File 2764/1904 Pt 3 'Baghdad Railway: general negotiations 1910-1912.' [‎233r] (476/544)

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[This Docnment is the Property of His Britannic Majesty's Government.]
BAGDAD KAILWAY.
SECRET.
[26703]
No. 1.
[July 23.]
Section 1.
Sir H. Babington Smith to Sir Edward Grey.—(Bcceived July 23.)
Dear Sir Edward Grey, Constantinople, July 19, 1910.
MUST apologise for my delay in thanking yon for your letter of the 31st May.
I received it on my return to Constantinople, but since then I have been laid up with
an attack of fever and have not been able to resume work until a few days ago.
Sir Ernest Cassel replied to Dr. Gwinner on the 3rd June in the sense suggested
in the course of our conversation at the Foreign Office. I understand that Sir Charles
Harclinge saw the letter before it was sent and approved of its terms. Since then I
have not heard anything further from Dr. Gwinner, nor, so far as I am aware, has Sir
Ernest Cassel.
As regards the extent of the British share to be claimed in any future negotiations,
I may mention that, when the question was raised before, Dr. Gwinner explicitly stated
that there would be no objection on the part of the Bagdad Company to a preponderant
British share, but he anticipated objection on the part of the Turks. In their present
frame of mind I think it is likely that their objections would be difficult to overcome,
and I venture to suggest that, if this should prove to be the case, the point after all is
not an essential one. A 50 per cent, interest in one hand would, I believe, as a matter
of fact, give absolute control, as against 50 per cent, divided among several interests.
It Avould, of course, be essential that the 50 per cent, should remain intact, but I do
not think there would be difficulty in devising arrangements to secure this.
As regards ports, article 23 of the original concession gives the concessionnaires
the right of constructing and managing ports at Bagdad, Bussorah, and the terminus
of the Koweit section. Whatever arrangements are agreed upon as regard the line
south of Bagdad would no doubt apply also to the ports of Bussorah and Koweit. The
point is not mentioned in Dr. Gwinner’s memorandum of the 15th December ; and we
will bear it in mind in any future negotiations.
With reference to the last paragraph of your letter, may not an inconvenient
situation arise if the conditions on which the French and Russian Governments will
agree to an arrangement are not ascertained till after the arrangement has been
negotiated ? If their conditions were ascertained beforehand, they could be kept in
view in the course of the negotiations.
Inn vp tvf*
H. BABINGTON SMITH.
[2825 z—1]