‘Bagdad Ry’ [‎13r] (25/129)

[This Document is the Property of His Britannic Majesty’s Government.]
BAGDAD RAILWAY.
CONFIDENTIAL.
Section 1.
No. 1.
'Memorandum communicated, by Board of Trade, dune 23, 190<>.
THE accompanying Memorandum on the Bagdad Railway, prepared in this
Department by Captain Bigham, summarizes very well the main features— commercial,
financial, and political—of the project, and deals with the question of British partici
pation therein.
The available evidence indicates that the Germans are likely to persevere with the
scheme and finally to accomplish it, with or without our co-operation, and that they
may be able to do*so even without the raising of Turkish customs duties from > to 11
per cent,, in order to provide the necessary guarantee—a measure which would require
the assent of the Powers. On the other hand, it would probably be difficult to find the
necessarv funds for the guarantee out ot the tithe revenues alone, and the financial
difficultv is especially acute at the present time when the Germans are anout to enter
on the construction of the most costly and difficult part of the railway, involving t e
piercing of the Taurus Mountains. If the Germans are willing to give us good terms
in return for our co-operation, they are much more likely to do so now than they will
be after thev have overcome the greatest difficulty of construction and the railway has
emerged into the plains. We should therefore consider our policy without delay.
The railway, either as a whole or as regards the section from Bagdad to the
Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. (in which we are predominantly interested), is not likely to pay its way
without a subsidv for many years to come, though it is impossible to forecast the
results that might follow if a large investment of capital took place in irrigation
works, which might restore fertility and ultimately attract population to Lower
With the kilometric guarantee for construction and working expenses provided
in the Concession, the railway is likely to be a safe investment unless the cost ot
construction should enormously exceed the estimate. It is true that tor some yeais
the receipts added to the guarantee for working expenses will probably tall below or
onlv barely reach the expenses of working the line, but there should be a suiplus from
the guarantee (of about 7001 per mile) for interest on the cost of construction winch
would amply meet any deficit. .
Our aim if any negotiations were undertaken, should be to secure the predominance
of British capital an,l direction in the construction and administration ot tire section
Of the line from the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. to Bagdad or possib y further, say, to Leknt or
even to Mosul. This would balance the predominantly German character oi .lie
existing Anatolian Railway as far as Konia. i i r ,
Some working arrangement for pooling the general traffic over the w 10 e me
ho necessary <uvin°‘ Great Britain adequate representation on the general
directorate. It would be necessary to secure such a modification of the Concession as
tould permit of the working of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. section ot the line as constructed
instead 1 of waiting for the completion of the entire railway which, conceivabl\, m ght
never take place, as the district between Mosul and Ourta is exceedingly dis ur >ec ,
iqual right s of
mvticination in the navigation or me ngris, me —, ....... the exception
of a Umitcd number of Messrs. Lynch’s steamers, are a private adventure of. the
Sultan. n ong were ^ it would be jin possible to say bow far the Germans
would be ready to meet us with regard to these conditions, but the whole question is
too s ^° U p^ e ^ e a Q°^ mittee and the Foieign Office have recently been considering it
from their points of view. (Initialled) 11. LI. S.
June 6, 1905.
B
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