File 3047/1909 'Railways: Asiatic Turkey; railway construction in Asia Minor' [‎69r] (142/368)

[ This Document is the Property of H is Britannic Majesty’s Government.]
ASIATIC TURKEY AND ARABIA.
[April 18.]
CONFIDENTIAL.
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Section 4.
No. 1.
8 ir G. Lowther to Sir Edward Grey,—(Received April 18.) 0-.'
(No. 229.)
Sir, Constantinople, April 13, 1910.
WITH reference to my despatch No. 194 of the 1st Fehmary last, I have the
honour to forward herewith an article from the “ Yeni Gazeta,” giving further news
regarding the Chester, Glasgow, and Schaeffer Railway schemes.
I have, &c.
GERARD LOWTHER.
Enclosure in No. 1 .
Extract from the “ Yeni Gazeta ” of Api'il 12, 1910.
The American Railway in Anatolia Peninsula that forms most of modern-day Turkey. .
IN previous articles we have examined the proposals of Mr. Glasgow, and of
Mr. Chester ; and have given our opinion on them. We now wish to look at a further
project—that of the Belgian financial group, known as the “ Societe generale ”—the
moving spirit of which is Colonel Schaeffer. Let us repeat what we have said in
connection with the other schemes, the points and conditions of which we make mention
are not necessarily the final ones; indeed, we hear that the Societe generale is about
to make further proposals ; but in order to form any logical opinion, we must go into
such details as we have.
In the petition presented to the Minister of Public Works the Societe generale
make the following remarks :—
“ The treatment of railways in connection with mines appears to us to be open to
grave objections, both on the part of our company and on the part of the Ottoman
Government, because the contract made would be based on a value which is unknown
to either of the contracting parties, and which would therefore be nothing more than a
speculation. As a speculation the business is promising enough to produce a deficit of
5,000Z. Indeed, it is sufficient in the first place to understand the nature of petroleum
mines ; if these mines are important and rich enough to guarantee a 2,000 kilom. line,
then there is a probability that the Government which owns them will turn out the
loser, and not the gainer, for a great and fertile source of wealth will have been taken
from it before its true value is known in return for a disproportionately small advantage.
The Belgian Societe generale, acting on the rule that all business should be based on
sound foundations, does not wish to have anything to do with so vague and proble
matical a matter, a matter which, even though it were profitable to the company itself,
would cause the Government to be always regretful, and would expose it to hostile
criticisms. We wish to propose to the Government an undertaking that will be both
advantageous to the Government, and will enable a serious financial company to earn
a reasonable and legitimate profit. The Societd generale proposes that the Govern
ment shall itself work both mines and railways. The societe will provide the money
necessary both for the building of a railway and for the discovery of mines. From the
actual revenues a sufficient sum will be appropriated to pay 7 per cent, on the capital,
and also to amortise the capital within the period of the duration of the concession. If
there be any revenue over it shall be equally divided between the Government and the
company. If things go well, this will be a most profitable undertaking, both for the
Government and for the company.”
We do not know why this proposal should not be acceptable to the Government ; \
but one thing we do know is that a convention is to be made with the Chester group
on their making certain modifications ; it remains to be seen what these modifications
are, and whether they are open to the objections that we have pointed out in our
previous articles.
COPY TO INDIA
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