File 2764/1904 Pt 2 'Baghdad Railway: General negotiations 1908-10.' [‎40r] (88/799)

This Document is the Property of His Britannic Majesty’s Government.]
BAGDAD RAILWAY.
SECRET.
[11933]
•s** »•**»*>
— —-i/ t-
No. 1.
[April 20.]
Section 1,
Sir Edward Grey to Sir G. Lowther.
(No. 107. Secret.)
Sir, Foreign Office, April 20, 1910.
IN your Excellency’s despatch No. 197 of the 2nd instant you reported that the
Ottoman Minister for Foreign Affairs, while denying that negotiations on the subject
had as yet reached a binding or final conclusion, had admitted that active discussions
were in progress between the Sublime Porte and the parties concerned, with a view
to facilitating the ultimate prolongation of the Bagdad Railway from El Halif to
Bagdad by means of the allocation of the surplus revenues of the tithes which would
be available for kilometric guarantees in 1915.
This information, as your Excellency is aware, has been received by His Majesty’s
Government with surprise and concern: in the first place it appears to indicate a
fundamental change in the attitude assumed by the Ottoman Government only a
few months ago in regard to the Bagdad Railway concession of 1903,—a concession
which could hardly meet with the approval, let alone the encouragement and support,
of an enlightened administration under the new regime, unless and until it had
undergone drastic revision and substantial modifications : in the second place it
tends to confirm an impression that the Ottoman Government, by disregarding the
well-known views and wishes of His Majesty’s Government, no longer recognise that
community of interest which, in the critical period following upon the revolution of
July 1908, induced His Majesty’s Government on their part to extend to Turkey,
with no small measure of success, their whole-hearted and consistent support: while
finally, it foreshadows the progress of an enterprise which, as at present controlled
and unless rendered innocuous by the execution of protective and countervailing
measures, is calculated to involve increasing injury to long-established British commerce
in Mesopotamia, as well as to affect political issues of the greatest magnitude in the
Middle East, and more especially in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , where, owing to the proximity
of the Indian Empire, the commercial interests of Great Britain have long been
recognised as predominant to those of all other European States.
It will be convenient that I should deal with these important subjects under distinct
and separate headings.
Firstly, as regards the Bagdad Railway Convention of 1903, your Excellency was
categorically informed by Hikni Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. , in his capacity as Grand Vizier, that the Bagdad
Railway would not be continued unless the terms of the concession, negotiated under
the corrupt and obscurantist rule of the ex-Sultan Abdul Hamid, were first materially
altered. His Majesty’s Government had cordially shared the estimate formed by Hilmi
Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. of the concession : and the failure both in 1903 and subsequently to enlist
British participation in the undertaking is largely due to the recognition in this country
of the onerous nature of the concession,—imposing upon Turkey burdens altogether out
of proportion to the advantages it is likely to confer,—while certain pourparlers which
took place in Berlin in the closing months of last year have not led to any concrete
residt owing to some extent to the disinclination of the present holders of the conces
sion to consider certain financial modifications advantageous to the Turkish Exchequer,
which His Majesty’s Government desired to see introduced into the scheme of the
concession as regards its application to the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. section.
I do not intend in the present despatch to enter upon a detailed exposure of the
objections to which the terms of the convention of 1903 might reasonably be subjected,
the more so since those objections are sufficiently patent from a perusal of the
document in question : but I shall touch upon certain salient points which appear
particularly disadvantageous to the interests of the Turkish Government and
taxpayer.
Under article 35 two guarantees are instituted, the one a working-expenses
guarantee, the other for purposes of construction : the first is arranged upon such a scale
that it directly militates against the progressive development of traffic, and therefore
against the commercial success of the line; the other is calculated upon a basis so
extravagant that, even if the main line alone be taken into consideration, there should
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