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_,