‘Bagdad Ry’ [‎22v] (44/129)

10
(Confidential.)
D.
Copy.
Constantinople;
April 1905.
On many sides doubts are expressed of the probability of the 3 % increase
of Turkish import duties being given effect to. Conditions which we regard as
innocuous or non-contentious are regarded by the Turks in a different light,
and it is generally believed that the German Ambassador is lukewarm. He
stands quite apart from all his colleagues in the influence he exercises on
Turkish official circles, and is not at all likely to drive the Turks it' they
dislike the scheme as a whole.
The German Ambassador’s pose is that he is at Constantinople on business
to push German trade : if his colleagues waste their energies on high politics
that is their business; he will have none of it.
His view of Macedonia is that the Powers are wasting their time: the
question is one of race, not administration.
It would appear that, if the revenue derived from the increase of 3^ on
the import duties were earmarked for Macedonia, the Baghdad Railway
Company will be losing sight of what might have become a suitable securitv
for their kilometric guarantee.
The 3^ increase is estimated to produce £800,000 per annum.
Taking £15,000,000 as a rough figure of the cost of the line, the above
sum would more than cover the requirements of the kilometric guarantee.
The Directors of the Company are now casting about for security to cover
the kilometric guarantee lor two sections beyond Eregli (400 kilometres). It is
thought that they will in reasonable time come to terms with the Porte, and
that the security will be found.
The Konich-Eregli section was constructed for less than one million
sterling, i.e., less than £5,000 per kilometre. Dr. Nander states that much of
the balance of the 54,000,000 fr. (i.e., the kilometric guarantee capitalised)
went in expenses, including money spent on Turkish officials, but it is said
that a large sum remains which is to be expended on the next 200 kilometres.
The revenues on the tithes already set aside for the kilometric guarantees
of all guaranteed railways in Turkey and Asia Minor, &c., exceed the actual
requirements by £350,000.
The revenues of the tithes hypothecated to the Anatolian Railway show
surplus of £130,000. (Ibis is included in the £350,000 mentioned above.)
Until recently this surplus of £350,000 was mortgaged for three years from
now to cover curient advances of the following sums i—£430,000 advanced bv
the Anatolian Railway Company to the Porte; £332,000 advanced by the
Ottoman Bank to the Porte. J
It has now been agreed that the £430,000 is to be repaid at once from
the Deutsche Bank Loan just concluded.
The £332,000 similarly is to be repaid at once from the Ottoman Bank
Loan, not yet signed, so that the £350,000 surplus will immediately become
available.
It is believed that the Deutsche Bank hopes to hvpothecate this surplus
for the extension of the Baghdad Railway beyond Eregli.
It is clear that the tithes are by no means exhausted, and, as may be seen
from recent reports of the “ Dette” administration, they are steadily improving.
The last report of the “Dette” shows that a surplus of £100,000 over
a n 0Ve 1 t rec l uir . eme nts ef the Unified Loans was expected last year.
Actually the sum was largely exceeded.