When Alexander left behind a three-man regency headed by Stefan Stambolov, the Bulgarian government was as unstable as it was in its first year. A Russian-educated liberal, Stambolov became prime minister in 1887 and ceased tailoring Bulgarian policy to Russian requirements. The tsar's special represÍÍÍÍentative in Bulgaria returned to Russia after failing to block a subranie called to nominate a new prince. Russo-Bulgarian relations remained chilly for the next ten years, and this break further destabilized Bulgarian politics and society. Stambolov brutally suppressed an army uprising in 1887 and began seven years of iron control that often bypassed the country's democratic institutions but brought unprecedented stability to Bulgaria. Meanwhile, Ferdinand of SaxeCoburg -Gotha, a Catholic German prince, accepted the Bulgarian throne in August 1887.

Independence from the Ottoman Empire brought drastic economic and social changes to Bulgaria at the end of the nineteenth century. Industrialization proceeded rapidly (thirty-six major factories opened between 1878 and 1887), and a new class of industrial labor formed from displaced artisans and agricultural workers. Harsh working conditions led the urban poor to the cause of socialism, and in 1891 the Social Democratic Party was formed. (Later transformation of one of its factions into the Bulgarian Communist Party made that organization the oldest communist party in the world.) Town-centered trade and the guild structure were swept away by an influx of West European commerce to which Bulgaria had been opened by the terms of the Treaty of Berlin.

Despite industrialization, Bulgaria remained primarily an agricultural country. Liberation eliminated the Ottoman feudal landholding system. Bulgarian peasants were able to buy land cheaply or simply occupy it after Turkish landlords left, and a system of village-based small landholding began. Agricultural production rose in spite of heavy government land taxes. Many peasants were forced into the urban work force by taxes or high interest on borrowings for land purchase. Until the end of the nineteenth century, the vast majority of the Bulgarian population were small landholders or independent small tradesmen.

Russia and the other great powers did not recognize Ferdinand as rightful prince of Bulgaria until 1896. Supporters of Prince Alexander who remained in power used this failure as a weapon against the policies of Ferdinand and Stambolov. In 1890 a widespread plot against the government was discovered. As before, the basis of the plot was dissatisfaction with Stambolov's refusal to intercede with the Turks on behalf of Macedonian independence. In a masterful diplomatic stroke, Stambolov represented the insurrection to the Turks as an example of potential chaos that could be avoided by minor concessions. Fearing the Balkan instability that would follow an overthrow of Ferdinand, the Turks then ceded three major Macedonian dioceses to the Bulgarian exarchate. Stambolov thus gained solid church support and an overwhelming victory in the 1890 election, which legitimized h b14is goverernment among all Bulgarian factions and reduced the threat of radical plots.

In the next years, Stambolov and the People's Liberal Party he had founded in 1886 exerted virtually dictatorial power to suppress extreme nationalism and opposing parties and create conditions for economic growth. After the 1886 coup, the army was strictly controlled. Voters were intimidated to ensure the reelection of incumbent officials, and political patronage grew rampant. Using his own and Ferdinand's ties with Germany and Austria-Hungary, Stambolov built a capitalist Bulgarian economic system on foreign loans, protectionism, an expanded industrial and transport infrastructure, and a strict tax system for capital accumulation. Especially important to the Bulgarian economy were completion of the Vienna-to-Constantinople Railway through Bulgaria in 1888 and the Burgas-Yambol Railway in the early 1890s. Stambolov derived strong political support from the entrepreneurs who benefited from his industrial policy. The Stambolov era marked the victory of executive over legislative power in the Bulgarian political system.

Legitimacy of the Bulgarian throne remained an important symbolic issue in the early 1890s, and the threat of assassination or overthrow of the prince remained after Stambolov consolidated his power. Therefore, Stambolov found a Catholic wife for Ferdinand and maneuvered past Orthodox Church objections in 1893 to ensure Ferdinand an heir that would stabilize the throne. That heir, Boris, was born the next year. Meanwhile, Stambolov's autocratic maneuvering and tough policies won him many enemies, especially after the stabilization of the early 1890s appeared to make such tactics unnecessary. In 1894 Ferdinand dismissed his prime minister because the prince sought more power for himself and believed that Stambolov had become a political liability. The next year, Macedonian radicals assassinated Stambolov.

Data as of June 1992