…whether it was true that, in the interview that Protopopov had had with a German agent at Stockholm, the latter had stated that, if Russia would make peace, Germany would evacuate Poland and raise no objection to Russia’s acquisition of Constantinople…
These were among the political aspects of the conversation Proto-popov had with Fritz Warburg, but there were also financial ones, for Warburg was an economic adviser at the Stockholm embassy and younger brother of Max Warburg, the Hamburg banker.9 That generation of seven siblings also included the brothers Paul Warburg of Kuhn, Loeb & Co. in New York, reformer of the Federal Reserve Bank; Felix Warburg, a powerful New York banker whose father-in-law was the legendary New York financier Jacob Schiff; and Aby, the eldest, a scholar.10 Fritz’s account, as related to the family, may be somewhat disingenuous:
In July 1916 Fritz stumbled into the history books quite by accident. A Russian delegation was passing through Stockholm on its way home from financial talks in London, when a Count Olusfiev asked to meet a German from the economic sphere. Having sounded out the mood in France and England, he said offhand, he wanted to do the same for Germany. The casual request concealed a serious agenda. During talks at the Foreign Office in Berlin, Fritz had received instructions to follow up on such overtures, and von Lucius encouraged him to meet with the Russians… Perhaps to give the German government some self-protective distance from the talks, Fritz claimed that he attended the Grand Hotel meeting with little official coaching and that he was astonished when the door opened and Alexander Protopopov, vice-president of the Russian Duma, strolled into the room. Suddenly Fritz was engaged in high-level, if discreetly unofficial talks, looking toward a separate peace between Germany and Russia… Felix was careful to stress that he was voicing his own views and not those of his government… [and that Germany’s] real grievance lay with France and England, not Russia. He proposed a swap in which Germany would get Baltic territory and Russia parts of German-occupied Poland, followed by stepped-up trade between Russia and Germany.11
The Warburgs were on shaky ground. Having established the family in Germany some time between the fourteenth and seventeenth centuries, they were now impelled to demonstrate their loyalty to the country. This should not have been necessary, for they were patriotic Germans; Aby loathed Anglo-Saxon culture and Max had won an Iron Cross. Max had been livid when the Chancellor discriminated against Jews in the German army and his disgust at this had been made public only weeks before. The Hamburg bank had financed the construction of Germany’s navy and its merchant fleet before the war. Only last year, Max had sent Carl Melchior, his own closest advisor, to Romania to do deals over grain supplies that were tempting enough to keep Romania neutral.
But Felix now could only offer territorial advantage, and the Tsar did not need any more land, resources or coastline. At this point the Tsar needed generous capital incentives to make peace. He had been here before, in 1905; he would need money to rebuild the country and repress the rebellious element.
Russian Jews, in general, were pro-German, and in view of the cruel pogroms and daily insults, as Sir Bernard Pares wrote in a despatch to the Foreign Office, ‘it is difficult to blame them’. German propaganda suggested (with dubious sincerity) that peace with Germany would mean liberation. But Max Warburg could not offer to reconstruct Russia for the Tsar. Germany was suffering from the Allied blockade and so was his bank. By this stage in the war the German Warburgs, and German and Russian financiers in general, could only have got money for Russia from America – and they knew Wall Street would refuse to lend it to them. Felix Warburg’s father-in-law, Jacob Schiff, so detested the Tsarist regime that he strenuously prevented Russia from getting Wall Street money. Partly out of his hatred for the Tsar’s victimisation of Jews, Schiff had organised finance for the Japanese victory in 1904–5.12 From an old Frankfurt banking family, he could not see why the Germans and Allies were fighting; as his biographer points out,
Schiff banked on a neutral Wilson to engineer a status quo peace. Objecting to the craze for military preparedness in America, he opposed the export of munitions and funds to the belligerents.13
With the Warburgs and the Rothschilds, he was Jewish royalty. Together the distinguished old man Schiff, and Felix and Paul Warburg, would decide who got American money and who didn’t. They could make business difficult for banks that propped up the Tsar.
On the other hand, if Felix Warburg was in a position to offer Protopopov nothing the Tsar would want, this calls into question the provenance of the New York money that Buchanan was able to promise the Tsar in the summer of 1916. It may possibly have come from J.P. Morgan Jnr, a noted anglophile whose Britannica Online entry includes the lines
…during the first three years of World War I, he became the sole purchasing agent in the United States for the British and French governments, buying about $3,000,000,000 worth of military and other supplies from American firms on behalf of those countries. To finance the Franco–British requirements for credits in the United States, he organized more than 2,000 banks to underwrite a total of more than $1,500,000,000 in Allied bonds. After the end of the war his firm floated loans totaling more than $10,000,000,000 for European reconstruction work.14
The Americans were in a position to impose conditions. They could well have been persuaded by Buchanan’s argument, often stated, that providing Rasputin were out of the picture, the Tsar would concede power to a pro-Ally, progressive Duma.
In addition to the feelers put out to Protopopov, and Nicholas’s subsequent reaction, there is evidence to believe that Berlin was also considering other options in terms of brokering a peace with Russia. A decade after the events of 1916, Alexei Raivid, a Soviet consul in Berlin, was having one of his occasional meetings with Baron von Hochen Esten, when the subject of Rasputin cropped up. The Baron, a German specialist in Russian affairs employed by the Hungarian embassy, told Raivid that, in the summer of 1916, he and a number of others were sent to Petrograd. The purpose of their mission was to establish contacts with certain elements of the Russian court who sought a separate peace with Germany. Raivid recorded in his diary an account of what von Hochen Esten told him that day:
In his own words, the ties between the two courts never broke during the war and were maintained unofficially and through illegal means by different elements close to the courts. The main purpose of the mission was to take advantage of the difficult domestic situation in Russia and to warn the influential elements of the Russian Court that the only way to save Russia from the forthcoming revolution would be Russia’s withdrawal from the war with Germany and some domestic reforms. He was charged, if necessary, to cooperate with other persons in preparation of a coup to remove Nicholas II from the throne. On his arrival he got in touch with the following three persons who together with Tsarina Alexandra worked on the development of the separate peace treaty: Sturmer; Beletsky, Director of the Department of Police; and one of the synod leaders, Vasily Mikhailovich Skvortsov. The group, in cooperation with other German agents, sought to persuade Rasputin that he and the Tsarina should lead a movement for peace with Germany. Because Nicholas opposed the idea of signing a separate peace treaty with Germany (he explained his position by the fact that as a nobleman he could not break the promise that he had made to the Allies) he was to be persuaded to abdicate the throne on 6th December (his Saint’s Day) in favour of his heir Alexei. This would then allow Alexandra, as Regent, to conclude a separate peace treaty, as neither she nor the Tsarevich had given such a promise to the Allies. According to a further plan, the Regent would publish a manifesto stating that the difficult domestic circumstances in Russia required the conclusion of a peace treaty and carry forward a programme of reforms in the country. The manifesto allegedly promised to ‘give land to the people’. Von Hochen Esten claims that Rasputin was among those who wrote a draft of the manifesto and that he favoured the idea of a separate peace and totally approved of the slogan promising land for the people.15