File 2764/1904 Pt 2 'Baghdad Railway: General negotiations 1908-10.' [‎290r] (594/799)

ASIATIC TURKEY AND ARABIA.
CONFIDENTIAL.
1^3424]
Sir Edward Grey to Sir F. Bertie.
(No. 276.)
Sir, Foreign Office, June 30, 1909.
THE French Ambassador called on the 19th instant and was received by
Sir Charles Hardinge. He had been instructed to state that M. Auboyneau had on
the previous day informed M. Pichon that in 1903 an agreement had been made
between the Deutsche Bank and the Ottoman Bank by which the latter institution
was to participate to the extent of 30 per cent, or 40 per cent, in the Badgad Railway
scheme The Ottoman Bank had now received a warning from the Deutsche Bank that
they must declare before the 23rd June, i.6., within four days, whether they intend to
take up this participation or not, and that if the reply was in the negative, the
Deutsche Bank would proceed without the co-operation of the Ottoman Bank.
M. Auboyneau wished to know what he should do.
M. Pichon had replied that if the Ottoman Bank went in with the Deutsche Bank
in the Bagdad Railway, it was a banking concern, and must be regarded as such ; but
that the French Government would not allow the shares to be quoted on the Paris
Bourse unless the scheme were one which they could approve and in which there was a
British participation.
M. Auboyneau told M. Pichon that the Ottoman Bank were in the course of
discussing British participation with a financial group in London.
The French Ambassador had been instructed to enquire whether this information
was true, and what were the views of His Majesty’s Government in regard to the
matter.
Sir Charles Hardinge replied that the views of His Majesty’s Government were
well known to M. Gambon, and that they had not been modified. He added that no
information whatever as to any negotiations with a British financial group for
participation in the Bagdad Railway had reached this Department, and that he could
hardly believe that any serious negotiations could be in progress without the views of
His Majesty’s Government having been previously ascertained.
M. Gambon remarked that he was afraid that, owing to the recent exodus of
capital from England and France to Belgium and Switzerland, the financial situation
had been modified to the advantage of Germany, and that unless some agieement were
come to before long we might have the unpleasant spectacle of the Bagdad Railway
being completed with British and French capital.
I am, &c.
E. GREY.
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