The

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

( ro, Marea Criză Economică or, rarely, ) of 1929–1933, which affected the whole world, had several consequences in the

Kingdom of Romania The Kingdom of Romania ( ro, Regatul României) was a constitutional monarchy that existed in Romania from 13 March ( O.S.) / 25 March 1881 with the crowning of prince Karl of Hohenzollern-Sigmaringen as King Carol I (thus beginning the Romanian ...

. Romania had been among the winner countries of

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

. It received several new territories (

Bessarabia Bessarabia (; Gagauz: ''Besarabiya''; Romanian: ''Basarabia''; Ukrainian: ''Бессара́бія'') is a historical region in Eastern Europe, bounded by the Dniester river on the east and the Prut river on the west. About two thirds o ...

Bukovina Bukovinagerman: Bukowina or ; hu, Bukovina; pl, Bukowina; ro, Bucovina; uk, Буковина, ; see also other languages. is a historical region, variously described as part of either Central or Eastern Europe (or both).Klaus Peter Berge ...

and

Transylvania Transylvania ( ro, Ardeal or ; hu, Erdély; german: Siebenbürgen) is a historical and cultural region in Central Europe, encompassing central Romania. To the east and south its natural border is the Carpathian Mountains, and to the west the A ...

), with many

natural resource Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. ...

s. However, the war caused heavy human and economic losses to the country. Romania had to fight

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

and the non-

convertibility Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies mus ...

of its

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...

, the

Romanian leu The Romanian leu (, plural lei ; ISO code: RON; numeric code: 946) is the currency of Romania. It is subdivided into 100 (, singular: ), a word that means "money" in Romanian. Etymology The name of the currency means "lion", and is derive ...

(lei in plural). Romania then had a fundamentally

agrarian economy An agrarian society, or agricultural society, is any community whose economy is based on producing and maintaining crops and farmland. Another way to define an agrarian society is by seeing how much of a nation's total production is in agricultu ...

, with

agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people ...

accounting for 63.2% of the national production. The Great Depression affected Romania on several ways. For example, in 1933, the

net national income In national income accounting, net national income (NNI) is net national product (NNP) minus indirect taxes. Net national income encompasses the income of households, businesses, and the government. Net national income is defined as gross domestic ...

was of 172,614,000,000 lei, only 62% of that of 1929, which was of 275,180,000,000 lei. To fight the

economic crisis An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...

, the

National Bank of Romania The National Bank of Romania ( ro, Banca Națională a României, BNR) is the central bank of Romania and was established in April 1880. Its headquarters are located in the capital city of Bucharest. The National Bank of Romania is responsible ...

carried out various measures and the country took various

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...

s. Help was also called upon from

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...

. The Great Depression led to a drop of 50% in

industrial production Industrial production is a measure of output of the industrial sector of the economy. The industrial sector includes manufacturing, mining, and utilities. Although these sectors contribute only a small portion of gross domestic product (GDP), the ...

and an increase of 300,000 persons in

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...

in Romania. By the early 1930s, the price of a quintal of

wheat Wheat is a grass widely cultivated for its seed, a cereal grain that is a worldwide staple food. The many species of wheat together make up the genus ''Triticum'' ; the most widely grown is common wheat (''T. aestivum''). The archaeologi ...

had fallen below the cost of harvesting it; agricultural goods, unprotected by any

customs Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country. Traditionally, customs ...

measures, were left to the discretion of international competition, which contributed to the decrease of their prices by 60–70% compared to those of 1928 and 1929. Landowners went bankrupt and the

peasant A peasant is a pre-industrial agricultural laborer or a farmer with limited land-ownership, especially one living in the Middle Ages under feudalism and paying rent, tax, fees, or services to a landlord. In Europe, three classes of peasa ...

s had little left to eat or pay taxes to the state. By 1932, some 2.5 million farmers had unpaid debts to banks, worth 52 billion lei. Between October 1929 and July 1931, more than 17 billion lei were withdrawn from Romanian

bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

s. As a result, the banking system collapsed, and several banks, including the Romanian Peasantry Bank and the Bercovici Bank, went

bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

. The banking crisis, announced as early as 1930, created a panic among depositors, as people began to withdraw their money en masse. The peak of the financial disaster was reached in 1931, when one of the most important banks in Romania, the of

Aristide Blank Aristide or Aristid Blank, also spelled Blanc or Blanck (January 1, 1883 – January 1, 1960), was a Romanian financier, economist, arts patron and playwright. His father, Mauriciu Blank, an assimilated and naturalized Romanian Jew, was manager o ...

, declared bankruptcy. On 28 January 1933, the Grivița strike of 1933 was started at the Grivița Workshops in

Bucharest Bucharest ( , ; ro, București ) is the capital and largest city of Romania, as well as its cultural, industrial, and financial centre. It is located in the southeast of the country, on the banks of the Dâmbovița River, less than north o ...

by workers of

Căile Ferate Române Căile Ferate Române (; abbreviated as the CFR) is the state railway carrier of Romania. As of 2014, the railway network of Romania consists of , of which (37.4%) are Railway electrification system, electrified. The total track length is , ...

(CFR). The strike was brought about by the increasingly poor working conditions of railway employees in the context of the Great Depression in Romania.

References

Economic history of Romania

Romania Romania ( ; ro, România ) is a country located at the crossroads of Central Europe, Central, Eastern Europe, Eastern, and Southeast Europe, Southeastern Europe. It borders Bulgaria to the south, Ukraine to the north, Hungary to the west, S ...

1920s in Romania 1930s in Romania Poverty in Romania {{Romania-hist-stub

See also

References