'The Baghdad Railway Negotiations' [‎61v] (12/32)

jq The Bagdad Railway.
The mise en dcmeure of the German Government at Cairo was the more abrupt in
that it was taken without any prior attempt to ascertain Irom oilicial Jjritish sources in
Constantinople or in London precisely what action the British Ambassadoi had takei.
No doubt the British Government were keenly moved by the rerman ( cnunche, am,
it was understood at the time, did not fail to impress their sense of resentment at
Berlin • whereupon the German Government modified their Egyptian attitude. 1 nit t he
German extension to Konia was granted ; and the eil'orts ol the britisli Ambassadoi on
behalf of the Smyrna-Aidin Company, which possessed no definite contractual rights
to extend to Konia, were, indeed, foredoomed to almost certain failure even without
the German threat at Cairo. It is true that Smyrna, in view of its harbour facilities
and geographical position, was, as against Constantinople, the natural outlet tor pro- luce
from Konia ; but there were at the Sublime Porte important political and strategical
considerations which militated against the extension of the Smyrna lines to Konia ami
beyond The Sultan's object was not to favour railway communication between that
region and Smyrna, but, on the contrary, to see the Asia Minor trunk-lines converging
on Constantinople, and to have such lines built for strategical purposes and al^o oi
attracting to the Bosphorus the agricultural and other produce ot that part of the
Imperial dominions.
The German concessions of lS9o were based upon the secuntx ot
kilometric guarantees, computed at an annual value of . several hundred thousands ol
pounds. As the Imperial budget already showed a deficit of over 500,000/. for the
current year, misgivings were felt by expert authorities as to the ability ol the I urkish
Treasury to support the weight of the obligations thus assumed. While the development
of the resources of the Empire and the promotion of its prosperity by the establishment
of railways on sound principles would admittedly have been to the advantage of the bond
holders, the kilometric guarantees were so graded that they seemed to create a premium
on bad working oC the lines, and afforded no apparent inducement for the development of
traffic beyond a fixed limit. At that time German financial interests, other than those
in railways, scarcely existed in Turkey; and the gr^at mass of Turkish bondholders
were English and French. The British delegate on the Ottoman Public Debt Adminis
tration did not fail to utter a note of warning as to the serious danger to the Turkish
Treasury, and therefore to the security of the bondholders w r hom he represented,
involved in these railway promoting operations, with the result that an inspired article
appeared in the "Cologne Gazette" attacking him on account of the hesitation he so
justifiably entertained, and even threatening general measures of retaliation against
British interests elsewhere.
A series of bad harvests marked the years succeeding the granting of the German
concessions in 1893, and combined with the general fall in the price of agricultural
produce to increase the burden on the Turkish Treasury, which in 1S95 had to find a
quarter of a million sterling to meet guarantees on behalf of the Anatolian Railway
alone. The German banks still held a large number of unissued bonds, which had
not yet found a market; and the miserable traffic earnings shown by the published
accounts of the Anatolian Railway were such as to discourage investment in the
concern. These conditions undoubtedly led many recognised financial authorities to
anticipate that the existing Turkish liabilities might become too great and involve