'Collection of papers respecting the attitude of His Majesty's Government in regard to the Bagdad Railway and the Purchase of Land at Koweit (amended version)' [‎4r] (7/34)

surmount alone the financial difficulties which were at one time held likely to bar *the
completion of the line by them without our assistance. On the whole, it seems probable
that, if our participation in the scheme is much longer delayed, we shall be unable to
rely on the pecuniary embarrassment of the Company as a factor in the situation
inducing them to seek our assistance.
6. In the second place, we are disposed to doubt whether our position with
reterence to the question of a terminus for the railway is as strong as we were previously
inclined to believe. It appears to have been the original intention of the concession-
naires that the line should terminate at a port on or near the open sea, and some spot
in the neighbourhood of Koweit appeared to be indicated at first as a likely terminus.
I he financiers controlling the Syndicate seem, however, to have cast about for the
means of making themselves independent of British assistance in the matter, and from
the ^report of Captain Mahon, who was specially deputed last year to make an
examination of all possible termini, there would appear to be no reason why they
should not succeed in attaining their object. Captain Mahon is of opinion that there ,
aie no engineering difficulties which would prevent Bussorah from beino- made the
terminus of the line, and he thinks that it would provide a port capable of accommodating
steamers fully equal to the demands of trade for many years to come. He further 1
points out that, from a commercial point of view, Bussorah offers advantages over all
possible termini. His opinion as to the feasibility of dredging the bar of the Shatt-el-
Arab is supported bv his Excellency the Naval Commander-in-chief and by the officers
of the British India Steam Navigation Company who ply in those waters. Mr. Grant
Lulls recent report of German attempts to purchase from Persia a Concession for a
port and a coaling station at the mouth of the Shatt-el-Arab is not without significance.
We are siill disposed to think that the best terminus is to be found in the neighbour- \
hood of the Khor Abdulla or of Kathama Bay. But we recognize that a suitable port
may,^if necessary, be secured at some point less directly subject to British influence.
7. In these circumstances, though our opinion on the subject has not been invited
by His Majesty’s Government, we think it desirable that we should place you in
possession of our views as to the advantages to be secured by participation in the
scheme and as to the dangers to be feared, in the event of the project being completed
without reference to British claims. The authoritative statements in regard to the
detrimental effects likely to be produced upon British interests by a railway on the
alignment proposed, if under the exclusive control of a great military and industrial
nation, have been summarized in Part V of Mr. Alwyn Parker’s Memorandum, dated the
10th March, 1906. His Majesty’s Government have no doubt considered these
statements and the conclusions arrived at in them, but even at the risk of recapitulatino-
arguments with which His Majesty’s Government are already familiar, we think it as
well on the present occasion to lay stress on some considerations of both local and
general importance, with which the Government of India regard themselves as intimately
concerned. J
8. At Bagdad we have had a Resident since 1766. Kerbala and Nejef are annually
visited by large numbers ot Indian pilgrims. At Bussorah there is a British Consul,
who is charged with the care of British trade, which is represented by 81’Oo per cent, of
the shipping coming into the port, and by the Tigris and Euphrates Steam Navigation
Company, who are the principal carriers of merchandize between Bussorah and Bagdad,
and who are subsidized by the Indian Government. At Koweit for some years past we
have been steadily endeavouring to consolidate our influence, in anticipation of the day
when the port of a trans-continental railway system should be located in this neighbour
hood. Lately we have, with the approval of His Majesty's Government, sent a British
Political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. to reside at this port, and have authorized the Sheikh to adopt a
distinctive flag. The Bagdad-Khanikiu route is the line by which a very substantial
share of British trade with Persia passes.
9. r l he Germans have already clearly shown that they have no intention of
confining their energies to the mere construction of a through line of rail. The
Convention itself gives them the right to construct a branch* from Sadijeh to Khanikin,
to establish f various industries, to construct J quays at the terminal port, to utilize §
such natural water-power as may be available, and during construction to run |j steamers
on the Tigris. Schemes have also been started by German Commercial Associations for
the exploitation of the mineral wealth of the country traversed by the railway. Nor do
they intend to restrict their activity to Mesopotamia only. In 1897 they appointed for
* Article I. + Article XXII. f Article XXIII.
§ Article XXV. || Article IX.