Post by Diarist on Mar 29, 2016 6:54:03 GMT 1
Hungary's signing of the Treaty of Trianon on June 4, 1920, ratified the country's dismemberment, limited the size of its armed forces, and required reparations payments. The territorial provisions of the treaty, which ensured continued discord between Hungary and its neighbours, required the Hungarians to surrender more than two-thirds of their pre-war lands. Romania acquired Transylvania; Yugoslavia gained Croatia, Slavonia, and Vojvodina; Slovakia became a part of Czechoslovakia; and Austria also acquired a small piece of pre-war Hungarian territory. Hungary also lost about 60 percent of its pre-war population, and about one-third of the 10 million ethnic Hungarians found themselves outside the diminished homeland. The country's ethnic composition was left almost homogeneous. Hungarians constituted about 90 percent of the population, Germans made up about 6 to 8 percent, and Slovaks, Croats, Romanians, Jews, and other minorities accounted for the remainder.
New international borders separated Hungary's industrial base from its sources of raw materials and its former markets for agricultural and industrial products. Its new circumstances forced Hungary to become a trading nation. Hungary lost 84 percent of its timber resources, 43 percent of its arable land, and 83 percent of its iron ore.[3] Because most of the country's pre-war industry was concentrated near Budapest, Hungary retained about 51 percent of its industrial population, 56 percent of its industry, 82 percent of its heavy industry, and 70 percent of its banks.
Following the Wall Street Crash of 1929 in the United States and the beginning of the Great Depression, world grain prices plummeted, and the framework supporting Hungary's economy buckled. Hungary's earnings from grain exports declined as prices and volume dropped, tax revenues fell, foreign credit sources dried up, and short-term loans were called in. The Hungarian national bank depleted its supply of precious metals and foreign currency during a period of a few weeks in 1931. Hungary sought financial relief from the League of Nations, which insisted on a program of rigid fiscal belt-tightening, resulting in increased unemployment. The peasants reverted to subsistence farming. Industrial production rapidly dropped, and businesses went bankrupt as domestic and foreign demand evaporated. Government workers lost their jobs or suffered severe pay cuts. By 1933 about 18 percent of Budapest's citizens lived in poverty. Unemployment leapt from 5 percent in 1928 to almost 36 percent by 1933.
As the standard of living dropped, the political mood of the country shifted further towards the right. Bethlen resigned without warning amid national turmoil in August 1931. His successor, Gyula Károlyi, failed to quell the crisis. Horthy then appointed a reactionary demagogue, Gyula Gömbös, but only after Gömbös agreed to maintain the existing political system, to refrain from calling elections before the parliament's term had expired, and to appoint several Bethlen supporters to head key ministries. Gömbös publicly renounced the vehement antisemitism he had espoused earlier, and his party and government included some Jews.
Gömbös's appointment marked the beginning of the radical right's ascendancy in Hungarian politics. The radical right garnered its support from medium and small farmers, former refugees from Hungary's lost territories, and unemployed civil servants, army officers, and university graduates. Gömbös advocated a one-party government, revision of the Treaty of Trianon, withdrawal from the League of Nations, anti-intellectualism, and social reform. He assembled a political machine, but his efforts to fashion a one-party state and fulfill his reform platform were frustrated by a parliament composed mostly of Bethlen's supporters and by Hungary's creditors, who forced Gömbös to follow conventional policies in dealing with the economic and financial crisis. The 1935 elections gave Gömbös more solid support in the parliament, and he succeeded in gaining control of the ministries of finance, industry, and defense and in replacing several key military officers with his supporters.
Source: Wikipedia - en.wikipedia.org/wiki/Hungary_between_the_World_Wars