London, affected by the domestic crash in grain prices, the capitalists who had signed contracts with the Russians were no longer prepared to honor their agreements.
Openly breaching the contract was definitely not an option, as it would not only violate British law but also involve diplomatic issues.
Moreover, these payments for grain were to be used to repay the Russians' debts to domestic banks. Since the initial loans had been disbursed, if they breached the contract, the Russians could also legally default, which the bankers would certainly not accept.
Take Black Rye as an example, the current market price in the United Kingdom is around 6 to 7.5 pounds per ton, whereas the contract price agreed with the Russians was as high as 9.1 pounds per ton.
This meant that with this transaction, they would not only fail to make a profit but actually have to pay out more.
