ملف ١٩٠٤/٢٧٦٤ الجزء ٣ "سكة حديد بغداد: مفاوضات عامة ١٩١٠-١٩١٢." [و‎‎٢‎٣‎٤] (٥٤٤/٤٧٨)

[This Docmi?ent is the Property of His Britannic Majesty’s Government. ]
BAGDAD RAILWAY.
SECRET.
[July 4.]
Section 1,
[23954] No. 1 .
Sir G. Lowther to Sir Edward Grey.—(Received Jidy 4 .)
(No. 434. Very Confidential.)
Sir, Therapia, June 27, 1910.
I HAVE the honour to address you on certain aspects of the present financial
situation of the Ottoman Empire.
In my despatch No. 262 of the 26th April I commented on the advance shown in
Turkish finance by the presentation of a budget, even with a deficit, based on
reasonably sound data. Circumstances are tending to shake my opinion. On Saturday
last the budget as a whole again came before Parliament, and, whereas just two months
ago the deficit was set down at 7 millions, it now appears as £ T. 10,528,000. It was
explained that in the upshot this deficit would be reduced to £ T. 5,000,000, because
there will ( 1 ) remain doubtless at the end of the year an unexpended balance of
£ T. 2,000,000 ; (2) be an increase in revenue, owing to a good harvest, of IJ millions ;
(3) be a balance from the last financial year of 2 millions. But these explanations are
not convincing. I further hear, on fairly good authority, that the metal with which
Mahmoud Shevket secured his successes in Albania was not steel or lead, but gold, and
that the extraordinary disbursements necessitated by the campaign will bring the total
deficit to something like £ T. 12,000,000. What, I think, is true is that in the event j
this total will be considerably diminished by, firstly, an excellent harvest, if prospects
are maintained, and, secondly, by improved methods of tax collecting. Competent
authorities reckon the gain to be obtained from these two sources at about 1 ^ millions
each.
The Finance Minister is about to start for Paris to commence negotiations for a
loan, but meanwhile the pressure for money is growing acute. The Government has
recently disposed of the cover for the current account deposited—as explained in my
despatches Nos. 619 and 810 of the 28th September and the 29th November, 1908—in
the Ottoman Bank, which offered only 87J, selling it at 89 to the Credit Mobilier of
Paris. This caused the shares of the 1908 loan to sink two points, the Credit Mobiher
having only a small capital and being quite unable to carry a million of Turkish
securities. The Turkish Government, after asking for offers on the local market, found
that the Imperial Ottoman Bank were the most economical means for bringing out the
money, but were surprised to find this institution unwilling to cash their cheques
without any account, and accordingly made a temporary loan of £ T. 350,000 with
which to pay salaries, pending the arrival of the proceeds of the sale of the current
account deposit. They have since been successful in inducing the Ottoman Bank to
allow them to have a current account of 1 million, without depositing cover, paying
interest on their drawings at the rate of 6 per cent.
A suggestion has been made to me as to French policy which seems not at all
improbable. It is that the French financiers will put off Javid Bey in his negotiations
with them and will leave him without money till the end of the year, by which time the
financial pressure will probably be even more severe than now, and the amount
required will be considerably increased. They will thus be able to impose such terms
as they like, including the grant of those concessions which they most value.. The first
fruits of this plan are regarded as having already matured : the concession for the
Soma-Panderma Railway has been confirmed.
In my despatch No. 379 of the 14th instant I had to point out the lack of any
constructive measures during the last two years. I should have made an exception m
favour of the attempt to build irrigation works in Mesopotamia. Although Sir W.
Willcocks has found his work considerably impeded, still a sum of money has been
actually expended on the task. But with regard to the natui al and rational
development of the country, such as might be expected from a libeial and enlightened
Government, nothing else has been done, and the struggle for.concessions continues in
preciselv the same way, though under more complicated conditions, as m the time of
Abdul Hamid.
[2825 d—1]