Coll 17/7(1) 'Iraq and Palestine: agreement for transit through Palestine of goods to and from Iraq; Baghdad-Haifa railway' [‎343v] (697/1068)

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6. This is by no means the first time that Haim Effendi has been approached
by railway and other transport interests in Syria contemplating development of
Iraqi routes; for they realise that, in view of his virtual control of the transport
business in Iraq, his co-operation is an important factor of success. Haim
Effendi previously consulted Colonel Tainsh on the subject, asking, in particular,
whether the decision to construct the Bagdad-Haifa Railway is to be taken th >L
year. If so, he is prepared to continue development of the road route, Bagdad-
Amman-Haifa, provided he is given facilities by the Iraqi and Palestine Govern
ments equivalent to those obtainable from the Syrian Government. It will be
remembered (see paragraph 120 (ii) of Bagdad Economic Report No. 4 for the
month of April 1932) that Haim Effendi was encouraged last year by the
Director of Railways to develop that route and to divert traffic to Haifa in order
that trade and traffic connexions should be established between Bagdad and Haifa
by the time the Bagdad-Haifa railway came to completion.
7. As regards official assistance in the development of the Amman route,
an informal conference is about to be held in Palestine between the authorities
of the Palestine Government and an Iraqi delegation consisting of Yasin Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. -
al-Hashimi, the Minister of Finance, Mr. A. G. H. Sievwright, the British
Director of Customs and Excise in the Iraqi Government, and the Iraqi Director
of Commerce and Economics. It is hoped that one result of the discussions will
be the notification by the Iraqi Government of the Amman route as a transit
route for purposes of the Transit Trade Law of 1924. In the absence of such
notification, goods consigned by this route to and from Persia in transit to Iraq
do not benefit by the special customs facilities accorded to goods in transit, and
are liable to full Iraqi import duties instead of the transit dues of one-tenth per
cent, ad valorem. Accordingly, the Amman route is not yet being used for goods
in transit Iraq.
8. For this reason, Haim Effendi's present motor service via Amman is
operated principally on account of the mails, and he is therefore somewhat
alarmed to learn that United Kingdom and continental mails to Iraq may be
diverted to the Simplon-Orient and Taurus Express route via Damascus. Motor
convoys are allowed to leave Damascus for the desert crossing to Bagdad only
on two days in the week when the road is patrolled by police. One of these days
is Friday, and mails sent by the Simplon-Orient and Taurus Express do not reach
Damascus until Saturdays. It has been suggested to the Iraqi authorities that
the road should be patrolled on Saturday in future, instead of Fridays, in order
to ensure connexion for the mails. Mails from London could then be sent via
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Damascus to Bagdad and in six and a half days, compared with existing timings
by Haim Effendi’s Amman service of nine days via Port Said and eight days
via Brindisi.
9. If the decision to build the Haifa-Bagdad Railway is not taken this
year, Haim Effendi fears that competition on the Damascus-Bagdad and the
NI sib in-Mosul roads will be so successful that subsequent diversion of traffic to
Haifa will not be possible. His position is thus becoming increasingly difficult.
He has to visit Syria frequently in the course of his business, where he is
inundated with demands for co-operation in the exploitation of the Beirut-
Bagdad and Alexandretta-Mosul-Tabriz routes. The authorities in Syria are
fully alive to the danger to the commerce of Beirut which the development or
Haifa involves; and are ready to give substantial concessions to transporters m
a position to help them to retain traffic for Beirut. Haim Effendi fears that he
will be unable to remain aloof much longer, for he has considerable capital l 00 ^
up in trans-desert transport which he naturally desires to use to the best
advantage to himself.
10. Colonel Tainsh is inclined to agree with Haim Effendi that, if heavy
traffic is allowed to develop under French and Syrian auspices on the Benu --
Damascus-Bagdad and Alexandretta-Nisibin-Mosul routes, it will have a very
detrimental effect on the prospects of the Haifa-Bagdad Railway. The Haqi
railways have to consider their own position, which is, in some respects, simi a
to that of Haim Effendi. If a decision to build the Haifa-Bagdad Railway is
not taken in the near future, they may be compelled to co-operate with byri
railway and road interests in order to ensure that these are not developed to
detriment of the Iraqi railways. These interests may even be in a position
preclude the Iraqi railways from taking part in the anticipated revival throng
the medium of the desert motor routes of the Iraqi transit trade with Peisia.
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