During the 1930s, Turkey came across significant political and economic instability, as seen by the rise of the Liberal Republican Party (Serbest Cumhuriyet Fırkası) , advocating for a more liberal and democratic political system, freedom of speech and the right to assemble with the growing conflicts with the ruling Republican People’s Party (Cumhuriyet Halk Partisi) under Mustafa Kemal Atatürk. This research will explore and investigate how these events demonstrated significant divisions in Turkish society and government through the analysis of Department of State records, university database, and official correspondence from the time. The political and economic issues involved not only caused public dissatisfaction but also prepared the way for many of Turkey’s current political and economic challenges. Understanding these trends enables to understand how political power and public trust are linked, and why they remain relevant today.
Background
The formation of the Republican People’s Party (RPP) in 1923 and Mustafa Kemal Atatürk’s important role in building the new republic are fundamental to understand Turkey’s political instability in the 1930s. Atatürk started as the Republic of Turkey’s leader in 1923. Determined to modernize and secularize the state, as explained by the BBC, he implemented a series of major changes that “included the emancipation of women, the abolition of all Islamic institutions and the introduction of Western legal codes, dress, calendar and alphabet, replacing the Arabic script with a Latin one” . These reforms were implemented under a one-party system dominated by the RPP, which Atatürk created and controlled.
Atatürk’s method of leadership was very personal and authoritative. His vision for Turkey’s future depended greatly on strict oversight over political life to guarantee the success of his reforms. This method of thinking was founded on his idea that a strong central authority was required to implement his six guiding principles, according to the textbook called Turan,
“Republicanism, replacing the hereditary monarchy with an elected parliament. Nationalism, citizens working together with pride in a common interest. Secularism, separating religion from government. Populism, the equality of all citizens before the law. Reformism, a constant process of development and modernization. Etatism, an economic system combining private enterprise with government-funded monopolies of large industries”
However, this extremely strict attitude resulted in increased opposition and the foundation of a new political party. Atatürk allowed the party’s formation as a means of proving the effectiveness of his reforms and introducing a kind of opposition within an institutionalized environment. Personal differences, rather than ideological differences, dominated Turkey’s political atmosphere . Fethi Bey, diplomat and politician, indicated that Mustafa Kemal instructed him to lead an opposition party, the Liberal Republican Party (LRP), to increase political competition. He attacked the government for financial mismanagement, the financial crisis, and issues with justice and foreign policy.
Atatürk, also known as the Ghazi, welcomed the new party, pointing out that it maintained the Republic’s essential values. At the same time, the administration recognized this arising political force as a valuable “safety valve” for relieving increasing public dissatisfaction . Many questioned the administration’s economic policies, believing that it focused too much on developing railways while ignoring agriculture. Furthermore, Turkey’s refusal to take international loans was seen as a threat to financial stability that led to future issues.
Economic Situation (Corruption, Waste of Money, Debt, Currency)
The economic situation in early Republican Turkey in the 1930s aggravated the country’s political instability. The government came under condemnation for mismanaging public funds, spending money on poorly designed infrastructure, and failing to prioritize critical industries such as agriculture, recognizing that “Commercial agriculture and trade were the main economic activities”. During that time many Turks were facing a financial hardship. The general economic condition in Turkey was extremely challenging, particularly for those living in the countryside. People in Smyrna, a town on the Aegean coast of Anatolia, including previously financially stable households, were now facing the effects of poor harvests, declining market prices, and increased taxes. Ali Fethi, Second Prime Minister of Turkey, criticized excessive government spending and high taxes, which have resulted in decreased exports and currency volatility .
One aspect contributing to the deteriorating situation in the countryside was tax. As noted by a journal article from JSTOR, Turkey in Economic Crisis (1927-1930): A Panoramic Vision by Cem Emrence, “’While the law stated that 4 percent of the land value would be charged, the actual practice jumped to 6.5 percent, which was identified as an unprofitable economic policy .” Struggling with rising expenses and decreasing profits, many farmers went to the Agricultural Bank for support. However, “A pressing issue was that the bank mostly preferred to extend credit to merchants instead of farmers .” In order to get one, peasants commonly had to mortgage their land or find a guarantor, such as a merchant or even the entire town. In addition to these financial challenges that grew dissatisfaction with the government’s economic policies, corruption and bribery were common and strongly embedded in both government operations and business practices.
Bribery, known in Turkey as baksheesh, became an important part of Turkish politics, reflecting the weakness of institutions and economic inefficiency. Government deals and other official processes frequently required payments to high-ranking officials. This practice became so common that European businesses operating in Turkey actively accepted it as part of conducting business, frequently “buying” government favors. In contrast, American corporations, constrained by greater ethical standards, usually refused to accept bribes. This corrupt environment reinforced public distrust of the government and intensified dissatisfaction with economic inadequacy. The Turkish press often reported on government officials stealing public funds. Per Politurco, a newspaper, “Bribery was also prevalent in the military, with officers involved in such acts being dismissed and sometimes penalized with fines and imprisonment. This included bribery in military recruitment”.
In addition to widespread corruption, the government’s poor financial decisions generated public discontent. There were claims from the commercial attaché Julian Gillespie, that Fethi Bey’s party, Liberal People’s Party, of wasted spending, such as distributing money in Smyrna to artificially create an impression of popular support (an example of astroturfing) during a counter-manifestation to offset any effects of the demonstration of the populace of Fethi Bey. On a wider level, Turkey’s economic management has caused severe concern.
The circulation of paper money was so limited and inflexible that it could not meet the country’s basic demands. In fact, the total amount of paper currency in circulation was less than half the value of Turkey’s foreign trade, and the central government’s budget exceeded the money supply by roughly 70 million Turkish pounds. These discrepancies pointed to a weak and unstable financial system. Because of this poor financial structure, the government failed to manage its growing debt, causing even more alarm among the public.
As described by Emrence, “the economic crisis started with price falls in the world market and hit the peasantry via the tax mechanism, indebtedness and the loss of the means of production, as a result of unpaid debt .” Also, as noted in the article, unpaid peasant debts increased year after year from 17.2 million in 1927 to 21.8 million in 1930, representing an enormous rise during that time . This demonstrates how the combination of going prices, increased taxes, and increasing levels of debt caused a catastrophic crisis in the countryside, leaving many peasants without resources and deepening economic instability throughout the country.
During a speech by Ismet Pasha, the political leader defended the government’s emphasis on railway development, presenting it as both a patriotic and military need. During the Greek War, Turkish soldiers suffered due to a lack of railroads and a lot of lives scarified because of lack of transportation and communication. On the other hand, Pasha did not want any foreign country to intervene in the construction of railways, but the purchase of the Anatolian railway line presented considerable financial difficulties. Despite this, Ismet Pasha’s colleagues made him to purchase this new railroad line. They have been able to construct 1800 kilometers of railways essential for the unity of the country, constructing them in the cheapest way possible due to the financial difficulties. However, due to railways, Turkey is free and independent.
President: Media Control
President Mustafa Kemal Atatürk, sometimes known as the Ghazi, held significant authority in Turkey’s political system, not just through reforms and party leadership, but also through media influence and inside military authority, threating and persuading. The government financially financed the majority of newspapers, allowing them to control news coverage and restrict opposing views. This indicated authoritarian control, raising concerns about media freedom and dictatorship. This control led to media bias and censorship.
Newspaper editors from Hizmet, Yeni Asır, and Son Posta were imprisoned for publishing opinion pieces about the ruling Republican People’s Party. Bail was denied to the editors of Son Posta and Hizmet. In some cases, the liberal media that uncovered local management fraud were penalized. Press corruption went beyond politics and into business. For example, they were campaigns against the Ford Factory in Turkey. Certain Turkish newspapers constantly circulated disinformation that the Ford Factory was closing because of problems with the government.
The motivation for this fraudulent reporting was not ideological, but financial: the newspapers wanted Ford’s agent, Mr. Collins, to pay for advertising in their publications. When Collins refused to “buy” positive press coverage, newspapers responded with negative stories claiming that the factory was collapsing. Ismet Pasha (Turkey’s Prime Minister at the time) personally informed Collins in Ankara that he did not trust the false allegations and that the government would take action if the newspapers continued to promote harmful misinformation. Through his influence over government decisions and the media, Atatürk kept an absolute control on politics and popular opinion. He was able to defend his reforms thanks to this, but it also limited political freedom.
The Two Parties
The main political force in early Republican Turkey was Mustafa Kemal Atatürk’s RPP. As referenced by the website Cumhuriyet Halk Partisi (CHP), “CHP adopted four foundational principles in 1927: ‘Republicanism’, ‘Populism’, ‘Nationalism,’ ‘Laicism,’ ‘Statism,’ and ‘reformism. ’ Atatürk implemented changes such as secularism, modernization, and power centralization. The party favored a strong state-led economy and tight control over political life, usually suppressing opposition viewpoints.
In contrast, LRP was founded in 1930 by Fethi Bey, a former prime minister and close colleague of Atatürk. One of its main objectives was to reduce taxes in order to encourage economic growth without imposing a significant burden on individuals. The party also underlined that public funds should be spent properly and in ways that do not harm future generations. It aimed to abolish monopolies and make low interest lending more accessible to struggling farmers .
The party also promoted the growth of local industry, including proposals to increase the Bank of Industry and Mining. Fighting corruption was also a key priority, with significant support for legislation to prevent bribes and abuse in government posts. On the political front, the party favored peaceful relations with neighboring countries, membership in international organizations such as the League of Nations, direct elections, and increased political rights for women. On August 9th of September 1930, there were announcements of the formation of the new party, the LRP. Its platform, first published in the newspaper Yarin, stating their principles and reforms. By August 15th, the party’s program had been officially shared with the public, outlining eleven core articles that also focused on ending corruption, revaluing the currency, and supporting farmers. They offered a different vision, less government interference, and stronger connection with the outside world.
İsmet Pasha, chairman of CHP and Prime Minister, and Fethi Bey differed significantly in how they addressed Turkey’s economic issues during this time period. Ismet Pasha’s vision was that Turkey should finance its own growth rather than relying on foreign loans. While, Fethi Bey’s position was that the burden on the present generation is too high, and Turkey should seek outside financial assistance .
Furthermore, the new agenda of the new party, the LRP, generated some international reactions. France supported Fethi but avoided outright backing. The Soviet Union was firmly opposed. The Soviet ambassador pressed Turkish officials. Italy was dissatisfied; they did not want French influence. Germany prefers Ismet because he is committed to railway projects that serve German interests. However, merchants were concerned about the shifting political environment’s impacting on their business.
Although its liberal program and support for reforms, the LRP immediately faced considerable opposition from the ruling RPP. As Fethi Bey went to Smyrna and promote the new party, tensions increased. People’s Party announced that there will be a meeting. They were organizing a counter-manifestation to offset any effects of the demonstration of the populace of Fethi Bey. The situation turned violent; the police reportedly removed flags flown by free citizens, arrested typesetters, and attempted to prevent public meetings. This represents how fragile political competition was in early Republican Turkey. Prisoners in the Central prison apparently got out of hand and yelled “Down Ismet Pasha, long live Fethi Bey ”. The crowd that went out to hear Fethi Bey’s speech was about forty-thousand people. Julian, commercial attaché, stated that, “I am frank to admit that the present situation seems more difficult to explain and understand than heretofore. His obvious sincerity and his knowledge of politics in Turkey only complicate the situation in my mind”.
After all of these complications, on September 27th, Ismet Pasha formed a new cabinet with the anticipated vote of confidence in the Grand National Assembly of 249 against 12 . It was the first time the two parties confronted each other in the Assembly. The fear from Atatürk was that will be no one adequate to fill this (Ghazi) position. Nevertheless, the Ghazi have had four different plans to this actual concern. Shortly after the new party was formed, he stated in a letter to Fethi Bey that at the end of his term of office as President (October 1931) he would step down and take over the active Presidency of the People’s Party. Again, on September 25th, he expressed extreme displeasure over rumors of a plan to elect him President for life. Later he is reported to have threatened to take over the Prime Minister should Ismet Pasha refuse. This was subsequently denied. A few days after, becoming more specific, he stated to the editor of the Akcham that, although there were many who could assume the position. He even stated that he could become Prime Minister if the nation desires. The final announcement was that the Gazi has now transferred all his property as a gift to the People’s Party as he promised before. On September 22nd, the elections were held in Turkey. The Liberal candidates received a large number of votes. Fethi Bey had been elected as a deputy and the President reappointed Ismet Pasha to lead the government after the entire cabinet resigned due to political pressure and unrest.
Women in Government
One of the most significant advances of this political period was the inclusion of women in government positions and electoral participation. Women were granted the right to vote for the first time, marking an important turning point in Turkey’s early republican history. As illustrated by Global Data on National Parliaments, “On 3 April 1930, women were granted the right to vote in local elections”. Despite these limits, eight women were elected to the Istanbul municipal council for the People’s Party, making it the first-time women held such seats. However, not until 1934 women’s right to vote and stand in national elections was ensured in the country . As mentioned by Middle East Review of International Affairs, “In political parties, women remain as ‘vote gatherers’ rather than ‘decisionmakers.’ Still, many–if not all–women have discovered their status outside of the kitchen and entered the political as well as the socio-economic realm”. This moment in history was not just a legal milestone, but also the beginning of a larger societal transformation, as women began to demand their presence in public life, despite continued obstacles to full political participation.
International Entities
During this time, Turkey’s economic and political conditions attracted the attention of foreign entities such as Russia, the US, and European nations. Diplomatic reports revealed how Russia’s economic actions affected Turkey and neighboring Balkan countries. Russia policy was to export raw materials and sell them abroad at low prices. Russia policy as “dumping.” Russian coal was being sold in Constantinople and Smyrna for bunkerage of ships and for the Smyrna-Aydin Railway at prices less than that of Zonguldak coal .
At the same time, Turkish opposition leaders, like Fethi Bey and Aghaoglu Ahmed, Deputy of Kars, questioned why neither American nor European finance was coming into Turkey. The US representative, Gillespie, stated that no real investors would enter the Turkish market until the country established greater economic stability and liberalized its regulations. These international perspectives reflected a greater concern about Turkey’s internal conditions, emphasizing how foreign economic involvement was intrinsically connected to domestic changes and political transparency. An important aspect is that as described in the Journal of History Culture and Art Research, “The US was the primary consumer of the Turkish tobacco yield and tobacco products constituted the largest share in bilateral trade,”…” the American Tobacco Company was the largest American buyer of Turkish tobacco with a sales volume of $10,000,000 and about 4 thousand employees in Kavala, İzmir, Samsun and İzmit”, but this was until 1930, after the American commercial presence in Anatolia. These factors have demonstrated how Turkey’s internal instability affects not only its economy but also its capacity to form strong and dependable partnerships with global powers.
Turkey Then vs. Now
Studying at Turkey’s political and economic issues in the 1930s provides important context for the country’s current condition. The establishment of a single-party system, economic instability, and limited political liberties determined the Republic’s early shape. However, many of these patterns may still be found in contemporary Turkish politics. Media control, centralized power, and popular unhappiness remain sources of concern for democracy and transparency. As outlined in Reporters Without Borders, “With 90% of the national media now under government control, the public has turned, during the past five years, to critical or independent media outlets of different political biases to learn about the impact of the economic and political crisis on the country ”. As of today, 5 journalists have been detained. In the words of Gan Integrity, “There is a high risk of corruption when dealing with Turkey’s judiciary,” … “Bribes and irregular payments in return for favorable judicial decisions are perceived by companies to be fairly common ”. These obstacles demonstrate that, over a century later, many of the same challenges persist. It raises the question of whether this is due to government decisions or the continued employment of traditional leadership methods. In any case, Turkey’s past and present have a common story: each step forward can be followed by challenges caused by excessive control by the government and a lack of democratic principles.
Conclusion
The political and economic instability of 1930s Turkey, characterized by opposition party conflicts, corruption, limited freedoms, and economic mismanagement, indicates major obstacles to establishing a solid democratic government. Although women’s rights and political presence increased, public discontent and power disputes frequently delayed development. Similar challenges exist today in Venezuela, where the government faces economic collapse, sanctions, and public distrust. In recent years, Venezuela has turned to Turkey as an important friend, particularly in the gold trade. As reported by Al Jazeera, “Turkey has emerged as a vital ally for Venezuela on the world stage ”. With both countries’ histories of strong state control and limited opportunities for democracy, it is worth asking: could other nations be slowly heading down the same path as Venezuela?
Bibliography
CHP History. Cumhuriyet Halk Partisi. https://en.chp.org.tr/chp-tarihi
Çora, Ali Nazmi. “Who is Mustafa Kemal Ataturk.”ProQuest, 2019. https://www.proquest.com/docview/2206978446?accountid=10003&pq-origsite=primo&sourcetype=Scholarly%20Journals
Emrence, Cem. “Turkey in Economic Crisis (1927-1930): A Panoramic Vision.” Middle Eastern Studies 39, no. 4 (2003): 67–80. http://www.jstor.org/stable/4284328.
Grand National Assembly of Türkiye.” Global Data on National Parliaments, https://data.ipu.org/parliament/TR/TR-LC01/elections/historical-data-on-women/
Grew C, Joseph. U.S. Department of State, Index Bureau: 867.00/2025, 29 Jan. 1930.
“Kemal Atatürk (1881-1938)” BBC. https://www.bbc.co.uk/history/historic_figures/ataturk_kemal.shtml
Nizamoglu, Yuksel. “From Empire to Republic: The Persistent Challenge of Bribery in Turkish History,” Politurco, 16 Dec. 2023, https://politurco.com/from-empire-to-republic-the-persistent-challenge-of-bribery-in-turkish-history.html
Karakoç, E., Küçük, H. Turkish American Commercial Relations (1908-1930): The Success of Trade-The Failure of Investment. Journal of History Culture and Art Research, 2020, https://www.researchgate.net/publication/348218074_Turkish-American_Commercial_Relations_1908-1930_The_Success_of_Trade-The_Failure_of_Investment.
Keskin, Burcak. “Political Participation Patterns of Turkish Women.” Middle East Review of International Affairs. Jan. 1998. https://ciaotest.cc.columbia.edu/olj/meria/meria198_keskin.html
Türkiye. Equal Future. https://www.equalfuture-eurasia.org/womens-representation-in-politics-and-public-administration/turkiye
Türkiye. Reporters Without Borders. https://rsf.org/en/country-t%C3%BCrkiye
Turkey Risk Report. Gan Integrity. 5 Nov. 2020. https://www.ganintegrity.com/country-profiles/turkey/
Wilks, Andrew. “As gold trade booms, Venezuela eyes stronger Turkey ties.” Al Jazeera, 17 Jan. 2019, https://www.aljazeera.com/features/2019/1/17/as-gold-trade-booms-venezuela-eyes-stronger-turkey-ties