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File 2764/1904 Pt 2 'Baghdad Railway: General negotiations 1908-10.' [‎206v] (421/799)

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The record is made up of 1 volume (391 folios). It was created in 1908-1910. It was written in English. The original is part of the British Library: 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. Records and Private Papers Documents collected in a private capacity. .

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This is almost sufficient for the Germans as far as Aleppo, and as soon as the
reserve fund of the debt amounts to £ T. 2,000,000 (namely, in 1911) the interest
thereof is paid into the general receipts, and the surpluses will increase by, say,
£ T. 80,000, of which the share of the Government is £ T. 60,000 available again fo^*'
the railway. M. Huguenin agreed with these figures, but he said that that would onhy
take the Germans to Aleppo. For the next two sections there was no money, unless
the revenues of the debt increased or unless when the definite contract came to be
signed for these two sections the Turks gave fresh revenues. He thought that the debt
revenues would gradually increase, but unless there was a modification of the tobacco
monopoly or the spirits tax he did not foresee an increase which would provide the
£ T. 220,000 for the third series (sections 4 and 5) for some time to come. He stated
that the Germans would have the revenues arising from the creation of monopolies,
which might help them. This, I admit, is new to me, but he spoke of it with
assurance, and it is therefore of importance to Great Britain that when the monopolies
are introduced the consent of His Majesty’s Government should only be given on
condition that the product is to be applied to purposes of general State expenditure.
From the above it is evident that in M. Huguenin’s opinion there is no chance
yet of the surpluses of the debt revenues being sufficient for the fourth and fifth
sections.
In my opinion the following points should be kept in mind :—
1 . The construction of the fourth and fifth sections of the Bagdad railway is a
matter of time, and it remains to be seen whether the Turkish Government will sign
the definite contract for series 3 (sections 4 and 5) of the Bagdad railway loans with
out demur. Under present conditions I don’t think they will be rushed, nor show any
eagerness to set aside funds for the purpose.
Series 2 is practically an accomplished fact, but Series 3 is a matter of “ longue
haleine.”
2 . I consider that normally the Public Debt revenues will slowly increase, and will
eventually suffice for sections 4 and 5.
3. There is a possibility of abnormal increase by altering the system of the tobacco
monopoly or by modifying the tax on spirits.
4. In view of M. Huguenin’s uncertain attitude as to the destination of the
4 per cent, increase of Customs, a solemn declaration should be obtained from the Turkish
Government that the product thereof shall not be assigned to the Bagdad railway
either for sections 2 3, 4 and 5, or for other sections.
5. An engagement should be required from the Turkish Government that the
existing 3 per cent., if ever it ceases to be specially applied to Macedonia, either
before or after the expiration of seven years shall also not be assigned to the railway.
6. That the consent of the British Government to the creation of new monopolies
should not be given unless the product of these new monopolies should be assigned to
the general expenditure of the Empire, and not to the railway.
These demands are the more legitimate that the Turkish budget of this year
shows a deficit of £ T. 5,000,000, and will have to be covered by proceeds of loans or
from extraordinary sources; not only will this be so this year, but perhaps for several
years to come. To assign revenues for the Bagdad Railway under such circumstances
would be an act of folly, which every Government desirous of seeing the establish
ment of a sound financial policy in Turkey would be justified in pointing out and
preventing.
If the product of the 4 per cent, is to be applied to a loan it might be unofficially
urged on the Porte that at least 50 per cent, of the loan shall be placed in London.
The 4 per cent, might produce a loan of, say, £ T. 20,000,000. British trade is by far
the most important in Turkeyy and it would not be fair to give French or German
houses an opportunity of a large lucrative and sound operation with money derived
chiefly from British trade.
It is in my opinion advisable that the 4 per cent, should pass through the hands of
the debt, as the 3 per cent, does, under the decree of Mouharrem. I think the French
and the German Governments would agree to this if they were approached ; probably
also Italy and Austria, as by this means 25 per cent, of the money would go to the extra
ordinary sinking fund of the Unified Debt and Lots Turcs. The advantage to the Turks
is twofold—
[a.) Increased security for the loan, and hence better terms ;
(6.) Increased rapidity in the amortisation of the debt, and in regaining their
financial independence.

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Content

The volume comprises telegrams, despatches, correspondence, memoranda, newspaper cuttings, maps and notes, relating to negotiations over the proposed Berlin to Baghdad Railway in the period 1903-1907.

The discussion in the volume relates to the economic, commercial, political and military considerations impinging on British strategy for the international negotiations over the development of a railway to Baghdad in particular.

Further discussion surrounds the motivations and strategies of British competitors in the area; included in the volume are four maps.

The principal correspondents in the volume include the Secretary of State for Foreign Affairs (Lord Lansdowne, Sir Edward Grey), His Majesty's Ambassador at Constantinople (Sir Nicholas O'Connor), the Under Secretaries of State for Foreign Affairs (Sir Charles Hardinge, Sir Thomas Henry Sanderson), and for India (Earl Percy, Sir Arthur Godley), the Viceroy of India (Lord Curzon of Keddleston), the Secretary to the Political and Secret Department of 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. (Sir Richmond Richie) and the London Manager of the Imperial Bank of Persia (George Newell).

Extent and format
1 volume (391 folios)
Arrangement

The papers are arranged in approximate chronological order from the rear to the front of the volume.

The subject 2764 (Bagdad Railway) consists of five volumes, IOR/L/PS/10/56-60. The volumes are divided into five parts with each part comprising one volume.

Physical characteristics

Foliation: the main foliation sequence (used for referencing) commences at the first folio with 1 and terminates at the inside back cover with 392; these numbers are written in pencil, are circled, and are located in the top right corner of the recto The front of a sheet of paper or leaf, often abbreviated to 'r'. side of each folio. An additional foliation sequence is also present in parallel between ff 329-358; these numbers are also written in pencil, but are not circled, and are located in the same position as the main sequence. A previous foliation sequence, which is also circled, has been superseded and therefore crossed out. The foliation sequence does not include the front cover.

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File 2764/1904 Pt 2 'Baghdad Railway: General negotiations 1908-10.' [‎206v] (421/799), British Library: India Office Records and Private Papers, IOR/L/PS/10/57, in Qatar Digital Library <https://www.qdl.qa/archive/81055/vdc_100026492733.0x000016> [accessed 29 March 2024]

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