CHAPTER VIII

GREAT BRITAIN BLOCKS THE WAY

EARLY BRITISH OPINIONS ARE FAVORABLE

The idea of a trans-Mesopotamian railway was not new to informed

Englishmen. As early as 1831 a young British army officer, Francis

R. Chesney, who had seen service in the Near East, became impressed

with the desirability of constructing a railway from the Mediterranean

to the Persian Gulf. From 1835 to 1837—while Moltke was in Turkey

studying military topography—Chesney was engaged in exploring the

Euphrates Valley and upon his return to England brought glowing tales

of the latent wealth of ancient Babylonia. It was not until twenty

years later, however, that his plan for a Mesopotamian railway was

taken up as a practical business proposition. In 1856 Sir William

Andrew incorporated the Euphrates Valley Railway Company, appointed

General Chesney as chief consulting engineer, and opened offices at

Constantinople to carry on negotiations for a concession from the

Imperial Ottoman Government. The plans of the Company were supported

enthusiastically by Lord Palmerston, by Lord Stratford de Redcliffe,

British ambassador at Constantinople, and by the Turkish ambassador in

London. The following year the Sultan granted the Euphrates Valley

Company a concession for a railway from the Gulf of Alexandretta to the

city of Basra, with the understanding that the Ottoman Treasury would

guarantee a return of six per cent upon the capital invested in the

enterprise. The promoters, however, experienced difficulty in raising

funds for the construction of the line, and the project had to be

abandoned.[1]

Lord Palmerston, in the meantime, was busily opposing the Suez Canal

project. De Lesseps was handicapped by the obstructionist policies of

British diplomacy as well as by the unwillingness of British financiers

to invest in his enterprise. Palmerston frankly informed the great

French engineer that in the opinion of the British Government the

construction of the Canal was a physical impossibility; that if it

were constructed it would injure British maritime supremacy; and that,

after all, it was not so much a financial and commercial venture as a

political conspiracy to provide the occasion for French interference in

the East![2]

Nevertheless the Suez Canal was completed in 1869, and immediately

thereafter the question of a Mesopotamian railway was again brought to

the fore in England. The advance of the Russians in the Near East and

the control by the French of a short all-water route to the Indies gave

rise to serious concern regarding the maintenance of communication with

British India. In 1870 a British promoter proposed the construction of

a railway from Alexandretta _via_ Aleppo and Mosul to Bagdad and Basra.

Such a railway, as Sir William Andrew had pointed out, would assure

the undisturbed possession of India, for the “advancing standard of

the barbarian Cossack would recoil before those emblems of power and

progress, the electric wire and the steam engine, and his ominous tread

would be restrained behind the icy barrier of the Caucasus.”[3] Also

it would render Great Britain independent of the French-owned Suez

Canal by providing an alternative route to the East, making possible

more rapid transportation of passengers, mails, and troops to India.

This plan seemed desirable of execution from so many points of view

that a special committee of the House of Commons, presided over by

Sir Stafford Northcote, was appointed “to examine and report upon the

whole subject of railway communication between the Mediterranean, the

Black Sea, and the Persian Gulf.” This committee reported that the

construction of a trans-Mesopotamian railway was a matter of urgent

imperial concern and recommended a plan which would have involved

the investment of some £10,000,000. The necessity of providing an

alternative route to India was obviated, however, by Disraeli’s

purchase, in 1875, of a controlling interest in the Suez Canal at a

cost of less than half that sum.[4]

For the forty years during which, at intervals, these projects were

under discussion Germany was not even an interested spectator in Near

Eastern affairs. Domestic problems of economic development and national

unification were all-absorbing, and capitalistic imperialism was quite

outside the scope of German policies. France and Russia, not Germany,

were the disturbers of British tranquillity in the Orient.

When during the last two decades of the nineteenth century there was

a marked increase of German political and economic interests in the

Ottoman Empire, there was little disposition in England to resent the

German advance. As late as 1899, the year in which the preliminary

Bagdad Railway concession was awarded to German financiers, British

opinion, on the whole, was well disposed to Teutonic peaceful

penetration in the Near East. The press was delighted at the prospect

that the advent of the Germans in Turkey would block Russian expansion

in the Middle East. Such eminent imperialists as Joseph Chamberlain and

Cecil Rhodes announced their willingness to conclude an _entente_ with

Germany in colonial affairs. The British Government was more suspicious

of France than of Germany.[5]

During the opening years of the twentieth century, however, the

situation was materially changed. Although there was a continuance

of the cordial relations between the British and German Governments,

there was an undercurrent of hostility to Germany in England (as well

as to England in Germany) which was to be disastrous to the hopes for

an Anglo-German agreement on the Near East. By 1903, the year of the

definitive Bagdad concession, German diplomacy and German business were

under a cloud of suspicion and unpopularity in Great Britain.

The underlying reason for the increasing estrangement between England

and Germany was, as far as the British were concerned, the phenomenal

rise of Germany as a world power. The commercial advance of the German

Empire disturbed the complacent security and the stereotyped methods

of British business. The colonial aspirations of German imperialists

rudely interfered with British plans in Africa and appeared to be

threatening British domination of the East. The German navy bills of

1898 and 1900 constituted a challenge to Britannia’s rule of the waves.

German criticism of English procedure in South Africa had aroused

widespread animosity, in large part because the British themselves

realized that their conduct toward the Boers had not been above

reproach. This animosity was revealed in an aggravated and unreasoning

form in the vigorous denunciation which greeted the Government’s joint

intervention with Germany in the Venezuela affair of 1902. Joseph

Chamberlain, who in 1899 had advocated an Anglo-German alliance, in

1903 was preaching “tariff reform,” directed, among other objectives,

against the menace to the British Empire of the rising industrial

prosperity of Germany. The proposal that British capital should

participate in the Bagdad Railway project was introduced to the British

public at a distinctly inopportune time from the point of view of those

who desired some form of coöperation between England and Germany in the

successful prosecution of the plan.

THE BRITISH GOVERNMENT YIELDS TO PRESSURE

The Bagdad Railway came up for discussion in Parliament on April 7,

1903. Mr. Balfour then informed the House of Commons that negotiations

were being carried on between British and German capitalists, and

between British capitalists and the Foreign Office, for the purpose

of determining the conditions upon which British financiers might

participate in the enterprise. If a satisfactory agreement could be

reached by the bankers, His Majesty’s Government would be asked to

give its consent to a reasonable increase in the customs duties of the

Ottoman Empire, to consider the utilization of the new railway for the

transportation of the Indian mails, and to adopt a friendly attitude

toward the establishment of the eastern terminus of the Bagdad Railway

at or near Koweit.

Coöperation with the German concessionaires on any such basis was

attacked vigorously from the floor of the House. One member declared

it a menace to the existing British-owned Smyrna-Aidin Railway lines

in Turkey, a potential competitor of British maritime supremacy, and

a threat at British imperial interests in Egypt and in the region of

the Persian Gulf. Another member of the House believed that “it was

impossible to divorce the commercial from the political aspect of

the question. What made the House take a real, live interest in it

was the feeling that bound up with the future of this railway there

was probably the future political control of large regions in Asia

Minor, Mesopotamia, and the Persian Gulf.” Another member was certain

the House “knew Mesopotamia was a blessed word. They all felt it was

impossible for this country to oppose the introduction of a railway

through Mesopotamia. The only wonder was that the railway was not

constructed forty or fifty years ago.” At the same time, he felt, it

would be well for Britain to be assured that her participation in the

enterprise would not lead to another “Venezuela agreement”; Germany

must be given to understand that Britain, by control of the Persian

Gulf, held the “trump card” of the deck.

The Prime Minister made it plain, nevertheless, that he favored

coöperation with the German concessionaires provided British capital

were permitted to participate on a basis of equality with any other

power. He believed, also, that an obstructionist policy would be

futile. “I have no doubt that whatever course English financiers may

take and whatever course the British Government may pursue, sooner or

later this great undertaking will be carried out,” said Mr. Balfour.

“It is undoubtedly in the power of the British Government to hamper and

impede and inconvenience any project of the kind; but that the project

will ultimately be carried out, with or without our having a share in

it, there is no question whatsoever.”

“There are three points,” continued Mr. Balfour, “which ought not to be

lost sight of by the House when trying to make up their minds upon this

problem in its incomplete state. They have to consider whether it is or

is not desirable that what will undoubtedly be the shortest route to

India should be entirely in the hands of French and German capitalists.

Another question is whether they do or do not think it desirable that

if there is a trade opening in the Persian Gulf, it should be within

the territories of the Sheik whom we have under our special protection

and with whom we have special treaties [_i.e._, the Sheik of Koweit],

or whether it should be in some other port of the Persian Gulf where

we have no such preferential advantage. The House must also have in

view a third consideration with regard to a railway which goes through

a very rich country and which ... is likely after a certain period of

development to add greatly to the riches of Turkey, and indirectly,

I suppose, greatly to the riches of any other country which is ready

to take advantage of it. Whether the British producer will be able to

take advantage of it is not for me to say; but the House will have to

consider whether he is more likely to be able to take advantage of it

if English capital is largely interested, than if it is confined to

French and German capital. The House will have to calculate whether ...

it will be prudent to leave the passenger traffic in the hands of those

two nations, France and Germany, with whom we are on the most friendly

terms, but whose interests may not be identical with our own.”[6]

Mr. Balfour’s presentation of the case was hailed in Berlin as

eminently lucid and fair. The _National Zeitung_ and the _Vossische

Zeitung_ of April 8 expressed the hope that British participation in

the Bagdad Railway would be approved by Parliament and the press,

in order that the German promoters might have the opportunity

to demonstrate that no political ambitions were connected with

the enterprise. The Russian attitude of refusing even to discuss

internationalization, on the other hand, was roundly denounced.

The London press, however, saw no reason for enthusiasm over the

Prime Minister’s proposal. _The Times_, the _Daily Mail_, the _Daily

Telegraph_, the _Pall Mall Gazette_, and the _National Review_ let

loose a torrent of vituperation against German imperialist activities

in general and the Bagdad Railway in particular. The _Spectator_,

forswearing any thought of prejudice against Germany, constantly

reminded its readers of German unfriendliness during the Boer War and

suggested that the Bagdad negotiations offered the British Government

an admirable opportunity to retaliate.

The _Manchester Guardian_, organ of the old Liberalism, likewise was

opposed to British participation in the Bagdad Railway. Pleading for

continued observance of Britain’s time-honored policy of isolation,

its leading editorial of April 15 said: “Mr. Balfour expressed his

belief that ‘this great international artery had better be in the hands

of three great countries than in the hands of two or of one great

country.’ In other words, England is to be mixed up in the domestic

broils of Asia Minor; every Kurdish or Arab attack on the railway will

raise awkward diplomatic questions, and any disaster to the Turkish

military power will place the whole enterprise in jeopardy. What is

far more important, English participation in railway construction

in Asia Minor will certainly strengthen the suspicions which Russia

entertains regarding our policy. It is the fashion with certain English

politicians to abuse Russia for building railways in Manchuria and

for projecting lines across Persia. Yet Mr. Balfour seems more than

half inclined to pay her policy the compliment of imitation by helping

to build a railway across Mesopotamia to the Persian Gulf—and, worse

still, of imperfect imitation, since the Government is certainly

not prepared to occupy the territory through which the railway will

pass, as Russia does in Manchuria. What vital interests of our own

shall we strengthen by this sudden ardour for railways in Turkey to

counterbalance the certain weakening of our friendly relations with

Russia?”

Violent as was the opposition of the press to any coöperation with the

Germans in the Bagdad Railway, the opposition would have been still

more violent had all of the facts been public property. Mr. Balfour,

however, was keeping the House and the country in complete ignorance

of many of the most important aspects of the situation. Although the

Prime Minister denied that there had been any negotiations between

the British and German Governments regarding the Bagdad enterprise,

he failed to admit that there had been such negotiations between His

Majesty’s Government and German financiers. He made no mention of the

fact, for example, that he and Lord Lansdowne, his Secretary of State

for Foreign Affairs, had attended a meeting at the home of Lord Mount

Stephen at which Dr. von Gwinner, on behalf of the _Deutsche Bank_,

and Lord Revelstoke, on behalf of the interested British financiers,

explained the terms of the proposed participation of British capital

in the Bagdad Railway.[7] The plan was to place the Railway, including

the Anatolian lines, throughout its entire length from the Bosporus

to the Persian Gulf, under international control. Equal participation

in construction, administration, and management was to be awarded

German, French, and British interests to prevent the possibility of

preferential treatment for the goods or subjects of any one country.[8]

To this proposal both Mr. Balfour and Lord Lansdowne gave their

approval, assuring the bankers that no diplomatic obstacles would be

offered by Great Britain to the construction of the Bagdad Railway.

Dr. von Gwinner thereupon returned home to obtain the consent of his

associates to the reapportionment of interests and, perhaps, to consult

the German Foreign Office and the Ottoman minister at Berlin. This was

early in April, 1903.[9]

Persistent rumors in the London press that a Bagdad Railway agreement

had been negotiated brought the subject to the attention of the

Cabinet, which heretofore, apparently, had not been consulted by the

Prime Minister and the Secretary of State for Foreign Affairs. It was

decided that the Prime Minister should make a statement to Parliament—a

statement which, perhaps, might serve as a sort of trial balloon to

ascertain the opinion of the country upon the question. Mr. Balfour’s

presentation of the Bagdad Railway affair to the House of Commons, as

we have seen, however, provoked unfriendly comments from the floor and

was subjected to heavy fire from the press. Thereupon a rebellious

element in the Cabinet—led, presumably, by Joseph Chamberlain, who now

was more interested in the development of the economic resources of the

British Empire under a system of protective and preferential tariffs,

than in coöperation with other nations—persuaded Mr. Balfour not to

risk the life of his Ministry on the question of British participation

in the Bagdad enterprise. Accordingly, the agreement with the _Deutsche

Bank_ was repudiated, and on April 23, 1903, Mr. Balfour informed

the House of Commons that His Majesty’s Government was determined to

withdraw all support, financial and otherwise, which Great Britain

might be in a position to lend the Bagdad Railway. He was convinced,

he said, after a careful examination of the proposals of the German

promoters, that no agreement was possible which would compensate the

Empire for its diplomatic assistance and guarantee security for British

interests.[10]

This announcement was a distinct disappointment to the bankers in

Berlin and in London. The directors of the _Deutsche Bank_ were

stunned by the termination of negotiations which they believed

had been progressing satisfactorily. The British financiers were

chagrined at the sudden decision of their Government to oppose their

participation in a promising enterprise. They were convinced that the

terms offered by the German bankers met every condition imposed by the

Prime Minister. They were agreed on the wisdom of British coöperation

with the _Deutsche Bank_, and they were not a little annoyed at what

appeared to be bad faith on the part of Downing Street. They were

convinced that only a bellicose press frustrated the attempt to make

the Bagdad Railway an international highway.[11]

This, in any event, is the diagnosis of the situation furnished by Sir

Clinton Dawkins, of the Morgan group, one of the British financiers

interested in the project. In a letter to Dr. von Gwinner written on

April 23, 1903, but not made public until six years later, he said,

“As you originally introduced the Bagdad business to us, I feel that

I cannot, upon its unfortunate termination, omit to express to you

personally my great regret at what has occurred. After all you have

done to meet the various points raised, you will naturally feel very

disappointed and legitimately aggrieved. But I am glad to think, and

I feel you will be convinced, that your grievance lies not against

the British group but against the British Foreign Office. The fact is

that the business has become involved in politics here and has been

sacrificed to the very violent and bitter feeling against Germany

exhibited by the majority of our newspapers, and shared in by a large

number of people. This is a feeling which, as the history of recent

events will show you, is not shared by the Government or reflected in

official circles. But of its intensity outside these circles, for the

moment, there can be no doubt; at the present moment coöperation in

any enterprise which can be represented, or I might more justly say

_mis_represented, as German will meet with a violent hostility which

our Government has to consider.”

Sir Clinton thereupon asserted that the effort of Mr. Balfour to quiet

the uproar in Parliament was due to the Prime Minister’s complete

satisfaction with the agreement reached by the financiers. Just as

success seemed assured, a bitter attack was launched on the Government

“by a magazine and a newspaper [The _National Review_ and _The Times_]

which had made themselves conspicuous by their criticisms of the

British Foreign Office on the Venezuela affair. Who instigated these

papers, from whence they derived their information, is a matter upon

which I cannot speak with certainty. My own impression is that the

instigation proceeded from Russian sources. The clamour raised by

these two organs was immediately taken up by practically the whole

of the English press, London having really gone into a frenzy on the

matter owing to the newspaper campaign, which it would have been quite

impossible to counteract or influence. It is, I think, due to you that

you should know the _histoire intime_ of what has passed.”[12]

There was only one London newspaper, the _St. James’s Gazette_, which

came out frankly in favor of British participation in the Bagdad

Railway. In the issue of April 14, 1903, the editor ridiculed the

suggestion of the _Spectator_ that the Foreign Office was obliged to

warn bankers of the financial risks involved in the enterprise. “Why

our contemporary should be so anxious to save financiers, British

or foreign, from making a bad investment of their money, we cannot

imagine. Financiers are generally pretty wide-awake, and the City as

a rule requires no advice from Fleet Street, the Strand, or Whitehall

in transacting its business.” In an editorial entitled “Bagdad and Bag

Everything,” April 22, 1903, the _Gazette_ condemned _The Times_ for

the “curious and alarmist deductions” which that journal drew from

the terms of the Bagdad Railway convention. The suggestion that this

was a deliberate attempt on the part of Germany to ruin British trade

was characterized “as much a figment of a fevered imagination as the

mind-picture of Turkey using ‘this enormous line to pour down troops

to reduce the shores of the Persian Gulf to the same happy condition

as Armenia and Macedonia,’ about which _The Times_ is so suddenly and

unaccountably concerned. The concession is a monument to the German

Emperor’s activity, built on the ruins of the influence which we threw

away, and we do not precisely see what our _locus standi_ in the matter

is. If the interests of the Ottoman Government and of the German

concessionaires be served by the construction of the line, constructed

the line will be, and there’s an end. Whether it ever will, or ever can

pay its way, is the affair only of capitalists who are contemplating

investment in it. It is not the slightest use barking when we cannot

bite, and our power of biting in the present instance is excessively

small.... The Emperor William, like Jack Jones, has ‘come into ’is

little bit of splosh’ in Asia Minor, and it is quite useless to be

soreheaded about it. It is childish to be ever carping and nagging and

‘panicking.’ We question whether the Bagdad Railway—while the rule of

the Sultan endures—is going to do much good or much harm to anybody.

The vision which some Germans have of peaceful Hans and Gretchen

swilling Löwenbrau in the Garden of Eden to the strains of a German

band, is little likely of fulfilment. If trade develops, a fair share

of it will come our way, provided we send good wares and such as the

inhabitants want to buy.” This minority opinion, however, was unheeded

in the outburst of anti-German feeling which followed Mr. Balfour’s

first statement to the House of Commons.

As events turned out, the failure of the Balfour Government to

effect the internationalization of the Bagdad Railway was a colossal

diplomatic blunder. If the proposed agreement of 1903 had been

consummated, the _entente_ of 1904 between France and England would

have taken control of the enterprise out of the hands of the Germans,

who would have possessed, with their Turkish collaborators, only

fourteen of the thirty votes in the Board of Directors. Sir Henry

Babington Smith assures the author that there was nothing in the

arrangement suggested by the _Deutsche Bank_ which would have prevented

eventual Franco-British domination of the line. Surely, as Bismarck is

said to have remarked, every nation must pay sooner or later for the

windows broken by its bellicose press!

VESTED INTERESTS COME TO THE FORE

In addition to the pressure which was brought to bear on the Balfour

Cabinet by the newspapers, there were important vested business

interests which quietly, but effectively, made themselves heard at

Downing Street during the critical days of the Bagdad negotiations of

1903.

It already has been noted that in 1888, as part of the plans of the

Public Debt Administration for the improvement of transportation

facilities in Turkey, the British-owned Smyrna-Aidin Railway Company

was granted permission to construct several important branches to

its main line. For a time this new concession thoroughly satisfied

the owners and directors of the Company, and there was no objection

on their part to the extension and development of the German-owned

Anatolian system. By 1903, however, when the Bagdad concession was

under discussion, the Smyrna-Aidin line demanded the protection of the

British Government against the undue extension of German railways in

the Near East. In particular, it objected to the agreement between the

Anatolian Railway and the Smyrna-Cassaba Railway, by which the latter

joined its tracks with the Anatolian system at Afiun Karahissar and

accepted a schedule of tariffs satisfactory to both lines.[13] The

Smyrna-Aidin Company feared that the Bagdad Railway would develop the

ports of Haidar Pasha, Alexandretta, and Mersina at the expense of

the prosperity of Smyrna, thereby decreasing the relative importance

of the Smyrna-Aidin line and cutting down the volume of its traffic.

Finally, it objected to the payment of a kilometric guarantee to the

German concessionaires while there was no likelihood of its being

similarly favored by the custodians of the public purse. The interests

of the shareholders of the railway were well represented in the House

of Commons by “that watchful dragon of imperial interests”, Mr. Gibson

Bowles.

Mr. Bowles (Conservative member from King’s Lynn, 1892–1906, and

Liberal from the same constituency, 1910–1916) was a frank defender

of the interests of the stockholders of the Smyrna-Aidin Railway.

He believed that investors were entitled to governmental protection

of their investments, whether at home or abroad. He left no doubt,

however, that he took his stand on high grounds of patriotism as well.

He informed the House that “he did not object to the railway, because

all railways were good feeders of ships. But this was not a railway;

it was a financial fraud and a political conspiracy—a fraud whereby

English trade would suffer and a conspiracy whereby the political

interests of England would be threatened. It amounted to a military and

commercial occupation by Germany of the whole of Asia Minor.”[14]

Comparable to the interests of the Smyrna-Aidin Railway were those

of the Euphrates and Tigris Navigation Company, Ltd. Under this name

the Lynch Brothers had been operating steamers on the Tigris and the

Shatt-el-Arab since the middle of the nineteenth century. In the trade

between Bagdad and Basra they enjoyed a practical monopoly. In the

absence of competition they were able to render indifferent service at

exorbitant rates, and there was nothing to disturb their tranquillity

except an occasional complaint from a British merchant. But the old

order was about to change. The Bagdad Railway concession of 1903

(articles 9 and 23) destroyed the monopoly of the Lynch Brothers by

granting to the Railway Company limited rights of navigation on the

Tigris. Construction of the Mesopotamian sections of the Railway,

furthermore, would be almost certain to kill, by competition,

profitable navigation between Bagdad and Basra. The course of the

Tigris is shallow and winding, subject to heavy rises and falls, and

constantly changing with the formation and disappearance of sand

shoals. The river journey from Bagdad to Basra is about five hundred

miles and takes from four to five days by steamer, under favorable

conditions. The distance by land is about three hundred miles and

could be traversed by railway in a single day’s journey, regardless

of weather conditions. For passengers and most classes of freight the

Bagdad Railway promised more economical transportation. The Lynch

Brothers were determined, however, to resist such rude encroachment on

their profitable preserves. In defence of their interests they wrapped

themselves in the Union Jack and called upon their home government

for protection; they were patriotic to the last degree and were

determined “that the custody of a privilege highly important to British

commerce would never pass to Germany except over the dead bodies of

the principal partners.”[15] Overcharge their countrymen they might;

surrender this prerogative to a German railway they would not!

British shipping interests, also, were vigorous in their opposition

to the Bagdad Railway. A trans-Mesopotamian railway, they knew, would

absorb some of the through traffic to the East, and the competition

of the locomotive might compel a general readjustment of freight

rates. Furthermore, it was one of the avowed purposes of the Bagdad

line to acquire the profitable Indian mails concession from the

British Government; this would be equivalent to the withdrawal of a

subsidy from the steamship lines operating to the East. It was not for

their own sake, but for the sake of British commerce, however, that

these shipping interests objected to the construction of the Bagdad

line! They warned the British public that the proposed railway would

adversely affect the traffic passing through the Suez Canal; inasmuch

as the United Kingdom was a stockholder in the Canal, this was the

concern of every English citizen. They pointed out that the kilometric

subsidy which had been guaranteed the Railway was to be paid from an

increase in the customs duties; thus, it was charged, British commerce

would be obliged to contribute indirectly to the dividends of the

_Deutsche Bank_. The improvement of communications between Middle

Europe and the Near East would be almost certain to disturb British

trade with Turkey; the feared and hated “Made in Germany” trade-mark

might exert its hypnotic influence in a region where British commerce

heretofore had been preëminent. If, in addition, the German owners

of the Bagdad Railway should choose to grant discriminatory rates

to German goods, a severe body-blow would be dealt British economic

interests in the Ottoman Empire. The completion of this Railway would

bring with it all sorts of German interference in the Near East and

undermine British commercial and maritime interests in the region.[16]

Many of the charges brought against the Bagdad Railway by the British

shipping interests could not have been substantiated. As early as 1892,

Lord Curzon stated emphatically that, for most commercial purposes, a

trans-Mesopotamian railway would be next to valueless. “If I were a

stockholder in the P. & O. [the Peninsular and Oriental, one of the

Inchcape lines touching at Indian and Persian Gulf ports], I would

not,” he said, “except for the possible loss of the mails, be in the

least alarmed at the competition of such a railway.”[17] Informed

Germans, likewise, did not consider the Bagdad Railway a serious

competitor to the Suez Canal. One authority, for example, wrote: “The

Bagdad Railway taken as a whole is of importance only for through

passenger and postal traffic (in which respect, therefore, it is of

greatest value to the British in their communications with India) and

occasionally for fast freight. The great bulk of the freight traffic,

on the other hand, carrying the import and export trade of the East,

hardly can fall to the Bagdad Railway, which, for a long time at least,

must content itself with the local traffic of certain sections of the

line,” particularly in Cilicia, Syria, and northern Mesopotamia.[18]

The assertion that the cost of constructing and operating the line

would be borne by British commerce was based upon specious reasoning.

Higher customs duties would not be paid by the British merchant, but

by the Turkish consumer. The only harmful effect of the increased

duties would be a general increase of prices of imported commodities

in Turkey, leading, perhaps, to a lesser demand for foreign goods. It

was probable, on the other hand, that this slight disadvantage would be

more than offset by the wider prosperity which the Railway was almost

certain to bring the districts traversed. In any event, whatever burden

might be saddled upon the import trade would have to be borne, in

proportion to the volume of business transacted, by the competitors of

British merchants as well as by British merchants themselves.

Many British business men were shrewd enough to foresee that the Bagdad

Railway might prove to be far from disadvantageous to their interests.

Where was the menace to British prosperity in a railway, German or

otherwise, which promised improved communication with the British

colonies in the Orient? The facilitation of mail service to India; the

development of rapid passenger service to the East; the reduction of

ocean freight rates as a result of healthy competition—all of these

injured no one except the vested interests which had handicapped the

expansion of British commerce by inadequate service and exorbitant

rates. There was no indication that the Bagdad Railway Company

proposed to discriminate against non-German shippers; in any event,

such a course was specifically prohibited by the concession of 1903,

which decreed that “all rates, whether they be general, special,

proportional, or differential, are applicable to all travelers and

consignors without distinction,” and which prohibited the Company

“from entering into any special contract with the object of granting

reductions of the charges specified in the tariffs.”[19] As the British

Chamber of Commerce at Constantinople appropriately pointed out, the

most certain means of avoiding discriminatory treatment was to permit

and encourage the participation of British capital in the enterprise

and to assure the presence of British subjects on the Board of

Directors of the Company.[20]

From an economic point of view, it would appear that the British

Empire had a great deal to gain from the construction of the Bagdad

Railway. In proportion as improved methods of transportation shrink the

earth’s surface, the contacts between mother country and dependencies

will become more numerous. An economic community of interest is more

likely to spring up and thrive with the aid of more numerous and

more rapid means of communication. True, certain interests believed

that the Bagdad Railway threatened their very existence. But would

the British people have been willing to sacrifice the wider economic

interests of the Empire to the vested privileges of a handful of

English capitalists? They would not, of course, if the issue had been

put to them in such simple terms. The problem was complicated by the

obvious fact that it was not alone the economic interests of the empire

which were at stake. The political import of the Bagdad enterprise

overshadowed all economic considerations.

IMPERIAL DEFENCE BECOMES THE PRIMARY CONCERN

British journalists and statesmen, as well as the ordinary British

patriot, have been accustomed to judge international questions from

but one point of view—the promotion and protection of the interests of

that great and benevolent institution, “the noblest fabric yet reared

by the genius of a conquering nation,” the British Empire.[21] Imperial

considerations have been the determining factors in the formulation of

diplomatic policies and of naval and military strategy. The possession

of a far-flung empire has required further imperial conquests to insure

the defence of those already acquired. Strategic necessities have

constituted a “reason for making an empire large, and a large empire

larger.”[22]

India, an empire in itself, is the keystone of the British imperial

system. To defend India it has been considered necessary for Great

Britain to possess herself of vital strategic points along the routes

of communication from the Atlantic seaboard to the Indian Ocean. The

acquisition of Cape Colony from the Dutch at the conclusion of the

Napoleonic Wars enabled the British fleet to dominate the old route to

India, around the Cape of Good Hope. Judiciously placed naval stations

at Gibraltar, Malta, and Cyprus assured the safety of British trade

with the East _via_ the Mediterranean. After a futile attempt to

prevent the construction of the Suez Canal, which temporarily placed

a new and shorter all-water route to India in the hands of the French,

Great Britain proceeded to acquire the Canal for herself. To assure

the protection of the Suez Canal, in turn, it was necessary to occupy

Egypt and the Sudan. Control of Somaliland and Aden, together with

friendly relations with Arabia, turned the Red Sea into a British lake.

Menaced by the Russian advance toward India, Great Britain proceeded

to dominate the entire Middle East: the foreign affairs of Afghanistan

were placed under British tutelage and protection; Baluchistan was

compelled to submit to the control of British agents; parts of Persia

were brought within the sphere of British influence.[23]

Great Britain, apparently, was determined to control every

important route to India. What, then, would be her attitude toward

a trans-Mesopotamian railway, terminating at the only satisfactory

deep-water port on the Persian Gulf? Was the possession of such a

short-cut to India consistent with the exigencies of imperial defence?

Without a satisfactory terminus on the Persian Gulf the Bagdad Railway

would lose its greatest possibilities as a great transcontinental

line; with such a terminus it might become a menace to vital British

interests in that region. British imperialists had been interested in

control of the Persian Gulf since the seventeenth century, when the

East India Company established trading posts along its shores. The

British navy cleared the Gulf of pirates; it buoyed and beaconed the

waters of the Gulf and the Shatt-el-Arab. A favorable treaty with the

Emir of Muscat, in the latter part of the nineteenth century, provided

Great Britain with a “sally port” from which to organize the defence

of the entrance to the Gulf; later, Muscat became a protectorate of

Great Britain. From time to time treaties were negotiated with the Arab

chieftains of southern Mesopotamia, extending British influence up

the Shatt-el-Arab and the Tigris and Euphrates to Bagdad. Under these

circumstances, it was apparent from the very beginning that, whether

or not the Balfour Government consented to British participation in

the Bagdad enterprise, there would be no surrender of the privileged

position enjoyed by Great Britain in the Persian Gulf. Foreign

merchants might be admitted to a share in the Gulf trade, but the

existence of a port under foreign control hardly could be approved.[24]

Lord Lansdowne, Secretary of State for Foreign Affairs, speaking before

the House of Lords, on May 5, 1903, made the position of the Government

clear: “I do not yield to the noble Lord [Lord Ellenborough] in the

interest which I take in the Persian Gulf or in the feeling that this

country stands, with regard to the navigation of the Persian Gulf, in a

position different from that of any other power.... The noble Lord has

asked me for a statement of our policy with regard to the Persian Gulf.

I think I can give him one in a few simple words. It seems to me that

our policy should be directed in the first place to protect and promote

British trade in those waters. In the next place I do not think that

he suggests, or that we would suggest, that those efforts should be

directed towards the exclusion of the legitimate trade of other powers.

In the third place—I say it without hesitation—we should regard the

establishment of a naval base, or of a fortified port, in the Persian

Gulf by any other power as a very grave menace to British interests,

and we should certainly resist it with all the means at our disposal.

I say that in no minatory spirit, because, as far as I am aware, no

proposals are on foot for the establishment of a foreign naval base in

the Persian Gulf.”[25]

Lord Lansdowne might have reminded his hearers that, although the

British Government was disposed to be friendly toward the Bagdad

Railway, measures already had been taken which effectively precluded

any possibility of the construction by the concessionaires, without

British consent, of terminal and port works at Koweit. In 1899,

when the first announcements came from Constantinople regarding the

Bagdad project, Lord Curzon, then Viceroy of India, became alarmed

at the construction of a railway which would link the head of the

Persian Gulf with the railways of Central Europe. Lord Curzon was a

trained imperialist. It was his custom to utter few words; to make no

proclamations from the housetops; to act promptly—and in secret. It

was at the instigation of the Indian Government that Colonel Meade,

British resident in the Persian Gulf region, proceeded to Koweit and

negotiated with the Sheik a clandestine agreement by which the latter

accepted the “protection” of the British Government and agreed to enter

into no international agreements without the consent of a British

resident adviser.[26] When a German technical commission visited Koweit

in 1900 to negotiate for terminal and port facilities, they found the

Sheik suspiciously intractable to their wishes. Thereupon Abdul Hamid

despatched an expedition to Koweit to assert his sovereignty over the

Sheik’s territory, but the presence of a British gunboat rendered both

reason and force of no avail.[27]

“Protection” of Koweit by Great Britain served notice on both Turkey

and Germany that the construction of a railway, owned and controlled by

Germans, to a deep-water port on the Persian Gulf was deemed contrary

to the interests of the British Empire. From first to last British

officials persistently refused to accede to any arrangement which would

thus jeopardize imperial communications. Control of the Persian Gulf,

an outpost of Indian defence, became the keynote of British resistance

to the Bagdad Railway.

During the visit of William II to England in 1907, he was informed by

Lord Haldane, Sir Edward Grey, and other responsible British statesmen,

that their objections to the Bagdad enterprise would be removed if

the sections of the Railway from Bagdad to Basra and the Persian Gulf

were under the administration of British capitalists.[28] In March,

1911, shortly after the Kaiser and the Tsar had reached an agreement

at Potsdam on the Bagdad Railway question, Lord Curzon vigorously

denounced the enterprise as a blow at the heart of Britain’s empire in

India and called upon the Foreign Office to persist in its policy of

blocking construction of the final sections of the line.[29] This was

in accord with a caustic criticism of German and Russian activities in

the Near East, delivered by Mr. Lloyd George to the House of Commons,

during which the future Premier made it plain that, whatever course

Russia might pursue, Great Britain would not compromise her vital

imperial interests in the region of the Persian Gulf.[30] The German

concessionaires learned, to their disappointment and chagrin, that,

on this point, in any event, the British Government stood firm. Even

in 1914, when an international agreement was reached permitting the

construction of the Bagdad Railway, Great Britain subscribed to the

arrangement with the express proviso that the terminus of the line

should be Basra and that the port to be constructed at Basra should

be jointly owned and controlled by German and British capitalists.

Construction of the line beyond Basra was not to be undertaken without

the permission of the British Government.[31]

Although fear of foreign interference in the Persian Gulf region

was the chief political objection raised by Great Britain to the

construction of the Bagdad Railway, it was supplemented by a number

of other objections—all associated, directly or indirectly, with the

defence of India. The Bagdad Railway concession of 1903 provided for

the construction of a branch line from Bagdad to Khanikin, on the

Turco-Persian border. This proposed railway not only would compete

with the British caravan trade between these cities, amounting to

about three-quarters of a million pounds sterling annually, but would,

perhaps, lead to the introduction into the Persian imbroglio of the

influence of another Great Power. Persia lay astride one of the natural

routes of communication to India. The uncertainty of the situation in

Persia already was such as to cause grave concern in Great Britain,

and there were few British statesmen who would have welcomed German

interference in addition to Russian intrigue.[32]

British imperialists, too, had excellent reason to fear that any

increase in the power of the Sultan, such as would be certain to

follow the construction of adequate rail communications in the Ottoman

Empire, might be but the first step in a renaissance of Mohammedan

political ambitions, and, perhaps, a Moslem uprising everywhere against

Christian overlords. Such a situation—had it been sufficiently matured

before the outbreak of the War of 1914—might have been disastrous to

the British position in the East: a rejuvenated Turkey, supported by

a powerful Germany, might have been in a position to menace the Suez

Canal, “the spinal cord of the Empire,” and to lend assistance to

seditious uprisings in Egypt, India, and the Middle East. Why should

Britain not have been disturbed at such a prospect, when prominent

German publicists were boastfully announcing that this was one of the

principal reasons for official espousal of the _Bagdadbahn_?[33] Why

should British statesmen have closed their eyes to such a possibility,

when the recognized parliamentary leader of the Social Democratic Party

in Germany warned the members of the Reichstag that limits must be

placed upon the political ramifications of the Bagdad enterprise, lest

it lead to a disastrous war with Great Britain?[34]

Furthermore, British statesmen were too intimately acquainted with

the dynamics of capitalistic imperialism to accept the assurances

of Germans that the Bagdad Railway, and other German enterprises in

Turkey, were business propositions only. They knew that promises to

respect the sovereignty of the Sultan were courteous formalities of

European diplomatists to cloak scandalous irregularities—it was in

full recognition of the sacred and inviolable integrity of Turkey that

Disraeli had taken possession and assumed the “defence” of Cyprus

in 1878! Furthermore, experienced imperialists knew full well that

economic penetration was the foundation of political control. As Mr.

Lloyd George informed the House of Commons in 1911, the kilometric

guarantee of the Bagdad Railway gave German bankers a firm grip on the

public treasury in Turkey, and such a hold on the imperial Ottoman

purse-strings might lead no one could prophesy where.[35]

British experience in Egypt, however, indicated one direction in which

it might possibly lead. English control in Egypt had been acquired by

the most modern and approved imperial methods. It was no old-fashioned

conquest; the procedure was much more subtle than that. First, Egypt

was weighted down by a great burden of debt to British capitalists;

then British business men and investors acquired numerous privileges

and intrenched themselves in their special position by virtue of the

Anglo-French control of Egyptian finance; the “advice” of British

diplomatists came to possess greater force of law than the edicts

of the Khedive; “disorders” always could be counted upon to furnish

an excuse for military conquest and annexation, should that crude

procedure eventually become necessary.[36] Might not _Wilhelmstrasse_

tear a leaf out of Downing Street’s book of imperial experience?

There is a seeming inconsistency in this description of the British

interests involved in the Bagdad Railway question. If British shipping

might be seriously injured, if the imperial communications were to be

endangered, if undisputed control of the Persian Gulf was essential

to the safety of the Empire, if the defence of India was to be

jeopardized, if a German protectorate might be established in Asia

Minor—if all these were possibilities, how could the Balfour Government

afford to temporize with the German concessionaires, holding out

the hope of British assistance? Were Mr. Balfour and Lord Lansdowne

less fearful for the welfare and safety of the Empire than were the

newspaper editors? Rather, of course, were they convinced that the

very best way of forestalling any of these developments was to permit

and encourage British participation in the financing of the Bagdad

Railway Company.[37] Only thus could British trade hope to share in

the economic renaissance of the Ottoman Empire; only thus could there

be British representatives on the Board of Directors to insist that

the _Deutsche Bank_ confine its efforts to the economic development

of Turkey, excluding all political _arrières pensées_. And it would

not have required an imperialist of the experience of Mr. Balfour to

imagine that dual ownership of the Bagdad Railway might have the same

ultimate outcome as the Dual Control in Egypt. But blind antagonism

toward Germany prevented the average Englishman from seeing the obvious

advantages of not abandoning the Bagdad Railway to the exclusive

control of German and French capitalists.

BRITISH RESISTANCE IS STIFFENED BY THE ENTENTE

One year after the failure of the Bagdad Railway negotiations of

1903, the age-old colonial rivalry of France and Great Britain was

brought to a temporary close by the _Entente Cordiale_. It is not

possible, with the information now at our disposal, to estimate with

any degree of accuracy the influence which the Bagdad Railway exerted

upon British imperialists in the final determination to reach an

agreement with France. One may agree with an eminent French authority,

however, that “neither in England nor in France is the principle of the

understanding to be sought. Rather was it the fear of Germany which

determined England—not only her King and Government, but the whole of

her people—to draw nearer France.”[38] British fear and dislike of

Germany were founded upon the phenomenal growth of German industry and

overseas commerce, the rapid expansion of the German mercantile marine,

the construction of the German navy, and the insistence of German

diplomatists that Germany be not ignored in colonial matters. The

Bagdad Railway did nothing to quiet those fears. It served, rather, to

render precarious Britain’s position in the East.

In March, 1903, when the definitive Bagdad Railway concession was

granted, British imperial affairs were in a far from satisfactory

state. The termination of the Boer War had ended the fear that the

British Empire might lose its hold on South Africa, but the sharp

criticism of British conduct toward the Boers—criticism which came

not only from abroad, but from malcontents at home—had dealt a severe

blow to British prestige. The relentless advance of Russia in China,

Persia, and Afghanistan gave cause for anxiety as to the safety of

Britain’s possessions in the Middle and Far East. And although France

had withdrawn gracefully from the Fashoda affair, it was by no means

certain that Egypt had seen the last of French interference. Added

to all of these difficulties was the proposed German-owned railway

from Constantinople to the Persian Gulf, flanking the Suez Canal and

reaching out to the back door of India.

Under such circumstances it was small wonder that Great Britain took

stock of her foreign policies. The Anglo-Japanese Alliance of 1902

already had ended the British policy of aloofness, and there appeared

to be no sound reason against the negotiation of other treaties

which similarly would strengthen the British position in the East.

The Bagdad Railway negotiations collapsed, but the agreement with

France—which seemed far more difficult of achievement—was consummated

without further delay. Three years later, in 1907, Great Britain

came to an agreement with another of her rivals in the East—Russia.

The Tsar, chastened by military defeat abroad and by revolution at

home, recognized a British sphere of interest in Persia, relinquished

all claims in Afghanistan, and acknowledged the suzerainty of China

over Tibet.[39] The understanding with France had assured the safety

of the Suez Canal from an attack from the Sudan; the agreement with

Russia removed the menace of an attack upon India from the north and

northwest. Germany became Great Britain’s only formidable rival in the

Near East.

Thus the Germans found themselves facing a powerful diplomatic

obstacle to the construction of the Bagdad Railway. Here was another

instance, in their minds, of the “encirclement” of Germany by a hostile

coalition—an “encirclement” not only on the Continent, but in a German

sphere of imperial interest as well. A conspicuous German Oriental

scholar said that the attitude of the other European powers toward

the Bagdad Railway was the best proof of their enmity toward Germany.

“Every single kilometre had to be fought for against the unyielding

opposition of Great Britain, Russia, and France, who desired to

frustrate any increase in the power of Turkey. Great Britain led and

organized this opposition because she feared that India and Egypt

were threatened by the Bagdad Railway.” If one wishes to understand

the diplomatic history of the War, “he needs only to study the

struggle for the Bagdad Railway—he will find a laboratory full of rich

materials.”[40] Here was the tragedy of the Bagdad Railway—it was

one of a number of imperial enterprises which together constituted a

principal cause of the greatest war of modern times!

There were some ardent British imperialists who were out of sympathy

with the popular opposition to the Bagdad Railway and with the

policy of the _Entente_ in obstructing the building of the line. Few

Englishmen were more thoroughly acquainted with the Near East than

Sir William Willcocks.[41] Basing his opinions upon an intimate,

scientific study of conditions in Mesopotamia, he advocated full

British coöperation with the _Deutsche Bank_ in the construction

of the Bagdad Railway, which he considered was the best means of

transportation for Irak. He criticized the British Government for its

short-sighted policy in the protection of the Lynch Brothers and their

antiquated river service; “rivers,” he said, “are for irrigation,

railways for communications.” Furthermore, “You cannot leave the waters

of the rivers in their channels and irrigate the country with them.

For navigation you may substitute railway transport; for the purpose

of irrigation nothing can take the place of water.”[42] He believed

that adequate irrigation of the Mesopotamian Valley would result

in such a wave of prosperity for the country that it would induce

immigration, particularly from Egypt and British India. It was not

inconceivable, under such conditions, that Britain would fall heir to

ancient Mesopotamia when the Ottoman Empire should disintegrate.[43]

Sir William Willcocks was neither pacifist nor visionary; he, himself,

was an empire-builder.

Another British imperialist who believed that Great Britain was

pursuing entirely the wrong course in obstructing German economic

penetration in Turkey was Sir Harry Johnston, novelist, explorer,

lecturer, former member of the consular service. He believed in “The

White Man’s Burden,” in the inevitable overrunning of the habitable

globe by the Caucasian race. But he believed that the task of spreading

white civilization to the four corners of the earth was such an

herculean task, that “what we white peoples ought to strive for, with

speech and pen, is unity of purpose; an alliance throughout all the

world in this final struggle for mastery over Nature. We ought to

adjust our ambitions and eliminate causes of conflict.” His program

for the settlement of the Near Eastern question was: “the promotion of

peace and goodwill among white nations, to start with; and when the

ambitions and the allotment of spheres of influence have been nicely

adjusted, then to see that the educational task of the Caucasian is

carried out in a right, a Christian, a practical, and sympathetic

fashion towards the other races and sub-species of humanity.” Sir

Harry believed that Great Britain was the last country in the world

which ought to oppose the legitimate colonial aspirations of any other

nation. There was every reason for the recognition of the economic and

moral bases of German expansion, and any dog-in-the-manger attitude on

the part of British statesmen, he was sure, would defeat the highest

interests of the Empire.[44]

Applying his principles to the problem of Teutonic aggrandizement in

the Ottoman Empire, Sir Harry Johnston advocated that the western

European nations should acknowledge the Austrian _Drang nach Osten_

as a legitimate and essential part of the German plans for a Central

European Federation and for the economic development of Turkey.

“The Turkish Sultanate would possibly not come to an end, but would

henceforth, within certain limits, be directed and dominated by German

councils. Germany in fact would become the power with the principal

‘say’ as to the good government and economic development of Asia Minor.

Syria might be constituted as a separate state under French protection,

and Judea might be offered to the Jews under an international

guarantee. Sinai and Egypt would pass under avowed British protection,

and Arabia (except the southern portion, which already lies within the

British sphere of influence) be regarded as a federation of independent

Arab States. For the rest, Turkey-in-Asia—less Armenia, which might

be handed over to Russia—would, in fact, become to Germany what Egypt

is to England—a kingdom to be educated, regenerated, and perhaps

transfused and transformed by the renewed percolation of the Aryan

Caucasian. Here would be a splendid outlet for the energies of both

Germany and Austria, sufficient to keep them contented, prosperous,

busy, and happy, for at least a century ahead.” Sir Harry believed

that obstructionist tactics on the part of Great Britain would promote

Prussianism within Germany, whereas, on the other hand, a frank

recognition of Germany’s claims in the Near East would provide Central

Europe with a safety valve which would “relieve pressure on France,

Belgium, and Russia, paving the way for an understanding on Continental

questions. Let us—if we wish to be cynical—welcome German expansion

with Kruger’s metaphor of the tortoise putting out his head. Germany

and Austria are dangerous to the peace of the world only so long as

they are penned up in their present limits.”[45]

One obvious disadvantage of the solution suggested by Sir Harry

Johnston was its total indifference to the wishes of the Ottoman Turks.

Apparently it was out of place to consider the welfare of Turkey in

a discussion of the Bagdad Railway question! Certainly there were

very few European statesmen who cared the least about the opinions

of Turks in the disposition of Turkish property. Among the few was

Viscount Morley, one of the old Gladstonian Liberals. Answering Lord

Curzon, in the House of Lords, March 22, 1911, Lord Morley, a member

of the Asquith cabinet, asserted the right of the Turks to determine

their own destinies: “A great deal of nonsense,” he said, “is talked

about the possible danger to British interests which may be involved

some day or other when this railway is completed, and there have been

whimsical apprehensions expressed. One is that it will constitute a

standing menace to Egypt ... because it would establish [by junction

with the Syrian and Hedjaz railways] uninterrupted communication

between the Bosporus and Western Arabia. _That would hardly be an

argument for Turkey to abandon railway construction on her own soil_,

whereas it overlooks the fact that the Sinai Peninsula intervenes. You

cannot get over this plain cardinal fact, that this railway is made on

Turkish territory by virtue of an instrument granted by the Turkish

Government.... I see articles in newspapers every day in which it is

assumed that we have the right there to do what we please. That is not

so. It is not our soil, it is Turkish soil, and the Germans alone are

there because the Turkish Government has given them the right to be

there.”[46]

BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Sir William Andrew, _Memoir on the Euphrates Valley Route_ (London,

1857), _passim_; also _The Euphrates Valley Route to India_ (London,

1882); F. R. Chesney, _Narrative of the Euphrates Expedition_ (London,

1868); _The Proposed Imperial Ottoman Railway_, a prospectus issued by

the promoters (London, 1857); F. von Koeppen, _Moltke in Kleinasien_

(Hanover, 1883).

[2] _Cf._ article “Suez Canal” in _Encyclopedia Britannica_, Volume

26, p. 23. How similar were these objections to those subsequently

advanced in opposition to the Bagdad Railway! _Cf._, _e. g._, a

statement by Lord Curzon, _Parliamentary Debates, House of Lords, fifth

series_, Volume 7 (1911), pp. 583 _et seq._

[3] Andrew, _Memoir on the Euphrates Valley Route_, p. 225.

[4] _Parliamentary Debates, House of Lords_, fourth series, Volume 121

(1903), p. 1345; “The Bagdad Railway Negotiations,” in _The Quarterly

Review_, Volume 228 (1917), pp. 489–490; Baron Kuhn von Kuhnenfeld,

_The Strategical Importance of the Euphrates Valley Railway_ (English

translation by Sir C. W. Wilson, London, 1873); V. L. Cameron, _Our

Future Highway to India_, 2 volumes (London, 1880); A. Bérard, _La

route de l’Inde par la vallée du Tigre et de l’Euphrate_ (Lyons, 1887);

F. Jones, _The Direct Highway to the East considered as the Perfection

of Great Britain’s duties toward British India_ (London, 1873).

[5] _Supra_, pp. 66–67.

[6] _Parliamentary Debates, House of Commons_, Volume 120 (1903), pp.

1247–1248, 1358, 1361, 1364–1367, 1371–1374.

[7] Lord Mount Stephen had been president of the Canadian Pacific

Railway and of the Bank of Montreal. Lord Revelstoke was senior partner

in the firm of Baring Brothers & Company and a director of the Bank of

England.

[8] The participation of the three Great Powers was to be on the

basis of 25–25–25%, 15% was to be reserved for minor groups, and 10%

for the Anatolian Railway Company. The provisions of Article 12 of

the concession of 1903 were to be amended to establish a board of

directors of 30, upon which each of the principal participants should

be represented by 8 members. The remaining 6 members of the board were

to be designated by the Ottoman Government and the Anatolian Railway

Company. The directors were to be appointed by the original subscribers

so that sale or transfer of shares could not alter the proportionate

representation thus agreed upon.

[9] For the facts in this and the succeeding paragraph the author is

indebted to Dr. Arthur von Gwinner, managing director of the _Deutsche

Bank_; and to Sir Henry Babington Smith, erstwhile chairman of the

Ottoman Public Debt Administration, a partner of Sir Ernest Cassel,

president of the National Bank of Turkey, and a director of the Bank of

England. Dr. von Gwinner placed at the disposal of the author many of

the records of the _Deutsche Bank_ and of the Bagdad Railway Company,

and Sir Henry Babington Smith graciously volunteered to answer many

puzzling questions.

[10] _Parliamentary Debates, House of Commons_, Volume 121 (1903), pp.

271–272.

[11] The British banking houses interested in the Bagdad enterprise

were Baring Brothers, Sir Ernest Cassel, and Morgan-Grenfell Company.

_Cf._ _The Westminster Gazette_, April 24, 1903; _Stenographische

Berichte, XII Legislaturperiode, 2 Session_, Volume 260 (1910), p.

2181d. The bankers, of course, were not bound by the decision of the

Cabinet to withdraw from the negotiations; they still would have been

at liberty to invest in Bagdad Railway securities, as did the French

bankers. However, it has been the practice of British financiers

to accept the “advice” of the Foreign Office in the case of loans

which may lead to international complications. An analogous case in

American experience was the decision of prominent New York financial

institutions to withdraw from the Chinese consortium in 1913 because

of the avowed opposition of President Wilson to the terms of the loan

contract.

[12] _The Nineteenth Century_, Volume 65 (1909), pp. 1090–1091.

[13] _Supra_, pp. 30, 59–60.

[14] _Parliamentary Debates, House of Commons_, Volume 120, pp.

1360–1361; Volume 126, p. 108. The opinions of Mr. Gibson Bowles were

not cordially received by _The Scotsman_, which said, April 9, 1903,

“Mr. Gibson Bowles carried the House in imagination to the banks of the

Euphrates and Tigris. Germany is there seeking by means of a railway to

supersede our trade, and to serve herself heir to the wealth and empire

of ancient Babylon and Assyria. The member for King’s Lynn was, as

usual, not very well posted up on his facts. On this occasion he was so

entirely wrong-headed that no one on the opposition bench would agree

with him.... The outstanding moral of the debate was, indeed, that the

honorable member for King’s Lynn was much in want of a holiday.”

[15] Fraser, _op. cit._, pp. 42–43. The senior member of the firm of

Lynch Brothers was H. F. B. Lynch (1862–1913), who was widely known

as an authority on the Near East and who, as a Liberal member of

Parliament, 1906–1910, was able to call official attention to the

necessity for safeguarding British interests in Persia and Mesopotamia.

That he succeeded in convincing the Government of the importance

of his navigation concession is evidenced by the vigorous protests

filed by the British Government with the Young Turks in 1909, when

the latter attempted to operate competing vessels on the Tigris and

the Shatt-el-Arab. On this point see _Stenographische Berichte, XII

Legislaturperiode, 2 Session_, Volume 260 (1910), pp. 2174d _et seq._

Again in 1913–1914, the British Government refused to consider any

settlement of the Bagdad Railway question which did not adequately

protect the interests of the Lynch Brothers. _Infra_, pp. 258–265. Mr.

Lynch, however, was not an irreconcilable opponent of the _Deutsche

Bank_. He took the point of view that the Germans had rendered Turkey

a great service by the construction of the Anatolian Railways because

of the total lack of natural means of communication in the Anatolian

plateau. He urged that they were making a great mistake, however, to

extend the Anatolian system into Mesopotamia, where the Tigris and

Euphrates provided natural and logical avenues of trade for the Valley

of the Two Rivers. In Mesopotamia, he maintained, what was needed was

a development of the river traffic, not the construction of railways.

_Cf._ H. F. B. Lynch, “The Bagdad Railway,” _Fortnightly Review_, March

1, 1911, pp. 384–386.

[16] It will be recalled that the Hamburg-American Line established

a Persian Gulf service in 1906. _Supra_, pp. 108–109. Regarding the

activities of British shipping and commercial interests in opposing the

Bagdad Railway see _Diplomatic and Consular Reports_, No. 2950 (1902),

pp. 25 _et seq._, No. 3140 (1904), pp. 24 _et seq._; _The Times_, April

24, 1903.

[17] G. N. Curzon, _Persia and the Persian Question_ (2 volumes,

London, 1892), Volume I, p. 635; a similar view was set forth by Sir

Thomas Sutherland, of the P. & O., in a letter to _The Times_, April

27, 1903.

[18] E. Banse, _Auf den Spuren der Bagdadbahn_ (Weimar, 1913), Chapter

XI, _Die Wahrheit über die Bagdadbahn_, a critical analysis of the

value of the Railway in Eastern trade, pp. 145–146. _Cf._, also,

Dr. R. Hennig, “Der verkehrsgeographische Wert des Suez- und des

Bagdad-Weges,” in _Geographische Zeitschrift_, Volume 22 (1916), pp.

649–656.

[19] _Specifications_, Articles 24–25. It might be added that the

Company loyally observed this restriction; C. W. Whittall & Co.,

largest British merchants in Turkey so testified. _Anatolia_, p. 103;

von Gwinner, _loc. cit._, p. 1090. Sir Edward Grey said no complaints

of discrimination against British goods had come to the attention

of the Foreign Office. _Parliamentary Debates, House of Commons,_ 5

Series, Volume 53 (1913), pp. 392–393.

[20] _Diplomatic and Consular Reports_, No. 3140, p. 30.

[21] Consider the dedication of Lord Curzon’s _Persia and the Persian

Question_: “To the officials, military and civil, in India, whose hands

uphold the noblest fabric yet reared by the genius of a conquering

nation, I dedicate this work, the unworthy tribute of the pen to a

cause, which by justice or the sword, it is their high mission to

defend, but whose ultimate safeguard is the spirit of the British

people.”

[22] Woolf, _op. cit._, p. 24.

[23] Regarding the Anglo-Russian rivalry in the Middle East, _cf._

Rose, _op. cit._, Part II, Chapters I-IV; Curzon, _Persia and the

Persian Question_, Volume II, Chapter XXX.

[24] See a statement by Lord Lansdowne, in the House of Lords,

_Parliamentary Debates_, fourth series, Volume 121 (1903), p. 1347, and

a statement by Lord Curzon, _ibid._, fifth series, Volume 7 (1911),

pp. 583–587; also Curzon, _Persia and the Persian Question_, Volume

II, Chapter XXVII. The strategic importance of the Persian Gulf to the

British Empire was realized by foreign observers, as well as by English

statesmen. Writing in 1902, Admiral A. T. Mahan, an American, said,

“The control of the Persian Gulf by a foreign state of considerable

naval potentiality, a ‘fleet in being’ there based upon a strong

military port, would reproduce the relations of Cadiz, Gibraltar,

and Malta to the Mediterranean. It would flank all the routes to

the farther East, to India, and to Australia, the last two actually

internal to the Empire, regarded as a political system; and although

at present Great Britain unquestionably could check such a fleet, so

placed, by a division of her own, it might well require a detachment

large enough to affect seriously the general strength of her naval

position.” A. T. Mahan, _Retrospect and Prospect_ (New York, 1902),

pp. 224–225. Lord Curzon is said to have remarked that he “would not

hesitate to indict as a traitor to his country any British minister who

would consent to a foreign Power establishing a station on the Persian

Gulf.” A. J. Dunn, _British Interests in the Persian Gulf_ (London,

1907), p. 7. See also _The Persian Gulf_ (No. 76 of the Foreign Office

Handbooks); _Handbook of Arabia_, Volume I (Admiralty Intelligence

Division, London, 1916); Lovat Fraser, _India under Curzon and After_

(London, 1911).

[25] _Parliamentary Debates, House of Lords_, fourth series, Volume

121 (1903), pp. 1347–1348. Two observations should be made regarding

this quotation. First, it is included in every book I have consulted

on the Bagdad Railway, written since 1903, but in every instance the

last sentence has been omitted—a sentence which considerably alters

the spirit of the statement. Second, the German press, at the time,

considered that the warning was directed, not at the Bagdad Railway,

but at the rapid and alarming advance of Russia in Persia. _Cf._ an

analysis of foreign press comments in an article by J. I. de La Tour,

“Le chemin de fer de Bagdad et l’opinion anglaise,” in _Questions

diplomatiques et coloniales_, Volume 15 (1903), pp. 609–614—an

excellent digest.

[26] _Cf._ a statement by Lord Cranborne, Under-Secretary of State

for Foreign Affairs, in _Parliamentary Debates, House of Commons_,

fourth series, Volume 101 (1902), p. 129. Although he was less than

forty years of age at the time of his appointment as Governor-General

of India (1898), the Right Honorable George Nathaniel Curzon, Baron

Curzon of Kedleston, even at that early age, had had wide experience

and training of the type so common among the masters of British

imperial destiny. He was educated at Eton and Oxford, and he traveled

widely in the Near East. He served as a member of Parliament from 1886

until 1898. He was Under-Secretary of State for India, 1891–1892;

Under-Secretary of State for Foreign Affairs, 1895–1898; Privy

Councillor, 1895.

[27] _Supra_, p. 34; _The Annual Register_, 1901, pp. 304–305; K.

Helfferich, _Die Vorgeschichte des Weltkrieges_, p. 129.

[28] Viscount Haldane, _Before the War_ (London, 1920), pp. 48–51;

Viscount Morley, _Recollections_ (New York, 1917), p. 238.

[29] _Infra_, pp. 239–244; _Parliamentary Debates, House of Lords_,

fifth series, Volume 7 (1911), pp. 583–587, 589. It is interesting to

contrast this opinion of a German trans-Mesopotamian railway with that

held by the same man when it was proposed that British capitalists

should construct such a line. Writing in 1892, Lord Curzon had this to

say regarding the project: “Its superficial attractions judiciously

dressed up in a garb of patriotism, were such as to allure many

minds; and I confess to having felt, without ever having succumbed

to, the fascination. Closer study, however, and a visit to Syria and

Mesopotamia have convinced me both that the project is unsound, and

that it does not, for the present, at any rate, lie within the domain

of practical politics.” Lord Curzon believed that a Mesopotamian

railway would be practically valueless for military purposes: “The

temperature of these sandy wastes is excessively torrid and trying

during the summer months and I decline to believe that during half the

year any general in the world would consent to pack his soldiers into

third class carriages for conveyance across those terrible thousand

miles, at least if he anticipated using them in any other capacity than

as hospital inmates at the end.” _Persia and the Persian Question_,

Volume I, pp. 633–635.

[30] _Parliamentary Debates, House of Commons_, fifth series, Volume 21

(1911), pp. 241–242.

[31] _Infra_, pp. 258–265.

[32] For the views of a typical British imperialist on the Persian

situation, _cf._, Curzon, _Persia and the Persian Question_, Volume

II, Chapter XXX; a later account is that of the American, W. Morgan

Shuster, _The Strangling of Persia_ (New York, 1912); _cf._, also, H.

F. B. Lynch, “Railways in the Middle East,” in _Proceedings of the

Central Asian Society_ (London), March 1, 1911.

[33] See P. Rohrbach, _Die Bagdadbahn_, p. 18; Reventlow, _op. cit._,

pp. 338–343. That Rohrbach’s frank avowal of the menace of the Bagdad

Railway to India and Egypt was not without influence in Great Britain

is evidenced by the fact that long quotations from _Die Bagdadbahn_

were read into the records of the House of Commons by the Earl of

Ronaldshay, on March 23, 1911. _Parliamentary Debates_, fifth series,

Volume 23, p. 628.

[34] Herr Scheidemann, in an eloquent speech to the Reichstag, March

30, 1911, pleaded with the German Government to be sympathetic with

the position in which Great Britain found herself. No nation with the

imperial responsibilities of Great Britain could afford to neglect to

take precautionary steps against the possibility of the Bagdad Railway

being used as a weapon of offense against Egypt, the Suez Canal, and

India. “Complications upon complications,” he said, “are certain to

arise as a result of the construction of the Bagdad Railway. But

we expect of our Government, at the very least, that in the course

of protecting the legitimate German economic interests which are

involved in the Bagdad Railway, it will leave no stone unturned to

prevent the development of Anglo-German hostility over the matter.

We want to do everything possible to effect a thorough understanding

with England. Only by such a policy can we hope to quiet the fears

of British imperialists that the Railway is a menace to the Empire.”

_Stenographische Berichte, XII Legislaturperiode, 2 Session_, Volume

266 (1911), pp. 5980c-5984b.

[35] _Parliamentary Debates, House of Commons_, fifth series, Volume 21

(1911), pp. 241–242.

[36] _Cf._ H. N. Brailsford, _The War of Steel and Gold_, Chapter III,

“The Egyptian Model.”

[37] _Supra_, pp. 181–182.

[38] André Tardieu, _France and the Alliances_ (New York, 1908), p. 46.

For M. Tardieu’s analysis of the causes of the growing Anglo-German

hostility, _cf._ pp. 48–57. It was in the latter part of April, 1903,

that the Bagdad Railway negotiations fell through. In May, Edward VII

paid an official visit to Paris; in October, an arbitration agreement

was signed by France and Great Britain. The following spring the

treaties constituting the Entente Cordiale were executed. Sir Thomas

Barclay, _Thirty Years’ Reminiscences_ (London, 1906), pp. 175 _et

seq._ For the text of these agreements _cf._ _Parliamentary Papers_,

Volume 103 (1905), No. Cd. 2384.

[39] For the text of the Anglo-Russian Entente, _cf._ _British and

Foreign State Papers_, Volume 100, pp. 555 _et seq._ Regarding the

nature of the Anglo-Russian rivalry in the Middle East and the effect

of the Bagdad Railway in hastening a settlement of that rivalry, _cf._

Edouard Driault, _La question d’Orient depuis ses origines jusqu’à la

paix de Sèvres_ (Paris, 1921), Chapter VIII, and pp. 273 _et seq._;

also Tardieu, _op. cit._, pp. 239–252, and Curzon, _op. cit._, Volume

II, Chapter XXX.

[40] Ernst Jäckh, _Die deutsch-türkische Waffenbrüderschaft_

(Stuttgart, 1915), pp. 17–18.

[41] Sir William Willcocks (1852- ) is one of the foremost authorities

on Egypt, India, and Mesopotamia. As a young man he was employed in

India by the Department of Public Works and for a period of eleven

years, 1872–1883, was engaged in the construction of the famous

irrigation works there. From 1883–1893, he was employed in a similar

capacity by the Egyptian Public Works and was largely responsible for

the development of irrigation in the Nile Valley. In 1898, he planned

and projected the Assuan Dam, which turned out to be the greatest

irrigation work in the East. In 1909, Sir William Willcocks became

consulting engineer to the Ottoman Ministry of Public Works, and was

responsible for the construction, 1911–1913, by the British firm of Sir

John Jackson, Ltd., of the famous Hindie barrage, the first step in the

irrigation of the Valley of the Two Rivers.

[42] _Mesopotamia_, p. 54, and _The Geographical Journal_, August, 1912.

[43] _The Recreation of Chaldea_ (Cairo, 1902). This suggestion led

to the absurd charge by Dr. Rohrbach that Sir William Willcocks was

actively promoting the establishment of a British colonial empire in

southern Mesopotamia. _German World Policies_, pp. 160–161. _Cf._,

also, _Diplomatic and Consular Reports_, No. 3140 (1903), p. 27.

[44] H. H. Johnston, _Common Sense in Foreign Policy_ (London, 1913),

pp. v-vii. A similar opinion was expressed by Colonel A. C. Yate, at

a meeting of the Central Asian Society, May 22, 1911. In answer to an

alarmist paper on the Bagdad Railway which had been read to the society

by André Chéradame, Colonel Yate made a spirited speech in which he

warned his countrymen that M. Chéradame proposed that they should

follow the same mistaken policy which had guided Lord Palmerston in

resistance to the construction of the Suez Canal. “We cannot pick up

every day,” he said, “a Lord Beaconsfield, who will repair the errors

of his blundering predecessors.... Because the German Emperor and his

instruments have adopted and put into practice the plans which Great

Britain rejected [for a trans-Mesopotamian railway], we are now,

forsooth, to pursue a policy which savours partly of ‘sour grapes’

and partly of ‘dog-in-the-manger,’ and which in either aspect will do

nothing to strengthen British hands and promote British interests.”

_Proceedings of the Central Asian Society_ (London), May 22, 1911, p.

19.

[45] Johnston, _op. cit._, pp. 50–51, 61. Sir Harry Johnston made an

extended lecture tour through Germany during 1912 for the purpose

of promoting Anglo-German friendship. For details of this trip see

Schmitt, _op. cit._, pp. 355–356. It is interesting to note how nearly

Sir Harry’s proposals corresponded with the terms of the treaties of

1913–1914. _Infra_, Chapter X. For a similar point of view, _cf._

Angus Hamilton, _Problems of the Middle East_ (London, 1909), pp.

178–180.

[46] _Parliamentary Debates, House of Lords_, fifth series, Volume 7

(1911), pp. 601–602. The italics are mine.

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