Franco-Russian Relations during the Russo-Japanese War

Franco-Russian Relations during the Russo-Japanese WarAuthor(s): James LongSource: The Slavonic and East European Review, Vol. 52, No. 127 (Apr., 1974), pp. 213-233Published by: the Modern Humanities Research Association and University College London, School ofSlavonic and East European StudiesStable URL: http://www.jstor.org/stable/4206868 .

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Franco-Russian Relations during

the Russo-Japanese War JAMES LONG

THE period 1904 to 1905 was crucial for the Franco-Russian alliance. Since its official inception in I894 the alliance had undergone a significant transformation. Created as a military and diplomatic counterbalance to the German alliance system by I905 its military strength was seriously depleted. In I905 revolutionary turmoil racked Russia and the Far Eastern war destroyed, at least temporarily, her military capability. The primary signifi- cance of the war and the revolution was that both revealed the weakness of the Russian government rather than the strength of its adversaries.

At the same time France was no bulwark of strength. The Dreyfus affair and the separation of Church and State preoccupied and divided Frenchmen; the French army, weakened and demoralised by the influence of the Dreyfus case and the efforts of General L. Andre to 'republicanise' it, was of questionable value in resisting the growing military power of Germany. Consequently, by I905 France and Russia, facing threats from Germany and Japan respectively, expressed serious disenchantment with the state of the alliance. Emperor William II used Russian dissatisfaction with the alliance to try to destroy it; on 24July I 905, he convinced Tsar Nicholas to sign the secret Bjork6 treaty which envisaged a defensive Russo-German agreement which France would later be asked to sign.'

The cement that held the alliance together was the French-Rus- sian creditor-debtor financial relationship that had developed so rapidly since I890. The Foreign Minister, Theophile Delcasse, re- peatedly declared that the alliance would remain strong because the two powers had no conflicting interests; but they really had no common interests either. By 1904 the financial bond between the two countries had become the 'common interest'. The Russo-Japanese war severely tested the alliance because Russia became dependent on the Paris financial market for funds to prosecute the war. Simulta- taneously French government officials, particularly the Finance Minister, Maurice Rouvier, and officials of his ministry, seriously

James Long is Assistant Professor of History at Colorado State University. 1 There are several monographs dealing with i904-6, but most discuss diplomatic

rather than financial relations. Most useful are John White, The Diplomacy of the Russo- Japanese War, Princeton, I964; Christopher Andrew, Thiophile Delcasse and the Making of the Entente Cordiale, London and New York, I968; and Boris Anan'ich, Rossiya i mezhdu- narodnyy kapital I897-I9I4; ocherki istoriifinansovykh otnosheniy, Leningrad, I970.



214 JAMES LONG

began to advocate the curtailment of Russian borrowing in France.2 During the war France remained neutral because of Delcasse's attempts to improve relations with Great Britain and because the alliance did not stipulate French military support of Russia against Japan unless, of course, Great Britain entered the war. However, there was no doubt among Russian officials that the funds needed to finance the war would have to come from foreign loans, chiefly from Paris. The tsarist government believed that France, being Russia's only ally, should give generously of its abundant financial resources. From 1905 to I906 Russia's deepening financial dependence on Paris coupled with the steady deterioration of her armed forces placed the French government in a serious predicament.

The French at first willingly loaned to Russia although they looked with disfavour upon the war. Soon, disillusioned with their incom- petent ally and the unsatisfactory trade relations with Russia, more and more Frenchmen began to question the feasibility of endless loans to her. French business and industry demanded better trade relations with Russia. French treasury officials became increasingly concerned over the vast number of Russian bonds issued in France and possible domestic repercussions. After Bloody Sunday, 22 Janu- ary 1905, vociferous opposition groups in France and Russia appealed to the French government and public not to grant loans which allegedly would be used to crush the aspirations of the Russian people.3

At the outbreak of war with Japan, Russia's finances were in a chaotic state. In November I904, the State Controller pointed out that at the time the war started Russia had not yet fully recovered from its commercial-industrial crisis.4 The economic strength of the agricultural population was undermined because the harvests of I 903 were not very good and in nineteen provinces the harvest was considered very poor when compared with those of past years. In Febru- ary I904, the new Minister of Finance, Vladimir Kokovtsov, was confronted with the problem of finding funds for the war. In his report to the Committee of Finance on I 7 March, Kokovtsov insisted

2 Very little work has been done on the career of Rouvier. The only monograph is the short one by Claude Gignoux, Rouvier et lesfinances, Paris, I 93 1 . Some insights on his 1904-6 government service are contained in Octave Homberg, Les Coulisses de l'histoire: souvenirs I898-1928, Paris, 1938. Rouvier was the founder and chairman of the board of the Banque fransaise pour le commerce et l'industrie. From January 1905 to March I 906, while he was President of the Council of Ministers, he also remained as president of the Banque fransaise. Thus Rouvier's banker's mentality disposed him to pursue a more conservative loan policy with Russia at war.

3 For this aspect of the problem see my article 'Organized Protest against the 1906 Russian Loan' (Cahiers du monde russe et sovitique, XIII, Paris, janvier-mars 1972, pp. 24- 39).

4 Gosudarstvennyy kontrol', Vsepoddaneyshiy otchot gosudarstvennago kontrolyora za 1904 god, St Petersburg, 1905, p. 64 (hereafter called Gosudarstvennyy kontrol').



FRANCO-RUSSIAN RELATIONS 215

that the gold standard had to be maintained at all costs and then proposed to contract foreign loans in order to strengthen Russia's gold reserves which would enable the government to increase the issue of paper roubles; to raise domestic loans which would withdraw excess currency from circulation to avoid inflation, and to pare un- necessary expenditures from the budget.5 New taxes would not bring about any appreciable increase in revenues. The Finance Committee also ordered that the printing presses be used only sparingly.

A cursory examination of the Russian budget for 1904 clearly revealed to the finance ministry that it was not possible to carry on the war without large foreign loans. Actual ordinary revenues for I904 amounted to 2,028,000,000 roubles: more than estimated, but I3,800,000 roubles less than the I903 revenues. The greatest decline was in customs duties, but liquor sales were also down and redemp- tion dues slumped by IO,OOO,OOO roubles. During I904 the civilian departments made additional cuts in their ordinary expenses totalling about 70,000,ooo roubles reducing the actual ordinary expenses to i,905,400,000 roubles. After subtracting this from the ordinary revenues the Russian government was left with the small surplus of 122,600,000 roubles, compared with its annual foreign debt obligations of i 8o,000,ooo roubles.6 The Russian government had to resort to more borrowing to pay off loans due.

The war furthermore brought real havoc to the extraordinary revenues and expenditures. The government originally estimated that the extraordinary revenues of I904 would amount to 2,700,000

roubles and extraordinary expenses (primarily railroad construction) to 2I2,200,000 roubles. By the end of I904 the tsarist government had spent or allocated 803,700,ooo roubles for extraordinary expenses, most of it connected with the war.7 Even with the ordinary surplus of I22,600,000 roubles and the 'free cash' (svobodnaya nalichnost') which amounted to 38I,300,000 roubles on i January I904, there was a deficit of approximately 300,000,000 roubles which had to be covered by loans.8

Kokovtsov had no previous experience in arranging foreign loans and his first attempt, in March 1904, did not endear him to the French government. Following the common practice of Sergey Witte, Minister of Finance from I892 to I903, he bypassed the

5 Vladimir N. Kokovtsov, Iz moyego proshlogo, I, Paris, 1930, p. 27. 6 Gosudarstvennyy kontrol', p. 6. 7 Ibid., p. 8. 8 Svobodnaya nalichnost' was neither free nor cash. It was more or less a bookkeeping term

meaning a fund to meet emergencies such as war or payment of loans. This fund usually came from foreign loans and was kept on account of the State Bank with foreign banks so that it was not readily available. See Akademiya nauk SSSR, Trudy leningradskogo ot- deleniya instituta istorii, Monopolii i inostrannyy kapital v Rossii, Moscow, I962, pp. 359- 76.



2I6 JAMES LONG

French government and began to deal directly with the French bankers.9 In April he lured 1tdouard Noetzlin, a director of the Banque de Paris et des Pays-Bas, and Joseph Hottinguer, a director of the Banque de France and head of the Union Parisienne, to St Petersburg on the pretext of discussing the Russo-Chinese Bank in which both men had an interest.

The French government and especially Finance Minister Rouvier objected to Kokovtsov's devious methods. Rouvier instructed M. Bompard to inform Kokovtsov of the French government's dis- pleasure and to demand that the government be informed before the Russian government undertook further loan talks with French bankers.10 Maurice de Verneuil, head of the Paris stockbrokers and a close friend of Rouvier, informed Jean Hoskier, a French financier, that Kokovtsov had jeopardised the loan by his behaviour." Having been warned by Hoskier, Kokovtsov replied to Bompard that he thought the French government had been informed by Alexander Nelidov, the Russian Ambassador, and promised to keep it informed in future.

Kokovtsov and Witte, who also talked with Noetzlin and Hottin- guer, resorted to bluff, intimidation and deception in order to strengthen their bargaining position. Kokovtsov insisted that Russia was in no immediate need of money, which was true, and that the treasury assets and metallic reserves were sufficient to carry Russia through the war, which was false.'2 When the bankers refused a long-term loan of a billion francs by asserting that the French government probably would not permit such a large operation, both Witte and Kokovtsov warned that Russia could also get money from Germany, at the same time arguing that France should lend as much as possible to Russia: 'Not being able to second Russia at this time in any other way she should at least help her in this way [financially]."13 Kokovtsov also spoke of domestic loans, although only a week earlier he had informed Arthur Raffalovich, the Russian financial repre- sentative in Paris, that domestic loans would not be very successful because there was a scarcity of free capital in Russia.'4 As a further enticement to the French, Kokovtsov said that he was recommending

9 The French government wanted to be notified first in order to present the French bankers with its conditions rather than have to ratify afait accompli. The influence of the French government was most effective while the issue was in suspense and ceased once the loan was concluded.

10 Archives du Ministere des Affaires lttrangieres, Russie, Finances-Emprunts (new series), LVI, p. 23 (hereafter called Finances-Emprunts).

I1 E. A. Preobrazhensky (ed.), Russkiyefinansy iyevropeyskaya birzha v I9o4-I9o6gg., Mos- cow, I926, p. 59 (hereafter called Preobrazhensky).

12 Ministere des Affaires ttrang6res, Documents diplomatiques fran?ais, I871-I9I4, second series, I90I-I I, V, Paris, 1930, p. 49 (hereafter called DDF).

13 Ibid. 14 Preobrazhensky, p. 86.



FRANCO-RUSSIAN RELATIONS 2 I 7

to the Ministers of War and Marine that they place foreign military orders in France. The bankers did not waver and refused to change their terms: a short-term loan of 8oo,000,ooo francs at five per cent interest.

Since the loan was to be a large issue the attitude of the French government was crucial. Delcasse and Rouvier were concerned that a big issue of securities would lower the prices of other Russian securities on the Paris Bourse.15 Rouvier also wanted to prevent a large outflow of gold from France. However, they agreed to the loan because it would be politically embarrassing to refuse since the bankers had already agreed to negotiate. On 23 April Raffalovich informed Kokovtsov that 'in the French ministry of finance, which is not especially disposed to a large Russian loan, everyone understands the obligations that result from the alliance'.16

Because of these financial considerations, Rouvier presented Delcass6 with a number of conditions in order to protect the French financial market. First, the bankers should underwrite (guarantee) and place immediately only 400 million francs: on the remaining 400 million they would take an option up to 3 I December I 904. Secondly, Rouvier demanded direct placement of the loan by the banks among the depositors of the contracting banks and no public subscription. He hoped this would minimise the decline in prices of other Russian securities quoted on the Paris Bourse. Thirdly, the French bankers would deliver 250 million francs to Russia right after placement and the remainder in October, which would prevent a large loss of gold at one time. Fourthly, if there was a serious decline of Russian securities or some other complication on the Paris market the operation would be cancelled. Finally, only French banks would participate in the loan.'7 Rouvier also warned that Kokovtsov's promises of orders in France were vague. He wished the Ministries of War and Marine would be more explicit on the orders to be placed in France, but did not wish to force the question on the Russian government. (He was to regret this later.) Rouvier urged Delcass6 to inform Bompard of the conditions so that he could energetically support the French bankers in realising them.'8

Kokovtsov and Witte accepted the conditions of Rouvier and the bankers. The Russian government also gave written assurances to France that the railway near Siedlce in Russian Poland would be completed under conditions acceptable to the French government.'9

15 DDF, V, p. 82. 16 Preobrazhensky, p. 90. 17 Witte had been particularly insistent on German participation, hoping to play off

the bankers against each other (DDF, V, p. 82). 18 Finances-Emprunts, LVI, p. 37. 19DDF,V,p. I12.



2I8 JAMES LONG

The Quai d'Orsay was particularly pleased that only French banks participated so that France got all the political benefits from the loan. Bompard wrote to Delcasse on 7 May that 'since the Japanese have just concluded a loan in London, it is essential that the Berlin market cannot boast of having participated in a Russian loan'.20

On I2 May I904, the loan agreement was signed. In spite of Rouvier's worries, the loan was a success and the entire 8oo million francs (300 million roubles) was issued. The Russian government received a guaranteed price of 94, thus actually 282 million roubles, and the banks issued the bonds at 99 making a substantial profit. The French and Russian governments both appeared to be satisfied. The former reaped political benefits by showing that it was still the loyal ally. Kokovtsov and the tsarist government were pleased because with the loan the government would not have 'to search for new taxes which would impose more burdens on the population'.2' However, there were indications in the summer of I904 that the alliance was undergoing some stress and strain, and that France desired a moratorium on Russian loans in France. On 2 July Raffalovich informed Kokovtsov that both Rouvier and Georges Benac, directeur du mouvement des fonds in the finance ministry, had impressed upon him 'that in the future they wish to direct us to another source [of credit], for example Berlin'.22

The French government had not tried to attach the condition of industrial orders to the loan although Finance Minister Rouvier had questioned the vagueness of Kokovtsov's promises. Bompard raised this issue with Kokovtsov on I4 May after the loan was agreed. Kokovtsov later assured Bompard that he had urged giving prefer- ence to French industry in matters of Russia's military orders 'in consideration of France's position as a friendly and allied power, and in consideration of the financial support which it renders to Russian state credit'.23 Kokovtsov could not, however, fulfil this promise. In Russia, where each minister was master of his own ministry, Kokov- tsov could only recommend to the Ministers of War and Marine to buy in France. The promised industrial orders to France never material- ised. In June I904, the French military attachd in St Petersburg, Colonel G. Moulin, reported that Russia was planning to get all its artillery from native foundries and Krupp of Germany and added bitterly that France would get no orders, because 'the Russian Minister of War never has had any intention of acquiring in France materials being used in the war; the Russian military attache in

20 Finances-Emprunts, LVI, p. 43. 21 Preobrazhensky, p. 88. 22 Ibid., p. 102. 23 Ibid., p. ioi.




Paris never even received instructions in order to make some in- quiries in this sense'.24

This news could not have come at a more inopportune time for Rouvier, because on I7 May, just five days after conclusion of the loan, literally all French metallurgical interests had written to him demanding more orders from Russia. The groups that petitioned him included the Comit6 des forges de France, Chambre syndicale des fabricants et des constructeurs de materiel de guerre, and Chambre syndicale des fabricants et des constructeurs de materiel pour che- mins de fer et tramways. The letter from the Comit6 des forges, which represented the French iron and steel industry, noted that from 1894 to I904 Russia had placed military, naval and railway orders in France totalling 86,ooo,ooo francs while Japan for the same period had placed orders worth 73,000,000 francs. Since I897, it said, French shipyards had not received one order from the Rus- sian government. The Comit6 insisted that the French government should use loans to get orders from Russia: 'Has not the moment arrived ... to ask her [Russia] to allocate to French metallurgical industry part of the orders that it has to place abroad?'25 The Chambre syndicale des fabricants et des constructeurs de materiel de guerre also urged that the condition of orders be attached to Russian loans, and complained that Russian orders to its member industries had never corresponded to all the financial aid furnished by France. All the petitioners declared that as a result of the war French metallurgical industry had a right to expect Russian orders amounting to at least 200,000,000 francs.26

The French cabinet of 1tmile Combes could not take these petitions lightly, and Bompard was instructed to approach the Russian government again on the matter. He replied on 21 May that the Russian government contested these figures and contended that it had pur- chased goods for not less than i8o,ooo,ooo francs from the French metallurgical industry in the last twenty years.27 The rapid develop-

24 France, Service historique de l'armee, Russie, Rapports de l'attache militaire, carton no. I0 (I 900-I904). In August I904 the French embassy in St Petersburg prepared a report which gave the following trade statistics:

Exports to Russia 1902 1903 Germany 406,500,000 468,i00,000 roubles Great Britain 289,000,000 330,000,000 roubles France 81,500,000 I04,000,000 roubles

For the year 1904 Russian exports to France exceeded French exports to Russia by about 5: I. The French cabinet informed Ambassador Bompard to convey to the Russian govern- that it was very dissatisfied with France's commercial relations with Russia. From 1900-I 7 French exports to Russia averaged about 4-5 per cent of all Russia's imports, while Germany supplied 40-50 per cent. See Archives nationales, Commerce et Industrie, FI2 7175, FI2 9006.

25 Archives nationales, Finances, F30 332(2) (hereafter called Finances). 26 Ibid. 2 7 Ibid.



220 JAMES LONG

ment of the Russian metallurgical industry had caused a sharp decline in foreign orders, but because of the Russo-Japanese war in- creases were expected and Bompard promised that France would get its share. The French Ambassador criticised French industry for be- lieving rumours about Russia's unwillingness to buy from France. On 30 May Delcass6 tried to allay Rouvier's concern while defend- ing the actions of his ministry: 'This question of orders to French industry has already been the object of concern to my department, and I have taken it on myself, since the recent opening of talks to draw the particular attention of the tsarist government to the very great importance that these orders be decided upon in a sense favourable to the interests of our nationals.'28 The Russian government, however, adamantly refused to make any definite commitments.

Shortly after this episode French diplomats in Berlin and St Petersburg passed on rumours and hearsay to the home government about a new Russo-German commercial treaty, thereby adding fuel to the fire that Russia was disregarding French financial and commercial interests. Witte had resigned as Finance Minister in August I903, but was recalled in July I904 to negotiate a new commercial treaty with the German government, which he himself admitted was unfavourable to Russia due to the military, political and financial necessities of the war with Japan.29 Militarily the German government protected Russia's western frontier and this in turn necessitated friendly political relations between the two countries. Because of the war and the precarious state of the Russian economy, Russia could not afford to get involved in a tariff war with her primary trading partner and thus had been forced to surrender to Germany's commercial demands. French diplomats, however, claimed that Ger- many had demanded the commercial treaty as the price of a loan. According to Paul Bihourd, the French Ambassador in Berlin, the German government had promised a loan to Russia only after a commercial treaty favourable to Germany had been signed. Since the French consul at Stuttgart and Bompard reported similar rumours, the Combes cabinet continued to believe that the German government's manipulation of loans was the main reason for the successful commercial treaty. Thus the whole affair caused a noticeable chill in French-Russian relations.

28 Ibid. 29 Perepiska S. Yu. Vitte i A. N. Kuropatkina v 1904-1905 gg., Krasnyy arkhiv, XIX,

Moscow, I 926, p. 74 (hereafter called Perepiska). Bulow admitted that the treaty greatly satisfied the German government, and that Witte's conciliatory mood resulted from his conviction that the fate of Russia depended upon the maintenance of good relations with Germany: Bernhard Furst von Billow, Memoirs of Prince von Bulow, trans. Geoffrey Dunlop, Boston, 1931, II, p. 51.




During the second half of I904 the Quai d'Orsay experienced much uneasiness over the improved relations between Russia and Germany. After the Russo-Japanese war had begun, Emperor William II intensified his cordial relations with Nicholas II and tried to take advantage of the anti-French feeling in Russia after the sign- ing of the Anglo-French Entente on 8 April 1904. William's un- excelled ability in concocting intrigues and Nicholas's lack of willpower caused great anxiety among the French. Throughout the summer and autumn Bompard reported on William's continuing efforts to strengthen Russo-German relations. In August he asserted that the German government was even behind the campaign of some Italian newspapers against the Franco-Russian alliance.30

On 3 November I904 Bompard informed Delcasse that he sus- pected continuous German intrigues against the alliance; however, he was convinced that not even Foreign Minister V. Lamsdorff knew exactly what transpired between the two monarchs.31 As a result of the Dogger Bank incident Delcassd believed that there was a possi- bility of a European war if Russia deserted France and allied itself with Germany.32 He even sent Maurice Paleologue, a secretary in the Foreign Office, to London to warn the British government not to provoke Russia. Nevertheless, Delcasse stressed, France would never tie itself to Germany's apron strings. In mid-November when he was in Paris Bompard found Delcasse very pro-British, and the latter instructed Bompard to speak very frankly to the Tsar concerning Russia's ingratitude to France.33

The tsarist government was cognisant of the strained state of the alliance. On 7 May 1904, Raffalovich reported that officially and publicly Franco-Russian relations had deteriorated: 'In France we are caught in an opposite movement: here there has been no change for the better in attitudes toward Japan, but it has changed for the worse with regard to us'.34 This trend was also evident in a noticeable decline in the prices of Russian securities in Paris. The most virulent invective against Russia came from the French press. Strongly urged by Rouvier and other French officials Russia finally agreed to bribe

30 Archives du Ministere des Affaires Ltrangeres, Russie: Alliance franco-russe, 1904- 1905, XXXVII, p. 57.

31 Maurice Paleologue, The Turning Point, trans. F. Appleby Holt, London, I935, p. 131 . In November Emperor William seized the opportunity of the Dogger Bank incident and proposed to Tsar Nicholas an anti-British defensive alliance composed of Russia, Germany and France. He stressed the British danger to both Germany and Rus- sia which could only be countered with a continental alliance. If Russia and Germany signed the agreement and then presented it to the French government as afait accompli the French would have to sign it out of self-interest, knowing that the British navy could not save Paris but that land armies could.

32 Ibid., p. 134- 33 Ibid., p. 147. 34 PreobrazheInsky, p. 99.



222 JAMES LONG

the French press regularly: a costly operation which caused further friction between the two governments.35

The war with Japan continued to go badly and to drain Russia financially. For the years I904 and I905 war expenditure consumed 40 per cent of the total revenues and amounted to i,664,242,225 roubles, while total revenues reached 4,o83,494,72o roubles.36 Be- cause of the shortage of revenue and increasing military costs, loans had to make up the difference and accounted for almost 20 per cent of all revenue. Witte summarised Russia's predicament in the spring of 1905 in a letter to General A. N. Kuropatkin, the Russian Chief of Staff, stating that due to the war and the internal situation Russia would long be unable to play a world role and would have to recon- cile itself to a secondary position: 'We need twenty to twenty-five years in which we will be occupied only with ourselves and must have peace in our foreign relations.'37 Peace, however, was out of reach for the moment, and Russia would have to continue to borrow in France. In December I904, the State Controller, watchdog of Russia's finances, frankly forewarned that 'we must count on the fact that further [foreign] financial operations are ahead of us whether or not they can be completed on terms favourable to us'.38

Kokovtsov sounded out some French bankers in October 1904,

when L. Dorizon and E. Ullman, directors respectively of Societe generale and Comptoir national d'escompte, came to St Petersburg in order to secure a fair share in any new loan since they had been left out of the May loan. The Russian Finance Minister used the meeting to explain Russia's future financial plans: in order to meet all the I905 expenses he would have to raise 500,000,000 roubles (I,335,000,000 francs) by loans.39 Of this amount he planned to get 8oo,000,ooo francs from Paris and the remaining 535,000,000 in Berlin, Amsterdam and St Petersburg. Kokovtsov told the bankers that the Russian government would like to raise these loans some time during January I905, probably in the form of five per cent treasury bonds repayable after ten to fifteen years.

Kokovtsov again did not bother to inform the French government of his intentions, and it was the French charge d'affaires in St Peters- burg, M. Boutiron, who notified Delcasse on 20 October I904 of the project. Delcasse again complained to Rouvier that 'the Imperial government up to now has said nothing to our ambassador nor to

35 For this aspect of the alliance see my article 'Russian Manipulation of the French Press, I904-1906' (Slavic Review, XXXI, 2, Princeton, June I972, pp. 343-54).

36 Ministry of Finance, Proposed Budget of the Empire for I907, St Petersburg, I907, p. 21.

37 Perepiska, p. 8o. 38 Gosudarstvennyy kontrol', p. Io. 39 Finances-Emprunts, LVI, p. 98.




me'.40 In spite of this Boutiron insisted that it would be politically advantageous for France to lend Russia the entire amount or at least the largest part of it. He argued that since the Berlin and St Peters- burg governments had greatly improved their relations, this was not the time for the French government to bargain with Russia over a loan.41 But on hearing reports that the German banker Ernst Mendelssohn-Bartholdy had demanded and received substantial Russian military orders for Germany in exchange for a German loan to be issued in January I905, Boutiron changed his mind and advo- cated a 'tough' policy. On 8 November he reported to Delcasse that Germany had received about two thirds of all Russian military orders since the war broke out, while French industry had received orders worth only 40,000,000 francs.42 He insisted that France should teach Russia the policy of 'giving' and added that France should 'tie the question of orders to the negotiation of the loan . . . by the introduc- tion even of special conditions in the contracts of the banks which [will] become the agents of our industry'.43 He thought France would be successful in this matter because Mendelssohn-Bartholdy had informed Kokovtsov that money was scarce in Berlin, leaving France as the only large available source of credit left to Russia.

Rouvier shared Boutiron's opinion, and on 26 November notified Delcasse that although he had no objections to a second Russian loan raised in France, he was determined to defend French commercial and financial interests. In order to avoid the misunderstandings and disappointments of the May loan he demanded certain conditions. First, Russia must make definite commitments to buy in France. The tsarist government should be informed 'that the good offices of France are expressly subordinated to obtaining advantages for our industry in proportion to the importance of our financial assistance'.44 He wanted no more of Kokovtsov's vague promises but a 'definite engagement by Russia which would constitute one of the articles of the loan treaty'.45 He admitted that it was difficult to determine the precise figure of any orders but it should at least equal the orders received by Germany after its loan to Russia. Second, he warned that the Russian government had better use the proper channels in seeking a loan, since 'the French Minister of Finance alone has the right to give his consent to the loan'.46 His third condition concerned technical details of the loan; the loan should not be

40 Ibid., p. 100. 41 Ibid., p. 102. 42Ibid., p. i Io. 43 Ibid. 44 Rouvier to Delcasse, 26 November I904: Finances, F30 332(2). 45 Ibid. 46 Ibid.



224 JAMES LONG

issued before i January I905, and the bonds issued in Germany should be different enough to avoid mistaking them for those to be issued in France.

On 9 December Le Matin published a report about Russian industrial orders to Germany, giving the figure of 290,000,000 francs as their exact amount. Almost immediately the chambers of commerce of the metallurgical industry inundated Rouvier and Delcass6 with letters demanding similar treatment, especially for the stagnant French shipbuilding industry. Its leaders warned the French government there would be a large lay-off of ship workers by January I905,

unless the industry received some foreign orders. They demanded Russian orders amounting to 200,000,000 francs and even listed the various types and the number of ships Russia was to order.47 Chafing under the pressure of French industry, Rouvier and Delcasse tele- graphed to Bompard demanding an explanation of Russia's favour- itism toward German industry.

Bompard denied that industrial orders had been attached to the German loan, and added that the Russian government indignantly repudiated the assertions of the Le Matin article: French industry had been favoured and would be called upon still more in future if it made the necessary arrangements. Kokovtsov had recently shown him lists of orders to be placed in France amounting to 34,700,ooo francs.48 To soothe public sentiment Bompard subsequently reiter- ated his views in an interview with Le Matin on I 7 December.49

The loan talks had to be temporarily postponed because of Ko- kovtsov's negotiations with Mendelssohn-Bartholdy. In spite of Russian military defeats, the surrender of Port Arthur on i January I905 and the increasing discontent in Russia, the German banks of Mendelssohn, Bleichrbder, the Disconto Gesellschaft and the Han- delsgesellschaft granted Russia a loan of 23 I,500,000 roubles (6 i8,ooo,ooo francs), issued on 12 January 1905. Kokovtsov was very pleased with their good will.50 He did not envisage any difficulties in contracting a French loan, but he also foresaw neither the change in public and government opinion in France nor the bloodshed in St Petersburg.

47 Finances-Emprunts, LVI, p. 123. 48 DDF, V, p. 568. 49 Bompard expressed similar viess to Georges Villiers (Andr6 Tardieu) which ap-

peared in Le Temps on 15 December. However, he placed much blame for France's poor commercial relations with Russia on French industry: 'I am obliged to state, to my regret, that French industry is not organised in St Petersburg as it should be. An ambassador can assure the good dispositions of the ministers. And I do just that. But as for the details of the orders, . . . it is up to the industrialists themselves to make their offers to the respective Russian officials.' He added that French industrialists intermittently sent somebody to Russia to try and obtain orders, while German firms had permanent representatives in Russia who knew Russian and had a good knowledge of Russia's needs.

50 Kokovtsoy, op. cit., I, p. 6o.




In France in the winter of I904 the Combes ministry was rapidly losing its political support. In January I905, Combes gave up the struggle and resigned. His successor was Maurice Rouvier, Minister of Finance since 1902. When assuming the position of President of the Council of Ministers, Rouvier retained his post as Minister of Finance. Delcasse remained as Minister of Foreign Affairs, but it was known publicly in France that Delcasse and Rouvier did not get along well with each other. In 1904 Rouvier's bank had extensive investments in Russian enterprises.51 He asked Delcass6 if there would be war in the Far East, and Delcasse assured him there would not be, on the very eve of the war. According to Paul Cambon, the French Ambassador in London, Rouvier never forgave Delcasse for this faulty information because 'Rouvier played for profit and the Banque fransaise lost a lot of money; from this arose the ill-feeling which seeks to be avenged'.52 Likewise, Rouvier could not but look with resentment and bitterness upon the Far Eastern war, having lost a considerable sum of money as a result of it.

Two days before the formation of the Rouvier ministry the events of 'Bloody Sunday' in St Petersburg shocked the European capitals. This catastrophe was to have serious repercussions on the Franco- Russian alliance, because it marked the beginning of an organised campaign in France against the alliance with despotic Russia. Even the largest Russian bribes could not silence the leftist Parisian press, as opponents of the alliance turned on one of its most vulnerable aspects, the French loans to Russia. The French government had to consider whether the services rendered by Russia were worth the price paid for them by France in the form of endless loans.

The new Rouvier cabinet, therefore, was much less disposed to continue lending to Russia, at least while the war and revolutionary activity continued. Besides his own personal considerations, Rouvier was seriously concerned about the possible financial and political repercussions of Russian borrowing in France because of a discon- certing report from A. L. Guernaut, head of the department in the Ministry of Finance dealing with foreign loans, who warned that Russia might not be able to pay the interest on the debts contracted in France. He advised that France's policy of 'indefinite' lending to Russia be stopped and that the Russian government be informed that

51 The Banque fransaise pour le commerce et l'industrie had interests in several Russian banks. It also had considerable investments in Russian railways and municipal gas and electricity companies. The sudden outbreak of war adversely affected Russian banking and industry, and resulted in losses for the Banque francaise (Edmond Baldy, Les Banques d'affaires en France depuis I900, Paris, I922, pp. I 75-6). Likewise, Delcasse had alienated Rouvier by prohibiting French participation in the Baghdad railway and by ignoring Rouvier's advice concerning French loans to Morocco. See Andrew, op. cit., p. 300.

52 Paul Cambon, Correspondence, i870-1924, Paris, 1940, II, p. I88.



226 JAMES LONG

its too frequent appeals for French credit had reached their limit.53 Since the tsarist government never bothered to inform the French government of its financial plans, Rouvier did not see any need to warn the Russians. It was not until March I905, when Kokovtsov and the French bankers were negotiating a loan, that Rouvier showed his hand.

Kokovtsov first heard of Rouvier's misgivings about the Russian debt in France unofficially. In February Noetzlin, a semi-official leader of the French bankers interested in extending credit to Russia, informed Kokovtsov that he was acting as 'an unofficial agent' of the French government in expressing concern over the Russian government's ability to cope with the rising revolutionary movement and the resulting repercussions in France.54 On 2 March Ambassador Nelidov relayed to Kokovtsov a conversation he had with Maurice de Verneuil, head of the Paris stockbrokers, who claimed to represent Rouvier. According to Verneuil, the primary preoccupation of the French government was the security of the eight billion francs invested in Russian bonds. A serious decline in Russian bond prices would lead to furious attacks on the French cabinet:

Rouvier and Delcasse would not be able to withstand these attacks, and together with them would collapse the French-Russian union. The most critical internal crisis would then occur in France . .55

The spring of I905, therefore, was not the most propitious time for Russia to seek another loan in France, but the tsarist government feared any further delay. During preliminary negotiations with Noetzlin Kokovtsov had suggested that serious talks begin early in March. Thus on 3 March representatives of Credit Lyonnais, Banque de Paris et des Pays-Bas and Hottinguer et compagnie came to St Petersburg. The military reverses at Mukden considerably slowed down the negotiations. On hearing the news the bankers asked their respective institutions for instructions. Nevertheless on I i

March the two contracting parties did reach a preliminary agreement on a loan of 6oo,000,ooo francs at 6 per cent interest for eight years, which was to be sold at 9I .56 Kokovtsov was pleased with the progress of the talks although he had to agree to a high interest rate and a low issue price. On I3 March the negotiants settled the final conditions of the contract; at the request of Noetzlin and Hottinguer,

53 Note from the Direction du mouvement general des fonds, January 1905: Finances, F30 329-

54 Kokovtsov, op. cit., I, p. 62. 65 A. L. Popov (ed.), 'Zayem I 906 g. v doneseniyakh russkogo posla v Parizhe', Krasnyy

arkhiv, XI, 1925, p. 424. On I6 March Nelidov again wrote in the same vein: '. . . the desire for an end of the war has spread to all strata of the French public, beginning with the government': Nelidov to Kokovtsov, in Preobrazhensky, p. 172.

56 Finances-Emprunts, LVI, p. 173.




the French bankers visited Count A. N. Sol'sky, the chairman of the Russian Committee of Finance, whom they informed that the negotiations of the loan had been happily completed. They also asked him to see their action as evidence of their complete sympathy with the Russian government at the moment of its misfortunes (defeat at Mukden).57 That same evening the French bankers dined at the home of Kokovtsov, and all departed with the thought of meeting at i i : OO a.m. the following day to sign the contract.

The bankers did not appear at the designated hour. Instead Noetzlin notified Kokovtsov that the bankers had received orders from their respective institutions during the night not to sign the contract and to return to Paris immediately. Kokovtsov, Sol'sky and Witte were stunned at this reversal; the main questions in their minds were why this had happened and what had the French government done to prevent it. The Russian defeat at Mukden had un- questionably shocked the French people. In one of the biggest battles of the war a large Russian army led by General Kuropatkin, a man highly respected by French military officers, had been forced to re- treat. To Frenchmen it was clear that this was also a serious reverse for France. As a result there was a state of nervousness in Paris concerning the future of France, Russia and the alliance. Noetzlin reported to Delcassd on Ig March that the French bankers had been aware of the changed mood of the French public and reacted to it; but the terms of the Russian loan still attracted them.58 The low issue price of 9iI per cent would have been very profitable for the bankers and the 6 per cent interest would have attracted the subscribers. According to Noetzlin, when the heads of the banks met in Paris to decide on the fate of the loan, not all were in favour of abandoning it.59 Kokovtsov also argued that the events of Mukden only in- fluenced the bankers to increase their demands.60 According to Kokovtsov, the bankers were convinced that, although the Russian army had suffered a serious defeat, things were not so bad as they first appeared. (Even the French military attache in St Petersburg informed his superiors that Mukden was not a serious setback for the Russian army.61) This was confirmed by the fact that later

57 Preobrazhensky, p. I82. 68 Noetzlin to Delcasse, i9 March 1905. Noetzlin said that 'they [the bankers] were

apprehensive about multiple symptoms, such as the French bondholders who are aston- ished and depressed by the uninterrupted reverses of a campaign which they do not think is necessary to prolong to the detriment of the vital interests of our ally, and who are troubled by the rumours, true or false, calling for the continuation of military operations' (Archives du Ministere des Affaires ltrang'res, Papiers Delcasse, Russie, 1898-19I4, XI, p. 230).

59 Ibid. 60 Kokovtsov to Nelidov, 23 May I905: Preobrazhensky, p. I82. 61 Report of the military attach6, March, 1905: Service historique de l'armee, Russie,

Rapports de l'attache militaire, carton no. I I.



228 JAMES LONG

the bankers informed Kokovtsov that the loan would only be temporarily delayed.62

The attitude of the Rouvier government, however, compromised the proposed loan. Although there is no direct evidence that the government actually urged the French bankers to end their talks, there is very real evidence that it did nothing to encourage or to assist the bankers to grant credit to Russia. For over a week Premier and Finance Minister Rouvier maintained a stony silence while Ambassador Bompard kept asking Delcasse for Rouvier's opinion. Bompard first requested this information on 3 March. A week later he asked why he had not received a reply and added: 'Since my tele- grams have remained unanswered I am unaware of the views of the President of the Council [Rouvier] on the subject of the loan now being discussed'.63 The next day Delcasse replied that Rouvier had been studying the internal situation in Russia and the military reverses and was of the opinion that 'henceforth great prudence must be shown in the matter of loans to Russia'.64 Apparently Rou- vier took to heart Guernaut's warning that France should discon- tinue the policy of 'indefinite' lending to Russia. By not giving his endorsement to the Russian loan Rouvier effectively sealed the fate of the loan.

There was a very simple explanation for Rouvier's behaviour. He wanted Russia to conclude peace and was not prepared to lend it more money to lengthen the war. He realised the direct relationship between Russia's domestic disorders and the war. In the spring of I905 Paleologue, an undersecretary in the French Foreign Office, related that some French officials (Rouvier, Paleologue and Georges Louis, another high foreign office official) thought the French government should try to persuade the Tsar to conclude peace in order to save the alliance, the billions invested in Russia, and the Russian government from complete collapse.65 The problem was how to intervene without offending the Russian government. Even when requested by the Empress Dowager Maria Feodorovna, Delcasse consistently refused to intervene personally with the Tsar or Lams- dorff because Bompard considered it premature. Rouvier thought direct intervention by the French government at St Petersburg could bring the tsarist government to the peace table.66 However, officials in the Foreign Ministry warned that sooner or later the Russians would have to sign an onerous peace and would accuse France of a 'stab in the back' if it overtly pressed them to sue for peace.

62 Preobrazhensky, p. I82. 63 Finances-Emprunts, LVI, p. 171. 64 DDF, VI, p. I87. 65 Paleologue, op. cit., pp. I89, 202, 300. 66 Ibid., p. 300.




If the French government and bankers, on the other hand, stopped the flow of French money to Russia, Russia would be forced either to sign a peace treaty or to declare a bankruptcy. Bompard summed it up in a letter to Delcasse on i8 March:

The difficulty which Russia experiences in getting money from France could serve the cause of peace, but if it [French bankers' refusal to give a loan] was attributed by Russia to foul play of our credit establishments or to ill-will of the [French] press it could also have other, more unfor- tunate results for us.67

Paul Bihourd, the French Ambassador in Berlin, however, re- proached his countrymen for deserting Russia in her hour of need. He noted that rabid French nationalism had all but disappeared from France and that the sentiments of friendship for Russia seemed to have undergone a noticeable weakening, for Frenchmen now saw all their hopes based on the alliance crushed; they had never dreamed their ally would find itself in such a perilous position. On 23 March Bihourd wrote to Delcasse that now 'she [France] wants to force her [Russia] to conclude a humiliating peace by refusing her the pecuniary means which would permit her to continue the struggle.68

The sudden termination of the loan negotiations so stunned the Russian government, which was accustomed to little difficulty in obtaining money from France, that the subject was not broached in Russia until almost a week later. Kokovtsov was especially bewil- dered because, as he told Bompard, various French bankers had talked to him during the last six months about wanting to participate in a loan to Russia.69 He also warned Bompard that Tsar Nicholas was very much upset by the collapse of the loan talks. Although Kokovtsov at the time did not publicy accuse the French government of foul play, he did vent his feelings against the French press in an interview which appeared on 27 April I905 in Le Figaro.70 There he charged the English and French press with having deliberately frightened the public about Russia's finances with their alarming but false articles.

The failure of the loan negotiations seriously strained French- Russian relations. Bompard realised that the French refusal to grant a loan had placed the Russian government in an embarrassing posi-

67 Finances-Emprunts, LVI, p. I89. 68 Archives du Ministere des Affaires ttrangeres, Allemagne: Politique etrangere,

Relations avec la Russie, 1905-I914, LXI, p. 12. 69 Bompard to Delcasse, I8 March I905: Finances-Emprunts, LVI, p. 189. 70 It was not until 23 May in a letter to Nelidov that Kokovtsov stated that he had got

the impression from Noetzlin during the negotiations that Rouvier harboured some dis- pleasure towards the loan: Preobrazhensky, p. I84.



230 JAMES LONG

tion, because of the high priority Russia gave to the loan. On 6 May he reported to Delcassd that since the suspension of loan talks his relations with the Russian government were less than cordial, and as a consequence 'I have not been able to continue the relations that I previously enjoyed with Kokovtsov so that I am only informed by second-hand sources of his plans and projects'.7'

After the failure of the March negotiations Kokovtsov waited for the French bankers to renew the 'temporarily delayed' talks, but they did not take the initiative. During the spring and summer of 1905 it became apparent to Kokovtsov that because of the strained relations between France and Germany over the Moroccan question the French hoped to impress upon the Russians the desirability of concluding the war. On 23 March I905 Nelidov reported a wide- spread desire among all French officials that Russia conclude peace and again take its place among the European powers; he affirmed that only with the actual cessation of war would a large loan be possible in France.72 Raffalovich reported similar views; at a reception for the Spanish king in Paris several French ministers and deputies insistently advised Raffalovich that Russia should end the war which had so severely weakened her just at the time Europe needed her strength.73

Early in April it became evident that there might be no loan at all. Officials of the Russian government, especially Kokovtsov, were indignant at being treated so rudely by the French bankers as Ko- kovtsov expected the Paris bankers to take the initiative in renewing the talks. Rouvier and Delcasse realised, however, that they had the upper hand. On I8 March Delcasse received a report from Bihourd in Berlin relating a conversation he had had with Paul von Schwa- bach, head of the Bleichroder banking house and a participant in the German loan to Russia of January I905. According to Schwabach, the German market was incapable of absorbing any more Russian bonds at the moment because only a part of the 500,000,000 marks granted to Russia had been subscribed. Delcasse wrote on the mar- gin of the telegram 'We know it!'74 Schwabach stated that any new loan would have to be issued in France and, no doubt, the French government would use it to its best advantage. Time proved Schwa- bach correct.

In April the French became preoccupied with the new crisis over Morocco. The visit of the German Emperor to Tangier aroused strong concern in Paris. Rouvier immediately tried to reach a direct

71 Finances-Emprunts, LVI, p. 223. 72 PopoV, op. cit., p. 423- 73 Preobrazhensky, p. i86. 74 DDF, VI, p. 202.



FRANCO-RUSSIAN RELATIONS 23I

settlement with the German government, but they insisted on an international conference. On 6 June Delcassd lost his post when the cabinet voted unanimously against his policy of calling the German bluff, fearing that France was poorly prepared for war, that an agreement with England would precipitate a war at a time when Russia was rendered helpless by her defeat in the Far East, and that France would have to bear the burden of German hostility. Rouvier took over the Foreign Office and finally, on 28 July I905, agreed to a conference. It was in these circumstances that Rouvier had to return to Franco-Russian relations.

When Rouvier assumed the post of Foreign Minister in June he was so certain of war between France and Germany that he had Maurice Paleologue and Georges Louis prepare a memorandum outlining the steps to be taken upon the outbreak of hostilities.75 Then Rouvier requested information concerning the capability of Russia to meet the military obligations of the 1894 agreement. General A. Pendezec, the French Chief of Staff, stated that Russia's military effort against Germany would be practically nil and 5o,ooo German troops sufficient to hold it off.76 Hence Rouvier sought stronger Russian diplomatic support. One obvious way to obtain this was by promising to grant a loan. On 8 April Bompard informed his government that unless she received a foreign loan Russia could continue the war no longer than twelve months without abandoning the gold standard.77 By withholding the loan until after the conclusion of the Russo-Japanese war, Rouvier reckoned that he could obtain Russia's diplomatic support in Berlin, not dis- tracted by events in the Far East. To be sure French diplomatic circles were worried about German influence on the Russian government; Bompard, for one, believed that the Germans had convinced Tsar Nicholas, Lamsdorff and N. Osten-Sacken, the Russian Am- bassador in Berlin, that France was not menaced by German demands over Morocco.78

As a result, Rouvier now intervened personally in the loan question. In a meeting with Raffalovich on 15 May Benac, who was a close friend of Rouvier, stated that if Kokovtsov wanted a loan he should turn directly to Rouvier, who in turn would call in his cabinet, Maurice Mazeras (head of Credit Lyonnais), as well as three or four other bankers, and the operation would be completed without difficulty.79 The French government, after hesitating in March, now took a more determined stand. If the Russian government hoped to

75 Paleologue, op. cit., p. 276. 76 Ibid., p. 28i. 77 Finances-Emprunts, LVI, p. 2I6. 78 DDF, VI, p. I90. 79 Preobrazhensky, p. I78.



232 JAMES LONG

raise a loan it would have to turn to Rouvier, who was now prepared to influence the French bankers in favour of a loan.

After B6nac's statement Kokovtsov asked Ambassador Nelidov to confirm it officially, even though he asserted that Russia did not need a loan at that time (23 May). (Only a month later he was to advocate an end to the war because of the terrible financial strain on the country.) Desperately desiring Russian diplomatic support in the Moroccan affair, Rouvier vigorously denied the slanderous rumours accusing him of malfeasance in the March loan talks. He also promised to keep Nelidov informed of the financial situation in France and assured him that he would exert himself sans limites to assist the Russian financial authorities.80 Similarly, on 2 June, Raffa- lovich wrote to Kokovtsov that he had again been informed by Benac and an official of the Credit Lyonnais of the abundance of money in Paris which would make a large loan operation fairly easy if it were prepared with the assistance of Rouvier, because the French leader believed peace inevitable (o neizbezhnosti mira).81

The Russians were not blind to what the French were doing, but they could do little about it. On 24 August Kokovtsov complained to Nelidov that the French had made the conclusion of peace the sine qua non for a Russian loan, therefore Russia could not prolong the war without facing disastrous economic consequences.82 On 6 July Witte wrote to General Kuropatkin that with the failure to get a loan in France Russia was completely shut off from foreign credit.83 On I 4 August Witte informed Lamsdorff that without foreign credit the war would be doubly burdensome and as a result Russian finances would be completely undermined.84 Thus the French made their point; financial considerations, as well as military reverses, forced the Russian government to make peace at Portsmouth.85

It is not within the scope of this article to pursue the circuitous negotiations and political manipulations which eventually resulted in the 2,250,000,000 franc loan to Russia in April igo6.86 Rouvier, however, did fulfil his promise to Russia by actively assisting Rus- sian officials in the difficult loan negotiations.

80 Nelidov to Kokovtsov, 0 o June I 905: ibid., p. I 90. 81 Ibid., pp. I 86-7. 82 On 13 September Kokovtsov expressed the same thing in another letter to Nelidov:

Preobrazhensky, pp. 204, 210. 83 Perepiska, p. 8o. 84 Portsmut-perepiska S. Yu. Vitte i drugikh lits, Krasnyy arkhiv, VI, 1924, p. 3'. 85 Upon his return from Portsmouth Witte told Stanislaus Propper, editor-publisher of

the St Petersburg journal Birzhevyye vedomosti, that shortages of foreign credit for both Japan and Russia had played a key role in ending the war. In private talks between Baron Komura and Witte both statesmen admitted that their European allies, England and France respectively, had refused to lend them money to continue the war (Stanislaus Propper, 'Diplomatiya i finansy', Segodnya, no. 258, Riga, 23 September I928, p. 4).

86 See Olga Crisp, 'The Russian Liberals and the I906 Anglo-French Loan to Russia' (Slavonic and East European Review, XXXIX, 93, London, I96I, pp. 497-512).




The Russo-Japanese War ended the honeymoon of the Franco- Russian alliance. From I898 to I905 the French public quarrelled and divided over pressing domestic problems; with the French Foreign Ministry under the strong leadership of Delcasse most Frenchmen contentedly accepted the alliance as a diplomatic and military instrument. The Russo-Japanese war had disastrous consequences for both allied nations. In Russia the war caused mass discontent and revolution and paralysed the government. From France's viewpoint the war crippled her only ally, revealed Russia's precarious financial situation and threatened to ruin thousands of French rentiers. The two allied governments painfully realised that the creditor-debtor relationship which had developed so rapidly and reached such massive proportions since I894 was extremely intimate but not very agreeable. The French, especially under Rouvier's leadership, recognised that greater caution and control had to be exercised in lending to Russia. Responding to increasing pressure from the business community, Rouvier attempted to manipulate loans to benefit French industry. Although the tsarist government refused to accept any binding commitment which would limit its sovereignty, it did seriously endeavour to grant some preferential treatment to French products. The French financial market simply could not be inexplicably closed to Russia, nor could the French government treat its ally too brusquely, because if the Russian government suspended the payment on Russian bonds for even one quarter an unprecedented crash would follow on the Paris Bourse. However, in the spring of I905 when many Frenchmen publicly expressed a desire for an immediate peace, the Rouvier government did not hesitate to use its influence to forestall a loan and to influence Russia's policies in a manner favourable to France.

