The Warsaw Battle with No Victor

The shifting winds on the Prusso-Russian battlefield directly affected Europe's financial markets. For a time, even the rustle of wind and cry of a crane seemed an alarm; all war bonds issued by the Prusso-Polish Federation saw their market value plummet.

Anyone with a shred of common sense knew that if Moltke could not turn the tide in the coming battles, the Prusso-Polish Federation would inevitably default on its debts after defeat.

A financial winter was coming.

Even Prime Minister Benjamin, far away in London, felt a chill.

When debts piled up, they sometimes truly did not weigh one down. At this point, aside from the Prusso-Polish Federation itself, the people most afraid of its collapse were the British.

The more information Prime Minister Benjamin held, the more clearly he understood the gravity of the situation.

If the Prusso-Polish Federation was defeated, it would not merely mean that the loans extended to it became bad debts and the bonds issued on its behalf turned into waste paper. More crucially, there were the payments Berlin Government owed for goods.

The earlier losses would fall on financial institutions and speculators. These people were already wealthy and had relatively strong resistance to risk.

The outstanding payments were different. Major enterprises might be able to weather the storm, but small and medium-sized businesses had fragile cash flows and simply could not withstand such turmoil.

If the banks then took advantage of the chaos to plunder them, the day the Prusso-Polish Federation collapsed would be the beginning of Britain's industrial crisis.

The actual situation might be even worse. After all, the capitalist world was already suffering from overcapacity. Market competition would become ever fiercer after the war, and a wave of corporate bankruptcies was inevitable.

For mighty Britain, these small and medium-sized enterprises did not