The policy of deflation adopted in 1922, which followed Ru mania's first balanced budget has been continued, though trade has been seriously hampered thereby. The shortage of money and high rates of interest on loans have also continued and despite of an edict of the National Bank in 1927 to the effect that banks persisting in charging more than 18% on short loans would be penalised by the reduction and, in the event of continued trans gression by the complete withdrawal, of discount facilities, in terest is still high and likely to continue so until the effects of stabilisation supported by a foreign loan are sufficiently pro nounced as to ease the money stringency. The arrangement whereby the State undertook to repay to the National Bank loans to the extent of t i milliards of lei has proceeded satisfactorily and the State debt to the Bank has now been reduced to less than ten milliards and will continue to be thus amortised at the rate of some three-quarters of a milliard lei annually. All budgets have been balanced and the effectiveness of the measures adopted will clearly be seen from the following table : (In Millions of Lei) The Budget Estimates for 1928 were also balanced at 38,350 millions of lei or 3,710 millions more than the preceding Budget. The budget for 1929, passed in December, 1928, balanced at 38,30o millions of lei. It must also be borne in mind that laws were passed in 1926 and 1927 by which the State Railways, Post Office and the State Pensions Office became autonomous bodies with' separate budgets not included in the figures given for the years in question. The same holds good for succeeding years. Were the budgets of the autonomous departments also included in the Gen eral State Budget, the latter would be found to have become much inflated, being for the years 1926 and 1927 41,881 and 53,612 millions of lei respectively. Of the 1929 budget, 15,593 million lei was allotted to the Ministry of Finance, 7,930 million lei to the Ministry of War, 4,848 million lei to the Ministry of Educa tion, and 1,916 million lei to the Ministry of the Interior. In spite of the fact that budgets have been balanced in the face of acute financial depression, it must nevertheless be remembered that these results have only been accomplished at the cost of : 1. Impoverishment of the Army, Air Force, Navy and Civil Services.
2. Serious deterioration of the railway system.
3. Suffering in all but the highest classes through the arbi trary maintenance of the cost of living at a figure far above the intrinsic value of the heavily depreciated cur rency.
Communications.—A large part of Rumanian trade is carried on the Danube, although as far as concerns river traffic and petit cabotage Rumanian services are inadequate while foreign services are generally obstructed. The main communications of Rumania, converge on Braila and Galatz, and two-thirds of Rumanian im ports are received from the industrial countries of Europe through these river ports. Galatz is the principal port for the export of timber, Braila for cereals, vegetables and petroleum products, etc. Constanta is the only Rumanian port open all the year round and is, for this reason, of paramount interest to the oil industry, for the carriage of whose products to the port a second pipe-line is contemplated to augment the present somewhat in adequate service. Constanta is also a port of call for Near East and Levant steamers and provides a connection for quick trans Continental transit for travellers from the East. The incorpora
tion of the new provinces, whose communications were naturally directed chiefly to serve the States to which they formerly be longed, have made new railway communications essential to the development of Rumanian trade and industry. A new line from Oradea-Mare to Arad obviates a detour through Hungarian terri tory.
The new lines for which credits were voted in 1923—viz., Brasov-Nehoiasi; Ilva-Mica-Vatra Dornei; Bumbesci-Livezeni; Hamangia-Tulcea—are still (1929) under construction. The first of these provides a direct route from Brasov to Constanta; the second will give a direct connection between Transylvania and the Bukovina; the third will traverse the Vulcan Pass and permit the easy transport of coal from the Petroshani field to Craiova. Other work in hand includes the transformation of the Bessara bian railways to normal gauge and effective linking up of the Province with the Danube ports. Little progress is being made however in this direction owing to lack of credits for the recon struction work entailed. Before the war the outlet for Bessarabian produce was Odessa and a necessary condition for Bessarabian prosperity under the changed sovereignty is the provision of an easy outlet from the Danubian ports. Until the Bessarabian lines are re-orientated towards Rumania and from Russia, and are augmented by other lines binding the province closer to itself and with the other new provinces as well as with the Old King dom, no change in the present unsatisfactory economic position of this territory can be hoped for.
For the history of the countries constituting the modern Ru mania, until the end of Roman rule in them, see DACIA. From the 6th to the 12th century, wave after wave of barbarian conquerors, Goths, Huns, Bulgars, Slays and others, passed over the country, and, according to one school of historians, almost obliterated its original Daco-Roman population ; the modern Vlachs, on this theory, representing a later body of immigrants from Transdanubian territory. According to others, the ancient inhabitants were, at worst, only submerged for a time, and their direct descendants are the Rumans of to-day. Each of these con flicting views is supported by some evidence ; and the whole controversy, too large and too obscure for discussion here, is con sidered under the heading VLACHS.
Towards the close of the 13th century, when the authentic political history of the Vlachs in Rumania begins, Walachia (known to the chronicles as Muntenia) and Moldavia were occu pied by a mixed population, composed partly of Vlachs, but mainly of Slays and Tatars, with an admixture of Petchenegs and Cumans. The two principalities of Walachia and Moldavia which now emerge developed, however, separately and each has its separate annals. About the year 1774 it first becomes possible to record the progress of these Danubian principalities in a single narrative, owing to the uniform system of administration adopted by the Turkish authorities, and the rapid contemporary growth of a national consciousness among the Vlachs. In ;859, the two principalities were finally united under the name of Rumania. The following article is therefore arranged under the four headings: Walachia, Moldavia, the Danubian Principalities and Rumania.