Second Polish Republic - Economy

Economy

After regaining her independence Poland was faced with major economic difficulties. In addition to the devastation wrought by World War I, the exploitation of the Polish economy by the German and Russian occupying powers, and the sabotage performed by retreating armies, the new republic was faced with the task of economically unifying disparate economic regions, which had previously been part of different countries. Within the borders of the Republic were the remnants of three different economic systems, with five different currencies (the German mark, the Russian ruble, the Austrian crown, the Polish marka and the Ostrubel) and with little or no direct infrastructural links. The situation was so bad that neighboring industrial centers as well as major cities lacked direct railroad links, because they had been parts of different nations. For example, there was no direct railroad connection between Warsaw and Kraków until 1934.

On top of this was the massive destruction left after both World War I and the Polish Soviet War. There was also a great economic disparity between the eastern (commonly called Poland B) and western (called Poland A) parts of the country, with the western half, especially areas that had belonged to the German Empire being much more developed and prosperous. Frequent border closures and a customs war with Germany also had negative economic impacts on Poland. In 1924 prime minister and economic minister Władysław Grabski introduced the złoty as a single common currency for Poland (it replaced the Polish marka), which remained one of the most stable currencies of Central Europe. The currency helped Poland to bring under control the massive hyperinflation, the only country in Europe which was able to do this without foreign loans or aid.

The basis of Poland's gradual recovery after the Great Depression were mass economic development plans (see Four Year Plan), which oversaw the building of three key infrastructural elements. The first was the establishment of the Gdynia seaport, which allowed Poland to completely bypass Gdańsk (which was under heavy German pressure to boycott Polish coal exports). The second was construction of the 500-kilometer rail connection between Upper Silesia and Gdynia, called Polish Coal Trunk-Line, which served freight trains with coal. The third was the creation of a central industrial district, named COP – Central Industrial Region (Centralny Okręg Przemysłowy). Unfortunately, these developments were interrupted and largely destroyed by the German and Soviet invasion and the start of World War II. Among other achievements of interbellum Poland there are Stalowa Wola (a brand new city, built in a forest around a steel mill), Mościce (now a district of Tarnów, with a large nitrate factory), and creation of a central bank. There were several trade fairs, with the most popular being Poznań International Fair, Lwów's Targi Wschodnie, and Wilno's Targi Północne. Polish Radio had ten stations (see Radio stations in interwar Poland), with the eleventh one planned to be opened in the autumn of 1939.

Interbellum Poland was also a country with numerous social problems. Unemployment was high, and poverty was widespread, which resulted in several cases of social unrest, such as 1923 Kraków riot, and 1937 peasant strike in Poland. There were conflicts with national minorities, such as Pacification of Ukrainians in Eastern Galicia (1930), relations with Polish neighbors were sometimes complicated (see Soviet raid on Stołpce, Polish–Czechoslovak border conflicts, 1938 Polish ultimatum to Lithuania). On top of this, there were natural disasters, such as 1934 flood in Poland.