1898A.C. – 1913A.C.
In December 1898 was officially established the newly Cretan State, with the disembarkation of Prince George as a High Commissioner in Souda. Chania as the capital of the island became an important administrative, commercial, cultural and industrial center and the period of prosperity had just started.
During the Cretan State there was the eminently modernization of the city. Chania was developed outside the walls with the opening of new roads and the demolition of parts of the Venetian walls. The city was suffocating, as, according to the census of 1900, in Chania lived 21,000. In 1911 the rampart Piatta Forma was graded and the trench was filled in order to build the Municipal Market, while in the central streets of the new city, as Hroon Polytechniou Ave, Tzanakaki Street and King Constantine (now Andreas Papandreou) there were built many neoclassical buildings. There are houses belonging to doctors, lawyers, engineers and politicians, as the house of Savakis- the current Despotica, and the home of Manousou Koundourou. At that time there was a significant prosperity of the elegant district of Halepa, which included rich mansion, the High Commissioner Palace, the house of Venizelos and the Church of St. Mary Magdalene.
In terms of administration, Crete issued its own currency, the Cretan drachma, founded the Bank of Crete, executed the constitution, issued the official newspaper of the Cretan State and created the Cretan Gendarmerie. Also, in 1899 was established the Literary Association “Chrysostomos” and at the same time there were founded many spiritual, philanthropic, athletic and trade unions. On April 29, 1899 was formed the first government with five senior centers, corresponding with the current ministries, those of Finance, Interior, Public Education and Religious Affairs, Communications and Security and finally the Justice ministry headed by Eleftherios Venizelos.
Two years later, in 1901, Eleftherios Venizelos will clash with the High Commissioner, because of the authoritarian government of George and deposed him from his ministerial rights. In 1905, Venizelos will cause the revolution Therisos Revolt and he formed the Temporary Government of Crete. George will leave the island and he will be replaced by Alexandros Zaimis.
In July 1908 the foreign troops began to pull out and the Cretan parliament declared the island’s union with Greece. The Cretans took down the Cretan flag and raised the Greek flag at Firka that was taken down again by the foreign forces. Neither Greece had officially recognized the union in order to avoid the reactions of Turkey and of the European powers.
Eventually, in 1913, thanks to the victorious Balkan Wars, comes the definitive solution of the Cretan Question. With the Treaty of London (05.30.1913) and the special treaty between Greece and Turkey (11/01/1913) Sultan renounced all his rights to over Crete. The union with Greece took place on December 1, 1913 with the raising of the Greek flag at Firka Fortress in the presence of King Constantine of Greece, of the Prime Minister Eleftherios Venizelos and of the rebels Hatzimichalis Giannaris and Anagnostis Mandakas.