‘Bagdad Ry’ [‎15r] (29/129)

5
/
✓
anything new, and quite likely to lose part of what we already possess. Nor must the
very important and possible contingency be ignored of the Germans eventually, either
by means of the revenues assigned for the kilometric guarantee, or otherwise, getting
control of the Turkish customs (see paragraph 17).
16. On the other hand, were the line to be made a joint concern, or to be inter
nationalized, the damage to our prestige w T ould not be so evident, and to our military
interests would be considerably modified, while the competition which our commerce
would incur should be rather stimulating than crushing.
17. As regards the investment from the bondholder’s stand-point, it may be
regarded as quite safe under the existing system of kilometvic guarantee. ^ The loan
would be secured on provincial revenues which would be collected by the Adminis
tration of the Debt, revenues which usually produce more than the guarantee (about
700/. a-mile) require*. Recent experience has also shown that a railway has generally
increased the yielding power of the tithes of the provinces thr >ugh which it passes.
The bonds (4 per cent.) which would be issued by the Turkish Government were in
the last case taken up at about 86, which gives an interest of 4j per cent., and the bond
holders have in addition the security of the particular section of the line concerned.
18. There is, however, some doubt as to what reliable provincial revenues remain
to be hypothecated, as it has already been found necessary to assign some of the tithes of
the Bagdad Vilayet to the Konia-Eregli section, and the suggestion has accordingly
been put forward that a 3 per cent, increase on the Turkish Customs duties, which
wmulcl give 800,000/. per annum and would be ample to cover the interest on the
capital required for the construction of the whole line, should be pledged as the
guarantee. To do this it would be necessary, under Article 8 of the Decree of
Muharram of 1881, to obtain the consent of the Council of the Ottoman Public Debt,
but Sir N. O’Conor is sanguine of this being obtained.
It need hardly be said that without the hypothecation of these or some other analo
gous revenues for the kilometric guarantee, the investment considered commercially,
would be by no means secure, from the point of view of the bondholders. Never
theless, it might not be unwise, and from political considerations it might almost
appear to be the best course open in the final resort, for British capital to participate
in the venture on the security of the railway alone. The purchase of the Suez
Canal shares in 1875, is to some extent analogous, but it seems probable that in
the present instance some form of guarantee would be necessary from His Majesty’s
Government
19. The next question is that of working expenses. Here again there is a
guarantee, secured in the same manner as that for construction, of about 300/.
a-mile. In addition to this, there would be the traffic receipts, estimated by
Hr. Rohrbach at about 200/. a-mile to begin with, and likely to increase (from the
analogy of the Eski Sheyr-Konia section of the Anatolian Railway) to about 300/ in a
few (four to six) years. In the economic way in which traffic is conducted on the
Anatolian Railway, there is no reason why the expenses should exceed this figure
(600/. per mile),t and it may be noted that the average expenses of similar types of
lines in Russia in Asia (where many more trains are run) prior to the completion of
the Trans-Siberian Railway (1898-99), only reached 750/. per mile.
Supposing, however, that the whole line were built and that there was a
continuous loss of 100/. a-mile over its entire length of 1,250 miles—an improbable
event presuming the 300/. guarantee jjer mile to be regularly paid, and considering
that i:00/. a-mile is by no means a high figure for trafiic receipts—the total deficit
would even then only amount to 125,000/. a-year, of which the British would, at the
most, be liable for one-half—a sum considerably less than the annual sum paid by us
to the Sultan on account of Cyprus (which is at present hypothecated to the service of
the Ottoman Debt).
20. There is, however, no reason to doubt that certain portions of the line would
pay their way (in conjunction with the kilometric guarantee) very shortly.
As mentioned above, it is a fact that the revenues of the provinces served by the
Anatolian and other railways in Asia Minor have increased considerably, and an
export of corn to the value of 2,000,000/. has grown up from nothing in the last few
years. As regards Alesopotamia, it is common knowledge that in ancient times this
part of the country was populous and productive. Without implicitly accepting
| For 1902-1903 the working expenses averaged, for all the Anatolian Kailway, 249/. per mile: and the
traffic receipts, 605/. per mile.]
[2062 z—l] . C
* See Lord
Revelstoke’s
Memorandum,
(A.), p. 27, and
Mr, Whitehead,
(A.), p. 78.
(A.), pp. 28 and
31.
(A.), p. .
(A; p.