which was made no better by frequent changes in its personnel, regarded borrowing as the only cure for the creeping sickness in the State finances. Even the Chancellor of the Exchequer, von Schröder, whose probity and singleness of purpose were beyond all doubt, had been given a peerage by the Grand Duke, because he had succeeded in placing a loan at a high rate of interest in the most difficult circumstances. His heart was set on an improvement in the credit of the State: but as his resource was to contract new debts while he paid off the old, his policy proved to be no better than a well-meant but costly blind. For a simultaneous sale and purchase of bonds meant a higher purchase than selling price, involving the loss of thousands of pounds.

It seemed as if the country were incapable of producing a man of any adequate financial gifts. Improper practices and a policy of “hushing-up” were the fashion. The budget was so drawn up that it was impossible to distinguish between ordinary and extraordinary State requirements. Ordinary and extraordinary items were jumbled up together, and those responsible for the budgets deceived themselves, and everybody else, as to the real state of affairs, by appropriating loans, which were supposed to be raised for extraordinary purposes, to cover a deficit in the ordinary exchequer…. The holder of the finance portfolio at one time was actually an ex-court marshal.

Dr. Krippenreuther, who took the helm towards the end of Johann Albrecht III's reign, was the Minister who, convinced like Herr von Schröder of the necessity for a strenuous reduction in the debt, induced the Diet to consent to a final and extreme addition to the burden of taxation. But the country, naturally poor as it was, was on the verge of insolvency, and all Krippenreuther got was unpopularity. His policy really meant merely a transfer from one hand to the other, a transfer which itself involved a loss; for the increase in taxation laid a burden on the national economy which pressed more heavily and more directly than that which was removed by the sinking of the National Debt.

Where, then, were help and a remedy to be found? A miracle, so it seemed, was needed—and meanwhile the sternest economy. The people were pious and loyal, they loved their princes as themselves, they were permeated with the sublimity of the monarchical idea, they saw in it a reflexion of the Deity. But the economical pressure was too painful, too generally felt. The most ignorant could read in the thinned and crippled forests a tale of woe. The consequence was that repeated appeals had been made in the Diet for a curtailment of the Civil List, a cutting down of the appanages and Crown endowments.

The Civil List amounted to twenty-five thousand pounds, the revenues of the Crown demesnes to thirty-seven thousand pounds. That was all. And the Crown was in debt—to what extent was perhaps known to Count Trümmerhauff, the Keeper of the Grand Ducal Purse, a regular stickler, but a man of absolutely no business instincts. It was not known to Johann Albrecht; at any rate he seemed not to know it, and therein followed the example of his forefathers, who had rarely deigned to give more than a passing thought to their debts.

The people's attitude of veneration was reflected in their princes' extraordinary sense of their own dignity, which had sometimes assumed fanciful and even extravagant forms, and had found its most obvious and most serious expression in every period in a tendency to extravagance and to a reckless ostentation as exaggerated as the dignity it represented. One Grimmburger had been christened “the luxurious” in so many words,—they had almost all deserved the nickname. So that the state of indebtedness of the House was an historical and hereditary state, reaching back to the times when all loans were a private concern of the Sovereign, and when John the Headstrong, wishing to raise a loan, pledged the liberty of the most prominent of his subjects to do so.

Those times were past; and Johann Albrecht III, a true-born Grimmburger in his instincts, was unfortunately no longer in a position to give free rein to his instincts. His fathers had played ducks and drakes with the family funds, which were reduced to nothing or little better than nothing. They had been spent on the building of country-seats with French names and marble colonnades, on parks with fountains, on splendid operas and all kinds of glittering shows. Figures were figures, and, much against the inclination of the Grand Duke, in fact without his consent, the Court was gradually cut down.

The Princess Catherine, the sister of the Grand Duke, was never spoken of in the capital without a touch of sympathy. She had been married to a member of a neighbouring ruling House, had been left a widow, and had come back to her brother's capital, where she lived with her red-headed children in what used to be the Heir Apparent's palace on the Albrechtstrasse, before whose gates a gigantic doorkeeper stood all day long in a pompous attitude with staff and shoulder-belt complete, while life went on with peculiar moderation inside.

Prince Lambert, the Grand Duke's brother, did not come in for much attention. There was a coolness between him and his relations, who could not forgive him his mésalliance, and he hardly ever came to Court. He lived in his villa overlooking the public gardens with his wife, an ex-dancer from the Court Theatre who bore the title of Baroness von Rohrdorf, after one of the Prince's properties; and there he divided his time between sport and theatre-going, and struggling with his debts. He had dropped his dignities and lived just like a private citizen; and if he was generally supposed to have a struggle to make two ends meet, nobody gave him much sympathy for it.