to Mr. Frelinghuysen.
St. Petersburg , May 12, 1884. (Received June 7.)
Sir: The success of the new Russian 5 per cent, gold loan of £15,000,000 has exceeded public expectation, and testifies to the recovery of Russian credit. Two-thirds of this sum was negotiated through the house of [Page 450] Bleichröder, of Berlin, a protégé of Prince Bismarck, fast rising into prominence in the financial world, and the Preussisehe Seehandlung, one of the oldest and soundest corporations in Germany, which has never before been permitted to openly participate in or morally support a foreign loan; That this institute was authorized to subscribe for most of the amount of the loan allotted to Berlin has been much remarked, for as it is practically a branch of the ministry of finance, its aid to Russia is of great significance, and goes far to prove the cordiality of the relations now existing between the two Empires.
The loan has been covered more than fifteen times, principally in Germany and Holland. France took but a small sum, and England, it appears, none at all. For Russia itself the remaining third was reserved and eagerly sought. In fact, it has not given satisfaction to every one here that this loan was mostly contracted abroad, by which the already heavy drain of gold from the imperial treasury for the payment of interest upon foreign debts is increased, and the promptness with which her own people subscribed to the loan raised at home last December indicated that Russia need not have had recourse to foreign bankers.
The avowed object of the new loan is to build railways, especially in Siberia; but it is stated that not much money from abroad will be available for this purpose, as most of it will have to be taken for the payment of interest upon former foreign loans, for which Russia has at this moment no other funds at its disposition. Nevertheless, the favor with which this loan has been received abroad by bona fide investors has revived confidence in Russian finance, and exchange has risen 4 or 5 per cent, in less than the same number of weeks.
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I am, &c.,