The Economic Failures of Bessarabia in the Proximity of the Soviet State

Bessarabian economists worked to find solutions in the new conditions. They mainly insisted on the export of grapes, wines, nuts, dried fruit, furs, etc. One of the priority destinations was the Polish market. As a result of the different views of the Polish and Romanian political classes, the market share of Bessarabian products went down after 1926. Regarding imports, there was a competition between Germany, Poland and Czechoslovakia. The Bessarabian market was used as a testing ground for different marketing strategies, mostly for agricultural technology, footwear, ceramic, perfumes, fertilisers, fish, etc. In the second half of the 1920s, Poland and the port of Danzing (Gdańsk), Czechoslovakia and Austria were the largest importers. The main destinations of Bessarabian export were Germany, Poland, Czechoslovakia and Great Britain. The present work outlines the appraisals and perspectives reflected in the Bessarabian economics journals in the interwar period

In the 19th century, from 1812 to March 1918, Bessarabia, the former Eastern Moldavia, was incorporated in Tsarist Russia, both as part of greater administrative units (on both banks of Dniester) and as a guberniya from 1872.In the summer and autumn of 1917, based on principles of building political power originally advocated by the radical socialists of Aleksandr Kerenski, local nuclei of power form in Bessarabia.After the Bolshevik coup d'état, it will follow its course towards autonomy (with the proclamation of the Moldavian Democratic Republic), and subsequently towards independence.As a result of anarchist trends, which also involved seizing power by military action by the Bolshevik detachments, in early January 1918, units of the Romanian army entered Bessarabia for ensuring order.In the following period, the situation improved to a certain extent also in the context of the occupation of the left bank of the Dniester and of the city of Odesssa by the Austro-Hungarian and German troops.
On 27th March / 8th April 1918, in Chișinău, the local legislatureformed in the autumn of 1917 on the basis of representative delegations -voted for the conditional union with Romania.Bessarabia would enjoy autonomy and continue to have a local legislature.This vote was preceded by the meeting between the Romanian Prime Minister Alexandru Margiloman and the banking circles in Chișinău, which gave their consent for the integration with Romania.
On 28th November 1918, a part of the deputies of the legislative body in Chișinău met and dissolved this legislature and thus the idea of a conditional union was abandoned.Since then Bessarabia was de jure a part of Greater Romania.Formally, this was enshrined in the system of treaties of Paris-Versailles.However what interests us in the present work is the expectations of the Bessarabian inhabitants at the beginning of this period of relative quiet, the main economic problems, the actions taken or not taken to resolve them and the real state of the province at the end of the period (1939)(1940).The topic was not addressed in an unbiased manner after 1990, as most views are presented and assessed within the framework of the Romanian historiography -Soviet historiography dichotomy.The traumatic experience after 28th June 1940 became a barrier to an objective analysis and presentation of the events in the interwar period.Some of the most important works that approach the general framework of the developments in Bessarabia in the interwar period are the one authored by Ion Agrigoroaiei and Gheorghe Palade (1993) and an approach of these evolutions within the European context proposed by Svetlana Suveică (2010).In what follows, we shall use as sources the economic plans and analyses of the contributors to the journal "Economic Bessarabia", as well as some factual references in Polish archival records, particularly the reports of the Consulate of the Polish Republic in Chisinau.

The plans for the economic development of Bessarabia
Since the autumn of 1918, the local administrative bodies inherited from the czarist period were gradually abolished.Interim committees were created and the foundation was laid for a process of transition which lasted several years (Suveică, 2010, pp. 223-225).Concerning the primary institution of the province, the Council of the Realm, this was dissolved (in November 1918).Afterwards, the central public authorities began to exercise strict control over the economic life of the province.The minister delegated by the government in Bessarabia signed numerous ordinances.These were issued in the name of "public order and safety".In fact, many economic activities, including the barley trade, the provision of services, the copper trade and others, were taken control of.For example, on 23rd March 1919, Pantelimon Halippa signed ordinance no 17 which required a large number of public venues to obtain a licence to operate from the new authorities.These included hotels, inns, breweries, confectioneries, bakeries, restaurants, cafeterias, dairies, pie shops, pretzel shops, millet beer shops and "any other venues for public consumption" (Ordinance no 17, 1919, p. 106).The type of policy applied was neither liberal, nor protectionist, but reflected the tendency to control the services and some types of trade.
On the international scene, in 1919, although to the east of the Dniester River military clashes between different succeeding armed forces continued, in Chisinau there was a climate of hope.There were objective analyses of the economic situation and the solutions for development which had to be applied.After the end of the czarist period, the industry was less developed.According to estimates, the existing industry only covered‚ the eighth or tenth part of the industrial needs of the population (Giurgea, 1919, p. 7).A first step would have been the development of the agricultural industry, which would have led to the spread of agricultural technology, and the goods produced could have replaced similar imports, particularly cheeses, vegetable derivatives and textiles (Giurgea, 1919).Several years later, after an agricultural reform was underway throughout Romania (1921) and the new Constitution was adopted (1923), the economic goals remained unchanged.
In 1923, a year after serious problems were encountered in placing the Bessarabian production on the market, the Bessarabian economists held much lower expectations in this regard.There was hope of a real improvement of the port of Reni (located to the south of Bessarabia on the Danube), where the building of adequate warehouses and silos, as well as the development of the quays of the Reni River were much needed.All of these also stemmed from "the deplorable state of transport in Bessarabia".It was necessary to set up a shipping company on the Pruth River at least as soon as possible.Farmers needed financial support to acquire agricultural machines and tools.Another imperative was to organise more industrial enterprises which would have benefited from the raw materials available in the area, such as fruit and marmalade, canned fish, sugar, cloths and vegetable oils (Antonescu, 1923, p. 22).No significant changes in the province were recorded in the following decade.
In 1929 a petition was drawn up in which the need for the administrative-economic unity of Bessarabia was indirectly argued: Bessarabia can neither survive nor can it develop if it remains in its current state.Its economy is hedged in by the new economic conditions in which Bessarabia cannot find its place.Bringing Besarabia on a wide path of progress, which would be useful for itself as well as for Romania as a whole, can only be achieved by a sole representative body, which embodies the economic interests of the entire province.
Only in cooperation with this, the government can align the interests of Bessarabia with those of the Romanian Old Kingdom and the other provinces and only such a body could draw the real intellectual forces of the Bessarabian population, in the absence of which the work of economic construction is not conceivable (Petition, 1929, p. 6).
This petition was not granted by the government.An incentive for future plans and the return of optimism was provided by the increase in Soviet-Romanian contacts in 1934.In fact, on the Soviet side, there was sheer pragmatism -the need to export metals in Central Europe, as the routes through Poland were no longer sufficient.Thus, the Soviets turned their attention to the routes of Romanian Railways.The most prominent traders in Bessarabia believed then that the problem of navigation on the Dniester River can be resolved at last.It was thought that approval for navigation along the Dniester Bank near the Romanian border could be obtained from the Soviet side.As Polish diplomats, who showed interest in the subject, observed, the Bessarabian counties along the Dniester River had poor shipping routes, which made it impossible to market the surplus of agricultural History Trimarium No. 2 (2/2023) production and textiles.Opening up the river for navigation would have allowed the shipping of goods to the small port of the Black Sea -Bugaz.The latter would be enlarged.At the same time, opening up the Dniester would have allowed the shipping of wood from Poland (Poncet de Sandon, 1935).However, shortly after the optimistic expectations, the Bessarabian decision-makers understood that the central public authorities negotiated very carefully and, in effect, had very modest demands from the Soviet side.Some level of optimism returned in the province in 1939.A fiveyear economic development plan was drawn up then in Bucharest and therein, finally, the need to build roads in Bessarabia was taken into account.In the leading article of "Economic Bessarabia" (nr.7), it was stated that: And this is the way things were for instance regarding roads, which our province continued to demand for 20 years, but which it will likely obtain only under the new regime.Because the upstarts of the new regime disputed the importance of those roads, for as the province seemed to them to be economically backward, it would not need roads!They could not understand that building roads always facilitated the economic development of a region rich in raw materials and production which are however poorly exploited because of the lack of shipping routes ([n.a.], 1939, pp. 3-4).
The strain on international relations put by authoritarian regimes resulted from the offensive of Nazi Germany against Poland, on 1st September 1939.Consequently, all economic relations in Central and Eastern Europe deteriorated, and most businesses were faced with a lack of raw materials or the loss of the traditional markets.The Bessarabian goals mentioned above were again relegated to the shadow of history.Given that the Bessarabian industry did not have the support of the central public authorities even prior to that date and only had the status of a local industry, it survived in the early stages.
It continued to fight on its own against all current challenges, managing nonetheless to win a modest, yet stable place in the economy of the province, becoming a key element thereof.The metal industry, especially the farm machinery industry, the oil industry, the textiles industry, the milling industry, the sugar industry became a crucial element in the local economy and without them the growth of this economy can no longer be conceived ([n.a.], 1940, p. 3).
The extremely difficult situation called for certain measures by the central public authorities.These included one concerning the tax levied on the industry sector -in order for the "so-called markups" to no longer exist -and, regarding transport, one requiring Romanian Railways to slash the current fares until the necessary railway tracks were built.The issue of the diagonal railway tracks has not been resolved up to this date in Bessarabia.The somewhat autonomous destiny of the province which, while not having its autonomy granted by the central authorities, tried to resolve its economic problems by its own efforts, ended on 28th June 1940.Following the Soviet ultimatum of 26th June 1940, the Romanian civil administration and military units were mostly withdrawn.The inhabitants of the province would go through a process of Sovietisation, then war, afterwards it would form part of a frontier Soviet Republic for several decades.

Transport
The state of transport in Bessarabia was seen as terrible both by exporters in the province as well as by foreign diplomats who gave their attention to the subject.The fleet of locomotives from the czarist period was far from being used to its full capacity.In different railway stations in Bessarabia, there was talk of "train car graveyards".The port of Reni became a major export hub.In 1922, 22,000 wagonloads of cereals were exported through the port, which represented 85% of all wagonloads shipped from Bessarabia.On exports through this port the central government charged duties amounting to 154 million lei.At the same time, the port of Reni was actually "forsaken by the good will of the government" (Antonescu, 1923, p. 11).The very capital of the province began to lose its position as the centre of trade.The southern part of Bessarabia, especially Tighina, began to carry on trade with Galati and the traders in the northern part of Bessarabia turned their attention to Iasi and Cernauti (Antonescu, 1923, p. 14).In our opinion, an objective reason was that Chisinau was not linked by rail to the north of the province via Orhei-Balti, with a possible terminus at Hotin on the Dniester.The railway ran from Chisinau to Ungheni, from which (across the Pruth River) one could reach Iasi, this actually being a relevant destination for Russian trade in the period up to the Revolution.On the other hand, there was no trade with the Soviet Union.Another great chance for Chisinau would have been, under different circumstances, its rail link to the port of Odessa.But this would not play an important role even later, either under Soviet domination or after gaining independence in 1991.Another explanation would be, in our opinion, the lack of involvement of the provincial political elite which chose to pursue a career in the capital.As a columnist noted in 1934 about some of the politicians who achieved the Great Union of 1918, "very few followed the path of austerity and honour" (Funariu, 1934, p. 2).
The Bessarabians affiliated with the central public administrationwho also had press forums to make their views known -described the situation in bright colours.To illustrate such a view, one less related to the content of our article, we quote below a fragment from an article which came out in 1926: While all these hardships were being faced, what was nevertheless achieved in a short period of time were remarkable feats of Romanian action.Thus: The great Romanian Railways artery was regulated as it was directed towards the centre of the Old Kingdom and important rail links were built with the other trading, industrial and economic centres of Greater Romania.
The serf was turned into a free owner of land, acquiring the right to his labour, the right to life free of a landlord's control, and new horizons were opened up to him […].
The local elite was recruited to the administration, justice, finance sector, etc., as they knew the local situation and the soul of the locals and subordinate advisers and clerks were assigned to them for the purpose of harmonization and unification (Stelian, 1926, p. 42).
This approach of the Bessarabian reality became dominant in historiography after 1991.However, in the period under analysis, this reality was perceived and experienced differently by the locals.At the onset of the Great Depression, in 1929, there were citizens' initiatives aimed at safeguarding the economic interests of Bessarabia.One of them, which was already mentioned, was embodied in the so-called 'Petition for the organisation of local administration in Bessarabia', addressed to the president of the Council of Ministers of Romania.
Also in the context of that period, the centrifugal tendency in the local economy of the province was explicitly confirmed in a column from which we quote: And that policy pursued by the previous governments, which severed the living body of Bessarabia, by joining politically some counties of our province to Cernauti, others to Iasi and others to Galati, etc., demonstrated to the whole world the lack of rights of Bessarabia, and removed from it every practical intention even by those who supported it wholeheartedly ([n.a.], 1929, p. 3).
Polish merchants held a complementary view on the functionality of Romanian transport.In a visit to Chisinau in November 1930, the president of the Polish-Romanian Chamber of Commerce in Warsaw, Mickiewicz noted: "Romanian transport is extremely slow, even slower than that in more distant countries.It was found that because of the long distance, in many wagons grapes become coated with mould.Bessarabian transport is much faster that than in the Old Kingdom, and this is because of the shorter distance, however on the whole Romanian transport leaves a lot to be desired" (Tărîță, 2020, p. 219).As a measure to improve efficiency, Mickiewicz proposed that wagons going directly to Warsaw were customs cleared at the border, at the Sniatîn-Zaluce customs office.In Warsaw the clearing process would have taken 24 hours longer.Thus Mickiewicz admitted indirectly that some problems related to bureaucracy in the capital of Poland.
Transport fees in Bessarabia remained excessive to the end of the interwar period.In the summer of 1936, the board of directors of Romanian Railways doubled the fees on the fruit transport.This measure had negative consequences for fruit growing in Bassarabia, especially in Tighina ([n.a.], 1937a, pp. 4-5).In a column from 1939, it was specified that‚ "over a distance of 40km industrialists in Balti pay more for sunflower seeds than industrialists in Bucharest who bring the seeds from Bessarabia.Or the milling industry: it suffers from excessive tax procedures and the high transport fees" ([n.a.], 1939, p. 7).
Although the problem was raised numerous times, it was not resolved.It cannot be ruled out that certain politicians in the central government lobbied for producers in other regions of Romania, but these issues could be highlighted in a comparative economic study.

Bessarabian import and export
At the beginning of the interwar period the economic operators in Bessarabia lost, one by one, the outlet market they had access to previously.There were different reasons for this.To the east of the Dniester River trade was no longer possible because of the establishment of the Bolshevik regime which disputed the right of Bessarabia to lie within the borders of Romania.Even if such a consensus had existed, the bridges over the Dniester were half destroyed.The loss of other marks was caused by the failure to meet the obligations assumed.
In 1922 the nut harvest was poorer than in the previous year, 30% of the nuts being rotten.Until then, these were exported to the United States.The selling price was too high and the government tax on 1kg of nuts increased 8 times (Antonescu, 1923, p. 11).The plum harvest was worse too, and the fluctuation in prices decreased sales considerably.On the other hand, there was strong competition from countries like Serbia and Bulgaria.The foreign demand was also low, and the traditional markets of Poland and Germany could not be used because these two countries were confronted with the devaluation of the national currency (Antonescu, 1923, p. 10).
All this time, there was hope that it would be possible to resume exports to Poland, because of the high levels of Bessarabian exports to the cities of Gdańsk, Warsaw and Lubomir until the war.The situation can be seen in the table below.More than 70% of the wheat (901 wagonloads) and more than half of the cereals had Warsaw as their destination.It is possible that in the 1920s, when Poland modernized its railroads, the rail transport in Bessarabia used wide-gauge lines, which made direct communication difficult.On the other hand, once Soviet Russia (subsequently USSR) was kept in economic isolation, Romania and, implicitly, Bessarabia had the opportunity to penetrate large markets for agricultural products in Central Europe, something which actually never happened.Domestic political instability also played an important role in this respect.
In the second half of the 1920s, Bessarabian producers used as a temporary solution road transport over long distances and animaldrawn vehicles locally.These options were determined by the high fees promoted in Romanian Railways by the minister for transport.As a countermeasure, the Council of Ministers also increased fees for road transport (Вита, 1929, p. 16).
While for Bessarabia the Polish market represented a key export destination, for Romania as a whole, Poland was not one of its major trading partners.At the same time, there was an unfavourable trend that could be attributed to an imbalance between import and export.Poland exported more than it imported from Romania.This trend which was constant between the years 1922 and 1928 is shown in the table below.In 1927 Poland had a 27% share of the total imports from central Bessarabia.It mainly competed against Czechoslovakia.The most important categories of goods were ironware and metals, pottery and china, textiles and their by-products, pharmaceutical products, cars, glassware, paints, and oil cloths.The port of Danzig ranked second in the trade between Poland and Bessarabia.Information concerning imports through this port city mainly refers to one category of goods -herring.In 1928, 1,094.312kg of herring were shipped to Bessarabia through Chisinau customs.Austria ranked fourth after Czechoslovakia, and mostly coal was imported from Austria (in 1928), after the import of coal from Poland was given priority until 1927.
The main goods exported through Chisinau customs in 1928, for example, were: lamb skins (which took first place in terms of value), maize, salted intestines, mouse skins, grapes, wheat bran, rabbit skins, nuts, clothes, fox skins, oilcakes, sheep skins, fruit and ferret skins.The main destinations for export were Germany, with 54% of the total (especially maize) and Poland, with 25%, followed by Czechoslovakia, England and Austria (Synadino, 1928, pp. a13-a16).
The data above show the lack of two staple products from Bes sarab ian exports in 1928 -wheat and wines.The reasons were also mentioned in the section on transport, the rail transport fees being too high to be borne by local producers.In historiography, the decrease in wheat production and export is explained by the consequences of the agricultural reform (Suveică, 2010, p. 188).
A significant moment for the difference in perspective is represented by Mickiewicz's response, in November 1930, to the question concerning the obstacles put by Polish authorities to Bessarabian merchants.The former pointed out that "all merchants" complaints result essentially from their own fault.This comes from the inability to meet the generally accepted export conditions'.The head of the Polish conulate in Chisinau, Marian Uzdowski, concluded less tactfully that "all rumours concerning alleged difficulties… arise from misunderstanding and, more specifically, the failure to understand the requirements of the Polish market" (Tărîță, 2020, p. 219).
The high technological standards for the quality of wines were also applied by Poland to producers from Hungary, Italy, Bulgaria and Yugoslavia, countries which were interested in cornering a segment of the Polish market.To this end, technical and commercial studies were conducted on the specific features of the Polish market.The author of the analysis in question found that‚ "in this respect, regretfully, the necessary guides are lacking in our country" (Bahtalovschi, 1932, p. 5).
Towards the end of the interwar period, there was a certain resignation concerning the peripheral geographical location of Bessarabia, which led to its economic marginalisation: Removed from its main ports, further removed from its western borders, through which our trade with Europe is carried on, Bessarabia is condemned to give very low prices in valorizing its products through export; and on the contrary, it is condemned to pay very high prices on imports.This is the greatest evil of Bessarabian economy, which our province has suffered from for decades ([n.a.], 1937a, p. 4).

The problem of wines
One of the products connected to Bessarabia up to this day, almost stereotypically, is wines.The data concerning imports and exports to which we referred above show that this is an important local product, being at the same time one in a long list of such products.In the view of some authors of the age, Bessarabia was the most important province "producing high quality maize and wheat in Romania".With regard to wines, Bessarabia made a name for itself in the czarist period, when these were promoted on the Russian market together with wines produced in Crimea'.
At the beginning of the interwar period, a specific situation was created for wine-growing in Bessarabia.The right of harvesting was rented out.As indicated in a specialist journal in 1919, wine-growing and wine-making were not organised according to the current requirements: Often the wine-grower does not know how and when to sell his products and thus they end up in the hands of exploiters become capitalists, and the wine-grower's work and skills remain unpaid.This happens so often, that many wine-growers gave up their trade, -although this sector of the economy can generate a higher income, with less work and capital, compared to other sectors […].
Wine-making is in a worse situation: as transport is impossible, wine is not consumed elsewhere and in this spring and summer there is a risk of the wine spoiling, as it has little alcohol and also little acidity… (Secara, 1919, p. 6).
Shortly afterwards, in 1921, signing the Polish-Romanian bilateral agreements created additional obstacles for Bessarabian exports.Restrictions were introduced on "the export of wines, nuts and plums, which threatened the interests of Bessarabian merchants" (Świerz biński, 1929, p. 59).After "the golden age" of Bessar abian export to Poland, as it was appraised by the Polish counsel Antoni Swierbiński, the loss caused by restrictions would have amounted to around 200 lei.
Bessarabian wine merchants tried to organise themselves and in the same year 1921, they held a first specialty congress.The aim of these congresses which continued to take place in the following years was to improve the quality of Bessarabian wines.But the problems stemmed not only from Polish restrictions, but also from the domestic bureaucratic procedures which had to be followed in order for the goods to be eligible for export.
In 1929 the decline in Bessarabian wine-growing, compared to the prewar period, became obvious.One of the most important centres in Bessarabia, Cetatea Albă-Șvaba (a town of German settlers), produced 1 million pint pots less, also as a result of the dramatic decrease in the surface of the wine-growing area.
Because of the impossibility of exporting wines, because of the competition from the domestic wine market in the Old Kingdom and Transylvania, in 1922 the prices became downright ridiculous.Starting from 29 lei per pint pot, the price reached 34-35 per pint pot at the most.Compared to these modest prices, labour, copper sulphate, lime, American vine, credits, became instead more and more expensive (Antonescu, 1923, p. 9).
The harmful consequences of this situation also affected the wine--growers in the counties of Tighina and Orhei.
1924 was however a great year for the export of Bessarabian grapes to Poland.The Polish counsellor noted that "this year the export of grapes to Poland surpassed the most ambitious dreams of local merchants, and it is estimated that exporters realized high profits".
Because in Bessarabian businesses and households there were big quantities of wine left which could not be exported nor sold in the domestic market, there emerged a contraband across the Dniester River.The Polish consul Świerzbiński mentioned in a report the following: Russia.A great quantity of wines is smuggled there.Before the very eyes of the authorities and with their full knowledge.And although we have no trade relations with Russia, an intense cross-border trade is carried on, which does not appear in official statistics, but which helps Bessarabian wineries to survive (Tărîță, 2020, p. 215).
According to statistical data, towards the end of the interwar period, specifically in 1937, Bessarabia could export 1,500-2,000 wagonloads of wine annually (Agrigoroaie, Palade, 1993, p. 87).Also at the end of the interword period, self-critical voices began to be heard, which put the failure to export wines down to local problems.
In our country we have wines which sell for 500-1000 ley per deciliter (Cotnari, Târnavele, etc.).We can make pasteurised musts, our wines are admirably suited for being carbonated etc.But given the current level of wine-making and the lack of a national spirit, all our efforts to plan a more intense export of our wines would meet with our lack of organisation and skills in valorizing an asset which requires the use of a scientific method in its exploitation.
The great bane of our wine-growing is that it is not recognised as a science, an art and ultimately, an industry par excellence, but as a craft which anyone can practise… But if occasionally we find wines of outstanding quality, there are different varieties and relatively small amounts while an intense wine trade is only possible if there is an adequate amount of standardised wines available [n.a.], 1937b, p. 11).

Conclusions
At the beginning of the interwar period, the economic circles in Bessarabia -the status of which changed from a marginal guberniya of Russia to a province of Romania -had optimistic expectations about its economic and commercial development.Some of the problems facing local producers during the interwar period included the lack of diagonal rail transport, which would link the north of the province to the south, and the lack of navigation on the Dniester River.Although de facto, there was an advantage in Russia's closed political regime and the absence of competition from agricultural and agroindustrial goods from Ukraine, Bessarabia could not take advantage of this context.On the one hand, there was no local administrative-economic centralization (which was actually requested by a petition in 1929), and on the other hand, the rail transport fees were raised.Furthermore, there were restrictions, concerning import conditions imposed by states like Poland (on wines), which discouraged Bessarabian producers.The problems which the province was confronted with persisted throughout the period, until the Nazi invasion of Poland in September 1939, following which it went into a dramatic decline.Renewing relation with USSR, in 1934, was not conducive to resuming navigation, at least along the bank of the Dniester River, as Bessarabian merchants had hoped.It had been resumed, it would have allowed the shipping of surplus goods along the river from all Bessarabian counties, which had poor transport links to the rest of the country.The economic marginalisation of Bessarabia also led to its segmentation, the northern counties being more closely linked to Bukovina, the central ones -to Iasi, and the southern ones to Galati.

Table 2
Trade between Poland and Romania between  1922 and 1928 (in millions of zloty)

Table 3
Categories of goods imported between 1927 and 1928 by Poland and Czechoslovakia through Chisinau customs