File 2764/1904 Pt 5 'Baghdad Railway: Anglo-Turkish negotiations; concessions proposed in respect of Kowait; negotations with Hakki Pasha in London; Anglo-Turkish agreement.' [‎158r] (328/536)

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1 . HIS Majesty s Government have not failed to examine with much care and
attention the important proposals which are embodied m the memorandum communicated
by the Imperial Ottoman Government on the 15th April last.
2 . Throughout their deliberations, His Majesty’s Government have been animated by
the conviction that a complete agreement on outstanding questions is eminently to be
desired in the larger interests of both countries. They are persuaded that such an
agreement, to be justly appreciated, should be viewed not only in the measure of
sacrifice or advantage which each individual clause may imply, but also in its cumulative
and future effects upon Anglo-Turkish relations in general. His Majesty’s Govern
ment therefore desire to lay before the Ottoman Government the following proposals and
considerations :—
3. For convenience of reference the several proposals under consideration may be
dealt with under three distinct headings :—
(i.) The Bagdad Railway question.
(ii.) The respective interests of Great Britain and Turkey in the region of the
Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. .
(hi.) An increase in the Turkish customs duties.
(i.) The Bagdad Railway Question.
4. The interest which Great Britain must take in a railway which is to traverse a
region where British-Indian trade amounts to some 60 per cent, of the total exports and
imports is indeed so obvious as to call for little comment. His Majesty’s Government
have on repeated occasions dwelt upon the importance of that trade and the manner in
which it has been steadily consolidated since the foundation, upwards of two and a-half
centuries ago, of the first English factory An East India Company trading post. at Bussorah; they have recalled that
no less than 96 per cent, of the steam tonnage entered at the port of Bussorah was
British ; and they have consistently maintained that a satisfactory settlement of the
Bagdad Railway question was a necessary condition of their assent to an increase in
the Turkish customs duties.
5 . The magnitude of Great Britain’s manifold interests clearly renders it desirable
that some satisfactory agreement as to British participation in the southern section of
the Bagdad Railway should, if possible, be reached. His Majesty’s Government find,
however, that the question of participation on terms acceptable to them is likely to
cause the Ottoman Government some embarrassment, and that the views held on
this point by the two contracting parties are difficult to reconcile. In these circum
stances His Majesty’s Government, anxious to prove to the Ottoman Government the
sincerity of their desire to reach a comprehensive understanding without delay oi
controversy, are prepared to withdraw their request for British participation in the
railway from Bagdad to Bussorah, if a satisfactory agreement is arrived at on the othei
points enumerated in this memorandum.
6 . It would be impossible to reconcile British public opinion to such a step unless
Ills Majesty’s Government were at the same time able to show that British interests of
whatever character were fully safeguarded. His Majesty s Government consequent y
feel bound, apart from the territorial arrangements proposed, to lay down the o ov\mg
conditions as essential to that end:— . „ A
(a.) An arrangement, as sht forth in the accompanying draft convention, tor the Draft Con-
exclusion of differential treatment on all railways in Asiatic Turkey. /
(5.) The admission of two British representatives, approved by His Majesty s (• nnex