Government Bond Investment

While Waldemar was still in Britain, tasting the barbarism that lived beneath the civilized men of this age, a coup d'état erupted on the Balkan Peninsula. In Bulgaria — that small but formidable kingdom — the pro-Russian faction had made its move.

"Alexander I is not a man we can simply leave alone. A puppet, and he dares to have opinions of his own."

Russia had conceived a deep resentment ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠watching Bulgaria, which it regarded as a client state, not only resist interference in its internal affairs but expand its territory as it pleased. Once they decided they could not do business with Alexander I, they resolved to drive him from the throne.

"St. Petersburg wants Alexander removed. Do that much, they say, and they will guarantee the restoration of relations between our two countries."

"Given the importance Russia holds for this nation, a decision cannot wait. Let us throw out this German king who is ruining our diplomacy."

The pro-Russian officers, acting on a hint from St. Petersburg, set about planning their coup. The plot, led by Petar Gruev, commandant of the Military Academy, was carried forward in secret over several months: men were recruited, supplies gathered, the organization tightened, and contact maintained with Russia.

Toward the end of July, with the coup nearly at hand, the leadership fixed upon the following objectives:

The coup forces, however, did not believe they would need Russian support. By this stage they already held a substantial portion of the Sofia garrison in their grip.

At dawn on the twenty-first of August, 1886, they moved with swift precision.

"If Alexander I escapes, everything is finished. Hit them all at once and end it!"

Under the command of General Anastas Benderev, the rebels moved to seize the royal palace. The palace guard, whose duty it was to defend the residence, proved utterly powerless. A company-strength detachment could do nothing against two full battalions of coup troops. Once the guards laid down their arms, the rebels stormed through the palace in their hobnailed boots.

Captain Radko Dimitriev, at the head of the column, entered the king's bedchamber with a pistol at his belt. Alexander I was dragged from his bed before he had even a moment to grasp what was happening.

"What is the meaning of this?"

The prince asked more than once, but the coup soldiers gave him no answer. They hauled him into his study, sat him down, and delivered only what they had come to say.

"This is a decision for the good of the country, Your Highness."

Radko Dimitriev had ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠a prepared instrument of abdication brought before the prince. Alexander I regarded the document with a cold stare.

"Sign it. Your safety will then be guaranteed."

"And if I refuse?"

"Then Your Highness, your family, and your friends will all bleed for it."

It was a threat. Had he been alone, he might have ignored such intimidation entirely. But he could not gamble with the lives of those who trusted and followed him — nor with those of his family. And yet, if he put his name to this paper, Bulgaria would—

"We cannot give you much time."

After a long hesitation, the prince signed.

"A wise decision, Your Highness."

The captain tucked the signed document into his coat and nodded to his men.

"Take him to Russia."

Alexander I was gagged before he could protest and dragged away by the soldiers.

While Captain Radko Dimitriev subdued the prince, the remaining coup units rapidly secured the capital. At this stage, the coup leadership was certain of victory.

"We've sent the prince to Russia and secured the capital. Let us form a provisional government."

"Who would make a good candidate for prime minister?"

"Let us appoint Metropolitan Kliment of Tarnovo. He's an Orthodox churchman — his position will not differ from ours."

The coup forces hurried to assemble their provisional government. But not all of the prince's supporters had been purged. Rather than submit to the army's illegal coup, they prepared their counterstroke.

"A victorious coup? These military brutes are dreaming."

Stefan Stambolov, President of the National Assembly, immediately summoned the provincial armies and demanded their loyalty.

Stambolov issued stern commands to every military district in the provinces, and appointed Lieutenant Colonel Sava Mutkurov — commander of the 5th Infantry Brigade, and a soldier of the pro-Alexander faction — as commander-in-chief of the suppression forces.

"I will crush the rebels for His Highness and for the people of Bulgaria."

Rather than wait for his full strength to assemble, Mutkurov took the Plovdiv garrison — already prepared — and advanced rapidly on Sofia. The coup forces learned of this only belatedly, and had no means of responding. They had seized the capital, yes — but the politicians refused to cooperate, and the provisional government's authority did not extend a single centimeter beyond the city. The suppression force, by contrast, vastly outnumbered the rebels.

As Sava Mutkurov's troops closed on the capital, the coup leadership faced a choice. March out and offer battle in the field? Given the disparity in strength, that would be suicide. Fight it out in the streets? They did not even have the support of Sofia's citizens. Turn the city into a battlefield, and they were finished whether they won or lost.

The coup command scattered, each man looking to his own survival. Some fled into the mountains. Others escaped abroad, to Russia and elsewhere. A few hesitated too long and were arrested by the advancing troops.

In three days, the coup had lost power and collapsed. It was a Bulgarian three-day reign.

Stambolov reconstituted a legitimate government, then requested that Alexander I — who had been abducted to Russia — return home. It was phrased as a request to the prince, but it amounted to little more than a demand that Russia let him go.

The Russians received this demand and fell into deliberation. They had no choice. The pro-Russian faction within the Bulgarian army had been annihilated by the failed coup, and Russia's political influence in the country had fallen to an unprecedented low. Provoke the Bulgarians further in such circumstances, and the entire pro-Russian camp might collapse.

While Russia deliberated, Princess Victoria, at the Crown Prince's Palace, spent her days in tears, sick with worry for Prince Alexander.

"Prince Alexander will be all right."

"Waldi, do you really mean that?"

"Kings do not kill kings."

"I hope you're right."

Even as he comforted his sister, Waldemar was calculating, cold and clear, whether this affair could be turned to profit.

On the surface, this is just another coup in a minor country. ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠In truth, it is an event that could shake the peace of Europe. If I play this right, there should be some amusement ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠— and some profit — to be had. I wonder.

Waldemar decided, for the moment, to watch how the situation developed.

On the twenty-ninth of August, unexpectedly, Alexander I was sent back to Bulgaria. Princess Victoria heard the news and was flooded with relief.

Upon his return, Alexander I approved every measure Stambolov had taken, thereby recognizing the legitimacy of the anti-coup faction. Through these acts, Alexander I's throne was restored.

In response, Alexander III of Russia made it known that he would not recognize a Bulgaria ruled by Alexander I as a diplomatic partner. When Russia spoke, the gentlemen of the island empire across the water raised their voices in turn.

The British Empire not only threw its support behind Alexander I — a man they had until now opposed, but who now stood against Russia — they also demanded that Berlin and Vienna show their support as well. As the great powers' diplomatic contest over Bulgaria reached its peak, the thick smell of gunpowder drifted across the whole of Europe.

"If things go wrong, Britain, Austria, and Germany could end up in a shooting war with Russia."

The exchanges of every nation had already recognized the risk of a large-scale general war; the recovery in the government bond markets had stalled. Investment sentiment had contracted as well, and share prices drifted weakly lower.

Waldemar knew this confrontation would never lead to war. He gave the order to trade European government bond futures.

"Accumulate positions, focusing on the three-percent Rente government bonds."

John Connor understood Waldemar's intent at once.

"Understood, Your Highness."

Waldemar's people slowly, on a massive scale, scooped up the futures that had been trending downward. Considering that French government-bond futures amounted to some two billion francs — 1.6 billion marks — and the British to one and a half billion pounds — 30.6 billion marks — there was prey enough. The futures John Connor gathered in Britain and France came, all told, to eight hundred million marks. That astronomical sum could be secured with a mere two-percent margin. The capital Waldemar actually put down was only sixteen million marks.

With that vast position in his hands, Waldemar took stock of the situation.

Neither side will actually come to blows over this.

Russia, at the very least — still bruised and weakened from the pounding it had taken on the ruble short — had no such courage left. Waldemar was not about to overestimate the nerve of Russians who, even in the original history, had never found the courage to stand against Britain.

A few days later, worn down by the conflict and confrontation swirling around his country, Alexander I announced his abdication. With that, the market's fear of a head-on collision between Britain, Germany, Austria, and Russia was swept cleanly away. Investment sentiment snapped back into a recovery at once.

"What are you waiting for? Buy already! Don't you know how to chase a rally?"

Capital flooded in, government bond futures above all. The moment the forward contracts surged in value, Waldemar began dumping the futures in his hands.

Hot sentiment never lasts.

He closed the position in mid-September and tasted the sweetness of it. For putting eight hundred million marks' worth of futures through his hands, the return he extracted was roughly three percent. It came to twenty-four million marks. He had bought paper beaten down by a war scare and sold it dear. The result was only to be expected.

Had he held a little longer, the profit might well have been larger. Waldemar did not get greedy.

A little recreation and twenty-four million marks. That ought to be enough.

He felt a brief flicker of pleasure at having closed the position. Then he thought of Alexander and Victoria — the couple who had been put through so much by this affair — and felt a sigh rise in his chest.

A love that cannot be. That is a tragedy.

Waldemar offered their fate his sympathy. It was all he could do for his sister.