File 4030/1913 Pt 1 'Baghdad Railway: Negotiations; Navigation of the Tigris and Euphrates' [‎194v] (192/280)

commerce which we have created. Nobody could be more anxious than myself to arrive
at a reasonable arrangement with Lord Inchcape and to avoid any unpleasantness in the
future. As this is a question in which the British Government have intervened, and
have requested me to leave the decision in their hands, I think I have established a^
claim to their good offices for securing considerate treatment.
It is evident that, now that the Germans have been conceded a share in the
proposed new company, the scheme has taken a shape similar to that contemplated in
the Turkish proposals of March of this year, transmitted to me by the Deutsche Bank,
and by me to you, in which I was to provide the British share. You asked me not to
commit myself, but to give your Department time to think the matter out, and they
ultimately rejected those proposals. Though Lord Inchcape has now been put in my
place by the direct action of the Department, and the Germans have been brought in,
I am willing to abide by my proposals of the 13th August; but surely it is only fair
that I may be allowed to ask that the qualifications of them should be restricted to
matters of detail.
Yours sincerely,
H. F. B. LYNCH.
Enclosure in No. 1.
Memorandum by Mr. Slaughter in relation to the proposed New Ottoman Company
{hereinafter called the Ottoman Company).
The Euphrates and Tigris Steam Navigation Company (limited) (hereinafter called
the British Company) and La Societe des Transports fluviaux en Orient (herein
after called the Belgian Company).
THE real difficulty arises because Lord Inchcape claims the concession of the
Ottoman Company as his own property to do with what he likes in his uncontrolled
discretion.
Mr. Lynch was told that, while Lord Inchcape would be the concessionnaire, he
(Mr. Lynch) was invited to negotiate on the basis of Sir Edward Grey’s proposals of
the 19th May, 1913. (Copy herewith.)
Those proposals expressly stated that on certain conditions the Foreign Office
would use their good offices to secure to the British Company (i.e., Mr. Lynch’s
company) :—
1. The right to subscribe a substantial portion of the British share of the capital
of the Ottoman Company.
2. A seat on the board of the Ottoman Company.
3. A working agreement between the Ottoman Company and the British Company.
4. A payment in cash or a certain number of fully paid-up shares in the Ottoman
Company (in addition to any shares subscribed under No. 1 above) in consideration of
the position of the Messrs. Lynch as pioneers in the navigation of the rivers.
On receipt of these proposals, Mr. Lynch saw Mr. Parker on the 21st May, 1913,
with a memorandum wdiich Mr. Lynch submitted as to his views of Sir Edward Grey’s
proposals. Mr. Lynch had in his original draft stated that the proposals might be
construed as giving the control and management to outsiders, and that to bestow the
control and management of such a concern to newcomers would be grossly unfair.
Mr. Parker objected to this w 7 ay of stating it, and particularly to the words “grossly
unfair,” and at his instance Mr. Lynch’s memorandum was amended so as to read:
“ If the proposal involves the exclusion of Messrs. Lynch Brothers from participation
in the local management, then it is, in our view, a wholly inadequate recognition of our
existing position.”
In Sir Edward Grey’s proposals there is no mention of the Belgian Company at
all. The Belgian Company had previously been formed by Mr. Lynch, in co-operation
with the Deutsche Bank, to provide a fleet to handle the transport of material for the
construction of the Bagdad Hailway. The arrangements for the creation of this
company had been communicated by Mr. Lynch to the Foreign Office prior to its
formation ; and so much alive were the Foreign Office to its importance that they
asked and obtained from Mr. Lynch, without any consideration, but as a matter of
courtesy, an assurance that his company would not part with their interest in the