CHAPTER V
FINANCIAL TROUBLES
Perhaps the chief amongst the many obstacles which beset the path of Prince Charles in his task of raising Roumania from the depth to which it had sunk was the very serious state of the national finances. The effect of the previous drains upon the country's resources, and the expense of keeping an army prepared to meet any emergency, caused by the hostile attitude of Turkey, were thus summed up by the Prince in July 1866.
"The worst wound of the country is at present its finances. We have not a penny, in the literal sense of the word, and the Ministry, in order to restore the equilibrium of the Budget, has to adopt measures which will scarcely gain friends for us: the taxes have to be raised; 30 per cent. of salaries and pensions, which have not been paid for four months, have to be kept back. For my part, I have surrendered another 12,000 ducats of my Civil List. Only a loan can save us now; we are in communication with financiers, but their conditions are more than hard. With patience we shall yet escape from this calamity, but for the moment the situation is very difficult. Retrenchment must be made, wherever possible."
It is interesting to note that, whilst the receipts amounted to only 56,000,000 francs in the first year of the Prince's rule, they reached the total of 180,000,000 in 1891, being thus more than trebled in twenty-five years.
Though the financial situation was only slightly improved during 1867,[14] Prince Charles entered in the autumn of that year into negotiations with the Austrian financier, Herr von Ofenheim, for the construction of a railway from Suceava to Bucharest, passing through Jassy and Galatz. These negotiations, commenced as far back as 1862, had been allowed to drop; and Roumania had thus lost the favourable moment for appealing to the British money market, which, moreover, was never at any time favourable to the enterprise. However, Ofenheim's Syndicate, which included three Englishmen (amongst them Mr. T. Brassey), arranged for the construction of the line, which was to be built by sections, commencing with 110 miles from Suceava to Roman. How necessary railways were to the country is shown by the fact that only a quarter of the corn and wood intended for export that year could be moved by ship to its destination. Eventually the Chamber confirmed the Ofenheim concession, voting 230,000 francs for the first section, and a subsidy of 40,000 francs per kilometer.
Ofenheim only undertook to carry out the northern half of the concession, and ceded the southern portion to a Prussian syndicate, of which the well-known financier, Strousberg, was Chairman. This syndicate was granted a concession by the Roumanian Chamber on October 2, 1868.
Unfortunately for the progress of the railways, the question soon gave rise to heated debates in the Chamber. For example, on June 11, 1869, a great commotion was caused there by a charge brought against the Syndicate that it had extended the line unduly by a ten-mile curve at Barboschi (payment, it will be remembered, was to be made according to the mileage). Nevertheless, in spite of all this petty opposition, the Prince had the satisfaction of seeing the first section of the Roumanian railways, connecting Bukowina and Moldavia, completed on December 15, 1869, whilst no less than 130 miles of much needed high roads were opened for traffic, chiefly on the western frontier of Roumania.
As the payment for the railways was to be governed by the completed mileage, the Finance Minister instructed the Roumanian Commissary in Berlin, Privy Councillor Ambronn, to control his payments by the certificates of the engineer, countersigned by the chief of the newly created Technical Bureau. This evoked an immediate protest from one of the concessionaries, Dr. Strousberg, who threatened to appeal to the law courts against so unjustifiable a check on the honesty of the contractors. Councillor Ambronn reported that he felt unable to refuse payment, although the engineers' certificates were not countersigned, and further, that the proceeds of the bonds were deposited, partly in cash, partly in stocks bearing interest, at the Berlin Kassenverein. This led to a Parliamentary inquiry into the state of the funds entrusted to Councillor Ambronn, and later on to a unanimous resolution by the Ministry relieving him of his duties. Prince Charles, however, was of the opinion that this measure would only damage the credit of the railways, and declared his willingness to accept the responsibility for the railway construction which was thus thrust upon him by the country.