servants, teachers, and army officers had to be members of the Fascist party.

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