With the signing of the Lausanne Peace Treaty, the need arose for a name to give to the new state. Throughout the war, nothing had been done to the sultan, who had viewed very coldly the struggle for independence. After the war the sultanate had been abolished, and on October 29, 1923, the name of the new state was officially declared by the National Assembly to be the Republic of Turkey. Thus was born the first republic on the continent of Asia or of Africa.

Although Gazi Mustafa Kemal Pasha was elected president, power was in the hands of the National Assembly. Nevertheless, Atatürk's influence on the state and the party was always strongly felt.

When the republic was declared, the state of the nation was at a very low ebb, exhausted from both the economic and social points of view. The population was barely thirteen million, and only ten percent of the people could read and write. Only 23 lycees and one university existed in the whole land, and there were almost no schools where one could learn a trade. There was no industry: What workshops and manufacturing did exist amounted to little more than handicrafts. Only 80 thousand workers lived in the entire country. Machinery and equipment, and all products of industry were imported, and agriculture was in total collapse. The productive populace had been decimated by years of war. Supposedly an agricultural nation, Turkey was on occasion forced to import grain. Certain crops which in our time are considered everyday (citrus fruit, tea, bananas) were at that time unknown to the populace.