CHAPTER III

GERMANS BECOME INTERESTED IN THE NEAR EAST

THE FIRST RAILS ARE LAID

During the summer of 1888 the Oriental Railways—from the Austrian frontier, across the Balkan Peninsula _via_ Belgrade, Nish, Sofia, and Adrianople, to Constantinople—were opened to traffic. Connections with the railways of Austria-Hungary and other European countries placed the Ottoman capital in direct communication with Vienna, Paris, Berlin, and London (_via_ Calais). The arrival at the Golden Horn, August 12, 1888, of the first through express from Paris and Vienna was made the occasion of great rejoicing in Constantinople and was generally hailed by the European press as marking the beginning of a new era in the history of the Ottoman Empire. To thoughtful Turks, however, it was apparent that the opening of satisfactory rail communications in European Turkey but emphasized the inadequacy of such communications in the Asiatic provinces. Anatolia, the homeland of the Turks, possessed only a few hundred kilometres of railways; the vast areas of Syria, Mesopotamia, and the Hedjaz possessed none at all. Almost immediately after the completion of the Oriental Railways, therefore, the Sultan, with the advice and assistance of the Ottoman Public Debt Administration, launched a program for the construction of an elaborate system of railway lines in Asiatic Turkey.[1]

The existing railways in Asia Minor were owned, in 1888, entirely by French and British financiers, with British capital decidedly in the predominance. The oldest and most important railway in Anatolia, the Smyrna-Aidin line—authorized in 1856, opened to traffic in 1866, and extended at various times until in 1888 it was 270 kilometres in length—was owned by an English company. British capitalists also owned the short, but valuable, Mersina-Adana Railway, in Cilicia, and held the lease of the Haidar Pasha-Ismid Railway. French interests were in control of the Smyrna-Cassaba Railway, which operated 168 kilometres of rails extending north and east from the port of Smyrna. It was not until the autumn of 1888 that Germans had any interest whatever in the railways of Asiatic Turkey.[2]

The first move of the Sultan in his plan to develop railway communication in his Asiatic provinces was to authorize important extensions to the existing railways of Anatolia. The French owners of the Smyrna-Cassaba line were granted a concession for a branch from Manissa to Soma, a distance of almost 100 kilometres, under substantial subsidies from the Ottoman Treasury. The British-controlled Smyrna-Aidin Railway was authorized to build extensions and branches totalling 240 kilometres, almost doubling the length of its line. A Franco-Belgian syndicate in October, 1888, received permission to construct a steam tramway from Jaffa, a port on the Mediterranean, to Jerusalem—an unpretentious line which proved to be the first of an important group of Syrian railways constructed by French and Belgian promoters. Shortly afterward the concession for a railway from Beirut to Damascus was awarded to French interests.[3]

But the great dream of Abdul Hamid was the great dream of Wilhelm von Pressel: the vision of a trunk line from the Bosporus to the Persian Gulf, which, in connection with the existing railways of Anatolia and the new railways of Syria, would link Constantinople with Smyrna, Aleppo, Damascus, Beirut, Mosul, and Bagdad. As early as 1886 the Ottoman Ministry of Public Works had suggested to the lessees of the Haidar Pasha-Ismid Railway that they undertake the extension of that line to Angora, with a view to an eventual extension to Bagdad. The proposal was renewed in 1888, with the understanding that the Sultan was prepared to pay a substantial subsidy to assure adequate returns on the capital to be invested. The lessees of the Haidar Pasha-Ismid line, however, were unable to interest investors in the enterprise and were compelled to withdraw altogether from railway projects in Turkey-in-Asia. Thereupon Sir Vincent Caillard, Chairman of the Ottoman Public Debt Administration, endeavored to form an Anglo-American syndicate to undertake the construction of a Constantinople-Bagdad railway, but he met with no success.[4]

The opportunity which British capitalists neglected German financiers seized. Dr. Alfred von Kaulla, of the _Württembergische Vereinsbank_ of Stuttgart, who was in Constantinople selling Mauser rifles to the Ottoman Minister of War, became interested in the possibilities of railway development in Turkey. With the coöperation of Dr. George von Siemens, Managing Director of the _Deutsche Bank_, a German syndicate was formed to take over the existing railway from Haidar Pasha to Ismid and to construct an extension thereof to Angora. On October 6, 1888, this syndicate was awarded a concession for the railway to Angora and was given to understand that it was the intention of the Ottoman Government to extend that railway to Bagdad _via_ Samsun, Sivas, and Diarbekr. The Sultan guaranteed the Angora line a minimum annual revenue of 15,000 francs per kilometre, for the payment of which he assigned to the Ottoman Public Debt Administration the taxes of certain districts through which the railway was to pass. Thus came into existence the Anatolian Railway Company (_La Société du Chemin de Fer Ottomane d’Anatolie_), the first of the German railway enterprises in Turkey.[5]

The German concessionaires were not slow to realize the possibilities of their concession. They elected Sir Vincent Caillard to the board of directors of their Company, in order that they might receive the enthusiastic coöperation of the Ottoman Public Debt Administration and in order that they might interest British capitalists in their project. With the assistance of Swiss bankers they incorporated at Zurich the _Bank für orientalischen Eisenbahnen_, which floated in the European securities markets the first Anatolian Railways loan of eighty million francs—more than one fourth of the loan being underwritten in England. Shortly thereafter this same financial group, under the leadership of the _Deutsche Bank_, acquired a controlling interest in more than 1500 kilometres of railways in the Balkan Peninsula, by purchasing the holdings of Baron Hirsch in the Oriental Railways Company. The _Bank für orientalischen Eisenbahnen_ became a holding company for all of the _Deutsche Bank’s_ railway enterprises in the Near East.[6]

Under the direction of German engineers, in the meantime, construction of the Anatolian Railway proceeded at so rapid a rate that the 485 kilometres of rails were laid and trains were in operation to Angora by January, 1893. About the same time a German engineering commission, assisted by two technical experts representing the Ottoman Ministry of Public Works and by two Turkish army officers, submitted a report on their preliminary survey of the proposed railway to Bagdad. This was enthusiastically received by the Sultan, who reiterated his intention of constructing a line into Mesopotamia at the earliest practicable date.[7]

In 1887 there was no German capital represented in the railways of Asiatic Turkey. Five years later the _Deutsche Bank_ and its collaborators controlled the railways of Turkey from the Austro-Hungarian border to Constantinople; they had constructed a line from the Asiatic shore of the Straits to Angora; they were projecting a railway from Angora across the hills of Anatolia into the Mesopotamian valley. In coöperation with the Austrian and German state railways they could establish through service from the Baltic to the Bosporus and, by ferry and railway, into hitherto inaccessible parts of Asia Minor. Almost overnight, as history goes, Turkey had become an important sphere of German economic interest. Thus was born the idea of a series of German-controlled railways from Berlin to Bagdad, from Hamburg to the Persian Gulf!

The Ottoman Government apparently was well pleased with the energetic action of the German concessionaires in the promotion of their railway enterprises in Turkey. In any event, a tangible evidence of appreciation was extended the Anatolian Railway Company by an imperial _iradé_ of February 15, 1893, which authorized the construction of a branch line of 444 kilometres from Eski Shehr (a town about midway between Ismid and Angora) to Konia. The new line, like its predecessor, was guaranteed a minimum annual return of 15,000 francs per kilometre, payments to be made under the supervision of the Ottoman Public Debt Administration. The obvious advantages of developing the potentially rich regions of southern Anatolia, and of providing improved communication between Constantinople and the interior of Asia Minor, led the Anatolian Company to hasten construction, with the result that service to Konia was inaugurated in 1896.[8]

Simultaneously with the granting of the second Anatolian concession the Sultan authorized an important extension to the French-owned Smyrna-Cassaba Railway. The existing line was to be prolonged a distance of 252 kilometres from Alashehr to Afiun Karahissar, at which latter town a junction was to be effected with the Anatolian Railway. Another French company was awarded a concession for the construction of the Damascus-Homs-Aleppo railway, in Syria, under substantial financial guarantees from the Ottoman Treasury. It was said that these concessions to French financiers were “compensatory” in character and were granted upon the urgent representations of the French ambassador in Constantinople.[9]

Between 1896 and 1899 no further definite steps were taken to extend the Anatolian Railway beyond Angora, as had been provided by the original concession. In the latter year, however, largely because of Russian objections to the further development of railways in northern Asia Minor, the Sultan took under consideration the advisability of projecting and building, instead, a line from Konia to Bagdad _via_ Aleppo and Mosul. Early in 1899 a German commission left Constantinople to make a thorough survey of the economic and strategic possibilities of such a line. Included in the commission were Dr. Mackensen, Director of the Prussian State Railways; Dr. von Kapp, Surveyor for the State Railways of Württemberg; Herr Stemrich, the German Consul-General at Constantinople; Major Morgen, German military attaché; representatives of the Ottoman Ministry of Public Works. It was this commission that finally decided upon the route of the Bagdad Railway.[10]

At the close of the nineteenth century, therefore, the sceptre of railway power in the Near East was passing from the hands of Frenchmen and Englishmen into the hands of Germans. In a period of about ten years the German-owned Anatolian Railway Company had constructed almost one thousand kilometres of railway lines in Asia Minor. A German mission was blazing a trail through Syria and Mesopotamia for the extension of the Anatolian Railway to the valley of the Tigris River and the head of the Persian Gulf. German prestige seemed to be in the ascendancy: the Directors of the Anatolian Company reported to the stockholders in 1897 that, “as in former years, our Company has concerned itself continuously with the development of trade, industry, and agriculture in the region served by the Railway. As a result our enterprise has enjoyed in every sense the whole-hearted support and the powerful protection of His Majesty the Sultan. Our relationships with the Imperial Ottoman Government, the local authorities, and all classes of the people themselves are more cordial than ever.”[11]

The system of railways thus founded had been conceived by a German railway genius; it had been constructed by German engineers with materials made by German workers in German factories; it had been financed by German bankers; it was being operated under the supervision of German directors. In the minds of nineteenth-century neo-mercantilists this was a matter for national pride. A Pan-German organ hailed the Anatolian Railways and the proposed Bagdad enterprise in glowing terms: “The idea of this railway was conceived by German intelligence; Germans made the preliminary studies; Germans overcame all the serious obstacles which stood in the way of its execution. We should be all the more pleased with this success because the Russians and the English busied themselves at the Golden Horn endeavoring to block the German project.”[12]

THE TRADERS FOLLOW THE INVESTORS

The construction of the Anatolian Railways by German capitalists was accompanied by a considerable expansion of German economic interests in the Near East. In 1889, for example, a group of Hamburg entrepreneurs established the _Deutsche Levante Linie_, which inaugurated a direct steamship service between Hamburg, Bremen, Antwerp, and Constantinople. It was the expectation of the owners of this line that the construction of the Anatolian railways would materially increase the volume of German trade with Turkey—an expectation which was justified by subsequent developments. In 1888, the year of the original railway concession to the _Deutsche Bank_, exports from Germany to Turkey were valued at 11,700,000 marks; by 1893, when the line was completed to Angora, they mounted to a valuation of 40,900,000 marks, an increase of about 350%. Imports into Germany from Turkey during the same period rose from 2,300,000 marks to 16,500,000 marks, showing an increase of over 700%. No small proportion of the phenomenal increase in the volume of German exports to Turkey can be attributed to the use of German materials on the Ismid-Angora railway. In any event, there was no further substantial development of this export trade between 1895 and 1900, although imports into Germany from Turkey reached the high figure of 28,900,000 marks at the close of the century.[13]

That German traders should follow German financiers into the Ottoman Empire was to be expected. The _Deutsche Bank_—sponsor of the Anatolian Railways—had been notably active in the promotion of German foreign commerce. From its very inception it had devoted itself energetically to the promotion of industrial and commercial activity abroad, thus carrying out the object announced in its charter “of fostering and facilitating commercial relations between Germany, other European countries, and oversea markets.” By the establishment of foreign branches, by the liberal financing of import and export shipments, by the introduction of German bills of exchange in the four corners of the earth, and by other similar methods, this great bank was largely responsible for the emancipation of German traders from their former dependence upon British banking facilities. The Anatolian Railways concessions marked the initial efforts of the _Deutsche Bank_ at Constantinople. What it had done elsewhere it could be expected to do in the interests of German business men operating in Turkey.[14]

The London _Times_ of October 28, 1898, contained a significant review of the status of German enterprise in the Ottoman Empire during the decade immediately preceding. Whereas ten years before, the finance and trade of Turkey were practically monopolized by France and Great Britain, the Germans were now by far the most active group in Constantinople and in Asia Minor. Hundreds of German salesmen were traveling in Turkey, vigorously pushing their wares and studiously canvassing the markets to learn the wants of the people. The Krupp-owned Germania Shipbuilding Company was furnishing torpedoes to the Turkish navy; Ludwig Loewe and Company, of Berlin, was equipping the Sultan’s military machine with small arms; Krupp, of Essen, was sharing with Armstrong the orders for artillery. German bicycles were replacing American-made machines. There was a noticeable increase of German trade with Palestine and Syria. In 1899 a group of German financiers founded the _Deutsche Palästina Bank_, which proceeded to establish branches at Beirut, Damascus, Gaza, Haifa, Jaffa, Jerusalem, Nablus, Nazareth, and Tripoli-in-Syria.

Promoters, bankers, traders, engineers, munitions manufacturers, ship-owners, and railway builders all were playing their parts in laying a substantial foundation for a further expansion of German economic interests in the Ottoman Empire.[15]

THE GERMAN GOVERNMENT BECOMES INTERESTED

In a sense, German diplomacy had paved the way for the Anatolian Railway concessions. For numerous reasons, which need not be discussed here, French and British influence at the Sublime Porte gradually declined during the decades of 1870–1890. British prestige, in particular, waned after the occupation of Egypt in 1882. The German ambassador at Constantinople during most of this period was Count Hatzfeld, an unusually shrewd diplomatist, who perceived the extraordinary opportunity which then existed to increase German prestige in the Near East. His place in the counsels of the Sultan became increasingly important, as he missed no chance to seize privileges surrendered by France or Great Britain.[16]

An instance of Count Hatzfeld’s activity was the appointment of a German military mission to Turkey. Until 1870 there had been a French mission in Constantinople, with almost complete control over the training and equipment of the Ottoman army. At the outbreak of the Franco-German War, however, the mission was recalled because of the crying need for French officers at the front. After the termination of hostilities, and again after the collapse of the Turkish defence against Russia in 1877, the Sultan requested the reappointment of the mission, but the French Government politely declined the invitation. The German ambassador seized upon this neglected opportunity and, in 1883, persuaded Abdul Hamid to invite the Kaiser to designate a group of German officers to serve with the Ottoman General Staff.[17]

In command of the German military mission despatched to Turkey in response to this invitation was General von der Goltz. This brilliant officer—who, appropriately enough, was to die in the Caucasus campaign of 1916—remained in Turkey twelve years, reorganizing the Turkish army, forming a competent general staff, establishing a military academy for young officers, and formulating plans for an adequate system of reserves. So great was his success that he won the lasting respect of Turkish military and civil officials; time and time again he was invited to return to Turkey as military adviser extraordinary; in 1909 he answered the call of the Young Turks and lent his ripened judgment to the solution of their distracting problems; he was granted the coveted title of Pasha. The personal prestige of von der Goltz was of no small importance in brightening Germany’s rising star in the Near East.[18]

Another event of first rate importance in the history of German ventures in the Ottoman Empire was the accession, in 1888, of Emperor William II. During the three decades of his reign the economic foundations of German imperialism were strengthened and broadened; the superstructure of German imperialism was both reared and destroyed. During his régime the German industrial revolution reached its height, and the empire, it seemed, became one enormous factory consuming great quantities of raw materials and producing a prodigious volume of manufactured commodities for the home and foreign markets. Simultaneously there was developed a German merchant marine which carried the imperial flag to the seven seas. A normal concomitant of this industrial and commercial progress was the expansion of political and economic interests abroad—renewed activity in the acquisition of a colonial empire; marked success in the further conquest of foreign markets; the creation of a great navy; the phenomenal increase of German investments in Turkey. It is no insignificant coincidence that German financiers received their first Ottoman railway concession in the year of the accession of William II and that the capture of Aleppo—ending once and for all the plan for a German-controlled railway from Berlin to Bagdad—occurred just a few days before his abdication.

From the first the Kaiser evinced a keen interest in the Ottoman Empire as a sphere in which his personal influence might be exerted on behalf of German economic expansion and German political prestige. He was quick to recognize the opportunities for German enterprise in a country where much went by favor, and where political influence could be effectually exerted for the furtherance of commercial interests. In one of a round of royal visits following his accession, the young Emperor, in November, 1889, paid his respects to the Sultan Abdul Hamid. Upon the arrival in the Bosporus of the imperial yacht _Hohenzollern_, the Kaiser and Kaiserin received an ostentatious welcome from the Sultan and cordial greetings from the diplomatic corps. It was suggested at the time that there was more than formal significance in this visit of the German sovereigns, coming, as it did, when prominent German financiers were engaged in constructing the first kilometres of an important Anatolian railway. This impression was confirmed when, shortly after the Emperor’s return to the Fatherland, a favorable commercial treaty was negotiated by the German ambassador at Constantinople and ratified by the German and Ottoman Governments in 1890.[19]

The expansion of German economic interests and political prestige in the Ottoman Empire was not looked upon with favor by Bismarck. The Great Chancellor was primarily interested in isolating France on the continent and in avoiding commercial and colonial conflicts overseas. In particular he had no desire to become involved in the complicated Near Eastern question—toward which at various times he had expressed total indifference and contempt—for fear of a clash with Russian ambitions at Constantinople. He realized that German investments in Turkey might lead to pressure on the German Government to adopt an imperial policy in Asia Minor, as, indeed, German investments in Africa had forced him to enter colonial competition in the Dark Continent.[20] When the _Deutsche Bank_ first called the Chancellor’s attention to its Anatolian enterprises, therefore, Bismarck frankly stated his misgivings about the situation. In a letter to Dr. von Siemens, Managing Director of the _Deutsche Bank_, dated at the Foreign Office, September 2, 1888, he wrote:[21]

“With reference to the inquiry of the _Deutsche Bank_ of the 15 ultimo, I beg to reply that no diplomatic objections exist to an application for a concession for railway construction in Asia Minor.

The Imperial Embassy at Constantinople has been authorized to lend support to German applicants for such concessions—particularly to the designated representative of the _Deutsche Bank_ in Constantinople—in their respective endeavors in this matter.

The Board of Directors in its inquiry has correctly given expression to the assumption that any official endorsement of its plans, in the present state of affairs, would neither extend beyond the life of the concession nor apply to the execution and operation of the enterprise. As a matter of fact, German entrepreneurs assume a risk in capital investments in railway construction in Anatolia—a risk which lies, first, in the difficulties encountered in the enforcement of the law in the East, and, second, in the increase of such difficulties through war or other complications.

_The danger involved therein for German entrepreneurs must be assumed exclusively by the entrepreneurs, and the latter must not count upon the protection of the German Empire against eventualities connected with precarious enterprises in foreign countries._”[22]

Bismarck disapproved of the visit of William II to Turkey in 1889. Failing to persuade the young Emperor to abandon the trip to Constantinople, the Chancellor did what he could to allay Russian suspicions of the purposes of the journey. Describing an interview which he had with the Tsar, in October, 1889, Bismarck wrote, in a memorandum recently taken from the files of the Foreign Office: “As to the approaching journey of the Kaiser to the Orient, I said that the reason for the visit to Constantinople lay only in the wish of our Majesties not to come home from Athens without having seen Constantinople; Germany had no political interests in the Black Sea and the Mediterranean; and it was accordingly impossible that the visit of our Majesties should take on a political complexion. The admission of Turkey into the Triple Alliance was not possible for us; we could not lay on the German people the obligation to fight Russia for the future of Bagdad.”[23] In 1890, however, Prince Bismarck was dismissed, and the chief obstacle to the Emperor’s Turkish policy was removed.

During the succeeding decade the German diplomatic and consular representatives in the Ottoman Empire rendered yeoman service in furthering investment, trade, and commerce by Germans in the Near East. It became proverbial among foreign business men in Turkey that no service was too menial, no request too exacting, to receive the courteous and efficient attention of the German governmental services. German consular officers were held up as models for others to pattern themselves after. The British Consul General at Constantinople, for example, informed British business men that his staff was at their disposal for any service designed to expedite British trade and investments in Turkey. “If,” he wrote, “any merchant should come to this consulate and say, ‘The German consulate gives such and such assistance to German traders, do the same for me,’ his suggestion would be welcomed and, if possible, acted on at once.”[24]

A judicious appointment served to reinforce the already strong position of the Germans in Turkey. In 1897 Baron von Wangenheim was replaced as ambassador to Constantinople by Baron Marschall von Bieberstein (1842–1912), a former Secretary of State for Foreign Affairs. Baron Marschall was one of the most capable of German bureaucrats. The Kaiser was glad to have him at Constantinople because his training and experience made him an admirable person for developing imperial interests there; his political opponents considered his appointment to the Sublime Porte a convenient method of removing him from domestic politics. The new ambassador’s political views were well known: he was a frank believer in a world-policy for Germany; he was an ardent supporter of colonialism, if not of Pan-Germanism; he was a bitter opponent of Great Britain; he espoused the cause of a strong political and economic alliance between the German and Ottoman Empires. What Baron Marschall did he did well. Occupying what appeared, at first, to be an obscure post, he became the foremost of the Kaiser’s diplomatists and for fifteen years lent his powerful personality and his practical experience to the furthering of German enterprise in Turkey.[25]

In 1898 William II made his second pilgrimage to the Land of Promise. Every detail of this trip was arranged with an eye to the theatrical: the enthusiastic reception at Constantinople; the “personally conducted” Cook’s tour to the Holy Land; the triumphal entry into the Holy City through a breach in the walls made by the infidel Turk; the dedication of a Lutheran Church at Jerusalem; the hoisting of the imperial standard on Mount Zion; the gift of hallowed land to the Roman Catholic Church; the visit to the grave of Saladin at Damascus and the speech by which the Mohammedans of the world were assured of the eternal friendship of the German Emperor.[26] The dramatic aspects of the royal visit were not sufficient, however, to obscure its practical purpose. It was generally supposed in western Europe that the Kaiser’s trip to Turkey was closely connected with the application of the Anatolian Railways for the proposed Bagdad Railway concessions.[27] But little objection was raised by the British and French press. Paris laughed at the obvious absurdity of a Cook’s tour for a crowned head and his entourage; London took comfort in the discomfiture which the incident would cause Russia. But there was no talk then of a great Teutonic conspiracy to spread a “net” from Hamburg to the Persian Gulf.[28]

The true significance of this royal pilgrimage of 1898 cannot be appreciated without some reference to its background of contemporary events. For the preceding four years the Ottoman Government had permitted, if not actually incited, a series of ruthless massacres of Christians in Macedonia and Armenia. European public opinion was unanimous in condemnation of the intolerance, brutality, and corruption of Abdul Hamid’s régime; the very name of the “Red Sultan” was anathema. Under these circumstances any demonstration of friendship and respect for the Turkish sovereign would be considered flagrant flaunting of public morality.[29] By Abdul Hamid, on the other hand, it would be welcomed as needed support in time of trouble. With the Kaiser the exigencies of practical politics triumphed!

It was appropriate, furthermore, that the year 1898 should be marked by some definite step forward in German imperialist progress in Turkey, for during that year notable advances had been made by German imperialism in other fields. On March 5 there was forcibly wrung from China a century-long lease of Kiao-chau and of certain privileges in the Shantung Peninsula, thus assuring to German enterprise a prominent position in the Far East. Two weeks later was passed the great German naval law of 1898, laying the foundation of a fleet that later was to challenge British supremacy of the seas. German diplomacy had developed interests in eastern Asia; it was developing interests on the seas and in western Asia; it had abandoned a purely Continental policy. No further signs were needed that a new era was dawning in German foreign affairs—unless, perhaps, it be mentioned that the great Prince Bismarck quietly passed away at Friedrichsruh on July 30 of that momentous year!

GERMAN ECONOMIC INTERESTS MAKE FOR NEAR EASTERN IMPERIALISM

Bismarck’s policy of aloofness in the Near East, however desirable it may have been from the political point of view, could not have appealed to those statesmen and soldiers and business men who believed that diplomatic policies should be determined in large part by the economic situation of the German Empire. The interest of William II in Turkey was enthusiastically supported by all those who sought to have German foreign affairs conducted with full recognition of the needs of industrialized Germany in raw materials and foodstuffs, of the importance of richer and more numerous foreign markets for the products of German factories, and of the exigencies of economic, as well as military, preparation for war. The great natural wealth of the Ottoman Empire in valuable raw materials, the possibilities of developing the Near East as a market for manufactured articles, and the geographical situation of Turkey all help to explain why the economic exploitation of the Sultan’s dominions was a matter of more vital concern to Germany than to any other European power. To make this clear it will be necessary to digress, for a time, to consider the nature of the imperial problems of an industrial state and, in particular, the problems of industrial Germany.

Under modern conditions the needs of an industrial state are imperious. Such a state is dependent for its very existence upon an uninterrupted supply of foodstuffs for the workers of its cities and of raw materials for the machines of its factories. As its population increases—unless it be one of those few fortunate nations which, like the United States, are practically self-sufficient—its importations of foodstuffs mount higher and higher. As its industries expand, the demand for raw materials becomes greater and more diversified—cotton, rubber, copper, nitrates, petroleum come to be considered the very life-blood of the nation’s industry. It is considered one of the functions of the government of an industrial state—whether that government be autocratic and dynastic or representative and democratic—to interest itself in securing and conserving sources of these essential commodities, as well as to defend and maintain the routes of communication by which they are transported to the domestic market. The securing of sources of raw materials may involve the acquisition of a colonial empire; it may require the establishment of a protectorate over, or a “sphere of interest” in, an economically backward or a politically weak nation; or it may necessitate nothing more than the maintenance of friendly relations with other states. Protection of vital routes of communication may demand the construction of a fleet of battleships; it may be the _raison d’être_ for a large standing army; it may necessitate only diplomatic support of capitalists in their foreign investments. Methods will be dictated by circumstances, but the impulse usually is the same.[30]

The German Empire was an industrial state, and its needs were imperious. In the face of a rapidly increasing population the nation became more and more dependent upon importations of foreign foodstuffs. Herculean efforts were made to keep agricultural production abreast of the domestic demand for grain: transient laborers were imported from Russia and Italy to replace those German peasants who had migrated to the industrial cities; machinery was introduced and scientific methods were applied; high protective tariffs were imposed upon imported foodstuffs to stimulate production within the empire. These measures, however, were insufficient to meet the situation; the greatest intensive development of the agricultural resources of the nation could not forestall the necessity of feeding some ten millions of Germans on foreign grain.[31]

German manufacturers, as well, were unable to obtain from domestic sources the necessary raw materials for their industrial plants. Many essential commodities were not produced at all in Germany and in only insignificant quantities in the colonies. Some German industries were almost wholly dependent upon foreign sources of supply for their raw materials. The most striking example of this was the textile manufactures, which had to obtain from abroad more than nine tenths of their raw cotton, jute, silk, and similar essential supplies.[32] Interruption of the flow of these or other indispensable goods would have brought upon German industrial centers the same paralysis which afflicted the British cotton manufactures during the American Civil War.

The German Empire had to pay for its imported foodstuffs and raw materials with the products of its mines and factories, with the services of its citizens and its ships, with the use of its surplus funds, or capital.[33] The development of a German export trade was the natural outcome of the development of German industry. And as German industries expanded, the demand for imported raw materials increased, thus rendering more necessary the extension of the export trade. The German industrial revolution of the late nineteenth century was at once the cause and the effect of the growing dependence of German economic prosperity upon foreign markets.[34]

But foreign commerce is not concerned with the sale of manufactured articles only. In its export trade, German industry was closely allied with German shipping and German finance. The services rendered German trade by the German merchant marine need not be reiterated; they are sufficiently well known. The relationship between the policies of German industry and the policies of German finance was no less important. The export of goods by German factories was supplemented by the so-called “export of capital” by German banks. Sometimes the German trader followed the German investor; sometimes the investor followed the trader. But whichever the order, the services rendered by the investor were to develop the purchasing power and the prosperity of the market, as well as to oil the mechanism of international exchange.[35] The industrial export policy and the financial export policy went hand in hand. Certainly this was the case in the Near East.

The German Empire depended for its welfare, if not for its existence, upon an uninterrupted supply of food for its workers and of raw materials for its machines. But this supply, in turn, was conditional upon the maintenance and development of a thriving export trade. The allies of this export trade were a great merchant marine and a vigorous policy of international finance and investment. Thus the nation which in 1871 was economically almost self-sufficient, by 1900 had extended its interests to the four corners of the earth. This could not have been without its effects upon German international policy. “The strength of the nation,” said Prince von Bülow, “rejuvenated by the political reorganization, as it grew, burst the bounds of its old home, and its policy was dictated by new interests and needs. In proportion as our national life has become international, the policy of the German Empire has become international.... Industry, commerce, and the shipping trade have transformed the old industrial life of Germany into one of international industry, and this has also carried the Empire in political matters beyond the limits which Prince Bismarck set to German statecraft.”[36]

From the German point of view, the call to German imperialism was clearly urgent, but the resources of German imperialism were seriously limited. The colonial ventures of the Empire had culminated in no outstanding successes and in some outstanding failures. Entering the lists late, the Germans had found the spoils of colonial rivalry almost completely appropriated by those other knights errant of white civilization, French, British, and Russian empire-builders. The few African and Asiatic territories which the Germans did succeed in acquiring were extensive in size, but unpromising in many other respects. With the exception of German East Africa the colonies were comparatively poor in the valuable raw materials so much desired by the factories of the mother country; they were unimportant as producers of foodstuffs. Attempts to induce Germans to settle in these overseas possessions were singularly unsuccessful. On the other hand, colonial enterprises had involved the empire in enormous expenditures aggregating over a billion marks; had precipitated a series of wars and military expeditions costing the nation thousands of lives and creating a host of international misunderstandings; had won for Germans widespread notoriety as poor colonizers, as tactless and autocratic officials, as ruthless overlords of the natives. It was no wonder that the German people seemed to be thoroughly discouraged and discontented with their colonial ventures.

However, even had the German colonies been richer than they were, they, alone, could not have solved the imperial problem of an industrialized Germany. German colonial trade was possessed of the same inherent weakness as German overseas commerce—it would be dependent, in the event of a general European war, upon British sea power. German industry could be effectually crippled by interruption of the flow of essential raw materials, such as cotton and copper, or by the cutting of communications with her foreign markets. It was questionable whether the German navy could be relied upon to keep the seas open.

Blockades, furthermore, exist not only in time of war, but in time of peace as well. European nations were surrounded by tariff barriers which seriously restricted the development of international trade and served to promote a system of national economic exclusiveness—a condition of affairs which harmonized only too well with the existing colossal military establishments. In this respect, of course, Germany was more sinner than sinned against. But in such an age it behooved every nation to build its industries, as well as its armies, with some view to the contingencies of war.

German statesmen and economists were by no means backward in understanding the situation. Although they had no disposition to overlook the development of the merchant marine and the navy, they believed this was not enough. They sought to build up in Central Europe a system of economic alliances, as they previously had effected a formidable military alliance. Thus might Germany and her allies become an economically self-sufficient unit, freed from dependence upon British sea power.[37] And into this alliance could be incorporated the Near East!

Beyond the Bosporus lay a country rich in oils and metals; a country capable of supplying German textile mills with cotton of superior quality; a country which in ancient times was fabulously wealthy in agricultural products; a country which gave promise of developing into a rich market for western commodities. Communication with this wonderland was to be established by a German-controlled railway upon which service could be maintained in time of war, as in time of peace, without the aid of naval power. What greater inducements could have been offered to German imperialists, living in an imperialist world? Turkey was destined to fall within the economic orbit of an industrialized Germany!

A distinguished German publicist said in 1903, “From the German point of view, it would be unparalleled stupidity if we did not most energetically do our part to acquire a share in the revival of the ancient civilization of Mesopotamia, Syria, and Babylonia. What we do not do others will surely do—be they British, French, or Russian; and the increased economic advantage which, through the Bagdad Railway, will accrue to us in the Nearer East would otherwise not only fail to be ours, but would serve to strengthen our rivals in diplomacy and business.”[38] Some years later, in the midst of the Great War, an American writer expressed much the same point of view: “Hemmed in on the west by Great Britain and France and on the east by Russia, born too late to extend their political sovereignty over vast colonial domains, and unable (if only for lack of coaling stations) to develop sea power greater than that of their rivals, nothing was more natural than the German and Austro-Hungarian conception of a _Drang nach Osten_ through the Balkan Peninsula, over the bridge of Constantinople, into the markets of Asia. The geographical position of the Central European states made as inevitable a penetration policy into the Balkans and Turkey as the geographical position of England made inevitable the development of an overseas empire.”[39] Karl Helfferich has said that “it was neither accident nor deliberate purpose, as much as it was the course of German economic development, which led Germany to take an active interest in Turkey.”[40]

BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] _The Annual Register_, 1888, pp. 44, 310.

[2] Good general statements of the transportation problem of Turkey during the two decades 1880–1900 are Verney and Dambmann, _op. cit._,