London, 1 December 1885 

Dear Liebknecht, 

As regards Russia’s finances, see Kolb’s Statistik, 1875 ed., 
p. 499 et seq. The last loan shown therein is that of November 1873 for 
15 million pounds. After that a further loan of 15 million pounds was 
raised with great difficulty in 1875, but the Russians were also ad- 
vised by the bankers that this would be the last time, failing a guar- 
antee by a representative assembly. For after provisional arrange- 
ments had been made in 1869 in respect of the funds appropriated for 
railway purposes, there were further borrowings: 
1870 — 12 million pounds 

1871 — 12” id 
1872 — 15” id 
1873 — 15” id 
1875 — 15” id 

i.e between 1870 and 1875, six years, 69 million pounds = 1,380 mil- 
lion marks. They now had to think up some new dodges. Hence, 
1) an internal loan. Though this was in fact a forced loan, it proved an 
almost complete flop. For there was little capital available in the coun- 
try and the government was therefore compelled to lend its own 
money (paper money) to itself so as to give the impression that the 
loan had nevertheless been over-subscribed. 2) The Transcaucasian 
Railway Loan of £ 8,904,200. This was raised (1880 or 1881?) 
abroad on the security of the Poti to Baku line, but most of it had to be 
expended on the construction of the line itself; hence the financial 
straits persisted. Throughout this time repeated approaches were 
made to the bankers, all of them in vain. Finally the Minister for Fi- 
nance set off for the West in person— Paris, Berlin, Amsterdam; 
London was omitted from the itinerary as being quite hopeless. 
Everywhere he met with a rebuff; even Mendelssohn, the court 
banker in Berlin, is said to have asked for a parliamentary guarantee 
point-blank; in any case he, too, turned him away. The only remain- 
ing question was whether the Russian Duma ought to be convoked 
a year sooner or a year later; there was no other way out. Giers then 
visited Friedrichsruh and abased himself, whereupon Bismarck got 
hold of 15 million pounds for him in Germany, thereby postponing 
the evil day a little longer.? 

(One of the conclusions we may draw from the above is that Russia 
won't be able to start a war without Bismarck’s permission, for it can 
only raise money under his protection and the 15 million have long 
since been frittered away. So if it starts a war after all, or seriously 
threatens to do so, Bismarck will be directly responsible.) 

I don’t read The Economist, nor do I know where a run of them is to 
be found, for the many clubs have been the ruin of nearly all the read- 
ing-rooms here. I shall ask Kautsky to try and see if he can lay his 
hands on the Economist, Statist, Bullionist and Money Market Review 
and make extracts for you. 
Although your letter of 26 November was posted between 11 and 12 
in the morning, it didn’t reach me until the morning of 28 November; 
moreover the gum had been tampered with, as you will see from the 
envelope which I return herewith. It ought to have arrived here on 
the evening of 27 November. A bible is surely placed on the altar for 
the sole purpose of being opened. 45° 

Your speech at the first budget reading was sent to me by Bebel 
from Dresden. It was very good; I’m only surprised that you had so 
few interruptions. After all, you did elicit the obligatory call to 
order. *°° 

Your 
F.E. 

The seal on this letter is a count’s coronet and the monogram JC 
intertwined. 

The elections here are going very nicely. *°’ For the first time the 
Irish in England have voted en masse for one side, to wit the Tories. In 
doing so they have shown the Liberals to what extent they can tip the 
scales, even in England. The 80 or 85 Home Rulers over here — one of 
them has actually been elected in Liverpool!— correspond to the 
Centre 22° in the Reichstag and are capable of rendering any govern- 
ment powerless. Parnell must now show what he is worth. 

Incidentally, the new ‘Manchesterism’ is also proving victorious, in 
other words the theory of retaliatory tariffs, which is, of course, even 
more senseless in this country than in Germany, but has been taken 
up by the new generation of manufacturers after eight years of rotten 
trade.  Next there is Gladstone’s opportunist weakness and then, 
too, Chamberlain’s inept manner, first aggressive, then ingratiating, 
which evoked the cry The Church in danger! *8° Lastly Gladstone’s de- 
plorable foreign policy. The Liberals would have us believe that the 
new county voters will vote liberal. These are of course an unknown 
quantity but, if the Liberals are to obtain an absolute majority, they 
will have to win more than 180 of the 300 seats still to be decided and 
there’s no likelihood of that. Parnell will almost certainly become dic- 
tator of Great Britain and Ireland.