File 2764/1904 Pt 2 'Baghdad Railway: General negotiations 1908-10.' [‎86r] (180/799)

CONFIDENTIAL.
3 11 ^
Sir E. Goschen to Sir Edward Grey .— (Received April 10, 8 a.m.)
Berlin, April 10, 1910, T8 a.m.
{No. 25.) R.
CHANCELLOR sent for me this evening*.
Referring to your conversation with German charge d’affaires, he said that he
legretted not to have been able to fall in with your views respecting Bagdad Railway.
Public opinion would not allow him to give preponderance of influence on most
valuable section of railway without very substantial compensation. What His Majestv’s
Government seemed to regard as such was no compensation at all. It was something
for lurks but nothing for Germany.
After listening to my enumeration of advantages to Germany of British
participation, he said that they amounted to nothing. I asked him whether he had in
his mind any compensation which he and public opinion would deem sufficient. His
ieply was to tlm effect that the only way he could make such a great concession
palatable to public opinion was to make it form part of a general political under
standing such as he had indicated last year. Any other way was impossible. After
pointing out once more the difficulties in the way of a political understanding on his
lines, I said that surely fact that suggestion of British participation had come from
German side would have a tranquillising effect on German public opinion. He said
that, on the contrary, in the first place the Deutsche Bank was not Germany, and
secondly, much had changed since Cassel’s visit to render German public opinion
sensitive with regard to concessions. No one was more anxious than he to have good
relations with England, but he could assure me that nothing was more certain than
that if he gave away this valuable concession for what public opinion would regard as
nothing the relations between the two countries would become far worse than ever.
Alluding to your remarks about Persia, he said that, in his opinion, that was
another question which should form part of the general political understanding. His
views were that British and Russian Governments should renew assurances as to open
door; that Germany should engage not to apply for railway, telegraph, or such like
concessions in the British sphere, while, in return, Great Britain should give Germany
a fair share of supply of material, &c., in any British enterprises under such con
cessions. Germany would also ask for equal participation with other third Powers in
loans and situations under Persian Government. I also understood his Excellency
to say that, as regards Russia, Germany would require that line between Tehran
and Khanikin should be constructed, and that on completion of that line and the
German Bagdad-Khanikin line carriages and trucks from German line should be
allowed to run through to Tehran without prohibitory customs dues or other dis
advantages. As long as this was not promised—and the matter was almost as
important to British commerce as to German—any assurance of the open door was
illusory.