'File 73/7 II (D 22) Status of Koweit [Kuwait] - Baghdad railway, Anglo Turkish negotiations' [‎72v] (150/540)

would be in a position nominally superior to the foreign countries, and this would
make the agreement more acceptable to the Ottoman Parliament. But we anticipate
great reluctance on the part of Turkey to any arrangement admitting Russian
participation.
We have already expressed the view that the control to be exercised by the
Board will be unusually circumscribed; bnt, such as it is, it will, in so far as it is to
serve British interests, be dependent upon the continued solidarity of the Entente
Powers. The proposal made by His Majesty's Government last July is based upon
the assumption that, during the whole period of the concession—that is, for 99 years at
least—the general policy of His Majesty's Government and the Governments of France
and Bussia will be such as to insure concerted action on the railway Board, and
it presupposes that the Governments concerned will be able to control the policy
of their financiers, which in the case of France at least is more than doubtful. We
venture to suggest that it may in future prove inconvenient that our interests should
depend upon the co-operation of France and Russia , on the Board, since the necessity
of insuring concerted action by the three Powers in Mesopotamia may handicap British
policy in other quarters.
Moreover, it must be remembered that Russian commercial interests are here
contrary to our own, since the value of this section to us—at all events for many years
to come—lies in the fact that it will enable us more easily to pour our goods into
Western and Northern Persia where at present Russia is our only rival.
We are accordingly far from being persuaded that it is in the interests of this
country to insist upon Russian participation in the Bagdad-Bussorah section; and we
venture to think that it would be better to provide for the Russian Government by
participation in the Khanikin branch, to which, on terms, the German Government
might assent, though the last-mentioned consideration applies to this course also.
It must not be overlooked that Turkey is not altogether a free agent in regard
to the distribution of capital, since the Bagdad Railway Company has reserved the
right to a share equal to that obtained by any foreign country in the Bagdad-
Bussorah sections.
(b.) Proposed international convention providing for the exclusion of differential
rates on any railways in Asiatic Turkey; for the alignment of the railway
south of Bagdad, and the conditions under which it is to he constructed ; and for
guaranteeing that the interest in the enterprise of the several parties concerned
shall he of lasting duration and not subject to termination on the expiry of
the Bagdad Railway Company's concession.
No specific mention is made in the Turkish reply of the "international convention"
which His Majesty's Government desire, but we understood from the Turkish delegates
that no objection would he raised to it.
With regard to the exclusion of differential treatment, the Turkish Government
declare themselves ready to assure to British commerce all facilities compatible with
the agreements already concluded by Turkey with the Bagdad Railway Company.
This limitation no doubt principally refers to the " Cahier des Charges" or specification
attached to the Bagrdad Railway Convention of 1903, and there is some force in the
contention of the Turkish Government that their hands are tied so far as concerns
rates on the Bagdad Railway. The specification is composed of technical details, and
it would be well to ask the Board of Trade and Government of India to cause an expert
examination of the schedule of rates to be made, so as to ascertain whether they are
of a nature to serve or to militate against British-Indian trade.
At first sight the Turkish reply on this point, the exclusion of differential rates
seems satisfactory.
Sir H. Babington-Smith has suggested that it is of great importance to provide
that the facilities and rates on the Khanikin branch shall be the same for goods arriving
from the Gulf as for those arriving from the Mediterranean. In this view we entirely
agree. J
The^ Turkish Government are ready to meet His Majesty's Government in regard
to the alignment and the financial arrangements, subject to the arrangement of details.
On the other hand, they say that they are not prepared to agree to the
arrangement to be arrived at for the Bagdad-Bussorah sections being of lasting
duration, instead of subject to termination on the expiry of the Bagdad Railway
concession. This is a point of some importance; and we,do not think His Majesty's