"We are near to collapse--an athlete with great muscles and perhaps incurable heart weakness," repeated the statesman at parting. "We still maintain ourselves upright by stimulants, by loans, which, like all stimulants, only help to ruin the system more quickly. With that we are a rich country with all conceivable natural resources, simply ill-governed and prevented from unlocking its resources. But is this the first time that quacks have ruined a Hercules that has fallen into their hands? Whoever shall free us from these quacks will be our benefactor. We need light and air, and we shall then surprise the world by our abilities and achievements."
It was shortly after the Port Arthur naval catastrophe that I sought out a bank director, with whom I had become acquainted, to talk with him upon the financial effects of the war, that had had such noteworthy results on the floors of European exchanges. To my astonishment, I found the comfortable bank director very calm.
"The system will still help us out," said he, evasively, to my question whether Russia would have to face a financial crisis after the war.
The bank director adjusted his eye-glasses and, with round eyes, gazed at me for a while. Then, with that burst of candor which so often surprises us in the Russians, he began:
"We are not children, after all, and neither you nor I is dancing to the government music to which others are keeping time. We may, therefore, talk it over calmly. Well, we have a great drum, with which there can be no marching out of line. It drums. We have never as yet stopped our payments, like France, Austria, or Turkey. We are, therefore, punctual payers, hence we shall again secure money."
"God forbid!" was the answer. "We have paid to secure future credit. But it seems that this policy of honest debtor is wiser than the occasional discontinuance of payment, which allows some advance but involves the loss of credit. We can always repeat to the public that wishes to buy our bonds, 'Russia is honest; Russia pays; you need have no fear here of shrinkage.' And so the public buys."
"But the banker must know that the liberality is not real," I rejoined.
"And if he does know it? Is it the banker's business to initiate the public into the secret sciences? Do not forget that no government pays to the world such commissions for loans as we do. Prussia pays one-half per cent., Austria one and a half per cent., we pay three per cent.; and, confidentially, it does not end with that, but the issuing banks also get their six per cent., especially when they appear reluctant at first. For what reason should a commission of three to six per cent. be paid where the business is as bad as it is? It was Offenheim who said, 'You don't build railroads by moral maxims.' And high finance says that dividends and bonuses are not paid with moral maxims."