Towards the end of 1922, the prolonged legislative period of the Constituent Assembly came to an end. An electoral law was passed on July 28, and in November, elections for the upper and lower house of the first regular parliament were held. They ended by distributing power in the chamber pretty evenly be tween the Nationalists (163) and the peasant groups (150) ; the Socialists obtained only 41 seats, but the National Minorities, by organizing a bloc for electioneering purposes, got 83 (of whom 36 were Jews) and accordingly, in spite of the large abstention of the Ukrainian element from the elections, became an important and occasionally a decisive factor in the parliamentary system.
The first business of the two houses of the new parliament was jointly to elect a president of the republic. Marshal Pilsudski refused to stand. The parties of the Left, supported by the Na tional Minorities and the Witos Peasant Party, secured the elec tion of Narutowicz, a friend of Pilsudski, who had acted as minister of foreign affairs in several cabinets. Polish nationalism was infuriated by the election of a president through the votes of the National Minorities, including the Jews; and on December 16 a fanatic assassinated the new president. The new president was Wojciechowski, an old member of the Polish Socialist party. General Sikorski became premier.
Russia remained unsatisfactory, being especially troubled by the Soviet's persecution of Catholic priests. A Government formed in the spring by Witos, on the basis of an alliance between the Peasant Party and the National Democrats, had to struggle against the resolute opposition of the Left and the National Minorities; in spite of an excellent harvest, the Government proved unable to cope with the continued, disastrous fall of the mark; there was serious unrest in the country, culminating in riots at Cracow on November 6; and the Government was obliged to resign on De cember 1 1. It was followed by a non-party one under Grabski, who, as prime minister and minister of finance, made financial reform his principal task. The political parties now at last agreed to subordinate all other problems to those of financial recon struction. On Jan. 3, 1924, Grabski's Government was granted emergency powers for the purpose. Fulfilling partly the recom mendations of a British financial adviser, Mr. Hilton Young (now Lord Kennet), Grabski strenuously reorganized the financial sys tem of the country. A bank of Poland was once more created on a basis of private subscription. The budget was balanced by draconic reductions in expenditure, the printing of paper money stopped, the currency became stabilized at the disastrous rate of exchange which it had reached (1,800,000 marks to the gold franc), and finally, a new currency unit, the zloty, was introduced and declared equal to the gold franc. The drastic manner in which this financial reform was accomplished, inevitably brought about its revenge. The too high level at which the value of the new cur rency had been fixed, caused a period of heavy economic depres sion. The balance of the budget proved impossible to maintain, and finally the zloty fell to about half its value. The consolida tion of the Polish debt to America (Nov. 14, 1924) and to Great Britain (Dec. io, 1924) produced a favourable impression; but both an Italian and an American loan which the administration managed to obtain, were unsatisfactory; and the trading away of one asset of the State after another—such as the tobacco mo nopoly and the monopoly of matches—disquieted opinion at home. It was not till the force of events had corrected the errors of Grabski, that his achievements could be turned to profitable account by his successors, and the great work of financial stabiliza tion completed.