‘Bagdad Ry’ [‎27r] (53/129)

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[This Document is the Property of His Britannic Majestys Govemmentj
BAGDAD RAILWAY.
[August 28. |
CONFIDENTIAL.
Section 1.
No. 1.
Sir N. O'Conor to the Marquess of Lansdowne.—(Received August 28.)
(No. 572.)
My Lord, Therapia, August 20, 1905.
I HAVE the honour to inclose herewith a Memorandum prepared by Mr. Mark
Sykes, recording some of the phases of the negotiations respecting the Bagdad Railway,
which may be found convenient for reference at some future date.
My views on the general question were so fxdly explained in my despatch to your
Lordship, No. 217 of the 28th April, 1903, that I think it unnecessary to review the
subject again, or to put forward in detail the reasons that have induced me to favour
the participation of England in this important enterprise.
In looking back, however, on the course of negotiations, it is well to note that a
suggestion made by me, as far back, I think, as 1899, to the effect that the construction
of the Bagdad-Bussorah section should be intrusted to British participators, was
regarded at the time as impracticable, on the ground that the opposition offered by the
Germans to such a scheme would be too strong; however, in the negotiations which
took place in Paris in 1903 this point was virtually conceded by Mr. Gwinner, as
representative of the Deutsche Bank, and I considered the concession on this point
augured well for our position in future among the participators.
It has been my view that the railway will eventually be constructed, even without
the participation of England, and that a project which has already assumed such
definite shape, and is fraught with such immense political and commercial conse
quences and advantages, will not be allowed to drop easily, whatever may be our
ultimate decision, though no doubt we can impede or advance its development and
progress to a considerable and serious extent.
It may not be without interest to state that the Konia-Eregli section was built at
a cost of £ T. 700,000, and allowing £ T. 200,000 for various initial expenses, there
remains in the hands of the Deutsche Bank the sum of at least £ T. 1,200,000 over from
the Bagdad Railway Loan (first series). This surplus is being reserved for the purpose
of constructing the next section of the line, which will require a capital of £ T. 3,200,000.
The Company will therefore be obliged to raise £ T. 2,000,000 before commencing
active construction.
However, the surplus of the revenues assigned to the Fisheries Loan and other
unhypothecated revenues still at the disposal of the Turkish Government would be
ample for guaranteeing this loan.
Taking these facts into consideration, it may be easily conceived that the work
may be resumed at no very distant date, and I would lay stress on the fact that every 7
section of the line constructed makes the ultimate completion of the railway more certain,
and that if the Germans overcome the difficulties of the Taurus Mountains unaided,
they may feel less inclined to share the fruits of their labours with others ; for then
they will be within reach of the rich tracts of Mesopotamia, where the obstacles to
construction become less serious, and the propects of success more inviting.
T HQVA Arp
(Signed) ’ N. R. O’CONOR.
Inclosure in No. 1.
Memorandum containing a Brief Account of the Negotiations relating to the Bagdad
Railway, 1898-1905.
DURING the German Emperor’s visit in 1898, the proposal to construct a line 1898.
from Constantinople to Bagdad came into notice, with several other suggestions, as to To Foreign office,
German enterprise, which excited some attention at the time, but were not taken verv
seriously. Ootol ' er 2n '
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