The

Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

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

Kingdom of Romania The Kingdom of Romania () was a constitutional monarchy that existed from with the crowning of prince Karl of Hohenzollern-Sigmaringen as King of Romania, King Carol I of Romania, Carol I (thus beginning the Romanian royal family), until 1947 wit ...

. Romania had been among the winner countries of

World War I World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...

. It received several new territories (

Bessarabia Bessarabia () 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 of Bessarabia lies within modern-day Moldova, with the Budjak region covering the southern coa ...

Bukovina Bukovina or ; ; ; ; , ; see also other languages. is a historical region at the crossroads of Central and Eastern Europe. It is located on the northern slopes of the central Eastern Carpathians and the adjoining plains, today divided betwe ...

and

Transylvania Transylvania ( or ; ; or ; Transylvanian Saxon dialect, Transylvanian Saxon: ''Siweberjen'') is a List of historical regions of Central Europe, historical and cultural region in Central Europe, encompassing central Romania. To the east and ...

), 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 average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

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 must ...

of its

currency A currency 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 definition is that a currency is a ''system of money'' in common use within a specific envi ...

, 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 also means "money" in the Romanian language. Etymology The name of the currency means "lio ...

(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 agricultur ...

, with

agriculture Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...

accounting for 63.2% of the national production. The Great Depression affected Romania in several ways. For example, in 1933, the net national income 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 A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and ma ...

, the National Bank of Romania carried out various measures and the country took various

loan In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the deb ...

s. Help was also called upon from

France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...

. 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), they ...

and an increase of 300,000 persons in

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

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

quintal The quintal or centner is a historical unit of mass in many countries that is usually defined as 100 base units, such as pounds or kilograms. It is a traditional unit of weight in France, Portugal, and Spain and their former colonies. It is com ...

wheat Wheat is a group of wild and crop domestication, domesticated Poaceae, grasses of the genus ''Triticum'' (). They are Agriculture, cultivated for their cereal grains, which are staple foods around the world. Well-known Taxonomy of wheat, whe ...

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

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

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 peasan ...

s had little left to eat or pay

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

es 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 de ...

. The banking crisis, announced as early as 1930, created a panic among

depositor A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings account A savings account is a bank account at a retail banking, retail bank. Commo ...

s, 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, declared bankruptcy. On 28 January 1933, the

Grivița strike of 1933 The Grivița strike of 1933 was a railway strike which was started at the Grivița Workshops, Bucharest, the Kingdom of Romania in February 1933 by workers of Căile Ferate Române (Romanian Railways). The strike was brought about by the increa ...

was started at the Grivița Workshops in

Bucharest Bucharest ( , ; ) is the capital and largest city of Romania. The metropolis stands on the River Dâmbovița (river), Dâmbovița in south-eastern Romania. Its population is officially estimated at 1.76 million residents within a greater Buc ...

by workers of

Căile Ferate Române Căile Ferate Române (; abbreviated as the CFR) was the state railway carrier of Romania. The company was dissolved on 1 October 1998 by splitting into several successor companies. CFR as an entity existed from 1880, even though the first ra ...

(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 is a country located at the crossroads of Central Europe, Central, Eastern Europe, Eastern and Southeast Europe. It borders Ukraine to the north and east, Hungary to the west, Serbia to the southwest, Bulgaria to the south, Moldova to ...

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

See also

References