Reminiscences of the King of Roumania

by Mite Kremnitz

However, a report from the special commissioner, Herr Steege, sent to Berlin in the autumn of 1870, placed the affair in a different light, as it was then discovered that the money realised by the sale of the railway bonds (35,000,000 francs) had been placed in the Joseph Jacques Bank without the consent of the Roumanian Government. This incorrect procedure on the part of the Commissary placed the Prince in a most unpleasant position; for, though he considered it in no way desirable that the money should be left lying idle, he had never intended that it should be invested in a private company, and so exposed to every fluctuation of the market. M. Steege was therefore appointed to relieve Councillor Ambronn of his duties in connection with the railway funds.

It seemed that the climax of the railway dispute must have been reached with December 18, when Strousberg informed the Government that he was neither able nor willing to pay the coupon due on January 1, and further maintained that this payment should be made by the State, though, as a matter of fact, he had paid the July coupon himself. The interest, it is true, was guaranteed by the State, but the terms of the concession provided that the interest should be paid by Strousberg whilst the line was in course of construction.

The entire weight of the blow fell on Prince Charles; the railways were his pet idea, nay, even his consolation, as a passage in one of his letters to his father shows. "I have at least done something for my country—I have given it a railway!" But now even that comfort had been taken away.

Prince Charles, however anxious he was at that time to escape from his almost intolerable position in Roumania, felt that he could not quit his adopted country until he had procured justice for his people, and removed the slur which appeared to rest upon their honesty.

Early in March 1871 M. Sturdza thus described the financial situation of the Principalities. The expenditure, but not the receipts, of the State had increased threefold during the last thirteen years; the public debt, which in Prussia amounted to 2 francs a head, reached a total of 7 francs in Roumania, whilst 34,000,000 out of the 84,000,000 francs received had to be devoted to the payment of interest, thus leaving only 50,000,000 available for expenditure. It was, therefore, scarcely a matter for surprise that the Chamber should openly testify to the general indignation felt by the nation, when the fresh burden of the interest on the railway bonds was thrust upon the resources of the country. In their wrath, however, the deputies forgot to be just, and threw the whole blame on Prince Charles. Not a single voice was raised to point out that the Prince himself suffered most from the painful situation to which dishonesty and carelessness had brought the railways. He could not be expected to know in detail all the requirements of such concessions. The only just reproach which could be made against him was the unconditional confidence which he, in his youthful enthusiasm, had placed in Strousberg and Ambronn, from a desire to procure the benefits of the railway for his country as soon as possible.

The attacks turned chiefly on the circumstance that Ambronn had been for a long time in the service of the Prince of Hohenzollern, though this was rather a reason for excusing the Prince, who was surely justified in employing a man whose honest administration had already gained the confidence of his father.

As a way out of the difficulty Prince Charles thought that the State should pay the January coupon and sue Strousberg for the amount, in accordance with paragraph 7 of the concession. Unfortunately the Treasury was empty, the Chamber would never consent to such a measure, and to raise a loan was out of the question.

To crown the disaster an official intimation was received from the Prussian Government that the coupon due must be paid by the Roumanian State, as the bonds were only placed on the market owing to the confidence inspired in the Roumanian State guarantee.

Pressure was brought to bear on Roumania by a Note maintaining the rights of the German bondholders, addressed by Prince Bismarck to the Sublime Porte as Suzerain of the Principalities. The Strousberg affair thus threatened to become more a question de force than a question de droit. It appeared, moreover, that a lawsuit against Strousberg was out of the question, as the bondholders, and not the Roumanian Government, were the injured parties. Needless to say, this opinion of the Prussian law-officers evoked great indignation in Roumania.