Miscellaneous correspondence, reports, maps and other papers concerning the Middle East [‎11v] (23/220)

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It may be, however, that this plan has been suggested rather with a view
to meeting President Wilson than because it is practical. Of all bad systems lor
working purposes internationalism is the worst, and there is reason to believe that
the idea would be opposed on practical grounds by both the most interested depart
ments, the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. and the Board of Trade. The latter certainly are
entirely and emphatically opposed to it. They hold that the Turkish and German
interests should be expropriated, their value to form part ol the indemnity due to
the Allies, but that the Railway itself should be definitely partitioned among the
various new States which it traverses, and that no other country or combination of
countries should be entitled to have a say in the management and working of the
line in our sphere. This they consider vital, and it seems impossible to dissent from
this view. Apart from the unwisdom of allowing such a measure of foreign inter
vention and eventual intrigue in our sphere, it would suffice to point to the example
of Serbia and Bulgaria, who both before the war found it intolerable that the main
or sole great artery of their system should not be under their own control. In the
case at least of Serbia internationalisation was at first contemplated and then aban
doned. Moreover, with the deplorable record of the French and Italian business
communities before us, we might well not be long in finding these elements acting as
cat’s-paws or cover for German interests—the very thing we wish to avoid. It has
been suggested that such a contingency and other malpractices might be guarded
against by the establishment of a Federal Commission, as mandatory of the League
of Nations, with wide powers of veto, control, and regulation in regard to railway
lines and their prospective free ports. This, however, in itself seems at least equally
undesirable.
The solution of internationalisation should, in fact, only be considered, inas
much as we may conceivably be driven back upon it in the last resort.
The proposal would run somewhat on the following lines: We desire generally
to maintain that concessions are not cancelled by the war; therefore, the Baghdad
Railway Concession is still valid, but we should insist that it be handed over—
together, of course, with the Anatolian Railway—as part of the indemnity to the
Allies. The French contemplate such a demand in regard to all German concessions.
The first question arising is, who is to make the cession? The Convention of
1903 was concluded between the Turkish Government and the Anatolian Railway
Company, represented by Herrn Gwinner, Zander, and Huguenin, acting for the
Imperial Ottoman Company, in formation, of the Baghdad Railway. The concession-
naire, i.e., the Anatolian Railway Company, was to form a limited Turkish company
—stress is repeatedly laid on its Turkish character—with the above title. The
Anatolian Railway Company brought to the new company the concession granted
by the Turkish Government—that is, the new line from Konia to the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran.
and its branches—“ with all the rights, privileges, and advantages, attached to or
flowing from it.” The new company became the proprietor of the concession “ and
takes over all the rights and obligations of the concessionnaire. Nevertheless, the
Anatolian Railway Company keeps for its exclusive account the rights and obliga
tions concerning only the old lines, i.e., the Anatolian Railway. The Turkish
j-ove^nment, like the Anatolian Railway Company, retained 10 per cent, of the share
capital (15,000,000 francs), and the new company was only to be definitely consti
tuted when one-tenth of the share capital had been paid up.
Some space has beep allowed to this point, because doubt has been expressed
on the exact character and composition of the Company, with a view to deciding
on the form of the cession. In view of the above paragraph it is suggested that
the cession should be made by both the Turkish and German Governments, witK
whom we made the 1914 agreements. It would then be for those Governments to
indemnify any of their subjects whose interests might be affected. It was believed
that the subscribed capital was not considerable, but, according to the Baghdad
Railway Company’s Report for 1904, £300,000 had been paid. (The Germans, how
ever, have themselves admitted that the Company’s balance sheets were neither
intended to be accurate nor intelligible.) The same principle would apply to the
subjects of France, or any other country in a similar position. We should be
justified in adopting this attitude towards French private interests, as their partici
pation was originally concealed from us, and the original agreement providing for
it was only discovered in 1902 through the French Ambassador in Constantinople.
In 1905 the French Ambassador in London assured Lord Lansdowne that France
was absolutely unconnected with the Railway. The attitude of the French Govern
ment was officially that they refused, pending an agreement equitable to the interests