Greater Romania: Politics, Economy and Society

Politics (1919-1940)Greater Romania is considered to be a real political success from the previous period (lasting

between The Independence War and the World War I). A great number of foreign historians agree upon the idea that Romania was the most winning country after the World War I.

Romania’s economic force developed significantly, and this thing led to the creation of a perfect framework for a future development process. Thus, Romania’s surface grew from 137 000 km2

in 1914 to 295 049 km2 after the year 19181. Moreover, the arable surface enlarged from 6,6 mil hectares to 14, 6 mil hectares.

Nevertheless, Romanian politics underwent severe changes after the World War I, mostly due to the two reforms established in 1918 and applied later on. However, the major problem in Romanian political life in the inter-war period was the permanent confrontation between democracy and an authoritarian regime. If it is to consider that before the World War I, the political life was dominated by a rotation system of government between the Liberals and the Conservatives, in November 1918 all this system was radically changed due to the establishment of the universal vote reform. One single party was strong enough to keep up with all these changes, and this was The National Liberal Party.

Romanian political life interfered with formidable obstacles. First of all, there were the habits and traditions of a half-century. Great masses of peasants were characterised by a lack of experience, caused mostly by the fact that they had been excluded almost totally from the political scene. This inexperience together with the apathy of the numerous peasants, were not totally overcome, and as a result, the impact of the universal vote reform got diminished.

The elective basis of the Conservative Party2 was strongly affected by the elimination of the college system which meant changing them with a new proportional vote system. The Conservative Party would totally vanish in 1925. The Liberals (who constituted the most powerful political organisation of the ’20s), didn’t bother much with the habits of a half-century. Theoretically, they prefered to run the elections in an old-fashioned manner and to govern in an authoritarian way through a small financial and industrial oligarchy. Beside some traditional existing parties, there were a lot of organizations and individuals who were against European modern ideas; which meant urbanism, industry, rationalism and last but not least, democratic political institutions. Thus, those who sustained Nichifor Crainic and Nae Ionescu, promoted a favourable climate for developing extreme nationalist and authoritarian political movements.

The accession of Carol II to the throne in 1930 meant a real bad inspired moment for democracy, because he didn’t want to make a secret from the fact that he hated parliamentary institutions and that he wanted to impose himself as a decisive power in the state. The influence of the nazi Germany and the fascist Italy made those who were both for and against democracy to arrive at the conclusion that the Romanian political future belonged to authoritarianism, almost because top democratic parties that used to be once leaders, began now to lose their fame. They didn’t seem to be well prepared to resist the pressures inside and outside the country, so they had nothing else to do but to accept Carol’s II dictatorship in 1938. This moment marked the end of democratic regimes in Romania.

1 Aron Petric [coord], In: Istoria Romaniei intre 1918-1981, editura Didactica si Pedagogica, Bucuresti, 1981, pp 5; Ioan Scurtu, Constantin Mocanu, Doina Smarcea, Documente privind Istoria Romaniei intre 1918-1944, editura Didactica si Pedagogica, Bucuresti 1995.2 Ion Bulei, Conservatori si conservatorism in Romania, Editura Enciclopedica, Bucuresti, 2000, pp 643-667.

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Turning back to the Conservatives, it is to be mentioned the fact that they were severely affected by the agrarian reform, as it marked a big shock in their economic field, because they were great landowners. The period which followed after 1918 was characterised by a huge wave of socialist and working-class movements. As a result, in 1921, The Romanian Comunist Party was born, as a branch of the Socialist Party. This wave determined the split of a working-class movement, which would coexist in 4 Left Wing parties. Between 1924-1944, the Romanian Comunist Party would function illegally, after there were a few agressive incidents at Tarar-Bunar.3

In the inter-war period, as well as during the reign of Charles I, the king was considered to be the key-element of the political scene. The new Constitution adopted in 1923 , kept the fundamental points from the Constitution of 1866, but a few articles were modified (to be more precise, the number of the articles grew from 133 to 138 and 7 new ones were introduced).4 According to this new Constitution, the king could choose the ministers even outside the Parliament, but it was the tradition which obliged him to take into consideration what the majority party inside the Parliament wished. He could also had the authority of signing treaties of alliance, but only after they were ratified by the Parliament (that had the power to declare war or peace). All the limitations on the royal powers were respected by a monarch such as Ferdinand, but at the same time were ineffective when it comes to the incredible thrist of power that Carol II had.

The reforms which developed in the period of 1917-1923 radically changed the old social and political structures, by giving birth (institutionally speaking) to a very distinct image of Romania. First of all, it is important to talk about the agrarian reform which existed in the National Liberal Party’s programme even before the World War I would burst. In April 1917, in order to encourage the peasants to go and fight in the war, king Ferdinand made a proclamation according to which, after the war would have been won, the great lands would be divided between the peasants. Thus, in 1921, when this reform was finally voted, Romania became a country composed of small landowners, instead of great ones. This is the moment when the Conservative Party totally disintegrated itself, because it was severely affected by the agrarian reform and also by the adoption of the universal vote policy. A small part of those who remained faithfull to the Conservative Party, moved to a new created party, led by Alexandru Averescu, who was considered to be one of the great heroes of the World War I. Averescu, who was a political conservative and had a close connection with Take Ionescu, was the heart and soul of the party. He formed his own party, called People’s League and later on, People’s Party. This party will disappear together with the “myth of the marshal”.

The National Liberal Party was farly seen as the most important party of the inter-war period, playing a significant role in the political life of our country. During the ‘20s, some Liberal theoreticians, like Stefan Zelentin and Dimitrie Draghicescu, tried to gain the general acceptance over the idea that the National Liberal Party represented the whole nation (taking into consideration its dominant place in the economy and politics).It was composed of the so-called old liberals, who constituted in the ‘30s the official party and who were against Carol’s II attempts to impose an authoritarian regime. On the other hand, there were the young liberals, led by Gheorghe Tatarescu and who were for imposing a dictatorship; last, but not least, there were also some disidents grouped around Gheorghe Bratianu, who considered as being favourable the maintenance of a parliamentary system, refusing Carol’s II political ambitions, but who agreed upon a tight cooperation with Germany in the external relations. Nevertheless, the period between 1922-1926 represented the apogee of the National Liberal Party, as I.I.C Bratianu’s government succeeded in solving properly some difficult issues (both administrative and legislative). For example, this was the period of economic re-establishment, the

3 Ioan Scurtu [coord], In: Istoria Basarabiei de la inceputuri pana in 1994, editura Tempus, Bucuresti, 1994, pp 255-257.4 Ion Bulei, O Istorie a Romanilor, editura Meronia, Bucuresti, 2007, the 3rd edition revised, pp 156.

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application of reforms, the adoption of a new Constitution. Stefan Zeletin, a critical representative of the neoliberalism of that period, considered that the Constitution was the exclusive expression of the Romanian Neoliberalism.5 During their 4 years in office, the Liberals paid attention mostly to the development of the economic branch (especially to that of industry). However, after 1930s, the Liberal’s role would decrease slowly, especially because the important leaders died one by one (1927- I.I.C.Bratianu; in 1930-Vintila Bratianu; in 1933-I.G.Duca). As a result, they were substituted by a group of people who were either lacking experience in political matters or susceptible to influence, all in all, we can admit that they were slightly different from their predecessors.

If before 1914, the alternance of the parties was between The National Liberal Party and the Conservative Party, in the inter-war period the main opponent of the National Liberal Party would be the National-Peasant Party. The National-Peasant Party appeared in 1926, through the fusion of the National Party of Transilvania, led by Iuliu Maniu, with the Peasant Party, which appeared in 1918 6

and was led by the teacher Ion Mihalache (who was the president of the General Association of Teachers and who directly interfered with the mentality and aspirations of the peasants, fighting for their welfare and democracy). The economic politics of Romania was changed due to the National-Peasant Party, that after won the elections from 1928 (77,76%)7, would apply a free-open politics for the foreign capital. Although this new created party meant a serious rival for the National Liberal Party, the members of the National-Peasant Party made some serious tactical mistakes, like that of accepting Carol’s come-back on 6th June 1930 or the electoral “alliance” with the League of the Archangel Mihail (Liga Arhanghelului Mihail) in 1937.

The very beginnings of the iron-guardist movement started in 1922-1923, when Corneliu Zelea Codreanu firstly founded the Association of The Christian Students and secondly, together with A.C.Cuza (teacher of political economy at the University in Iasi), the League of National Christian Defence (Liga Apararii National Crestine-LANC). The final organization took place in 1927, when the League of the Archangel Mihail8 was founded; after 1930s this was known also as The Iron-Guard. It promoted a nationalist anti-Semite and anti-Occidental spirit, and also a form of worship of the leader and of the elites. They wanted to clean up the corruption existing in the country, to remove the cosmopolitan influence of the Jews and freemasons and to return at a mythical and popular past (they used the phrase: “Let us build a country as holy as the Sun!”). The Jews were regarded as being the main threat for the national development of the country (due to their incredible economic rivalry); in the inter-war period the most virulent reactions of anti-Semite could be seen at people like Nicolae.C Paulescu and A.C.Cuza. In 1933, after Hitler’s victory at the elections in Germany, the iron-guardists prepared for the elections which were about to come such a violent fascist, anti-Occidental and anti Semite programme, that the leader of the National Liberal Party (I.G.Duca who was in charge by Carol II to organize the elections) thought it was right to forbid the Iron-Guard to take part in the elections. As a result, three weeks later, he was assassinated by three iron-guardists in Sinaia railway station.

In the inter-war period, Romanian political scene was marked by the problem of throne succession, which manifested as a dynastic crisis9. In 1927, at the moment when king Ferdinand was dead, Carol was officially disinherited and the throne passed to his son, Mihai, who was only 6 years

5 Stefan Zeletin, Burghezia romaneasca-originea si rolul ei istoric”, Bucuresti, Editura Humanitas, 1991; Stefan Zeletin, Neoliberalismul, editura Scripta, Bucuresti, 1992, 3rd edition.6 Ioan Scurtu, Istoria Partidului Taranesc (1918-1926), editura Enciclopedica, Bucuresti, 2002, 2nd edition, pp 25-42.7 Al.Ghe.Savu, Sistemul Partidelor Politice din Romania 1919-1940, editura Stiintifica si Enciclopedica, Bucuresti 1976, pp 32. 8 Vlad Georgescu, In: Stelian Neagoe [editor], Istoria Romanilor, de la origini pana in zilele noastre, edition IV, editura Humanitas, Bucuresti, 1995, pp 213.9 Ioan Scurtu, Criza dinastica din Romania (1925-1930), editura Enciclopedica, Bucuresti, 1996.

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old. 3 years later, Carol changed his mind and with the help of the members of National-Peasant Party he took over the throne. The apogee of his politics was reached in 1938, when he established a royal dictatorship10, applying a “divide et impera” form of politics. The application of this dictatorial regime meant the end of democracy in the inter-war period in Romania. Nevertheless, Romania is the last country in Europe to have had a royal dictatorship, as Carol II was influenced by the ascension of the extreme right movements which were taking place at that time in Europe: first example which is worth mentioning is Benito Mussolini’s establishment of the fascist movement in Italy(1922); the second one would be Poland in 1926 with marshal Pilsudski’s dictatorship; the third and the most important one is Germany in 1933 when Adolf Hitler took over the power; Greece in 1936 wih general Metaxa’s dictatorship and last but not least, Franco’s dictatorial regime in Spain (1936). In spite of this situation, after a year or two, Carol II was somehow lucky to having taken advantage of the re-establisment of global economic situation, which had good effects over our country in terms of economic progress and infrastructure: for example, the first roads laid with asphalt were done during that period.

On 16th December 1938 a new organization was founded under the name of The Front of National Renaissance, whose basic principle was that of bureaucratic centralism. Decisions about policy and personnel were made at the top and then transmitted to the local units of the Front. The members of the Front were not allowed to elect or to be elected to positions of leadership at any level. At the end of 1939, Carol admitted that his attempt to obtain a mass support for his dictatorship with the help of the Front had failed. The most striking thing about the organization of the Front was that Carol II didn’t manage to create a general concept concerning what type of regime he and his counsellors wanted.

In conclusion, when talking about Greater Romania is worth saying that it was the work of people who belonged to the old country; those were the people who cleverly knew how to use the favourable international circumstances for creating a reunification of Romania. Without all those versatile political figures of the “old Romania”, the new one would never have been possible. Greater Romania didn’t mean only expanded borders or re-unified provincies; it also meant a new social and political system; it meant the creation of a new liberal democracy and precisely from this point of view, Greater Romania was the “masterpiece” of some political people who were intellectually formed in the 19th century (especially The Bratianu family and their supporters), all of them representing European democratic spirits. Eventually they called for radical reforms in order to modernize from the ground the economic, social and political structures of the new created state.

Bibliography:Keith Hitchins, Rumania, 1866-1947, (Oxford: Clarendon Press, 1994), pp 377-425.

Aron Petric [coord], In: Istoria Romaniei intre 1918-1981, editura Didactica si Pedagogica, Bucuresti, 1981, pp 5; Ioan Scurtu, Constantin Mocanu, Doina Smarcea, Documente privind Istoria Romaniei intre 1918-1944, editura Didactica si Pedagogica, Bucuresti 1995.

Ion Bulei, Conservatori si conservatorism in Romania, Editura Enciclopedica, Bucuresti, 2000, pp 643-667.Ioan Scurtu [coord], In: Istoria Basarabiei de la inceputuri pana in 1994, editura Tempus, Bucuresti, 1994, pp 255-257.Ion Bulei, O Istorie a Romanilor, editura Meronia, Bucuresti, 2007, the 3rd edition revised, pp 156.

10 Al.Ghe.Savu, Dictatura regala, editura Politica, Bucuresti, 1970.

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Stefan Zeletin, Burghezia romaneasca-originea si rolul ei istoric”, Bucuresti, Editura Humanitas, 1991; Stefan Zeletin, Neoliberalismul, editura Scripta, Bucuresti, 1992, 3rd edition.

Ioan Scurtu, Istoria Partidului Taranesc (1918-1926), editura Enciclopedica, Bucuresti, 2002, 2nd

edition, pp 25-42.

Al.Ghe.Savu, Sistemul Partidelor Politice din Romania 1919-1940, editura Stiintifica si Enciclopedica, Bucuresti 1976, pp 32.

Vlad Georgescu, In: Stelian Neagoe [editor], Istoria Romanilor, de la origini pana in zilele noastre, edition IV, editura Humanitas, Bucuresti, 1995, pp 213.

Ioan Scurtu, Criza dinastica din Romania (1925-1930), editura Enciclopedica, Bucuresti, 1996.

Al.Ghe.Savu, Dictatura regala, editura Politica, Bucuresti, 1970.

Neagu Djuvara, O scurta istorie a romanilor povestita celor tineri,editura Humanitas,2007, 5th revised edition, pp 234-243.

As far as society is concerned, in this period Romanian society faced a big contrast : the peasants’ way of living and the townsmen lifestyle 11 The introduction of universal male suffrage in November 1918 had the disadvantage to include the peasants who had no political information and no idea about what was going on at the top level 12

They were living a difficult life, eating bad food especially vegetables and less meat and because they were so used with working the land , the urbanization process was very difficult for them. At the same time , the towns were very developed , Bucharest for example was at that time called “little Paris” because of the French influences, it had big aristocratic houses, largi boulevards and also there was the fact that people could afford a decent way of living because the products’ prices were in concordance with the salaries.13

11 Vlad Georgescu, Romanians’s History-From the beginnings up to our days, Humanitas ,Bucharest, 1995 p 221

12 Keith Hitchins, Rumania 1866-1947, (Oxford :Clarendon Press,1994), p 377

13 Vlad Georgescu, Romanians’s History-From the beginnings up to our days, Humanitas ,Bucharest, 1995 p 222

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But according to statistics, even in 1930 the procent of rural population was far higher than the one of urban population in Greater Romania.This meant also that the majority was still dependent on working the land, almost hopeless regarding the possibility of adapting to an urban area.14

In what concerns politics, the peasants did not to manifest interest for occupying seats in the two Chambers although they represented in the interwar period , 80% , they led the majority of the seats occupied by lawyers. This lack of interest can be motivated by the fact that they had no idea what politics really means. Their lives were very practical and simple ones and many of them had not the chance to be educated. However, they were represented by the Peasant Party founded in 1918 on Ion Mihalache’s idea , this party fusioning in 1926 with The National Party of Transilvania generating the National Peasant Party. This party was not exclusively composed by peasants , there were also allowed merchants , manufacturers and artisans in order to obtain votes. This party, coming to power in 1928, wanted to give to the local authorities more power in order to make the communal administrations more responsive to local needs but those local organizations were unexperienced with what an administrative system really was . The party’s goals were to improve the peasants’ lives , to make them controlling the means of production and also the party had the aim to transform the peasant into a citizen, equality in front of the law in order to participate in political stuffs. The party was mainly composed by people from Moldavia and Wallachia and few fro Transilvania because there The National Party existed in order to protect their rights againt Hungarians 15

Another social important issue is the Agrarian Reform in 1921.The First World War ended with great material and human loses for the Romanians. Because the economy was based on agriculture, a lot of effort were done in order to reestablish this field and to continue assuring the necessary goods.Loosing so many human lives aproximatively 800.000 mainly peasants , diminished a lot the process of working the land.. So it was predictable that the first actions in the first years of the interwar period supposed to be dedicated to consolidating the agriculture. Also , regarding the international context , we can affirm the fact that the fall of two big empires :Russia and Austro-Hungary has determined a new reconsideration in what concerns agriculture field and the feudal system existing up to that period of time tended to loose its importance letting the capitalist and socialist systems to be in the center. In 1913 , Ion Bratianu promised in a public letter that the peasants are going to receive land and the same did the king in 1917 when he addressed proclamations to the soldiers. It was supposed that the peasants receive land from the domains of Royalty , of foundations , charity societies , also from foreiners both by marriages or by other means, and also from private domains But in was not clear enough that that taking the land , the expropriation will automatically signifie the that the peasants will become owners. The Agrarian Reform was continued by the liberals who gave some Decrets-Law which were ratified in 1921 by Parlamentary vote. This reform had a very strong social aspect : the peasants who were supposed to become landowners were classified after some affective considerations such as participants in military campaigns, or in battles , the widows because of the war.

14 Irina Livezeanu , Cultural Politics in Greater Romania , Cornell University Press , 1995 , p 12

15 Keith Hitchins, Rumania 1866-1947, (Oxford :Clarendon Press,1994), p 391

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The Reform had also another problem: the rich landowners of Transilvania were expropriated too and the Hungarian Government contested this fact saying that this is totally opposed to what was written in the Peace Treaty of Trianon in 1920. Romanian Authorities did not satisfied the demands of the Hungarians and for this reason , the Hungarians gave to this problem an international aspect. They addressed their demands to the Council of the Nations’s Society reminding to this international organization the “ violation” of Peace Treaty of Trianon . Finally , this problem was solved by The Convention adopted in 1930 at the Second Conference in Haga, Nicolae Titulescu explaining the fact that both rich Hungarians and Romanians landowners were treated the same and many times happened that the poor minorities received land from Romanian landowners16

This reform was a very important issue for the Peasant Party: the peasants who work the land should control the means of production , the organizing of agriculture should be based upon the small independent holding . The party programme also left room for a “peasant industry” , as means of enhancing the productivity of agriculture and improving the standard of living of the peasant. 17

The Agrarian Reform wanted to improve the relationships between peasants and landowners ,also increasing the wealthy of the country , the technical progress and most important improving the standard of living. The peasants were suppose to see the owners’s class as one that is concerned about their situation , the idea that the owners want to give from their wealth in order to emancipate the peasants’s condition18

The sensitive aspect of this reform was the fact that the peasants wanted to work their own land , to have the feeling of possession because they were used with the life in the countryside , with working the land, but the problem was that it was not their land. Also the unification of provinces signified that the Romanians had to live in the same country with other ethnical groups suck as Hungarians, Germans and nevertheless Jews. The so called “Jewish Question” was a very delicate issue. Untill the First World War , the Romanians intellectuals considered that being a Romanian is equal with being an Anti-Semit. Person and further in the interwar period , the Antisemit ideas were spread also in Romania. The peasants were against the Jews because of the different ways of living. The Jews were in majority of cases wealthy people, maybe wealthier than the “state owning “ Romanians. They were educated , they were living mostly in urban areas, they also entered Universities. But a major problem of the Jews was the religious aspect because the national feeling was very powerful in those times and all the common elements, that were providing the idea of belonging, were very important. The Christian Religion because it was practiced by the majority of population was a link element that made them think once again that they are a nation. The Orthodox Christian religion was expressing in the best manner the idea of nation but, in comparision with the Jews , at least Hungarians and Germans were Christians and as a consequence the Jews were not accepted between the Romanians. 19

In 1923 , A.C Cuza formed The League of National Christian Defence which had its principal goal the expulsion of the Jews from all domains of life concerning both the educational and cultural aspects in order to educate the young generation in the Christian and nationalist spirit and also, in 1927,

16 http//:www.biblioteca.ase.ro/downres.php?tc=6757 last accessed 15.11.2008

17 Keith Hitchins, Rumania 1866-1947, (Oxford :Clarendon Press,1994), p 39218 Keith Hitchins, Rumania 1866-1947, (Oxford :Clarendon Press,1994), p 39219 Irina Livezeanu , Cultural Politics in Greater Romania ,Cornell University Press,1995, p 14

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Corneliu Zelea Codreanu in order to express his Anti-Semitical feelings formed his own organization named the Legion of the Archangel Michael. 20

Codreanu, with the help of his father and four friends, founded the paramilitary Legion of the Archangel Michael with four basic characteristics developed by Codreanu himself: "(I) faith in God, (2) faith in our mission, (3 )love for each other, (4) and songs as the primary manifestation of our state of mind." As Captain of the Legionary Movement, Codreanu espoused a great admiration for Hitler and Mussolini, but did not wholly identify with the Nazis.  Codreanu wanted Romanian nationalism to be unique.  The Legion distinguished itself from other fascist movements in that it began as a young student movement, and espoused a deeply Christian faith, whereas most other fascist movements began as veteran's movements and were against organized religion.  Also in 1930 , Corneliu Zelea Codreanu established The Iron Guard which is also an Anti-Semitical organization , providing a sort of Orthodoxism and practicing the cult of the peasant as the “natural unspoiled man”.      Codreanu formed the Iron Guard as a paramilitary political branch of the Legion.  Codreanu found his support in peasants, teachers, and above all young people.  The Legion, led by young men, refused to admit men over thirty years old into their elite formation.  Codreanu's insistence on discipline and effort, as well as the enthusiasm and dedication of the peasant Legionaries helped encourage the Legion's success.  By 1937, the Legion had grown to six times its original membership 21

Regarding the educational aspect , the interwar period was an effervescent one. The Liberal party has made a lot of efforts in order to improve educational system such as: tripling the budget between 1922-1926, making that the elementary school be compulsory from 4 years as it used to be to 7 years , giving also severe punishments for those parents who refused to send their children to study. The most dynamical part of the educational system in this interwar period was the universitarian education. In 1922, Romania had 4 universities (Bucharest, Iasi ,Cluj ,Cernauti) , an academy of commerce at Cluj, and a teological institute at Chisinau.The number of students has considerably grown up to 1930s, the students being not only the Romanians but also Jews -15% , a very high procent , Hungarians and Germans .Also the state was giving substantial amount of money for scholarships. Also there were founded numerous institutes of research like the Central Institute of Statistics, various institutes of Romanian and Universal History and also Chemistry , Economical research , energetical and sociology institutes. 22

All those efforts were made in order to raise literacy level to more closely match to more educated national minorities and thus to promote their assimilation.Howerever , the population was in a sort of hard situation after the unification because they figured out that they had linguist, ethnic, religious, cultural and political different experiences . Talking about the intellectuals of this period , we can observe a tremendous change in what values really signified. The old values tend to be contested and it is remarked in literature a new type of modernism practiced by poets like Ion Barbu , Ion Vinea , Ilarie Voronca ,Tudor Arghezi and also in what concerns the Romanian drama , Eugen Ionesco brings the theatre of absurd.23

20 ? Keith Hitchins, Rumania 1866-1947, (Oxford :Clarendon Press,1994), p 403

21 http://www.claremontmckenna.edu/hist/jpetropoulos/ironguard/leaders.htm last accessed 15.11.2008

22 Vlad Georgescu, Romanians’s History-From the beginnings up to our days, Humanitas ,Bucharest, 1995 p 224

23 Irina Livezeanu , Cultural Politics in Greater Romania ,Cornell University Press ,1995, p 16

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All the aspects are very important when regarding a certain period of time but it happens frequently that this social aspect is not treated properly . Many times we seem to be impressed by what is happening at the top level forgetting about the bottom one , the fact that the society is like a construction and the top which is represented by the rullers cannot exist without the people.

Economy

The First World War let Romania in a state of severe poverty, just like the other countries in Europe. It wasn’t only the debts and the lack of basic supplies but the general state of being of the population. The inter-war period can be divided into 4 stages of development which come in pairs: 2 periods of progress and 2 of crisis.

The first period: 1918-1922

It was a period of reconstructing the economy and the country itself. The opportunities for the development brought by the 1918 Union were postponed for a while because the disastrous aftermath of the First World War and the German occupation. The human and material losses were immense as the country lost 1/5 of its active population. The industry was only functioning at half of its capacity. Oil production was reduced with 48% while the coal one with 55%. Railways and trains suffered noticeable damages and 26% of the road system needed extensive repairs. All losses were estimated at 31 billion golden lei which meant that 2 years of conflict lead to destruction of 16 years of hard work. The reconstruction process ended roughly in 1924 when the main production areas reached their level before war.

In the process of building-up the economy a major role was played by the bourgeoisie. The party in power, PNL, was consisted from capitalists whom main purpose was, in the end, financial satisfaction. They understood that no progress was to be done unless they started investing locally. Banking activity proved to be prosperous along with improving the industry and encouraging local investors.

By far, the greatest development of that time was the agrarian reform. It was the largest movement of this kind in the Eastern Europe. Even though the first aspects were drawn up from 1917, it was only in 1921 when the law was taken into force. The provision, which formerly declared "property of any nature" to be "sacred and inviolable” had the following text added: "because of national necessity, the extension of rural peasant properties is advanced through the expropriation of arable lands, with the intent of selling them to the peasants.” The distribution of land to the peasants was achieved by expropriating the estates of foreign citizens, of absentee landowners (those who did not work their own land), arable land belonging to the Crown Domains, land leased to tenants for over five years, floodplains, etc. Expropriated parcels measured over 150, 300 or, in certain cases, 500 ha. The total area of expropriated land came to 5,804,837.83 ha (22,412.60 mi², of which some 3.7 million ha were arable), while 1,393,383 peasants received property (648,843 in the Old Kingdom, 310,583 in Transylvania, 357,016 in Bessarabia and 76,941 in Bukovina)*1. After the agrarian reform, large landowners owned 10.4% of the country's arable surface, compared to 47.7% before. Previous owners were compensated in long-term bonds, and peasants were to repay 65% of the expropriation costs over 20 years. Not all the peasants were eligible to receive land. There were some criteria to be met until they will receive these benefits. Priority was given to soldiers, widows and poor peasants who owned

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less than 5 ha. In Transylvania, large landowners were almost exclusively Hungarian, while those to whom land was distributed were largely, though not exclusively, Romanian. Land reform was carried out quite difficult in the Old Kingdom, where landlords and peasants were Romanian; in Transylvania (and Bessarabia, where many large estates were Russian-owned), the new authorities saw reform as a means of imposing Romanian ideology. Consequently, the land reform was considered “ the most powerful means in the Romanization process of Transylvania”*2. Small landowners of Hungarian descent also experienced unequal application of the reforms; some were expropriated in order to build a church or a school. Even though this land reform managed to create an equilibrium between former and new owners, the productivity did not increase due to the rudimentary means of production.

The second period: 1922- 1929

It was an economically prosperous period. In 1924 the 4 th lows of organic economy of exploitation of country’s natural resources were enforced. Those laws concerned themselves with the main treasures of the country: energy, industries, mines and water power. As a positive result, this new measures were protecting the local investors and were ensuring the perfect environment of a safe development. Consequently, the internal market has consolidated its position. The postwar damages were now completely erased. In the same time, the external situation was flourishing. The whole Europe was undergoing a process of development and their need for basic products such as wood, oil, cereals consolidated a commercial relationship between Romania and other countries.

The third period: 1929 -1933

This period was characterized by a devastating crisis that affected all the economic fields. It wasn’t a local process but a worldwide one. All the countries were facing the devastating effects and each fought to keep its economy as stable as possible. In Romania, the crisis meant the damage throughout all area of activity from industry and agriculture to the banking system. The main internal factor which led to the worsening of this situation was the outdated agriculture which was the main supplier of the economy. When the price of the basic products started to drop, the consequences were catastrophic for the national economy. Peasants were unable to sell their products at their true value and therefore couldn’t cover the cost of production.

The negative effects appeared soon after, as a chain reaction. Numerous companies declared bankruptcy, people were made redundant (over 300,000 lay-offs), production dropped beyond the limit. Peasants were ruined. They reduced the cultivated surface but still they couldn’t afford maintaining it. Therefore, new loans were taken but without the capacity to cover the investment. Even though the government tried to get over this problem by reducing or simply erasing their debts, peasants will remain one of the most affected classes.

The fourth period: 1934 -1939

These years are the symbol of a rebirth of the economy. The industry has developed considerably, especially the branches of oil, textile and iron. A favorable aspect was the export-trade

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which was beneficial for our economy. However, the scepticism of this sudden growth led to a protective-policy which involved an economic control from the state. These measures proved to be effective and the 1938 was the most prosperous year in all our inter-war history. Romania was top of the European list in oil production, second on natural gas production and fourth on corn production. The overall status of Romania was the sixth economic power of Europe. This economic development had a positive impact on people’s lifestyle. The state of being of the population was generally improved. However, this progress favored those who already had a good financial and social background, like bankers and entrepreneurs. The remaining population was still at a medium level of development and bond to remain in this state.

At the end of the interwar period, society met a new stage: the separation of the population into two social classes: the urban and the rural categories. Urban bourgeoisie remains in power and ever since its formation it played an important role on the economic and political stage.

Endnote

1* Ministry of Agriculture and Domains, Statistical atlas “Agricultura în România”, p.75. Bucharest, 1938, 2003 reprint

2* Octavian Goga described land reform as "the most powerful means in the Romanization process of Transylvania"

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