Debt Hostage-Taking

Watching the Russians gain the upper hand on the battlefield, the well-prepared Berlin Government could still keep its composure, but the financiers behind them were the first to lose their nerve.

"The debtor is the boss." The saying might have been somewhat exaggerated here, but its essence had not changed. Once the Prusso-Polish Federation was defeated, the creditors would have a hard time getting their money back.

The "collateral" the Berlin Government had promised beforehand still depended on whether the Russians were willing to recognize it.

Judging by the Tsarist Government's usual conduct, there was an eighty percent chance they would pretend not to see it. The remaining twenty percent was that they saw it but refused to acknowledge it.

To win this war, the Berlin Government had gone all out in taking on debt, signing who knew how many secret agreements of every kind.

If the Prusso-Polish Federation was finished, no one knew how many financial institutions that had extended loans would go down with it. If the conglomerates wanted to shift their losses, a financial crisis would be indispensable.

It would not only be financial institutions that suffered; real industries would fare little better. Many companies appeared to be making a fortune from the war, but in truth, much of it was merely profit on paper, while final payments had been delayed in huge amounts.

There was no helping it. Delayed final payments were the greatest chronic disease of commercial circulation, running through nearly every link of the capitalist market economy. It was a problem every manufacturing enterprise had to face.

No one knew how long this war would last, much less how much it would cost. To hold out longer, the Berlin Government naturally had to spend as little as possible.

It did not matter how much