The Peoples of Rumania

Trade.

Rumania's principal exports are cereals, petroleum products and timber. Quantities for the years 1922 to 1926 show a gradual improvement, except in the case of timber exports for the latter year, which are less than those for 1923 :— Other exports are hides, wool, vegetable oils, manufactured wood articles, fruits and, in a lesser degree, eggs. Principal imports are manufactured goods (chiefly textiles), colonial produce and chemi cals. Following the Government's change of policy in 1925 in regard to export taxes, when a reduction in the taxes on cereals was effected, and as a result of the continued fall in the world prices of cereals, a further reduction in export taxes was put into effect in 1927.

Taking only imports for domestic consumption and exports of home produce, Rumania before the war showed a large and favourable balance of trade, due almost wholly to wheat exports. In the years immediately following the war however the balance was an adverse one, but the tide turned in 1922 and the monthly averages of ter that date are indicative of progressive recovery, with the exception of the 1927 slump only, the reasons for which have already been mentioned.

Finance.

The fundamental factor in foreign exchange in Rumania is the grain harvest and the facilities for moving it, for the lei which Rumanian merchants can devote to the purchase of foreign goods are the profits on cereal exports. There was much headway to make up, owing to the devastating effect of the Ger man occupation and the temporary chaos in agriculture which followed the expropriation of large estates. The financial position was made more difficult by the expenses incurred by the invasion of Hungary in 1919 and by the large expenditure on armaments due to Rumania's political situation, and especially to the un certainty existing as to Rumanian sovereignty over Bessarabia. During the occupation the Germans issued some two and a half milliards of lei; they also secured large sums of Rumanian gold by the sale to the peasants of goods, especially sugar, of which, there was a scarcity. Although, under the Peace Treaties, Ger many was to repay her various depredations, and it was eventually agreed between the two Governments that deliveries of loco motives and other goods should be made on account of Repara tions, no agreement has yet been reached in regard to the repay ment by Germany of the Banca General/ note issues above referred to ; Rumania, by way of retaliation, refusing to pay either amortisation or coupons of German-held Rumanian bonds in consequence.

On taking over the new territories Rumania also had to take over eight and a half million Austrian kronen and two milliards of Russian roubles. Further, at the time of the German invasion, the bullion of the National Bank with much private property in jewels, treasure and objects of art, was sent to Moscow for safety. This property, valued at 315,000,00o gold lei, ultimately fell into the hands of the revolutionary regime set up soon after, and is now considered to be irrecoverable. The decline in value of the leu was rapid between 1918 and 1922, during which period the amount of notes in circulation increased from two and a half milliards to 15 milliards and is today just over 21 milliards. The decline in the value of the leu, normally equivalent to the franc, is shown in the following table :— The excessive depreciation of the leu which characterised 1926, and which was the immediate result of the excessive influx of foreign goods to forestall the new and heavily protective Customs Tariff shortly afterwards introduced by the Government, was maintained until late in the year when the extent of the ex portable surplus of an exceptionally good harvest became known. At one period of the year the leu had dropped to 1,500 to the In addition to the excellent crop the oil production also proved to be more than usually large and almost doubled the highest pre-war output. Thus, despite a fall in world prices of both cereals and petroleum products, a favourable trade balance of more than four milliards of lei proved more than sufficient to permit the recovery of the leu and afforded besides a striking proof of Ru mania's recuperative powers. The tendency of the leu to appre ciate continued throughout 1927 in spite of indifferent crop yields. On Feb. i 1, 1929, a loan of $101,000,000 at 7% was negotiated in Paris and other cities which made it possible for the govern ment to pass a bill stabilizing the leu at 813.6 to the I. The main preoccupations of the Government were now directed towards the complete reconstruction of the State Railways without which neither true stability of currency nor maintained economic pros perity can be hoped for. There seems little reason to doubt that the Maniu Government will be able to proceed to ensure Ru mania's future prosperity.