[Illustration: TURKISH RAILWAYS IN 1918]

  TURKEY, THE GREAT POWERS,
  AND THE BAGDAD RAILWAY

[Illustration: ·The MM C^o·]

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  Turkey, The Great Powers,
  and
  The Bagdad Railway

  _A Study in Imperialism_


  BY

  EDWARD MEAD EARLE, PH.D.

  ASSISTANT PROFESSOR OF HISTORY IN
  COLUMBIA UNIVERSITY


  New York

  THE MACMILLAN COMPANY

  1924

  _All rights reserved_

  PRINTED IN THE UNITED STATES OF AMERICA

  COPYRIGHT, 1923,
  BY THE MACMILLAN COMPANY.


  Set up and electrotyped. Published July, 1923.

  _Reprinted_      _July, 1924_


  Press of
  J. J. Little & Ives Company
  New York, U. S. A.

“When the history of the latter part of the nineteenth century will
come to be written, one event will be singled out above all others for
its intrinsic importance and for its far-reaching results; namely, the
conventions of 1899 and of 1902 between His Imperial Majesty the Sultan
of Turkey and the German Company of the Anatolian Railways.”—Charles
Sarolea, _The Bagdad Railway and German Expansion as a Factor in
European Politics_ (Edinburgh, 1907), p. 3.

“The Turkish Government, I know, have been accused of being corrupt. I
venture to submit that it has not been for want of encouragement from
Europeans that the Turks have been corrupt. The sinister—I think it is
not going too far to use that word—effect of European financiers on
Turkey has had more to do with the misgovernment than any Turk, young
or old.”—Sir Mark Sykes, in the House of Commons, March 18, 1914.




PREFACE


The Chester concessions and the Anglo-American controversy regarding
the Mesopotamian oilfields are but two conspicuous instances of the
rapid development of American activity in the Near East. Turkey,
already an important market for American goods, gives promise of
becoming a valuable source of raw materials for American factories
and a fertile field for the investment of American capital. Thus
American religious interests in the Holy Land, American educational
interests in Anatolia and Syria, and American humanitarian interests
in Armenia, are now supplemented by substantial American economic
interests in the natural resources of Asia Minor. Political stability
and economic progress in Turkey no longer are matters of indifference
to business men and politicians in the United States; therefore the
Eastern Question—so often a cause of war—assumes a new importance to
Americans. This book will have served a useful purpose if—in discussing
the conflicting political, cultural, and economic policies of the Great
Powers in the Near East during the past three decades—it contributes to
a sympathetic understanding of a very complicated problem and suggests
to the reader some dangers which American statesmanship would do well
to avoid. Students of history and international relations will find in
the story of the Bagdad Railway a laboratory full of rich materials
for an analysis of modern economic imperialism and its far-reaching
consequences.

The assistance of many persons who have been intimately associated
with the Bagdad Railway has enabled the author to examine records
and documents not heretofore available to the historian. To these
persons the author is glad to assign a large measure of any credit
which may accrue to this book as an authoritative and definitive
account of German railway enterprises in the Near East. He wishes
especially to mention: Dr. Arthur von Gwinner, of the _Deutsche Bank_,
president of the Anatolian and Bagdad Railway Companies; Dr. Karl
Helfferich, formerly Imperial German Minister of Finance, erstwhile
managing director of the _Deutsche Bank_, and at present a member of
the Reichstag; Sir Henry Babington Smith, an associate of the late
Sir Ernest Cassel, a director of the Bank of England, president of
the National Bank of Turkey, and at one time representative of the
British bondholders on the Ottoman Public Debt Administration; Djavid
Bey, Ottoman Minister of Finance during the régime of the Young Turks,
an economic expert at the first Lausanne Conference, and at present
Turkish representative on the Ottoman Public Debt Administration; Mr.
Ernest Rechnitzer, a banker of Paris and London, a competitor for the
Bagdad Railway concession in 1898–1899; Rear Admiral Colby M. Chester,
of the United States Navy (retired), beneficiary of the “Chester
concessions.”

Valuable assistance in the collection and preparation of material has
been rendered, also, by the following persons, to whom the author
expresses his grateful appreciation: Sir Charles P. Lucas, director,
and Mr. Evans Lewin, librarian, of the Royal Colonial Institute; Sir
John Cadman, director of His Majesty’s Petroleum Department; Professor
George Young, of the University of London, formerly attaché of the
British embassy at Constantinople; Mr. Charles V. Sheehan, sub-manager
in London of the National City Bank of New York; Mr. M. Zekeria,
chief of the Turkish Information Service in the United States; Mr.
René A. Wormser, an American attorney who assisted the author in
research work in Germany during the summer of 1922. Dr. Gottlieb Betz,
of Columbia University, and Dr. John Mez, American correspondent of
the _Frankfurter Zeitung_, have aided in the translation of important
documents.

Professors Carlton J. H. Hayes and William R. Shepherd, of Columbia
University, have been patient advisers and judicious critics of the
author during the preparation of his manuscript. To them he owes much,
as teachers who stimulated his interest in international relations,
and as colleagues who cheerfully coöperate in any useful enterprise.
Professor Parker Thomas Moon, of Columbia University, also has read the
manuscript and offered many valuable suggestions.

  EDWARD MEAD EARLE

  Columbia University
  June, 1923




CONTENTS


  CHAPTER                                                   PAGE

    I  AN ANCIENT TRADE ROUTE IS REVIVED                        1


   II  BACKWARD TURKEY INVITES ECONOMIC EXPLOITATION            9

         Turkish Sovereignty is a Polite Formality              9

         The Natural Wealth of Asiatic Turkey Offers Alluring
           Opportunities                                       13

        Forces Are at Work for Regeneration                    17


  III  GERMANS BECOME INTERESTED IN THE NEAR EAST              29

         The First Rails Are Laid                              29

         The Traders Follow the Investors                      35

         The German Government Becomes Interested              38

         German Economic Interests Make for Near Eastern
           Imperialism                                         45


   IV  THE SULTAN MORTGAGES HIS EMPIRE                         58

         The Germans Overcome Competition                      58

         The Bagdad Railway Concession is Granted              67

         The Locomotive is to Supplant the Camel               71

         The Sultan Loosens the Purse-Strings                  75

         Some Turkish Rights Are Safeguarded                   81


    V  PEACEFUL PENETRATION PROGRESSES                         92

         The Financiers Get Their First Profits                92

         The Bankers’ Interests Become More Extensive          97

         Broader Business Interests Develop                   101

         Sea Communications Are Established                   107


   VI  THE BAGDAD RAILWAY BECOMES AN IMPERIAL ENTERPRISE      120

        Political Interests Come to the Fore                  120

        Religious and Cultural Interests Reënforce Political
          and Economic Motives                                131

       Some Few Voices Are Raised in Protest                  137


  VII  RUSSIA RESISTS AND FRANCE IS UNCERTAIN                 147

        Russia Voices Her Displeasure                         147

        The French Government Hesitates                       153

        French Interests Are Believed to be Menaced           157

        The Bagdad Railway Claims French Supporters           165


 VIII  GREAT BRITAIN BLOCKS THE WAY                           176

       Early British Opinions Are Favorable                   176

       The British Government Yields to Pressure              180

       Vested Interests Come to the Fore                      189

       Imperial Defence Becomes the Primary Concern           195

       British Resistance is Stiffened by the Entente         202


   IX  THE YOUNG TURKS ARE WON OVER                           217

       A Golden Opportunity Presents Itself to the Entente
         Powers                                               217

       The Germans Achieve a Diplomatic Triumph               222

       The German Railways Justify Their Existence            229

       The Young Turks Have Some Mental Reservations          235


    X  BARGAINS ARE STRUCK                                    239

       The Kaiser and the Tsar Agree at Potsdam               239

       French Capitalists Share in the Spoils                 244

       The Young Turks Conciliate Great Britain               252

       British Imperial Interests Are Further Safeguarded     258

       Diplomatic Bargaining Fails to Preserve Peace          266


   XI  TURKEY, CRUSHED TO EARTH, RISES AGAIN                  275

       Nationalism and Militarism Triumph at Constantinople   275

       Asiatic Turkey Becomes One of the Stakes of the War    279

       Germany Wins Temporary Domination of the Near East     287

      “Berlin to Bagdad” Becomes but a Memory                 292

       To the Victors Belong the Spoils                       300

      “The Ottoman Empire is Dead. Long Live Turkey!”         303


  XII  THE STRUGGLE FOR THE BAGDAD RAILWAY IS RESUMED         314

       Germany is Eliminated and Russia Withdraws             314

       France Steals a March and is Accompanied by Italy      318

       British Interests Acquire a Claim to the Bagdad
          Railway                                             327

       America Embarks on an Uncharted Sea                    336

  INDEX                                                       355


  MAPS

     The Railways of Asiatic Turkey                 _Frontispiece_

     The Chester Concessions                                  340


  TURKEY, THE GREAT POWERS,
  AND THE BAGDAD RAILWAY

TURKEY, THE GREAT POWERS AND THE BAGDAD RAILWAY

A Study in Imperialism




CHAPTER I

AN ANCIENT TRADE ROUTE IS REVIVED


Many a glowing tale has been told of the great Commercial Revolution
of the sixteenth century and of the consequent partial abandonment of
the trans-Asiatic trade routes to India in favor of the newer routes
by water around the Cape of Good Hope. It is sometimes overlooked,
however, that a commercial revolution of the nineteenth century,
occasioned by the adaptation of the steam engine to land and marine
transportation, was of perhaps equal significance. Cheap carriage by
the ocean greyhound instead of the stately clipper, by locomotive-drawn
trains instead of stage-coach and caravan, made possible the
extension of trade to the innermost and outermost parts of the earth
and increased the volume of the world’s commerce to undreamed of
proportions. This latter commercial revolution led not only to the
opening of new avenues of communication, but also to the regeneration
of trade-routes which had been dormant or decayed for centuries.
During the nineteenth century and the early part of the twentieth, the
medieval trans-Asiatic highways to the East were rediscovered.

The first of these medieval trade-routes to be revived by modern
commerce was the so-called southern route. In the fifteenth century
curious Oriental craft had brought their wares from eastern Asia
across the Indian Ocean and up the Red Sea to some convenient port
on the Egyptian shore; here their cargoes were trans-shipped _via_
caravan to Alexandria and Cairo, marts of trade with the European
cities of the Mediterranean. The completion of the Suez Canal, in
1869, transformed this route of medieval merchants into an avenue of
modern transportation, incidentally realizing the dream of Portuguese
and Spanish explorers of centuries before—a short, all-water route to
the Indies. Less than forty years later the northern route of medieval
commerce—from the “back doors” of China and India to the plains of
European Russia—was opened to the twentieth-century locomotive.
With the completion of the Trans-Siberian Railway in 1905 the old
caravan trails were paralleled with steel rails. The Trans-Siberian
system linked Moscow and Petrograd with Vladivostok and Pekin; the
Trans-Caspian and Trans-Persian railways stretched almost to the
mountain barrier of northern India; the Trans-Caucasian lines provided
the link between the Caspian and Black Seas.

The heart of the central route of Eastern trade in the fifteenth
century was the Mesopotamian Valley. Oriental sailing vessels
brought commodities up the Persian Gulf to Basra and thence up the
Shatt-el-Arab and the Tigris to Bagdad. At this point the route
divided, one branch following the valley of the Tigris to a point north
of Mosul and thence across the desert to Aleppo; another utilizing
the valley of the Euphrates for a distance before striking across the
desert to the ports of Syria; another crossing the mountains into
Persia. From northern Mesopotamia and northern Syria caravans crossed
Armenia and Anatolia to Constantinople. This historic highway—the
last of the three great medieval trade-routes to be opened to modern
transportation—was traversed by the Bagdad Railway. The locomotive
provided a new short cut to the East.

That a commercial revolution of the nineteenth century should revive
the old avenues of trade with the East was a matter of the utmost
importance to all mankind. To the Western World the expansion of
European commerce and the extension of Occidental civilization were
incalculable, but certain, benefits. Statesmen and soldiers, merchants
and missionaries alike might hail the new railways and steamship
lines as entitled to a place among the foremost achievements of the
age of steel and steam. To the East, also, closer contacts with the
West held out high hopes for an economic and cultural renaissance
of the former great civilizations of the Orient. Alas, however, the
reopening of the medieval trade-routes served to create new arenas
of imperial friction, to heighten existing international rivalries,
and to widen the gulf of suspicion and hate already hindering cordial
relationships between the peoples of Europe and the peoples of Asia.
Economic rivalries, military alliances, national pride, strategic
maneuvers, religious fanaticism, racial prejudices, secret diplomacy,
predatory imperialism—these and other formidable obstacles blocked the
road to peaceful progress and promoted wars and rumors of wars. The
purchase of the Suez Canal by Disraeli was but the first step in the
acquisition of Egypt, an imperial experiment which cost Great Britain
thousands of lives, which more than once brought the empire to the
verge of war with France, and which colored the whole character of
British diplomacy in the Middle East for forty years. No sooner was
the Trans-Siberian Railway completed than it involved Russia in a war
with Japan. So it was destined to be with the Bagdad Railway. Itself a
project of great promise for the economic and political regeneration
of the Near East, it became the source of bitter international
rivalries which contributed to the outbreak of the Great War. It is one
of the tragedies of the nineteenth and twentieth centuries that the
Trans-Siberian Railway, the Suez Canal, and the Bagdad Railway—potent
instruments of civilization for the promotion of peaceful progress and
material prosperity—could not have been constructed without occasioning
imperial friction, political intrigues, military alliances, and armed
conflict.

The geographical position of the Ottoman Empire, the enormous potential
wealth of its dominions, and the political instability of the Sultan’s
Government contributed to make the Bagdad Railway one of the foremost
imperial problems of the twentieth century. At the time of the Bagdad
Railway concession of 1903 Turkey held dominion over the Asiatic
threshold of Europe, Anatolia, and the European threshold of Asia, the
Balkan Peninsula. Constantinople, the capital of the empire, was the
economic and strategic center of gravity for the Black Sea and eastern
Mediterranean basins. By possession of northern Syria and Mesopotamia,
the Sultan controlled the “central route” of Eastern trade throughout
its entire length from the borders of Austria-Hungary to the shores
of the Persian Gulf. The contiguity of Ottoman territory to the Sinai
Peninsula and to Persia held out the possibility of a Turkish attack
on the Suez and trans-Persian routes to India and the Far East. In
fact, the Sultan’s dominions from Macedonia to southern Mesopotamia
constituted a broad avenue of communication, an historic world highway,
between the Occident and the Orient. To a strong nation, this position
would have been a source of strength. To a weak nation it was a source
of weakness. As Gibraltar and Suez and Panama were staked out by
the empire-builders, so were Constantinople and Smyrna and Koweit.
Strategically, the region traversed by the Bagdad Railway is one of the
most important in the world.

Turkey-in-Asia, furthermore, was wealthy. It possessed vast resources
of some of the most essential materials of modern industry: minerals,
fuel, lubricants, abrasives. Its deposits of oil alone were enough to
arouse the cupidity of the Great Powers. Irrigation, it was believed,
would accomplish wonders in the revival of the ancient fertility of
Mesopotamia. By the development of the country’s latent agricultural
wealth and the utilization of its industrial potentialities, it was
anticipated that the Ottoman Empire would prove a valuable source of
essential raw materials, a satisfactory market for finished products,
and a rich field for the investment of capital. Economically, the
territory served by the Bagdad Railway was one of the most important
undeveloped regions of the world.

Neither the geographical position nor the economic wealth of the
Ottoman Empire, however, need have been a cause for its exploitation
by foreigners. Had the Sultan’s Government been strong—powerful enough
to present determined resistance to domestic rebellion and foreign
intrigue—Turkey would not have been an imperial problem. But Abdul
Hamid and his successors, the Young Turks, showed themselves incapable
of governing a vast empire and a heterogeneous population. They were
unable to resist the encroachments of foreigners on the administrative
independence of their country or to defend its borders against foreign
invasion. That the Ottoman Empire, under these circumstances, should
fall a prey to the imperialism of the Western nations was to be
expected. Its strategic importance was a “problem” of military and
naval experts. Its wealth was an irresistible lure to investors. Its
political instability was the excuse offered by European nations for
intervening in the affairs of the empire on behalf of the financial
interests of the business men or the strategic interests of the
empire-builders. Diplomatically, then, the region traversed by the
Bagdad Railway was an international “danger zone.”

The problem of maintaining stable government in Turkey was complicated
by the religious heritage of the Ottoman Empire. It was the homeland of
the Jews, the birthplace of Christianity, the cradle of Mohammedanism.
European crusaders had waged war to free the Holy Land from Moslem
desecrators; the followers of the Prophet had shed their blood in
defence of this sacred soil against infidel invaders; the sons of
Israel looked forward to a revival of Jewish national life in this,
their Zion. It is small wonder that Turkey-in-Asia was a great field
for missions—Protestant missions to convert the Mohammedan to the
teachings of Christ; Catholic missions to win over, as well, the
schismatics; Orthodox missions to retain the loyalty of adherents to
the Greek Church. Despite their cultural importance in the development
of modern Turkey, the missions presented serious political problems
to the Sultan. They hindered the development of Turkish nationalism
by teaching foreign languages, by strengthening the separatist spirit
of the religious minorities, and by introducing Occidental ideas and
customs. They weakened the autocracy by idealizing the democratic
institutions of the Western nations. They occasioned international
complications, arising out of diplomatic protection of the missionaries
themselves and the racial and religious minorities in whose interest
the missions were maintained. In no country more than in Turkey
have the emissaries of religion proved to be so valuable—however
unwittingly—as advance pickets of imperialism.

Complicating and bewildering as the Near Eastern question always has
been, the construction of the Anatolian and Bagdad Railways made
it the more complicating and bewildering. The development of rail
transportation in the Ottoman Empire was certain to raise a new crop
of problems: the strategic problem of adjusting military preparations
to meet new conditions; the economic problem of exploiting the great
natural wealth of Turkey-in-Asia; the political problem of prescribing
for a “Sick Man” who was determined to take iron as a tonic. These
problems, of course, were international as well as Ottoman in their
aspects. The economic and diplomatic advance of Germany in the Near
East, the resurgent power of Turkey, the military coöperation between
the Governments of the Kaiser and the Sultan were not matters which
the other European powers were disposed to overlook. Russia, pursuing
her time-honored policy, objected to any bolstering up of the Ottoman
Empire. France looked with alarm upon the advent of another power in
Turkish financial affairs and, in addition, was desirous of promoting
the political ambitions of her ally, Russia. Great Britain became
fearful of the safety of her communications with India and Egypt. Thus
the Bagdad Railway overstepped the bounds of Turco-German relationships
and became an international diplomatic problem. It was a concern of
foreign offices as well as counting houses, of statesmen and soldiers
as well as engineers and bankers.

The year 1888 ushered in an epoch of three decades during which two
cross-currents were at work in Turkey. On the one hand, earnest efforts
were made by Turks, old and young, to bring about the political and
economic regeneration of their country. On the other, the steady growth
of Balkan nationalism, the relentless pressure of European imperialism,
and the devastation of the Great War gradually reduced to ruins the
once great empire of Suleiman the Magnificent. The history of those
three decades is concerned largely with the struggles of European
capitalists to acquire profitable concessions in Asiatic Turkey and
of European diplomatists to control the finances, the vital routes
of communication, and even the administrative powers of the Ottoman
Government. The coincidence between the economic motives of the
investors and the political and strategical motives of the statesmen,
made Turkey one of the world’s foremost areas of imperial friction. Its
territories and its natural wealth were “stakes of diplomacy” for which
cabinets maneuvered on the diplomatic checkerboard and for which the
flower of the world’s manhood fought on the sands of Mesopotamia, the
cliffs of Gallipoli, and the plains of Flanders. To tell the story of
the Bagdad Railway is to emphasize perhaps the most important single
factor in the history of Turkey during the last thirty eventful years.




CHAPTER II

BACKWARD TURKEY INVITES ECONOMIC EXPLOITATION


TURKISH SOVEREIGNTY IS A POLITE FORMALITY

The reign of Sultan Abdul Hamid II (1876–1909) began with a disastrous
foreign war; it terminated in the turmoil of revolution. And during the
intervening three decades of his régime the Ottoman Empire was forced
to wage a fight for its very existence—a fight against disintegration
from within and against dismemberment from without.

One of the principal problems of Abdul Hamid was the government of his
vast empire in spite of domestic dissension and foreign interference.
His subjects were a polyglot collection of peoples, bound together
by few, if any, common ties, obedient to the Sultan’s will only when
overawed by military force. In Turkey-in-Asia alone, Turks, Arabs,
Armenians, Kurds, Jews, Greeks combined to form a conglomerate
population, professing a variety of religious faiths, speaking a
diversity of languages and dialects, and adhering to their own
peculiar social customs. Of these, the Armenians were receiving the
sympathy, support, and encouragement of Russia; the Kurds were living
by banditry, terrorizing peasants and traders alike; the Arabs were in
open revolt.[1]

Nature seemed to make more difficult the task of bringing these
dissentient peoples under subjection. The mountainous relief of the
Anatolian plateau lent itself to the success of guerrilla bands
against the gendarmerie; a high mountain barrier separated Anatolia,
the homeland of the Turks, from the hills and deserts of Syria and
Mesopotamia, the strongholds of the Arabs. The vast extent of the
empire—it is as far from Constantinople to Mocha as it is from New
York to San Francisco—still further complicated an already tangled
problem, for there were not even the poorest means of communication.
Under these circumstances the authority of the Sultan was as often
disregarded as obeyed. To police the country from the Adriatic to
the Indian Ocean, from the borders of Persia to the eastern coast of
the Mediterranean, was a physical impossibility. Universal military
service was enforced only in the less rebellious provinces. It was
almost out of the question to mobilize the military strength of the
empire for defence against foreign invasion or for the suppression of
domestic insurrection. Efforts to build up effective administration
from Constantinople were paralyzed by incompetent, insubordinate, and
corrupt officials.[2]

To these problems of maintaining peace and order at home there was
added the equally difficult problem of preventing the extension of
foreign interference and control in Ottoman affairs. The integrity
of Turkey already was seriously compromised by the hold which the
Great Powers possessed on Turkish governmental functions. Under the
Capitulations foreigners occupied a special and privileged position
within the Ottoman Empire. Nationals of the European nations and the
United States were practically exempt from taxation; they could be
tried for civil and criminal offences only under the laws of their own
country and in courts under the jurisdiction of their own diplomatic
and consular officials; in fact, they enjoyed favors comparable to
diplomatic immunity. By virtue of treaties with the Sultan the Powers
exercised numerous extra-territorial rights in Turkey, such, for
example, as the maintenance of their own postal systems.[3]

The finances of Turkey, furthermore, were under the control of
the Ottoman Public Debt Administration, composed almost entirely
of representatives of foreign bondholders and responsible only to
them. The Council of Administration of the Public Debt—composed of
one representative each from the United Kingdom, France, Germany,
Austria-Hungary, Italy, and Turkey—had complete control of assessment,
collection, and expenditure of certain designated revenues. In fact,
it controlled Ottoman financial policy and exercised its control in
the interest of European bankers and investors. Customs duties of
the Sultan’s dominions might be increased only with the consent of
the Great Powers. Almost all administrative and financial questions
in Turkey were directly or indirectly subject to the sanction of
foreigners.[4]

European governments were not content to interfere in the affairs of
the Ottoman Empire. They sought to destroy it. Their zeal in this
latter respect was limited only by their jealousies as to who should
become the heir of the Sick Man. Russia encouraged the Balkan and
Transcaucasian peoples to resist Turkish domination; France acquired
control of Tunis and built up a sphere of interest in Syria; Great
Britain occupied Egypt; Italy cast longing glances at Tripoli and
finally seized it; Greece fomented insurrection in Crete. Germany and
Austria-Hungary sought to bring all of Turkey into the economic and
political orbit of Central Europe. The Powers rendered lip-service to
the sovereignty and the territorial integrity of the Ottoman Empire,
but they never allowed their solemn professions to interfere with their
imperial practices. At best Turkish sovereignty was a polite fiction—it
was always a fiction, if not always polite.

The economic backwardness of Turkey emphasized the existing political
confusion and instability. From one end of the empire to the other,
it seemed, obstacle was piled on obstacle to prevent the modernizing
of the nation. Brigandage made trade hazardous; there were almost no
roads; the rivers of Anatolia and Cilicia were not navigable; the
mineral resources of the country had been neglected; internal and
foreign customs duties were the last straws to break the camel’s
back—business was taxed to death. Agriculture, the occupation of the
great majority of the people, was in a state of stagnation. The absence
of systems of drainage and irrigation made the countryside the victim
of alternate floods and droughts. Methods of cultivation were archaic:
the wooden plow, used by the Hittites centuries before, was among the
most advanced types of agricultural implements in use in Anatolia and
Syria; harvesting and threshing were performed in the most antiquated
manner; fertilization and cultivation were practically unknown. Markets
were inaccessible; the peasant could not dispose of a surplus if he
had it; therefore, production was limited to the needs of the family,
and the Turkish peasant acquired a widespread reputation for inherent
laziness.

Industrially, the Ottoman Empire had back of it a great past. The
fine and dainty fabrics of Mosul; the famous mosque lamps, wonder-art
of the glass-workers of Mesopotamia; the master workmanship of the
coppersmiths of Diarbekr; the tiles of Erzerum; the steel work and the
enamels of Damascus—all of these had been far-famed articles of world
commerce for centuries. But Turkey in the nineteenth and twentieth
centuries was, industrially as well as politically, a “backward
nation.” Her manufactures were conducted under the time-honored
handicraft system, which long since had been discarded by her European
neighbors. In other words, Turkey had not experienced the Industrial
Revolution which was the modern foundation of Western society and
civilization. But Turkey was victimized by the Industrial Revolution.
Her manufactures—with the exception of some luxuries of incomparable
craftsmanship—produced by outworn methods, found it increasingly
difficult to compete even in the markets of the Ottoman Empire with the
cheaper machine-made goods of Europe. The pitiless competition of the
industrialized West eliminated the cottage spinner and weaver, the town
tailor and cobbler. And yet for Turkey to adopt European methods—to
introduce the machine, the factory, and the factory town—was for a time
impracticable. There was no mobile fund of capital for the purpose,
and even Young Turks were not in a position to furnish the necessary
technical skill. As for foreign capital and foreign directing genius,
they could be obtained only under promises and guarantees which might
still further jeopardize the independence of the Ottoman Empire.[5]


THE NATURAL WEALTH OF ASIATIC TURKEY OFFERS ALLURING OPPORTUNITIES

It was not because of a lack of natural resources that Turkey was a
“backward nation.” The Sultan’s Asiatic dominions were rich in raw
materials, in fuel, and in agricultural possibilities. Anatolia, for
example, is a great storehouse of important metals. A fine quality of
chrome ore is to be found in the region directly south of the Sea
of Marmora and in Cilicia, constituting sources of supply which were
sufficient to assure Turkey first position among the chrome-producing
nations until 1900, when exports from Russia and Rhodesia offered
serious competition. There are valuable deposits of antimony in the
vilayets of Brusa and Smyrna, as well as commercially profitable lead
and zinc mines near Brusa, Ismid, and Konia. These metals, particularly
chrome and antimony, are not only valuable for peace-time industry, but
are almost indispensable in the manufacture of armor-plate, shells and
shrapnel, guns, and armor-piercing projectiles.[6]

In the vicinity of Diarbekr there are mines, which, although not
entirely surveyed, promise to yield large supplies of copper.
Southern Anatolia is the world’s greatest source of emery and other
similar abrasives. The famous meerschaum mines near Eski Shehr enjoy
practically a universal monopoly. Boracite, mercury, nickel, iron,
manganese, sulphur, and other minerals are to be found in Anatolia,
although there is some question of the commercial possibilities of the
deposits.[7]

Although Anatolia is not ranked among the principal fuel-producing
countries of the world, its coal deposits are not inconsiderable.
Operation of the chief of the coalfields, in the vicinity of Heraclea,
was begun in 1896 by a French corporation, _La Société française
d’Héraclée_, which invested in the enterprise during the succeeding
seven years more than a million francs. The venture proved to be
profitable, for by 1910 the mines were producing in excess of half a
million tons of coal annually. In addition to coal, Anatolia possesses
large deposits of lignite which, mixed with coal, is suitable fuel for
ships, locomotives, gasworks, and factories.[8]

Oil exists in large quantities in Mesopotamia and in smaller quantities
in Syria. The deposits are said to be part of a vast petroliferous area
stretching from the shores of the Caspian Sea to the coast of Burma.
As early as 1871 a commission of experts visited the valleys of the
Tigris and the Euphrates for the purpose of studying the possibility
of immediate exploitation of the petroleum wells in that region. They
reported that although there was a plentiful supply of petroleum of
good quality, difficulties of transportation made it extremely doubtful
if the Mesopotamian fields could compete with the Russian and American
at that time. The oil supply was then being exploited on a small scale
by the Arabs and proved to be of sufficient local importance, as well
as of sufficient profit, to warrant its being taken over by the Ottoman
Civil List, in 1888, as a government monopoly.[9]

In 1901 a favorable report by a German technical commission on
Mesopotamian petroleum resources stated that the region was a veritable
“lake of petroleum” of almost inexhaustible supply. It would be
advisable, it was pointed out, to develop these oilfields if for no
other purpose than to break the grip of the “omnipotent Standard,”
which, in combination with Russian interests, might speedily monopolize
the world’s supply.[10] Shortly afterward, Dr. Paul Rohrbach, a
celebrated German publicist, visited the Mesopotamian valley and
wrote that the district seemed to be “virtually soaked with bitumen,
naphtha, and gaseous hydrocarbons.” He was of the opinion that the oil
resources of the region offered far greater opportunity for profitable
development than had the Russian Transcaucasian fields.[11] In 1904
the _Deutsche Bank_, of Berlin, promoters of the Bagdad Railway,
obtained the privilege of making a thorough survey of the oilfields
of the Tigris and Euphrates valleys, with the option within one year
of entering into a contract with the Ottoman Government for their
exploitation.[12] Shortly thereafter Rear Admiral Colby M. Chester, of
the United States Navy, became interested in the development of the oil
industry in Asiatic Turkey.[13]

The Near East possesses not only mineral wealth but potential
agricultural wealth as well. Mesopotamia, for example, gives promise
of becoming one of the world’s chief cotton-growing regions. In
antiquity the Land of the Two Rivers was an important center of cotton
production, and recent experiments have held out great inducements for
a revival of cotton culture there. The climate of Mesopotamia is ideal
for such a purpose. The length of the summer season is from six to
seven months, with a constantly rising temperature, as contrasted with
a shorter season and variable temperatures in America and Egypt. Frost
is almost unknown. Rainfall is plentiful during the early part of the
year and scarce, as it should be, during the growing period. The soil
contains a good percentage of the essential phosphorus, potash, and
nitrogen. It is believed that Mesopotamia can grow cotton as good as
the best Egyptian and better than the best American product and at a
considerably higher yield per acre.[14]

Extravagant prophecies have been made regarding the rôle of irrigation
in bringing about an agricultural renaissance in Turkey-in-Asia. A
writer in the Vienna _Zeit_ of August 31, 1901, predicted that as
soon as the economic effects of irrigation and of the Bagdad Railway
should be fully realized, “Anatolia, northern Syria, Mesopotamia, and
Irak together will export at least as much grain as all of Russia
exports to-day.” Dr. Rohrbach claimed that this probably would prove
to be an exaggeration, but that certainly Mesopotamia would become
one of the great granaries of the world.[15] Sir William Willcocks,
the distinguished English engineer who had planned and supervised the
construction of the famous irrigation works of the Nile, was no less
enthusiastic about the prospects of Mesopotamia. “With the Euphrates
and Tigris floods really controlled,” he wrote, “the delta of the two
rivers would attain a fertility of which history has no record; and we
should see men coming from the West, as well as from the East, making
the Plain of Shinar a rival of the land of Egypt. The flaming swords
of inundation and drought would have been taken out of the hands of
the offended Seraphim, and the Garden of Eden would have again been
planted.... Speaking in less poetical language we might say that the
value of every acre in the joint delta of the two rivers would be
immediately trebled before the irrigation works were carried out,
and again increased many fold more the day the works were completed.
Every town and hamlet in the valley from Bagdad to Basra would find
itself freed from the danger, expense, and intolerable nuisance of
flooding, and the resurrection of this ancient land would have been an
accomplished fact.”[16]

Here in the Near East, then, was a great empire awaiting exploitation
by Western capital and Western technical skill. No man could adequately
predict its ultimate contributions in raw materials to Western
industry, or accurately foretell its ultimate capacity in consumption
of the products of Western factories, or confidently prophesy its
final rôle in the promotion of Western commerce. But a trained and
intelligent observer, surveying the situation at the opening of the
twentieth century, could have said with a certain amount of assurance
that there were two essential conditions to even a partial realization
of the economic possibilities of the Ottoman Empire: the provision of
adequate railway communications and the establishment of political
security. The former of these conditions was met, in part, during
the régime of Abdul Hamid and his successors, the Young Turks. The
second, in spite of earnest efforts by loyal Ottomans, has not yet been
satisfied.


FORCES ARE AT WORK FOR REGENERATION

Probably there was no group of men more fully aware of the needs of
Turkey than the members of the Ottoman Public Debt Administration.
They were concerned, it is true, solely with obtaining prompt payment
of interest and principal of Ottoman bonds and with improving Ottoman
credit in European financial markets. But the accomplishment of this
purpose, they realized, was altogether out of the question in the
continued presence of political instability and economic stagnation.
One must feed the goose which lays the golden eggs. They sought some
means, therefore, of establishing domestic order in the Ottoman Empire,
of lessening the constant danger of foreign invasion, and of providing
a tonic for the economic life of the nation. All of these purposes,
it was believed, would be served by the encouragement of railway
construction in Turkey.

The interest and imagination of the Ottoman Public Debt Administration
were stimulated by the plans of the eminent German railway engineer
Wilhelm von Pressel, one of the Sultan’s technical advisers. Von
Pressel had established an international reputation because of his
services in the construction of important railways in Switzerland
and the Tyrol. In 1872 he was retained by the Ottoman Government to
develop plans for railways in Turkey, and a few years later he assumed
a prominent part in the construction of the trans-Balkan lines of the
Oriental Railways Company. No one knew more than von Pressel of the
railway problems of Turkey; few were more enthusiastic about the rôle
which rail communications might play in a renaissance of the Near East.

Von Pressel foresaw the possibility of establishing a great system of
Ottoman railways extending from the borders of Austria-Hungary to the
shores of the Persian Gulf. In this manner the far-flung territories
of the empire would be brought into communication with one another
and with the capital, and an era would be begun of unprecedented
development in agriculture, mining, and commerce. A market would be
provided for the crops of the peasantry; the hinterland of the ports
of Constantinople, Smyrna, Mersina, Alexandretta, and Basra would
be opened up; heretofore inaccessible mineral resources would be
exploited. Foreign commerce might be restored to the prosperity it had
once enjoyed before the Commercial Revolution of the sixteenth century
replaced the caravan routes of the Near East by the new sea routes to
the Indies. Mesopotamia might be transformed into a veritable economic
paradise. The railways also would insure political stability, for rapid
mobilization and transportation of the gendarmerie to danger points
would enable the Sultan’s Government to suppress rebellions of the
turbulent tribesmen of Kurdistan, Mesopotamia, and Arabia. Peace and
prosperity were goals within easy reach, thought von Pressel, if Turkey
could be provided with a comprehensive system of railways.[17]

To the Ottoman Public Debt Administration peace and prosperity were
means to reaching another goal—a full treasury. Greater income for
the Turkish farmer, miner, artisan, and trader would mean greater
opportunities for the extension of tax levies. And the greater the tax
receipts the greater would be the payments to the European bondholders
and the greater the value of the bonds themselves. Obviously, railway
construction would improve Turkish credit in the financial centers
of the world. But, for the time, the Ottoman Government had at its
disposal neither the capital nor the technical skill to carry into
execution the plans for an ambitious program of railway building, and
private enterprise showed no disposition to interest itself without
substantial guarantees. It was under these circumstances, therefore,
that the Ottoman Public Debt Administration recommended to the Sultan
that certain revenues of his empire should be set aside for the
payment of subsidies to railway companies.[18]

The Public Debt Administration were not unaware that the payment of
railway subsidies would materially increase the amount of the imperial
debt and mortgage certain of the imperial revenues. But they were
confident that railways would be a powerful stimulant to economic
prosperity in Turkey and would ultimately increase the revenues of the
Government by an amount in excess of the amount of the subsidies. They
believed that generous initial expenditures in a worth-while enterprise
might yield generous final returns. As an instance of this they could
point to the development of sericulture in Turkey. Under the auspices
of the Ottoman Public Debt Administration tens of thousands of dollars
were expended in the reclamation of more than 130,000 acres of land and
the planting thereon of over sixty million mulberry trees. As a result,
the silk crop increased more than tenfold during the years 1890–1910,
with a result that there was a corresponding increase in the 10% levy
(or tithe) on agricultural products in the regions affected. If the
Public Debt Administration were actuated by self-interest, at least it
was intelligent and far-sighted self-interest.[19]

But Sultan Abdul Hamid was no less interested than foreign bondholders
in the extension of railway construction in his empire. Railways could
be utilized, he believed, to serve his dynastic and imperial ambitions.
Effective transportation was essential to the solution of at least
three vexatious political problems: first, the problem of exercising
real, as well as nominal, authority over rebellious and indifferent
subjects in Syria, Mesopotamia, Kurdistan, Arabia, and other outlying
provinces; second, the problem of compelling these provinces, by
military force if necessary, to contribute their share of blood and
treasure to the defence of the empire;[20] third, the problem of
perfecting a plan of mobilization for war, on whatever front it might
be necessary to conduct hostilities. The maintenance of order, the
enforcement of universal military service, the collection of taxes in
all provinces of the empire, and defence against foreign invasion—all
of these policies would be seriously handicapped, if not paralyzed, by
the absence of adequate railway communications.

For strategic reasons, if for no other, Abdul Hamid would have
especially favored the Bagdad Railway. For strategic reasons, also,
he supplemented the Bagdad system with the famous Hedjaz Railway—from
Damascus to the holy cities of Medina and Mecca—one of the achievements
of which the wily old Sultan was most proud.[21] The completion of
these two railways would have extended Turkish military power from the
Black Sea to the Persian Gulf, from the Bosporus to the Persian Gulf.
General von der Goltz epitomized their military importance in the
following terms: “The great distance dividing the southern provinces
from the rest of the empire was not the only difficulty in holding
them in control; it made Turkey unable to concentrate her strength in
case of great danger in the north. It must not be forgotten that the
Osmanlie Empire in all former wars on the Danube and in the Balkans has
only been able to utilize half her forces. Not only did the far-off
provinces not contribute men, but, on the contrary, they necessitated
strong reënforcements to prevent the danger of their being tempted into
rebellion. This will be quite changed when the railroads to the Persian
Gulf and the Red Sea are completed. The empire will then be rejuvenated
and have renewed strength.”[22] The General might have added that the
new railways might conceivably be utilized for the transportation to
the Sinai Peninsula of an army intended to threaten the Suez Canal and
Egypt.[23]

The Ottoman Government made it plain from the very start that the
Bagdad Railway, in particular, was intended to serve military, as
well as purely economic, purposes. The concession of 1903 contained a
number of explicit provisions regarding official commandeering of the
lines for the objects of suppressing rebellion, conducting military
maneuvers, or mobilizing in the event of war. Furthermore, the Ottoman
military authorities insisted that strategic considerations be taken
into account when the railway was constructed. For example, the
sections of the Bagdad line from Adana to Aleppo were carried through
the Amanus Mountains, in spite of formidable engineering difficulties
and enormous expense, although the railway could have been carried
along the Mediterranean coast with greater ease and economy. The latter
course, however, would have exposed to the guns of a hostile fleet the
jugular vein of Turkish rail communications. From an economic point of
view the Amanus tunnels were the most expensive and most unremunerative
part of the Bagdad Railway; strategically, they were indispensable.
This point was emphasized in 1908, when the Ottoman General Staff
refused to consider a proposal to divert the line from the mountain
passes to the shore.[24]

One of the most frequent criticisms of Turkish railway enterprises in
general, and of the Bagdad Railway in particular, is that they were
military as well as economic in character. Such criticisms, however,
must be discounted, for potentially every railway is of military value.
And in the European countries few railways were constructed without
frank consideration of their adaptability to military purposes in time
of war. Railways, in fact, were one of the most important branches of
Europe’s “preparedness” for war. Which European nation, therefore,
was in a position to cast a stone at Turkey for adopting this lesson
from the civilized Occident? If the Ottoman Empire had a right to
prepare for defence against invasion, it had the right to make that
defence effective—at least until such time as its neighbors, Russia and
Austria, should abandon military measures of potential menace to Turkey.

Germans and Turkish Nationalists contended that there was a certain
amount of cant in the righteous indignation of the Powers that Turkey
should become militaristic. Was Russia, they said, as much interested
in the welfare of Turkey as she was angered at the active measures
of the Sultan to prevent a Russian drive at Constantinople via the
southern shore of the Black Sea? Was France as much concerned with the
safety of Turkey as she was solicitous of the imperial interests of her
ally? Was Great Britain engaged in preserving the peace of the Near
East, or was she fearful of a stiffened Turkish defence of Mesopotamia
or of a Turkish thrust at Egypt?[25] For the Sultan to have admitted
that foreign powers had the right to dictate what measures he might
or might not take for the defence of his territories would have been
equivalent to a surrender of the last vestige of his sovereignty.
Obviously this was an admission he could not afford to make.

Whatever else Abdul Hamid may have been, he was no fool. To assume
that this shrewd and unscrupulous autocrat walked into a German trap
when he granted the Bagdad Railway concession is naïve and absurd.
Abdul Hamid was not in the habit of giving things away, if he could
avoid it, without adequate compensation for himself and his empire.
As Lord Curzon said, there was no axiom dearer to the Sultan’s heart
than that charity not only begins, but stays, at home.[26] Abdul Hamid
knew that the granting of railway subsidies would mortgage his empire.
He knew that mortgages have their disadvantages, not the least of
which is foreclosure. But mortgages also have their advantages. Abdul
Hamid granted extensive railway concessions, carrying with them heavy
subsidies, because he hoped the new railways would strengthen his
authority within the Ottoman Empire and improve the political position
of Turkey in the Near East.


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Count L. Ostrorog, _The Turkish Problem_ (Paris, 1915, English
translation, London, 1919), Chapter II; Leon Dominian, _The Frontiers
of Language and Nationality in Europe_ (London, 1917); V. Bérard, _Le
Sultan, l’Islam, et les puissances_ (Paris, 1907), pp. 15 _et seq._;
E. Fazy, _Les Turcs d’aujourd’hui_ (Paris, 1898); A. Vamberry, _Das
Türkenvolk_ (Leipzig, 1885); A. Geiger, _Judaism and Islam_ (London,
1899). Regarding Arab nationalism, in particular, _cf._ N. Azoury, _Le
réveil de la nation arabe_ (Paris, 1905); E. Jung, _Les puissances
devant la révolte arabe_ (Paris, 1906). A fascinating tale of the
Arab separatist movement during the Great War is that of L. Thomas,
“Lawrence: the Soul of the Arabian Revolution,” in _Asia_ (New York),
April, May, June, 1920. _Cf._, also, H. S. Philby, _The Heart of
Arabia_ (2 volumes, New York, 1923).

[2] There is a wealth of material upon the problems of the Ottoman
Empire during the reign of Abdul Hamid. In particular, consult the
following: A. Vamberry, _La Turquie d’aujourd’hui et d’avant quarante
ans_ (Paris, 1898); C. Hecquard, _La Turquie sous Abdul Hamid_ (Paris,
1901); G. Dory, _Abdul Hamid Intime_ (Paris, 1901); Sir Edwin Pears,
_The Life of Abdul Hamid_ (London, 1917); W. Miller, _The Ottoman
Empire, 1801–1913_ (Cambridge, 1913), Chapters XVI-XVIII; N. Verney and
G. Dambmann, _Les puissances étrangères dans le Levant, en Syrie, et
en Palestine_ (Paris, 1900); Baron von Oppenheim, _Von Mittelmeer zum
persischen Golfe_ (2 volumes, Berlin, 1899–1900); Lavisse and Rambaud,
_Histoire Générale_ (12 volumes, 1894–1901), Volume XI, Chapter XV;
Volume XII, Chapter XIV; R. Davey, _The Sultan and His Subjects_
(London, 1897); V. Cardashian, _The Ottoman Empire of the Twentieth
Century_ (Albany, N. Y., 1908).

[3] The texts of the various treaties of capitulation may be found in
G. E. Noradounghian (ed.), _Recueil d’actes internationaux de l’Empire
ottoman, 1300–1902_ (4 volumes, Paris, 1897–1903), Volume I, documents
numbers 153, 170, 196, 201, etc., _ad lib._, Volume II, numbers 499,
593, etc., _ad lib._; also _Recueil des traités de la Porte ottomane
avec les puissances étrangères, 1536–1901_ (10 volumes, Paris,
1864–1901), _passim_; E. A. Van Dyck, _Report on the Capitulations of
the Ottoman Empire_, Forty-seventh Congress, Special Session, Senate
Executive Document No. 3, First Session, Senate Executive Document
No. 87 (Washington, 1881–1882); G. Pelissie du Rausas, _Le régime des
capitulations dans l’Empire ottoman_ (2 volumes, Paris, 1902–1905); A.
R. von Overbeck, _Die Kapitulationen des osmanischen Reiches_ (Breslau,
1917); W. Lehman, _Die Kapitulationen_ (Weimar, 1917); P. M. Brown,
_Foreigners in Turkey, Their Juridical Status_ (Princeton, 1914).

[4] For an account of the establishment, functions, and operation
of the Ottoman Public Debt Administration, _cf._ George Young
(ed.), _Corps de droit ottoman—Recueil des codes, lois, réglements,
ordonnances, et actes les plus importants du droit intérieur, et
d’études sur le droit coutumier de l’Empire ottoman_ (7 volumes,
Oxford, 1905–1906), Volume V, Chapter LXXXV; A. Heidborn, _Manuel de
droit public et administratif de l’Empire ottoman_ (2 volumes, Vienna,
1912), Volume II; C. Morawitz, _Les finances de Turquie_ (Paris, 1902);
A. du Velay, _Essai sur l’histoire financière de la Turquie_ (Paris,
1903), Parts V and VI; L. Delaygue, _Essai sur les finances ottomanes_
(Paris, 1911).

[5] There were a few factories erected in Turkey by foreign
capitalists, notably those of the Oriental Carpet Manufacturers,
Ltd., the American Tobacco Company, and the _Deutsche-Levantischen
Baumwollgesellschaft_. In general, however, the factory and the factory
town were not common phenomena in Asiatic Turkey. An interesting
account of the effects of the Industrial Revolution upon economic
conditions in Turkey is that of Talcott Williams, _Turkey a World
Problem of Today_ (Garden City, 1921), pp. 268 _et seq._; W. S.
Monroe, _Turkey and the Turks: an Account of the Lands, Peoples and
Institutions of the Ottoman Empire_ (London, 1909), Chapter X; M. J.
Garnett, _Turkish Life in Town and Country_ (London, 1904).

[6] J. E. Spurr (ed.), _Political and Commercial Geology_ (New York,
1921), pp. 109, 115–116, 172–173, 184–185; _Anatolia_, No. 17 in a
series of handbooks published by the Historical Section of the Foreign
Office (London, 1920), pp. 88–90.

[7] Spurr, _op. cit._, pp. 358–359; _Armenia and Kurdistan_, No. 62 of
the Foreign Office Handbooks, p. 60; L. Dominian, “The Mineral Wealth
of Asia Minor,” in _The Near East_, May 26, 1916, p. 91; E. Banse,
_Auf den Spuren der Bagdadbahn_ (Weimar, 1913), pp. 140–145; L. de
Launay, _La Géologie et les richesses minerales de l’Asie_ (Paris,
1911); R. Fitzner, _Anatolien, Wirtschaftsgeographie_ (Berlin, 1902);
P. Rohrbach, _Die wirtschaftliche Bedeutung Westasiens_ (Halle, 1902);
G. Carles, _La Turquie économique_ (Paris, 1906); E. Mygind, “Anatolien
und seine wirtschaftliche Bedeutung,” in _Die Balkan Revue_, Volume 4
(1917), pp. 1–6.

[8] L. Dominian, “Fuel in Turkey: an Analysis of Coal Deposits,” in
_The Near East_, June 23, 1916, pp. 186–187; J. Kirsopp, “The Coal
Resources of the Near East,” _ibid._, October 10, 1919, pp. 393–394.

[9] F. Maunsell, “The Mesopotamian Petroleum Field,” in the
_Geographical Journal_, Volume IX (1897), pp. 523–532; L. Dominian,
“Fuel in Turkey: Petroleum,” in _The Near East_, July 14, 1917;
_Mesopotamia_, No. 63 of the Foreign Office Handbooks, pp. 34, 85–86;
_Syria and Palestine_, No. 60 of the Foreign Office Handbooks, p. 111.

[10] _Parliamentary Papers_, 1921, Cmd. 675; _The Near East_, October
26, 1917, p. 516.

[11] _Die Bagdadbahn_ (1903), pp. 26–28.

[12] _Parliamentary Papers_, 1921, Cmd. 675. For some reason or other
this option was allowed to lapse.

[13] H. Woodhouse, “American Oil Claims in Turkey,” in _Current
History_ (New York), Volume XV (1922), pp. 953–959.

[14] _Report of the Department of Agriculture in Mesopotamia, 1920_
(Bagdad, 1921); _The Cultivation of Cotton in Mesopotamia_ (Bagdad,
1922); “Cotton Growing in Mesopotamia,” in the _Bulletin of the
Imperial Institute_, Volume 18 (1920), pp. 73–82.

[15] Rohrbach, _op. cit._, pp. 30–46.

[16] Quoted in _The Near East_, October 6, 1916, pp. 545–546. For an
elaboration of the views of Sir William Willcocks see the following
of his books and articles: _The Recreation of Chaldea_ (Cairo, 1903);
_The Irrigation of Mesopotamia_ (London, 1905, and Constantinople,
1911); “Mesopotamia, Past, Present and Future,” in the _Geographical
Journal_, January, 1910, pp. 1–18. For further works on the economic
resources of Turkey-in-Asia consult, also, the following: K. H. Müller,
_Die wirtschaftliche Bedeutung der Bagdadbahn_ (Hamburg, 1917); L.
Blanckenhorn, _Syrien und die deutsche Arbeit_ (Weimar, 1916); L.
Schulmann, _Zur türkischen Agrarfrage_ (Weimar, 1916); A. Ruppin,
_Syrien als Wirtschaftsgebiet_ (Berlin, 1917).

[17] W. von Pressel, _Les chemins de fer en Turquie d’Asie_ (Zurich,
1902), pp. 4–5, 52–59, etc. _ad lib._ For statements of the importance
of von Pressel in the development of railways in Turkey _cf._ André
Chéradame, _La question d’Orient: la Macédoine, le chemin de fer
de Bagdad_ (Paris, 1903), pp. 25 _et seq._; C. A. Schaefer, _Die
Entwicklung der Bagdadbahnpolitik_ (Weimar, 1916), p. 13.

[18] _Corps de droit ottoman_, Volume IV, pp. 62–64.

[19] Sir H. P. Caillard, Article “Turkey” in the _Encyclopedia
Britannica_, eleventh edition, Volume 27, p. 439; _Reports of the
Ottoman Public Debt_ (London, 1884 _et seq._), _passim._

[20] In Turkey all Mussulmans over 20 years of age were liable to
military service for a period of 20 years, 4 of which were with the
colors in the regular army. Residents in the outlying territories,
notably the Arabs and the Kurds, constantly avoided military service
and went unpunished because of the inability of the Government to send
punitive expeditions into these regions. Railways would have produced
satisfactory bases of operations for such expeditions and would have
shortened their lines of communication. _The Statesman’s Year Book_,
1903, pp. 1168–1170.

[21] The Hedjaz Railway was a great national enterprise which indicated
the strength of Moslem feeling in Turkey and which proved the desire of
the Ottoman Government to construct national railways as far as capital
and technical skill could be obtained. So far as Abdul Hamid was
concerned, the railway was an attempt to gain prestige for his claim to
the Caliphate, as well as a move to strengthen his political position
in Syria and the Hedjaz. In April, 1900, the Sultan announced to the
Faithful his determination to construct a railway from Damascus to the
holy cities of Medina and Mecca. An appeal was issued to Mohammedans
the world over for funds to carry out the work. The Sultan headed the
list with a subscription of about a quarter of a million dollars, and
by 1904 over three and a half million dollars had been collected. The
only compulsory contributions were the levies of 10% on the salary
of every official in the civil and military service of the empire.
It is estimated that the contributions eventually amounted to almost
fifteen million dollars. The engineers in charge of the construction
were Italians, although the great bulk of the work was done by the army
and the peasantry. Nearly seven hundred thousand persons were employed
on the construction work at one time or another, the non-Moslems
being replaced as quickly as Mussulmans could be trained to take
their places. On August 31, 1908, the thirty-second anniversary of
the accession of Abdul Hamid, the railway was completed to Medina,
where construction was halted temporarily because of the Young
Turk Revolution and the international complications which followed
it. _Corps de droit ottoman_, Volume IV, pp. 242–244; A. Hamilton,
_Problems of the Middle East_ (London, 1909), pp. 273–292; _Annual
Register_, 1908, pp. 328–329.

[22] Quoted by Hamilton, _op. cit._, pp. 274–275.

[23] _Via_ the Bagdad Railway and the Syrian system Turkish troops
could have been transported to a point less than 200 miles from Suez. A
successful attack on the Canal, of course, would have severed British
communications with the East. In addition, it would have given the
Sultan an opportunity to attack, and assert his suzerainty over, Egypt.
Dr. Rohrbach made a great point of this alleged menace to the British
position in Egypt. _Cf._ _Die Bagdadbahn_, pp. 18–19; _German World
Policies_, pp. 165–167. This program, however, would have been an
altogether too ambitious one for the military strength of the Ottoman
Empire, which had such far-flung frontiers to defend. In any event,
British statesmen seemed to realize that the Sinai Peninsula was a
formidable natural defence against an attack on the Suez Canal and that
such an expedition would be merely a pin-prick in the imperial flesh.
_Parliamentary Debates, House of Lords_, fifth series, Volume 7 (1911),
pp. 601 _et seq._ The termination in a fiasco of the Turkish drive of
1914–1915 against the Canal confirmed this prophecy.

[24] _Infra_, p. 83; Kurt Wiedenfeld, _Die deutsch-türkische
Wirtschaftsbeziehungen_ (Leipzig, 1915), p. 23; _Report of the Bagdad
Railway Company_, 1908, pp. 4–5.

[25] _Cf._, _e.g._, K. Helfferich, _Die deutsche Türkenpolitik_, p. 22.

[26] _Persia and the Persian Question_, Volume I, p. 634.




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._,
Part III; J. Courau, _La locomotive en Turquie d’Asie_ (Brussels,
1895), pp. 18–47; _Corps de droit ottoman_, Volume IV, pp. 117 _et seq._

[3] _Corps de droit ottoman_, Volume IV, pp. 202–223, 237–242, etc.

[4] _Bulletin de la Chambre de Commerce française de Constantinople_,
August 31, 1888, p. 10; September 30, 1888, p. 31. _Cf._, also a
prospectus issued by a banker, Mr. W. J. Alt, “Heads of a Convention
for the extension of the Haidar Pasha-Ismid Railway” (London, 1886), a
copy of which was loaned to the author by Mr. Ernest Rechnitzer.

[5] The story of these negotiations is well told in a new book by
Dr. Karl Helfferich, _Georg von Siemens—ein Lebensbild_ (Leipzig,
1923), the proofs of which I have had the privilege of reading. For an
official copy of the convention and by-laws of the Anatolian Railway
Company (_Firman Impérial de concession et statuts de la Société
du Chemin de Fer Ottomane d’Anatolie_, Constantinople, 1889), I am
indebted to Dr. Arthur von Gwinner, of the _Deutsche Bank_. _Cf._,
also, _Administration de la dette publique ottomane—Rapport sur les
opérations de l’année 1888_ (Constantinople, 1889); _Report of the
Anatolian Railway Company_, 1889, pp. 1–2; _Corps de droit ottoman_,
Volume IV, pp. 120–142.

[6] Helfferich, _op. cit._, Part V; A. P. Brüning, _Die Entwicklung
des ausländischen, speciell des überseeischen deutschen Bankwesens_
(Berlin, 1907), pp. 14 _et seq._; _Report of the Anatolian Railway
Company_, 1889, p. 3; _Report of the Deutsche Bank_, 1892, p. 4, 1890,
p. 4.

[7] _Report of the Anatolian Railway Company_, 1891, p. 20, 1892, pp.
16, 23.

[8] _Actes de la concession du chemin de fer Eski Shehr-Konia_
(Constantinople, 1893); _Report of the Anatolian Railway Company_,
1896, pp. 4, 9.

[9] _Corps de droit ottoman_, Volume IV, pp. 191–197. The junction of
the two systems at Afiun Karahissar did not immediately materialize.
The distance from that town to Constantinople is longer by sixty-six
kilometres than the distance to Smyrna; the latter port, therefore, is
the better natural outlet for the products of Anatolia. This diversion
of traffic to Smyrna the Anatolia Railway sought to avoid, it is
said, by granting discriminatory rates in favor of through freight
to Constantinople over its own lines. A rate war ensued between the
Anatolian and Smyrna-Cassaba systems, and neither was willing to permit
an actual joining of the tracks at Afiun Karahissar, with the result
that for years the rails of the two roads lay a comparatively few yards
apart. This absurd situation, so obviously detrimental to the interests
of the two roads, was remedied by an agreement of 1899. _Infra_, pp.
59–60. _Cf._, also R. LeCoq, _Un chemin de fer en Asie Mineure_ (Paris,
1907), pp. 23–24; _Report of the Anatolian Railway Company_, 1899, p. 3.

[10] A summary of the report of the Commission is to be found in
_Diplomatic and Consular Reports_, No. 3140 (London, 1903), pp. 26
_et seq._ A statement of its membership and purposes is given in the
_Report of the Anatolian Railway Company_, 1899, p. 9.

[11] _Report of the Anatolian Railway Company_, 1897, p. 3.

[12] _Alldeutsche Blätter_, December 17, 1899. It should be borne in
mind, however, that until the Bagdad Railway concession was granted
French financiers held the lead in the number of kilometres of railway
in operation or contracted for. The situation in 1898 was as follows:

_British_ Kiloms. Smyrna-Aidin 373 Mersina-Adana 67 —- Total 440

_French_ Kiloms. Smyrna-Cassaba 512 Jaffa-Jerusalem 87 Beirut-Damascus
247 Damascus-Aleppo 420 ——- Total 1,266

_German_ Kiloms. Haidar Pasha-Ismid 91 Ismid-Angora 485 Eski
Shehr-Konia 444 ——- Total 1,020

All of the British and German lines were in operation in 1898, whereas
the French Syrian Railways were only partially completed.

[13] _Statistisches Handbuch für das deutsche Reich_, Volume 2, pp.
506, 510; _Diplomatic and Consular Reports_, No. 2950 (1902), pp. 5,
23; _Turkey in Europe_, No. 16 of the Foreign Office Handbooks, pp.
86–87.

[14] J. Riesser, _Die deutschen Grossbanken und ihre Konzentration im
Zusammenhang mit der Entwicklung der Gesamtwirtschaft in Deutschland_
(third edition, Jena, 1909); translated into English and published as
Senate Document No. 593, Sixty-first Congress, Second Session, 1911.
References here given are to the translation. In this connection _cf._
“The Oversea and Foreign Business of the German Credit Banks,” pp. 420
_et seq._

[15] _Syria and Palestine_, p. 126; _The Times_, October 28, 1898,
August 2 and 16, 1899.

[16] Karl Helfferich, _Die deutsche Türkenpolitik_ (Berlin, 1921), pp.
10 _et seq._; J. A. R. Marriot, _The Eastern Question_ (Oxford, 1917),
pp. 347 _et seq._

[17] L. Ostrorog, _The Turkish Problem_ (London, 1919), pp. 52–53; E.
Dutemple, _En Turquie d’Asie_ (Paris, 1883), pp. 131 _et seq._

[18] For a biographical account of General von der Goltz (1843–1916)
_cf._ F. W. Wile, _Men Around the Kaiser_ (Philadelphia, 1913),
Chapter XXVI. Bismarck consented to the appointment of von der Goltz’s
military mission—which was not in accord with his general Eastern
policy—as a sort of insurance against the possibility that chauvinism,
Pan-Slavism, and anti-German elements in Russia should gain the
ascendancy at the court of the Tsar. In such an event it might be
possible to utilize Turkish bayonets and Turkish artillery, especially
if they had been trained by Prussian officers. _Memoirs of Prince
Hohenlohe-Schillingsfürst_ (English translation, New York, 1906),
Volume II, p. 268.

[19] _Recueil d’actes internationaux de l’Empire Ottoman_, Volume IV
(1903), Document No. 960.

[20] Mary E. Townsend, _Origins of Modern German Colonialism_ (New
York, 1921), Chapters V-VII; Prince Bismarck, _Reflections and
Reminiscences_ (New York, 1899), Volume II, pp. 233 _et seq._

[21] For this letter, hitherto unpublished, I am indebted to Dr. Karl
Helfferich, son-in-law of the late George von Siemens.

[22] The italics are mine.

[23] _Die grosse Politik der europäischen Kabinette, 1871–1914_
(Berlin, 1922 _et seq._), Volume VI, pp. 360–361. (A compilation
of documents from the files of the Foreign Office, edited by a
non-partisan commission appointed by the Government of the German
Republic.) Of Bismarck’s policy in the Near East the Ex-Kaiser writes,
“Bismarck spoke quite disdainfully of Turkey, of the men in high
position there, and of conditions in that land.– I thought I might
inspire him in part with essentially more favorable opinions, but my
efforts were of little avail.... Prince Bismarck was never favorably
inclined toward Turkey and never agreed with me in my Turkish policy.”
W. von Hohenzollern, _My Memoirs, 1878–1918_ (New York, 1922), p. 27.

[24] _Diplomatic and Consular Reports_, No. 2950 (1902), p. 20.

[25] For information regarding the appointment of Baron Marschall to
Constantinople the author is indebted to Dr. Arthur von Gwinner, who
believes that the Baron was being sentenced to political exile when he
was detailed to the Sublime Porte, but that his opponents overlooked
the possibilities of the embassy at the Ottoman capital. Wile, _op.
cit._, Chapter XVIII, gives a short biographical account of Baron
Marschall.

[26] _Cf._ E. Lamy, “La France du Levant: Voyage de l’Empereur
Guillaume II,” in _Revue des deux mondes_, Volume 150 (1898), pp.
880–911, Volume 151 (1899), pp. 315–348; E. Lewin, _The German Road
to the East_ (New York, 1917), pp. 105 _et seq._; C. S. Hurgronje,
_The Holy War, Made in Germany_ (New York, 1915), pp. 70–71; _The All
Highest Goes to Jerusalem_, being an English translation of a series of
articles published in _Le Rire_ (Paris) during 1898 (New York, 1917).
In Germany the royal pilgrimage was intended to be taken seriously.
Herr Heine, of the Munich _Simplicissimus_, was convicted of _lèse
majesté_ and imprisoned for six months for having published humorous
cartoons of the Kaiser and his party on their travels. _The Annual
Register_, 1898, pp. 255–258.

[27] The author found some difference of opinion in Germany regarding
the connection between the Kaiser’s visit and the pending Anatolian
and Bagdad concessions. Dr. von Gwinner denies that there was any such
purpose behind the Emperor’s trip to the East—or, at least, if there
was, that it was unsolicited by the promoters and not looked upon with
favor by them. Dr. Helfferich, on the other hand, is convinced that
His Majesty was directly concerned with the desirability of obtaining
additional railway concessions for German financiers. The Kaiser
himself agrees with Dr. Helfferich. _Cf._, _My Memoirs, 1878–1918_, p.
86.

[28] _Cf._ foreign correspondence in _The Times_ (London), October 25,
1898, and days immediately thereafter.

[29] For an analysis of this situation see _The Manchester Guardian_,
July 31, 1899, which took the stand that “for no sort of mercantile
gain would a nation be justified in making friendly advances to the
blood-stained tyrant of Armenia.”

[30] In this connection see Leonard Woolf, _Economic Imperialism_
(London and New York, 1920), Chapter I; Ramsay Muir, _The Expansion of
Europe_ (New York, 1917), Chapter I; J. E. Spurr (editor), _Political
and Commercial Geology_ (New York, 1920), Chapter XXXII, entitled
“Who Owns the Earth?”; Aspi-Fleurimont, “La Question du coton,”
in _Questions diplomatiques et coloniales_, Volume 15 (1903), pp.
429–432; J. A. B. Scherer, _Cotton as a World Power_ (New York, 1922).
In addition, for the wider aspects of imperialism, consult H. N.
Brailsford, _The War of Steel and Gold_ (New edition, London, 1915),
Chapter II; F. C. Howe, _Why War?_ (New York, 1916), _passim_; Walter
Lippman, _The Stakes of Diplomacy_ (New York, 1915); J. A. Hobson,
_Imperialism: A Study_ (London, 1902).

[31] W. H. Dawson, _The Evolution of Modern Germany_ (New York, 1908),
Chapter XII. P. Rohrbach, _Deutschland unter den Weltvölkern_, p. 17.

[32] Riesser, _op. cit._, pp. 110, 121.

[33] It should be remarked here that the author is not unaware of the
fallacy of speaking of “German trade” and “German industry.” He is
cognizant of the fact that trade takes place not between countries, but
between individuals. If he anthropomorphizes the German Empire for the
purposes of this description, it is not because of either ignorance or
malice, but for convenience.

[34] For further consideration of German economic progress during the
late nineteenth century see: Dawson, _op. cit._, Chapters III, IV,
XII, XVI; E. D. Howard, _The Cause and Extent of the Recent Industrial
Progress of Germany_ (New York, 1907); T. B. Veblen, _Imperial Germany
and the Industrial Revolution_ (New York, 1915); W. H. Dawson,
_Industrial Germany_ (London, 1913); Karl Helfferich, _Germany’s
Economic Progress and National Wealth_ (New York, 1913); G. Blondel,
_L’Essor industriel et commercial du peuple allemand_ (Paris, 1900).

[35] Paul Dehn, _Weltwirtschaftliche Neubildungen_ (Berlin, 1904),
_passim_.

[36] Bernhard von Bülow, _Imperial Germany_ (English translation, New
York, 1914), pp. 17, 18–20.

[37] The extent of German economic control of central and eastern
Europe before the War is indicated by Mr. J. M. Keynes, in his book
_The Economic Consequences of the Peace_ (New York, 1920), pp. 17–18:
“Germany not only furnished these countries with trade, but in the case
of some of them supplied a great part of the capital needed for their
own development. Of Germany’s pre-war foreign investments, amounting
in all to about six and a half billion dollars, not far short of two
and a half billions was invested in Russia, Austria-Hungary, Bulgaria,
Rumania, and Turkey. And by the system of ‘peaceful penetration’ she
gave these countries not only capital, but what they needed hardly
less, organization. The whole of Europe east of the Rhine thus fell
into the German industrial orbit, and its economic life was adjusted
accordingly.” A frank German admission of a policy of a self-sufficient
Central Europe is the work of Friedrich Naumann, _Mittel-Europa_,
translated into English by C. M. Meredith and published under the title
_Central Europe_ (New York, 1917). See, especially, Chapters IV-VII.
_Cf._, also, Ernst zu Reventlow, _Deutschlands auswärtige Politik_ (3rd
revised edition, Berlin, 1916), pp. 336 _et seq._; K. H. Müller, _Die
Bedeutung der Bagdadbahn_ (Hamburg, 1916), p. 29.

[38] Paul Rohrbach, _Die Bagdadbahn_ (Berlin, 1903), p. 16.

[39] H. A. Gibbons, _The Reconstruction of Poland and the Near East_
(New York, 1917), pp. 57–58. The author is not in agreement with either
Dr. Rohrbach or Dr. Gibbons. He certainly would hesitate to call any
imperialist policy “inevitable.”

[40] _Die deutsche Türkenpolitik_, p. 8.




CHAPTER IV

THE SULTAN MORTGAGES HIS EMPIRE


THE GERMANS OVERCOME COMPETITION

During 1898 and 1899 the Ottoman Ministry of Public Works received
many applications for permission to construct a railway to Bagdad.
Whatever may have been thought later of the financial prospects of
the Bagdad Railway there was no scarcity then of promoters who were
willing and anxious to undertake its construction. It was not because
of lack of competition that the _Deutsche Bank_ finally was awarded the
all-important concession.

In 1898, for example, an Austro-Russian syndicate proposed the building
of a railway from Tripoli-in-Syria to an unspecified port on the
Persian Gulf, with branches to Bagdad and Khanikin. The sponsor of
the project was Count Vladimir I. Kapnist, a brother of the Russian
ambassador at Vienna and an influential person at the Tsar’s court.
Count Kapnist had the support of Pobêdonostsev, the famous Procurator
of the Holy Synod, who was an avowed Pan-Slavist and an enthusiastic
promoter of Russian colonization in Asia Minor.[1] The Sultan
instructed his Minister of Public Works to study the Kapnist plan and
submit a report. The Austro-Russian syndicate, however, made no further
progress at Constantinople. The Sublime Porte obviously was opposed
to any expansion of Russian influence in Turkey—a point of view which
received the encouragement of the British and German ambassadors.
Furthermore, in Russia itself there was opposition to Count Kapnist’s
project. Count Witte, Imperial Minister of Finance, and foremost
political opponent of Pobêdonostsev, emphasized the strategic menace
to Russia of improved railway transportation in Turkey and sturdily
maintained that Russian capital and technical skill should be kept
at home for the development of Russian railways and industry. By the
spring of 1899 the Kapnist plan had been shelved.[2]

In the meantime French bankers had become interested in the
possibilities of constructing a railway from the Mediterranean to the
Persian Gulf, utilizing the existing railways in Syria as the nucleus
of an elaborate system. Their spokesman was M. Cotard, an engineer on
the staff of the Smyrna-Cassaba Railway. This project was possessed
of such strong financial and political support at Constantinople that
the _Deutsche Bank_ considered it best to negotiate for a merger with
the French interests involved.[3] Accordingly conversations were held
at Berlin early in 1899 between the _Deutsche Bank_ and the Anatolian
Railway Company, on the one hand, and the Imperial Ottoman Bank and
the Smyrna-Cassaba Railway, representing French interests, on the
other. The result was an important agreement of May 6, 1899, the chief
provisions of which were as follows:[4]

 1. The _Deutsche Bank_ admitted the Imperial Ottoman Bank to
 participation in the proposed Bagdad Railway Company. German and
 French bankers were to be equally represented in ownership and
 control, each to be assigned 40% of the capital stock, the remaining
 20% to be offered to Turkish investors. If British, or other capital
 were subsequently interested in the Company, the share of the new
 participants was to be taken from the German and French holdings in
 equal proportions.

 2. A _modus vivendi_ was arrived at between the Anatolian and
 Smyrna-Cassaba Railways. The prevailing rate-war was to be stopped; a
 joint commission was to be appointed to agree upon a uniform tariff
 for the two companies; a junction of the two lines was to be effected
 and maintained at Afiun Karahissar for reciprocal through traffic.

 3. In order to assure the faithful execution of the agreement between
 the Anatolian and Cassaba railways, each of the companies was to
 designate two of its directors to sit on the board of the other.[5]

 4. French proposals for the construction of a Euphrates Valley railway
 were to be withdrawn.

 5. The French and German bankers were to use their best offices with
 their respective governments to secure united diplomatic support for
 the claims of the _Deutsche Bank_ to prior consideration in the award
 of the Bagdad Railway concession.

This agreement temporarily removed all French opposition to the
Bagdad Railway. M. Constans, the French ambassador at Constantinople,
joined Baron Marschall von Bieberstein in cordial support of the new
“Franco-German syndicate.”[6]

Competition had arisen, however, from a third source. During the
summer of 1899 British bankers, represented in Constantinople by Mr.
E. Rechnitzer, petitioned for the right to construct a railway from
Alexandretta to Bagdad and the Persian Gulf. The terms offered by the
British financiers were considered more liberal than any heretofore
proposed,[7] and they were endorsed by the Ministry of Public Works.
Mr. Rechnitzer enlisted the aid of Mahmoud Pasha, a brother-in-law of
the Sultan. He secured the assistance of Sir Nicholas O’Connor, the
British ambassador. He attended to the niceties of Oriental business
by sending the Sultan and his aids costly presents.[8] He engineered
an effective press campaign in Great Britain to arouse interest
in his project. Just how much success Mr. Rechnitzer’s plan might
have achieved on its own merits is an open question. It definitely
collapsed, however, in October, 1899, when the outbreak of the Boer
War diverted British attention and energies from the Near East to
South Africa.[9] It was under these circumstances that the Sultan, on
November 27, 1899, announced his decision to award to the _Deutsche
Bank_ the concession for a railway from Konia to Bagdad and the Persian
Gulf.[10]

The success of the Germans was not unexpected. They had a strong claim
to the concession, for, in 1888 and again in 1893, the Sultan had
assured the Anatolian Railway Company that it should have priority in
the construction of any railway to Bagdad. On the strength of that
assurance, the Anatolian Company had conducted expensive surveys of
the proposed line.[11] After a short period of sharp competition for
the concession in 1899, the _Deutsche Bank_ group was left in sole
possession of the field—the Russian promoters had withdrawn because
of lack of support at home; the French financiers had accepted a
share in the German company in preference to sole responsibility for
the enterprise; the British proposals had lost support when the Boer
difficulty temporarily obscured all other issues. The diplomatic
situation, furthermore, was distinctly favorable to the German claims.
The Fashoda Affair and the serious Anglo-Russian rivalry in the Middle
East had served to put Russia, France, and Great Britain at sixes and
sevens, leaving Germans practically a free hand in the development of
their interests in Asia Minor.

Aside from these purely temporary advantages, however, there were
excellent reasons, from the Ottoman point of view, for awarding the
Bagdad Railway concessions to the German Anatolian Railway Company. The
usual explanations—that the soft, sweet-sounding flattery of William
II overcame the shrewdness of Abdul Hamid; that Baron Marschall von
Bieberstein dominated the entire diplomatic situation at the Porte;
that the German military mission exerted a powerful influence in
the final result—are more obvious than convincing. These were all
contributing factors in the success of the Germans, but they were not
determining factors. The reasons for the award of the concession to
the _Deutsche Bank_ were partly economic, partly strategic, partly
political.

The Germans alone submitted proposals which met the demands of the
Public Debt Administration and the Ottoman Government. They proposed to
extend the existing Anatolian Railway from Konia, across the mountains
into Cilicia and Syria, down the valley of the Tigris to Bagdad and
Basra and the Persian Gulf. The railway which they had in mind would
reach from one end of Asiatic Turkey to the other; in connection with
the railways of southern Anatolia and of Syria, it would provide
continuous railway communication between Constantinople and Smyrna in
the north and west, with Aleppo, Damascus, Beirut, Mecca, and Mosul
in the south and east. There were serious technical and financial
difficulties in the construction of such a railway, it is true, but
there were political and economic considerations which warranted the
expenditure of whatever effort and funds might be necessary to carry
the line to completion.

On the other hand, the groups other than the Germans proposed the
construction of a trans-Mesopotamian railway which did not come up
to specifications. They submitted plans calling for the building
of a line from some Mediterranean port—such as Alexandretta or
Tripoli-in-Syria—down the Euphrates valley to the Persian Gulf.[12]
Such a line would have had obvious advantages, from the point of view
of the concessionaires, over the projected German railway. The cost of
construction would have been materially less, for it would have been
unnecessary to build the costly sections across the Taurus and Amanus
mountains. The prospects of immediate earning power were better, for
the railway would have been able to take over some of the caravan
trade from Arabia to the Syrian coast and from Mesopotamia to Aleppo.
From the Ottoman point of view, however, the proposal was altogether
unsatisfactory. The railway would have developed the southern provinces
of the empire without connecting them with Anatolia, the homeland of
the Turks themselves and the heart of the Sultan’s dominions. It might
have promoted a separatist movement among the Arabs. Its termini on the
Mediterranean and the Persian Gulf could have been controlled by the
guns of a foreign fleet. From every standpoint—economic, political,
strategic—the acceptance of such a proposal was out of the question.

Even had all other things been equal, it is probable that the
German bankers would have been given preference in the award of the
concession. The Turkish Government was determined that the Anatolian
lines should be made the nucleus of the proposed railway system for
the empire. That being the case, no purpose, other than the promotion
of confusion, would have been served by awarding the Bagdad plum to
interests other than those which controlled the Anatolian Railway
Company. This reasoning was fortified by the fact that the Company had
made an enviable record in its dealings with the Ottoman Ministry of
Public Works. The existing lines were well constructed and were being
operated in a manner entirely satisfactory to the Ottoman Government
and to the peasantry and business men of Anatolia. And M. Huguenin,
Assistant General Manager of the Anatolian system, announced that
his Company would observe a similar policy in the construction and
operation of the proposed Bagdad Railway. “We are determined,” he said,
“to build a model line such as exists nowhere in Turkey, able in all
respects to undertake efficiently an international service involving
high speeds over the whole line.”[13]

From the political point of view, too, there were reasons for giving
preference to German capitalists. Abdul Hamid was seeking moral and
material assistance for the promotion of his favorite doctrine of
Pan-Islamism. He sought to foster this movement, which looked toward
the unification of Islamic communities for resistance to Christian
European domination over the Moslem world. As Caliph of the Mohammedan
world, Abdul Hamid placed himself at the head of those defenders of the
faith who had been propagating the idea that Mussulmans everywhere must
resist further Christian encroachment and aggression, be it political,
economic, religious, cultural. That the Sultan’s primary motives were
religious is doubtful. Apparently he believed that the Pan-Islamic
movement could be utilized to the greater glory of his dynasty and his
empire. As the tsars of Russia had utilized their position as head of
the Orthodox Church for the purpose of strengthening the power of the
autocracy, so Abdul Hamid proposed to exploit his position as Caliph
for purposes of personal and dynastic aggrandizement.[14]

In awarding the Bagdad Railway concession, which was of such
considerable economic and political importance, it was essential
to choose the nationals of a power which would be sympathetic
toward Pan-Islamism. Would it be Russia, whose tsars had set fires
in Afghanistan, sought to destroy the independence of Persia, and
threatened all of the Middle East? Would it be Great Britain, whose
professional imperialists were holding in subjection more than sixty
million Mohammedans in India alone? Would it be France, whose soldiers
controlled the destinies of millions of Mussulmans in Algeria and
Tunis? These nations could have no feeling for Pan-Islamism other than
fear and hatred,[15] for it threatened their dominion over their Moslem
colonies. Germany, however, had everything to gain and nothing to
lose in lending support to Abdul Hamid’s Pan-Islamic program. She had
practically no Mohammedan subjects and therefore had no reason to fear
Moslem discontent. She had imperial interests which might be served by
the revolt of Islam against Christian domination.[16]

Turkish patriots, as well as Moslem fanatics, would have preferred
to see Germans favored in the award of economic concessions in the
Ottoman Empire. The Germans came to Turkey with clean hands. Their
Government had never despoiled the Ottoman Empire of territory and
appeared to have no interests which could not be as well served by
the strengthening of Turkey as by its destruction. On the other hand,
Russia, traditional enemy of the Turks, sought, as the keystone of her
foreign policy, to acquire Constantinople and the Straits. France, by
virtue of her protectorate over Catholics in the lands of the Sultan,
sought to maintain special privileges for herself in Syria and the Holy
Land. Great Britain held Egypt, a nominal Turkish dependency, and was
fomenting trouble for the Sultan in the region of the Persian Gulf.[17]
Germany, it appeared, was the only sincere and disinterested friend of
the Ottoman Empire!

The rising prestige of Germany in the Near East and the rapid expansion
of German economic interests in Turkey, however, did not, during these
crucial years of 1898–1900, arouse the fear or the cupidity of other
European powers. Russia, it is true, objected for strategic reasons to
the construction of the proposed Bagdad Railway _via_ the so-called
“northern” or trans-Armenian route from Angora. But when the Tsar
was assured by the Black Sea Basin Agreement that a southern route
from Konia would be substituted, M. Zinoviev, the Russian minister
at Constantinople, withdrew his formal diplomatic protest.[18] The
French Government adopted a policy of benevolent neutrality toward the
claims of the _Deutsche Bank_ for the concession, on the ground that
the Imperial Ottoman Bank, representing powerful financial interests
in Paris, was to be given a substantial participation in the proposed
Bagdad Railway Company. The pact of May 6, 1899, between the German and
French promoters satisfied even M. Delcassé![19]

In Great Britain, likewise, there was the friendliest feeling toward
the German proposals. When the Kaiser made his second visit to the Near
East in 1898 the London _Times_ said: “In this country we can have
nothing but good wishes for the success of the Emperor’s journey and
for any plans of German commercial expansion which may be connected
with it. Some of us may perhaps be tempted to regret lost opportunities
for our own influence and our own trade in the Ottoman dominions. But
we can honestly say that if we were not to have these good things for
ourselves, there are no hands we would rather see them in than in
German hands.”[20] _The Morning Post_ of August 24, 1899, expressed the
hope that no rivalry over the Bagdad Railway would prejudice the good
relations between Great Britain and Germany. “So long as there is an
efficient railway from Haidar Pasha to Bagdad, and so long as the door
there is open, it should not really matter who makes the tunnels or
pays the porters. If it should be necessary to insist on an open door,
the Foreign Office will probably see to it; while if it should happen
to be, as usual, asleep, there are always means of poking it up. As a
matter of general politics it may not be at all a bad thing to give
Germany a strong reason for defending the integrity of Turkey and for
resisting aggression on Asia Minor from the North.”

Sympathetic consideration of German expansion in the Near East was
not confined to the press. Cecil Rhodes, great apostle of British
imperialism, visited Germany in the spring of 1899 and came away from
Berlin favorably disposed toward the Bagdad Railway and none the less
pleased with the Kaiser’s apparent enthusiasm for the Cape-to-Cairo
plan. In November of the same year William II paid a royal visit
to England. It was then that Joseph Chamberlain, Secretary for the
Colonies, learned the details of German plans in the Ottoman Empire,
but, so far from being alarmed, he publicly announced his belief in
the desirability of an Anglo-German entente. The almost simultaneous
announcement of the award of the preliminary Bagdad Railway concession
met with a favorable reception from the British press.[21]

At the same time, however, less cordial sentiments were expressed
toward Russia and France. There was general agreement among the London
newspapers regarding at least one desirable feature of the Bagdad
Railway enterprise: the discomfiture it would be certain to cause
the Tsar in his imperial ambitions in the Near East. _The Globe_
characterized as “impudence” the desire of Russia to regard Asiatic
Turkey as “a second Manchuria.”[22] No love was being lost, either, on
France. _The Daily Mail_ of November 9, 1899, said: “The French have
succeeded in wholly convincing John Bull that they are his inveterate
enemies. England has long hesitated between France and Germany. But she
has always respected German character, while she has gradually come to
feel scorn for France. Nothing in the nature of an _entente cordiale_
can exist between England and her nearest neighbor. France has neither
courage nor political sense.”


THE BAGDAD RAILWAY CONCESSION IS GRANTED

It was almost three years after the Sultan’s preliminary announcement
of the Bagdad concession that the imperial decree was issued. During
the interval the German technical commission was completing its survey
of the line; details of the concession were being arranged between
Zihni Pasha, Minister of Public Works, and Dr. Kurt Zander, General
Manager of the Anatolian Railway Company; Dr. von Siemens was working
out plans for the financing of the enterprise. Finally, on March 18,
1902, an imperial _iradé_ of Abdul Hamid II definitely awarded the
Bagdad Railway concession to the Anatolian Railway Company.[23]

The Constantinople despatches announcing the Sultan’s award met with a
varied reception. In Germany, of course, there was general satisfaction
and, in some quarters, jubilation. The Kaiser telegraphed his personal
thanks to the Sultan. In Vienna, the semi-official _Fremdenblatt_
expressed the opinion that “the construction of the railway would be
an event of the greatest economic and political importance and would
materially strengthen Turkey’s power of resistance.”[24] M. Delcassé,
French Minister of Foreign Affairs, interpolated in the Chamber,
informed the Deputies that, whether one liked it or not, the convention
was a _fait accompli_ which France must accept, particularly because
French capitalists were associated with the German concessionaires in
the enterprise.[25] The Russian Government was silent at the time,
although two months before M. Witte had informed the press that he saw
no reason for granting financial assistance or diplomatic acquiescence
to a possible competitor of Russian trans-Asiatic railways.[26]

In England there was very little opposition, but much friendly
comment, on the German plans. Earl Percy expressed the hope that
Great Britain would do nothing to interfere with the construction
of the Bagdad Railway. “Germany,” he told the House of Commons, “is
doing for Turkey what we have been doing for Persia, for the social
improvement and material welfare of native races; and in the struggle
between the Slavonic policy of compelling stagnation and the Teutonic
policy of spreading the blessings and enlightenment of civilization,
the victory will lie with those nations which are striving, selfishly
or unselfishly, consciously or unconsciously, to fulfil the high aims
which Providence has entrusted to the imperial races of Christendom.”
Lord Cranborne, Under-Secretary for Foreign Affairs, announced that,
although the Government had every intention of maintaining the
_status quo_ in the Persian Gulf, it would not otherwise interfere
in the project for a German-owned trans-Mesopotamian railway. Lord
Lansdowne, Secretary for Foreign Affairs, informed the French and
German ambassadors at London that His Britannic Majesty’s Government
would not oppose the Bagdad enterprise, particularly if British capital
were invited to participate in its consummation.[27] This was taken as
a definite promise, for English financiers already had been asked to
take a share in the Bagdad Railway Company by purchase, _pro rata_, of
portions of the holdings of the German and French interests.[28]

Although there was a noticeable lack of unanimity in European
diplomatic circles, little or no reason existed in 1902 to believe
that any determined resistance would be made to the consummation
of the plans for the construction of the Bagdad Railway. The chief
difficulties of the concessionaires seemed to be not political, but
financial and administrative. The year 1902 was one of economic
depression; in Germany, in particular, industrial and financial
conditions were distinctly unfavorable for the flotation of a
large bond issue such as would be required to raise funds for the
construction of the Bagdad Railway. Certain of the minor provisions
of the convention of 1902, furthermore, were unsatisfactory to the
financiers of the project. The concession for the lines beyond Konia
had been granted to the Anatolian Railway Company without privilege of
assignment to any other corporation. This meant that any participation
of outside capital in the new Bagdad Railway would, of necessity,
involve participation in the profits of the Anatolian lines already in
operation—a prospect by no means pleasing to the original promoters.
Furthermore, there was some question as to the advisability of placing
under a single administrative head all of the line and branches from
Constantinople to the Gulf.[29]

It was because of these difficulties, financial and administrative,
that the _Deutsche Bank_ marked time until March 5, 1903, when a
revised Bagdad Railway convention was executed and plans were perfected
for the financing of the first section of the line. It is to this
Great Charter of the Berlin-to-Bagdad plan that we now must turn our
attention.[30]

The definitive convention of 1903 provided that the existing
Anatolian lines were to continue in the possession of their owners;
the construction and operation of the new railway beyond Konia was
to be vested—without right of cession, transfer, or assignment—in a
new corporation, the Bagdad Railway Company. This new company was
incorporated under Turkish law on March 5, 1903, with a capital stock
of fifteen million francs, of which the Anatolian Railway Company
subscribed ten per cent. Continued Turco-German control of the railway
enterprise was assured by a provision of the charter that of the eleven
members of the Board of Directors, three should be appointed by the
directors of the Anatolian Railway Company, and at least three others
should be Ottoman subjects.[31]

It was apparent that the Ottoman Government expected big things of
the German concessionaires and their French associates. The new
convention provided, first, for the construction of a great trunk line
from Konia, southeastern terminus of the existing Anatolian Railways,
to the Persian Gulf. This was to be the Bagdad Railway proper, but
the concession carried with it, also, the privilege of constructing
important branches in Syria and Mesopotamia. With all its proposed
tributary lines completed, the Railway would stretch from the Bosporus
to the Persian Gulf and from the Mediterranean to the frontiers of
Persia. Second, it was stipulated that the Anatolian Railway Company
should effect any necessary improvements on its lines to make possible
the early initiation of a weekly express service between Constantinople
and Aleppo and the operation of fortnightly express trains to Bagdad
and the Persian Gulf as soon as the lines should be completed. The
Anatolian concessions were extended for a period of ninety-nine
years from 1903 to make them coincident with the new concession. The
concessionaires were obliged to make all improvements and to complete
all new construction by 1911, it being understood, however, that this
time limit might be extended in the event of delays by the Government
in the execution of the financial arrangements or in the event of
_force majeure_—the latter specifically including, not only a European
war, but any radical change in the financial situation in Germany,
England, or France.[32]


THE LOCOMOTIVE IS TO SUPPLANT THE CAMEL

The Bagdad Railway was to revive the “central route” of medieval
trade—to traverse one of the world’s historic highways. It was to
bring back to Anatolia, Syria, and Mesopotamia some of the prosperity
and prestige which they had enjoyed before the explorations of
the Portuguese and Spaniards had opened the new sea routes to the
Indies.[33]

The starting point of the new railway was to be Konia. This town of
44,000 inhabitants, situated high in the Anatolian plateau, was a
landmark in the Near East. It was once the capital of the Seljuk Turks
and during its heyday had been a crossroads of the caravan routes of
Asia Minor. Along one of these old routes to the northwest ran the
Anatolian Railway, with which the Bagdad line was to be linked. From
Konia the new railway was to cross the Anatolian table-lands, at an
average altitude of 3500 feet, passing through the towns of Karaman
and Eregli. Just beyond the latter town are the foothills of the
Taurus, the first of the mountain barriers between Asia Minor and the
Mesopotamian valley. In crossing the Taurus range the railway was to
pass through the famous Cilician Gates, down the eastern slope into the
fertile Cilician plain. At Adana, center of the trade of this region,
a junction was to be effected with the existing railway to Mersina, a
small port on the Mediterranean.[34]

Formidable engineering difficulties faced the succeeding stretch of the
railway. Beyond Adana stood the second mountain barrier of the Amanus
range, through which there was no natural pass, and it was apparent
that costly blasting and tunneling would be required before the hills
could be pierced.[35] Once beyond the mountains the railway could be
carried quickly to Aleppo, a city of 128,000, “the emporium of northern
Syria,” and a meeting place for the Mesopotamian, Syrian, and Anatolian
trade-routes. At this point connections were to be established with
the important railways of Syria, providing direct communication with
Hama, Homs, Tripoli-in-Syria, Beirut, Damascus, Jaffa, and Jerusalem.
In fact, enthusiastic Syrians have prophesied that when all projected
transcontinental railways are completed in Europe, Asia, and Africa,
Aleppo will become “the crossroads of the world”—a junction point for
rail communication between Berlin and Bagdad, Calais and Calcutta,
Bordeaux and Bombay, Moscow and Mecca, Constantinople and Cairo and
Cape Town.[36] Seventy miles away from Aleppo, along one of the few
good wagon roads in Turkey, lay the important Mediterranean port of
Alexandretta. Leaving Aleppo, the Bagdad Railway was to turn east,
crossing a desert country, to Nisibin and to Mosul, on the Tigris. From
this sector of the railway it was proposed to construct several short
spurs into the Armenian foothills, as well as a longer branch from
Nisibin to Diarbekr and Kharput.

The city of Mosul is the northern gateway to the Mesopotamian valley,
the “Land of the Two Rivers.” In medieval times it was a center of
caravan routes between Persia, Mesopotamia, Syria, and Anatolia, and
once was famed for its textile manufactures, which produced a cloth
named after the city, “muslin.” It is located on the site of a suburb
of the ancient city of Nineveh and guards a high pass leading through
the mountains into Armenia. In 1903 it had a population of 61,000 and
bade fair, after the completion of the Bagdad Railway, to regain some
of its lost lustre. South and southeast of Mosul flows the Tigris River
all the way to the Persian Gulf. Along the valley of this river was to
run the new railway, through the towns of Tekrit, Samarra, and Sadijeh,
to Bagdad.[37]

In 1903 the splendor of the ancient city of Bagdad was very much
dimmed. Although it still was the center of an important caravan trade
with Persia, Arabia, and Syria, its prosperity was but a name compared
with the riches which the city had enjoyed before the commercial
revolution of the sixteenth century. The population of 145,000—in part
nomad—was to a large extent dependent upon the important export trade
in dates and cereals, amounting, in 1902, to almost £1,000,000. All
told, the trade of Bagdad was valued at about £2,500,000 annually.
Whether the shadow of the former great Bagdad could be transformed into
a living thing was an open question.[38]

Five hundred miles south of Bagdad is the Persian Gulf,[39] the
proposed terminus of the Bagdad Railway. About sixty miles north of
the Gulf, located on the Shatt-el-Arab—the confluence of the Tigris
and Euphrates Rivers—is the port of Basra, the outlet for the trade
of Bagdad. Communication between these two Mesopotamian cities was
carried on, in 1903, by means of a weekly steamer service operated
by the English firm of Lynch Brothers, under the name “The Euphrates
and Tigris Steam Navigation Company, Ltd.” The Lynch Brothers—typical
British imperial pathfinders—had established themselves at Basra
during the decade 1840–1850 and had succeeded during the following
half-century in securing a practical monopoly of the river trade from
Bagdad to the Persian Gulf. The absence of effective competition
and the hesitancy of the Turkish Government to grant permission for
the operation of additional steamers were responsible for a totally
inadequate service. It was not uncommon for freight to stand on
the wharves at Bagdad and Basra for three months or more awaiting
transportation. Under these circumstances it was to be expected that
freight charges would be exorbitant; it cost more to transfer cargoes
from Bagdad to Basra than from Basra to London. The advent of the
Bagdad Railway promised great things for the trade of lower Mesopotamia
and Persia.[40]

It was the aim of the Turkish Government and the concessionaires not
only to compete with the river trade of the Tigris, but to develop
the Euphrates valley as well, there being no steamer service on the
latter river. With this in mind, it was decided to divert the railway
beyond Bagdad from the Tigris to the Euphrates and down the valley to
Basra. For a time Basra was to mark the terminus of the railway; the
concession made provision, however, for the eventual construction of a
branch “from Zubeir to a point on the Persian Gulf to be agreed upon
between the Imperial Ottoman Government and the concessionaires.”[41]

Of considerable importance was a proposed branch line from Sadijeh,
on the Tigris, to Khanikin, on the Persian frontier. This railway, it
was believed, would take the place of the existing caravan route from
Bagdad to Khanikin and thence to Teheran. The annual value of British
trade alone transported _via_ this route was estimated at about three
quarters of a million pounds sterling.[42]

The Bagdad Railway, as thus projected, was one of the really great
enterprises of an era of dazzling railway construction. Here was a
transcontinental line stretching some twenty-five hundred miles from
Constantinople, on the Bosporus, to Basra, on the Shatt-el-Arab—a
project greater in magnitude than the Santa Fé line from Chicago to Los
Angeles or the Union Pacific Railway from Omaha to San Francisco.[43]
It was a promise of the rejuvenation of three of the most important
parts of the Ottoman Empire—eastern Anatolia, northern Syria, and
Mesopotamia. It was to open to twentieth-century steel trains a
fifteenth-century caravan route. It was to replace the camel with the
locomotive.


THE SULTAN LOOSENS THE PURSE-STRINGS

There are special and peculiar problems connected with the
construction of railways in the economically backward areas of the
world. In well populated regions, such as western Europe, railways
have been built to accommodate existing traffic; in sparsely populated
regions, such as eastern Russia and western United States, they have
been constructed chiefly to create new traffic. In the economically
advanced countries of the world the railway has been the result of
civilization; in the backward countries it has been the outpost of
civilization. A new railway in an undeveloped region is obliged at the
outset to concern itself mainly with the upbuilding of the territory
through which it runs, in order to assure abundant traffic for the
future; during this period its receipts are rarely, if ever, adequate
to meet the costs of operation. Private capital cannot be expected
to assume alone the risk and burden thus involved, but the public
service which the railway renders during this critical time justifies
the government in subsidizing the enterprise until it can become
self-supporting. The granting of state subventions has been a common
practice of the nineteenth and twentieth centuries. China time and time
again has pledged national revenues in support of railway construction;
the Latin-American countries have been conspicuous exemplars of
the same practice; more than half of the railways of Russia were
constructed with government funds.[44]

There was every reason to believe that the Bagdad Railway would be
built with some system of state guarantees. Almost every railway in
Asiatic Turkey at one time or another had been the recipient of a
government subvention, and the proposed trans-Mesopotamian railway
faced many more obstacles than had faced any then in operation.
The provinces through which the Bagdad Railway was to pass were
sparsely settled and were too backward, economically, to warrant
the construction of a railway for the accommodation of existing
traffic;[45] the German technical commission of 1899 had pointed
out that the estimated gross operating revenue for some years would
be entirely inadequate to pay the expenses of running trains even
if there should be an unlooked for volume of passenger and mail
service to India. In time, it was believed, improved transportation
and greater political security would induce immigration and produce
widespread economic prosperity in the provinces of Anatolia, Syria, and
Mesopotamia, thus assuring financial independence to the railway.[46]
During the interim, however, a state guarantee appeared to be necessary.

Under the terms of the convention of 1903, the Turkish Government
undertook partially to finance the construction of the Bagdad Railway.
For each kilometre of the line built the Government agreed to issue
to the Company the sum of 275,000 francs, nominal value, in Imperial
Ottoman bonds, to be secured by a first mortgage on the railway and
its properties.[47] The payment of interest and sinking fund on these
bonds was to be guaranteed by the assignment to the Public Debt
Administration for this purpose of the revenues of certain of the
districts through which the railway was to pass. For the purpose of
financing the first section of two hundred kilometres beyond Konia,
there was delivered to the Company on March 5, 1903, an issue of
fifty-four million francs of “Imperial Ottoman Bagdad Railway Four Per
Cent Bonds, First Series.”[48] Similar payment for the construction of
subsequent sections was to be made the subject of further agreement
between the Government and the concessionaires.

In addition to supplying in this manner the actual funds for the
building of the railway, the Ottoman Government guaranteed gross
operating receipts of forty-five hundred francs annually for each
kilometre of the line open to traffic. If the receipts failed to
reach that sum, the Government was to reimburse the Company for the
deficiency. If the receipts amounted to more than forty-five hundred
francs per kilometre in any given year, the excess over that amount to
ten thousand francs was to belong to the Government; any excess over
and above ten thousand francs was to be divided sixty per cent to the
Government, forty per cent to the Railway. The Government also agreed
to reimburse the Company, in thirty annual payments of three hundred
fifty thousand francs, for such improvements as might be necessary to
prepare the Anatolian Railways for the initiation of a through express
service to the Persian Gulf and, furthermore, to subsidize that express
service at the rate of three hundred fifty thousand francs annually
from the date of the completion of the main line to Aleppo.[49]

Closely connected with these financial guarantees were grants of public
lands. Lands owned by the Government and needed for right-of-way were
transferred to the concessionaires free of any charge. Additional
land required for construction purposes might be occupied without
rental as well as worked by the Company for sand and gravel. Wood and
timber necessary for the construction and operation of the railway
might be cut from State-owned forests without compensation. The
concessionaires were permitted to operate mines within a zone twenty
kilometres each side of the line, subject to such regulations as might
be laid down by the Ministry of Public Works. As a public utility,
the railway was granted the right of expropriation of such privately
owned land as might be essential for the right-of-way, as well as
quarries, gravel-pits, or other properties necessary for purposes of
construction. The Company was authorized, also, to conduct researches
for objects of art and antiquity along the route of the railway![50]

In the foregoing respects the Bagdad Railway Convention was by
no means revolutionary in character. In issuing its bonds for the
purpose of financing railway construction, in pledging public
revenues as a guarantee of traffic receipts, in granting public lands
for right-of-way, the Imperial Ottoman Government was following
wellestablished precedents of the nineteenth century. The United
States, for example, had adopted similar measures to encourage the
building of transcontinental railways. To cite a single instance,
Congress granted the promoters of the Union Pacific system a
right-of-way through the public domain, twenty sections of land on
each side of each mile of the railway, and a loan of bonds of the
United States to an amount of fifty million dollars. Between 1850 and
1873 alone the Government transferred to the railways some thirty-five
million acres of public lands, an area in excess of that of the State
of New York.[51]

In certain other respects, however, the Bagdad Railway Convention was
radical and far-reaching in its innovations. Worthy of first mention
among its unusual provisions is the sweeping tax exemption granted
the concessionaires by _Article 8_: “Manufactured material for the
permanent way and materials, iron, wood, coal, engines, cars and
coaches, and other stores necessary for the initial establishment as
well as the enlargement and development of the railway and everything
pertaining thereto which the concessionaires shall purchase in the
empire or import from abroad shall be exempt from all domestic taxes
and customs duties. The exemption from customs duties shall also be
granted the coal necessary for the operation of the road, imported
abroad by the concessionaires, until the gross receipts of the line
and its branches reach 15,500 francs per kilometre. Likewise, during
the entire period of the concession the land, capital, and revenue of
the railway and everything appertaining thereto shall not be taxed;
neither shall any stamp duty be charged on the present Convention or
on the Specifications annexed thereto, the additional conventions,
or any subsequent instruments; nor on the issue of Government bonds;
nor on the amounts collected by the concessionaires on account of the
guarantee for working expenses; nor shall any duty be levied on their
stock, preferred stock and bonds, or on the bonds which the Imperial
Ottoman Government shall issue to the concessionaires.” Thus the Bagdad
Railway not only was assured of a subsidy constituting a preferred
claim on certain taxes collected from the Turkish peasantry, but, in
addition, was exempted from the payment of important contributions to
the national revenue. The extent to which such an arrangement would
confound confusion will be clear if one will recall that many other
restrictions on the collection and disbursement of public funds were
vested in the Ottoman Public Debt Administration.[52]

Incidental to the railway, the Bagdad Company was granted other
valuable concessions. The corporation was given permission to establish
and operate tile and brick works along the line of the railway. For the
direct and indirect use of the railway and its subsidiary enterprises
the Company was authorized to establish hydro-electric stations for the
generation of light and power. The erection of necessary warehouses
and depots was permitted as essential to the proper operation of
the railway. The Anatolian Railway was empowered to provide for
satisfactory ferry service between Constantinople and Haidar Pasha, in
order to insure direct sleeping-car service from Europe to Asia and to
provide other facilities for through traffic. All of these subsidiary
projects were to enjoy the same exemption from taxation as the railway
itself.[53]

The concessionaires were granted the right of constructing at Bagdad,
Basra, and at the terminus on the Persian Gulf modern port facilities,
including “all necessary arrangements for bringing ships alongside
the quay and for the loading, unloading, and warehousing of goods.”
During the period of the construction of the railway the Company
was granted rights of navigation on the Tigris, the Euphrates, and
the Shatt-el-Arab for the transportation of materials and supplies
necessary to the building and operation of the main line and its
branches.[54] These river and harbor concessions aroused the fear and
the rage of the Lynch Brothers, who, as we shall see, were to be among
the leaders of British opposition to the Bagdad Railway.[55]

These, then, were the outstanding economic provisions of the Bagdad
Railway Convention of 1903. The Imperial Ottoman Government assumed the
cost of the construction of the railway and, in addition, guaranteed
a certain minimum annual return on each kilometre in operation. It
pledged for these purposes the taxes of the districts through which
the railway was to pass, and it deputed the Ottoman Public Debt
Administration to collect these revenues and supervise payments to
the concessionaires. As additional compensation to the Company it
made large grants of public lands and conceded valuable privileges
indirectly connected with the construction of the railway. In this
manner the Sultan mortgaged his empire. But mortgages have their
purposes, and Abdul Hamid hoped for big things from the Bagdad Railway.


SOME TURKISH RIGHTS ARE SAFEGUARDED

As mortgagor the Sultan was certain to insist upon the recognition
and protection of certain rights. To assure observance by the
concessionaires of their obligations under the convention, supervision
over construction, operation, and maintenance of the railway was vested
in the Ministry of Public Works, represented by two Imperial Railway
Commissioners. As a guarantee of good faith the Company was obliged
to deposit with a Constantinople bank a bond of £30,000, subject to
release only upon the completion of the entire line. The Ottoman
Government was determined, also, that the concession, far-reaching as
were its implications, should not lead to additional extra-territorial
rights, or “capitulations,” in favor of foreign powers. The
concessionaires were forbidden to contract for the transportation
of foreign mails, or to perform other services for the foreign
post offices in Turkey, without the formal approval of the Ottoman
Government. It was specified, also, that, inasmuch as the Anatolian and
the Bagdad Railway Companies were Ottoman joint-stock corporations,
all disputes and differences between the Government and the Companies,
or between the Companies and private persons, “arising as a result
of the execution or interpretation of the present Convention and the
Specifications attached thereto, shall be carried before the competent
Ottoman courts.” It was further provided that the concessionaires “must
correspond with the State Departments in Turkish, which is the official
language of the Imperial Ottoman Government!”[56]

The Government was sincere in its determination that the railway
should become a powerful instrument in the economic development of the
backward provinces of the empire. A significant clause specified that
the section between Bagdad and Basra should not be placed in operation
before the section between Konia and Bagdad should have been opened
to traffic, although immediate operation of trains on the former
section would have enabled the Company to compete with the valuable
trade of the Lynch Brothers on the Tigris. The traffic between Bagdad
and Basra would have been profitable and would thus have decreased
by a considerable figure the total subsidies the Treasury might be
obliged to pay for railway operation. It was of more immediate concern
to the Turkish Government, however, that southern Mesopotamia should
be connected by an economic and political link with the rest of the
Sultan’s dominions. Elaborate regulations were laid down regarding a
minimum train service which the Company was required to supply, and
it was specified in this connection that Turkish mails, together with
postal employees and officials, should be transported without charge
and under such other conditions as the Government might stipulate. To
forestall discriminatory treatment of passengers and shippers maximum
rates were prescribed for all classes of traffic, including express,
insurance, and similar supplementary services; it was decreed that “all
rates, whether they be general, special, proportional, or differential,
are applicable to all travelers and consignors without distinction”;
the concessionaires were “formally prohibited from entering into any
special contract with the object of granting reductions of the charges
specified in its tariffs.”[57] This last provision was of the utmost
importance, as it enabled Germans and Turks alike to point to the
railway as an outstanding example of the economic “open door.”

One of the chief interests of the Turkish Government in the
construction of the Bagdad Railway was the possibility of its
utilization for military purposes. In time of peace for purposes of
maneuvers or the suppression of rebellion, in time of war for purposes
of mobilization, the Company was required, upon requisition of the
military authorities, to place at the disposal of the Government
its “entire rolling stock, or such as might be necessary, for the
transportation of officers and men of the army, navy, police or
gendarmerie, together with any or all equipment.” The Government
undertook to maintain order along the line and to construct such
fortifications as it might consider necessary to defend the railway
against invading armies, and the Company was obliged to expend, under
the direction of the Minister of War, a total of four million francs
for the construction of military stations. To give effect to all of
these provisions, a special military convention was to be drawn up and
approved by the Company and the Minister of War.[58]

Upon the expiration of the concession all rights of the concessionaires
in the railway, port works, and other subsidiary enterprises were to
revert, free of all debt and liability, to the Imperial Government. In
the meantime, a semblance of Turkish nationality was to be assured the
enterprise by the stipulation that the railway employees and officials
should wear the fez and such uniform as might be approved by the
Government. It was contemplated, also, that within five years after the
opening of each section to traffic the whole of the operating staff,
except the higher officials, should be composed exclusively of Ottoman
subjects.[59]

Appended to the Bagdad Railway Convention was a secret agreement
binding the Company not to encourage or install foreign settlements
or colonies in the vicinity of the Anatolian or Bagdad Railways.[60]
Although the Sultan had mortgaged his empire, at least he was
determined to retain possession![61]


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

  [1] On this point _cf._ M. Solovieff, _La Terre Sainte et la société
  impériale de Palestine_ (Petrograd, 1892). The society there referred
  to was said to be liberally patronized by the Tsar and other members
  of the imperial family.

  [2] For details of the Kapnist plan see _The Times_ (London),
  December 17, 1898; _The Euphrates Valley Railway_—a prospectus
  (London, 1899).

  [3] In a memorandum of June 10, 1899, to the Sultan, Dr. Kurt Zander,
  General Manager of the Anatolian Railway Company, said that, in
  accordance with the wishes of the Sultan—and “to avoid all obstacles
  and avert every possibility of opposition”—his Company sought to
  arrive at a satisfactory understanding with the Smyrna-Aidin and
  Smyrna-Cassaba railways. All proposals to the Smyrna-Aidin Company,
  however, “met with evasive answers, which finally resulted in a
  termination of negotiations.” _Cf._, also, E. Aublé, _Bagdad—son
  chemin de fer, son importance, son avenir_ (Paris, 1917), pp. 9 _et
  seq._

  [4] For a copy of the text of this agreement the author is indebted
  to Mr. E. Rechnitzer. Summaries were published in _The Times_, August
  10, 1899; _Le Temps_ (Paris), August 15, 1899; _Corps de droit
  ottoman_, Volume IV, pp. 155–156.

  [5] In June, 1899, the Anatolian Railway Company elected to its Board
  of Directors M. L. Rambert, of the Imperial Ottoman Bank, and in
  June, 1900, M. Gaston Auboyneau, of the same institution. The new
  directors replaced Mr. George Henry Maxwell Batten, of London, and
  Sir Edward F. G. Law, of the Ottoman Public Debt Administration. The
  refusal of the Smyrna-Aidin line to come to a working agreement with
  the Anatolian Company thus removed the last British directors from
  the board of the latter. _Cf._ _Reports of the Anatolian Railway
  Company_, 1898–1900, _passim_.

  [6] A letter from Mr. E. Rechnitzer to the Sultan, dated August
  16, 1899, accuses M. Constans of having publicly referred to the
  “accord” between French and German interests in Turkish railways. Dr.
  Karl Helfferich states that the agreement between the two railway
  companies was supplemented by a gentlemen’s agreement between the two
  ambassadors. _Die Vorgeschichte des Weltkrieges_ (Berlin, 1919), p.
  127. This would seem to be confirmed by André Chéradame, _op. cit._,
  pp. 48 _et seq._

  [7] The proposals previously made called for an absolute guarantee
  of several thousands of francs income per kilometre per annum.
  Mr. Rechnitzer’s plan called for “an annual guarantee of 15,000
  francs in gross receipts per kilometre, the said guarantee to be
  paid exclusively out of the excess of the tithes of the _vilayets_
  through which the railway is to pass; it being understood that in
  the event that the excess of such tithes be not sufficient to defray
  the kilometric guarantee, the concessionaire shall have no redress
  against the Imperial Government on account of the insufficiency.”
  Memorandum of May 14, 1899, from Mr. Rechnitzer’s files. Although
  this plan had the great advantage of requiring no immediate payments
  from the Ottoman Treasury, it probably would have cost Turkey
  more in the long run, for the guarantee specified was excessively
  high. Compare with provisions of the Bagdad Railway concession of
  March, 1903, _infra_. Mr. Rechnitzer also asked for extensive port
  privileges in Alexandretta and in the port to be determined on the
  Persian Gulf. The chief features of the plan were outlined in a
  pamphlet published in London, July 29, 1899, entitled _The Euphrates
  Valley Railway_.

  [8] Mr. Rechnitzer now has in his possession a beautiful watch—inlaid
  with a map of the Ottoman Empire, in precious stones, showing the
  route of the proposed Euphrates Valley Railway—which he presented to
  Abdul Hamid in 1899. He repurchased it at a public auction held in
  Paris after the Young Turk revolution of 1909.

  [9] In a letter dated September 30, 1922, to the author Mr.
  Rechnitzer outlines the situation as follows: “My offer being much
  more favorable than that of the Germans, it seemed likely in August,
  1899, that it would be accepted. Unfortunately the Transvaal War
  broke out in the autumn of that year, and the German Emperor, a
  few days after the declaration of war, specially came to London to
  ask our Government to give him a free hand in Turkey. It appears
  that there was an interview between the Emperor and Mr. Joseph
  Chamberlain, who was more interested in Cecil Rhodes’ scheme in
  Africa than in my scheme in Turkey. As a consequence Sir Nicholas
  O’Connor was instructed to inform the Turkish Government that the
  British Government’s support was withdrawn from my offers.” It is
  only fair to add, however, that there may have been other factors in
  the situation. _The Financial News_ (London), of August 17, 1899,
  intimated that Mr. Rechnitzer’s proposal did not have sufficiently
  strong financial backing; that it was more Austrian than British;
  that the support of the British Government was more formal than
  whole-hearted.

  [10] _Report of the Anatolian Railway Company_, 1899, pp. 9–10; _The
  Annual Register_, 1899, p. 292. Simultaneously the Sultan granted
  the _Deutsche Bank_ group a concession for the construction of port
  and terminal facilities at Haidar Pasha, across the Straits from
  Constantinople. Sweeping privileges were granted for the building of
  docks, stations, sidings, and quays to a subsidiary of the Anatolian
  Railway, the Haidar Pasha Port Company. The latter company completed
  a handsome station and terminal at Haidar Pasha in 1902, the year
  before the definitive Bagdad Railway concession. Furthermore,
  it entered into close coöperation with the Mahsoussie Steamship
  Company, a Government-owned company operating a ferry service between
  Constantinople and the Asiatic side of the Straits; in this manner
  adequate service was assured passengers and freight from European to
  Asiatic points. The text of the concession is to be found in _Corps
  de droit ottoman_, Volume III, pp. 342–351. _Cf._, also, _Report of
  the Anatolian Railway Company_, 1902, p. 8.

  [11] _Supra_, pp. 31–34.

  [12] The single exception was Mr. Rechnitzer’s plan, which provided
  that within five years of the award of the concession, the Sultan
  might require the construction of a spur from Alexandretta to
  Konia, on terms to be agreed upon between the Government and the
  concessionaire. The chief feature of Mr. Rechnitzer’s plan, however,
  unquestionably was the railway from Alexandretta to the Persian
  Gulf—_i.e._, the Syrian and Mesopotamian, not the Anatolian and
  Cilician, sections. Furthermore, there were political objectives
  connected with the Rechnitzer proposal which, however attractive to
  British imperialists, could not have been regarded with equanimity
  by the Sultan. The following are typical quotations from Mr.
  Rechnitzer’s prospectus: “It has long been the object of English
  statesmen to consolidate the position of England in the Persian
  Gulf, where British interests (both political and commercial) are
  now paramount. With a railway in this region controlled by British
  interests ... a very strong foothold would accrue to British
  influence” (p. 12). Among the advantages of the proposed railway
  are listed the following (pp. 17–18): “It will place under British
  control two important ports, one on the Mediterranean and the other
  on the Persian Gulf; it will strengthen British influence in Turkey
  and in the Persian Gulf, and indirectly, in Persia and Afghanistan;
  it will afford England powerful means of exercising her influence
  over the territory of Central Persia, and of establishing new
  commercial enterprises over an enormous area of unexploited country
  of exceptional wealth.”

  [13] Quoted by A. D. C. Russell, “The Bagdad Railway,” in _The
  Fortnightly Review_, Volume 235 (1921), p. 312. _Cf._, also, _Corps
  de droit ottoman_, Volume IV, pp. 153 _et seq._

  [14] Pan-Islamism started as a religious and cultural revival but
  rapidly took on political and economic significance. Later, in
  connection with Turkish nationalism (see _infra_, Chapter IX), it
  became a serious international problem. A short, popular discussion
  of the rise of Pan-Islamism is Lothrop Stoddard’s _The New World of
  Islam_ (New York, 1921), Chapters I, II, V. _Cf._, also, _Mohammedan
  History_, No. 57 of the Foreign Office Handbooks (London, 1920),
  Part I; G. Charmes, _L’avenir de la Turquie: le pan-islamisme_
  (Paris, 1883); A. J. Toynbee, _Nationality and the War_ (London,
  1915), pp. 399–411, and _Turkey: a Past and a Future_ (New York,
  1917); Tekin Alp, _Türkismus und Pantürkismus_ (Weimar, 1915); C.
  Snouck Hurgronje, _The Holy War, “Made in Germany”_ (New York, 1917).
  Regarding Abdul Hamid’s place in the Pan-Islamic movement _cf._
  _Mohammedan History_, pp. 42–46.

  [15] Great Britain, characteristically enough, took steps to protect
  her interests by reviving the Arabian caliphate—_i.e._, by supporting
  the claims of the Sherif of Mecca to the caliphate.

  [16] _Infra_, pp. 127–128.

  [17] Regarding British activities in Koweit, _cf. infra_, pp. 197–198.

  [18] _Infra_, p. 149.

  [19] _Infra_, pp. 155–157; Chéradame, _op. cit._, pp. 267 _et seq._;
  K. Helfferich, _Die Vorgeschichte des Weltkrieges_ (Berlin, 1919),
  pp. 124 _et seq._

  [20] _The Times_, October 28, 1898

  [21] _Annual Register_, 1899, pp. 289–291; _Parliamentary Debates,
  House of Commons_, Volume 120 (1903), p. 1247, Volume 126 (1903), p.
  108; W. von Hohenzollern, _My Memoirs, 1887–1918_, pp. 84–86, 101–103.

  [22] _The Globe_, August 10, 1899. _Cf._, also, _The Morning Herald_,
  August 10, 1899, and _The Westminster Gazette_, August 11, 1899.

  [23] No attempt is made here to analyze the convention of March
  18, 1902 (which had been preceded by a draft convention of January
  8, 1902), as it was superseded by the convention of March 5, 1903.
  _Cf. infra_, pp. 70–71, 77–84. The text of the convention of 1902
  is to be found as an appendix to R. LeCoq, _Un chemin de fer en
  Asie Mineure_ (Paris, 1907). George von Siemens (1839–1901) did not
  live to see the consummation of his great plans for the development
  of Turkish railways. After his death in 1901 his work was taken up
  by his successor as Managing Director of the _Deutsche Bank_, Dr.
  Arthur von Gwinner. For a short account of the life of von Siemens
  see an obituary by Professor J. Riesser, in _Bank-Archiv_, No. 2,
  November, 1901. The work of von Siemens in the development of German
  economic enterprises in the Near East is told in a biography by his
  son-in-law, Dr. Karl Helfferich; _Georg von Siemens_ (Leipzig, 1923).

  [24] _The Times_, January 25, 1902.

  [25] _Journal officiel, Débats parlementaires, Chambre des députés_,
  1902, pp. 1468 et seq.

  [26] _The Times_, January 25, 1902.

  [27] _Parliamentary Debates, House of Commons_, Volume 101, pp. 129,
  597, 628, 669, Volume 120 (1903), p. 1371.

  [28] _Report of the Anatolian Railway Company_, 1901, p. 17; _The
  Times_, January 25, 1902.

  [29] _Annual Register_, 1902, pp. 290–291; _Report of the Bagdad
  Railway Company_, 1904, p. 7.

  [30] _La Société Impériale Ottomane du Chemin de Fer de
  Bagdad-Firman, Convention, Cahier des Charges, Statuts_, in French
  and Turkish (Constantinople, 1905); translated into English in
  _Parliamentary Papers_, No. Cd. 5635, Volume CIII (1911), No.
  1. Where references are here given to the convention itself, no
  preceding identifying word will be given, the citation being merely,
  _e.g._, _Article I_. The _Statuts_ will be referred to as “By-Laws”
  and the _Cahier des Charges_ as “Specifications.”

  [31] Turco-German control of the Board of Directors was not
  inconsistent with the agreement of 1899 between the _Deutsche Bank_
  and the Imperial Ottoman Bank, which assured French interests only
  40% of the shares of the Bagdad Railway Company. For details of the
  organization of the Company see the _Report of the Anatolian Railway
  Company_, 1903, pp. 4–7; _By-Laws_, _passim_.

  [32] _Articles 1–4, 7, 12, 37–39_; _Specifications_, Article 30.

  [33] In this connection see Sir W. M. Ramsay, _The Historical
  Geography of Asia Minor_ (London, 1890); D. G. Hogarth, _The Nearer
  East_ (London, 1902); Jastrow, _op. cit._, Chapter II; Sir C. W.
  Wilson, _Murray’s Handbook for Asia Minor_ (London, 1895 and 1900);
  R. Fitzner, _Anatolien-Wirtschaftsgeographie_ (Berlin, 1902); F.
  Dernburg, _Auf deutscher Bahn in Kleinasien_ (Berlin, 1892). Good
  general accounts of the regions through which the Bagdad Railway
  was to run are: Baron E. von der Goltz, _Reisebilder aus dem
  griechisch-türkischen Orient_ (Halle, 1902); R. Oberhummer and H.
  Zimmerer, _Durch Syrien und Kleinasien_ (Berlin, 1899); E. Banse,
  _Die Türkei; eine moderne Geographie_ (Berlin, 1916); Sir Mark
  Sykes, _The Caliph’s Last Heritage—A Short History of the Turkish
  Empire_ (London, 1915), Part 2, Chapters II and IV. A well-informed
  article describing the projected route of the Bagdad railway is one
  by a member of the German technical commission, “Die anatolischen
  Eisenbahnen und ihre Fortsetzung bis zum persischen Golf,” in _Archiv
  für Eisenbahnwesen_, Volume 26 (1903), pp. 75–90.

  [34] For a description of the line from Konia to Adana, including
  an historical sketch of the principal towns served by the railway,
  _cf._ Karl Baedeker, _Konstantinopel und das westliche Kleinasien_
  (Leipzig, 1905), pp. 156–172, and _Konstantinopel, Balkanstaaten,
  Kleinasien, Archipel, Cypern_ (second edition, Leipzig, 1914), pp.
  270–306, generously supplied with excellent maps.

  [35] A popular account of the engineering difficulties facing the
  construction of the railway from Adana to Aleppo is to be found
  in _The Scientific American_, supplement, Volume 51 (1901), pp.
  21248–21249.

  [36] _Cf._ W. H. Hall (of the Syrian Protestant College in Beirut),
  _The Near East_ (New York, 1920), particularly an interesting map, p.
  174. According to the convention of 1903, Article 1, Aleppo was to be
  connected with the main line by a branch from Tel-Habesh, but in 1910
  the route was changed, on petition of the inhabitants, to include
  Aleppo as a station on the Bagdad line itself. _Report of the Bagdad
  Railway Company_, 1910, p. 8. Statistics regarding the population of
  Aleppo and other cities along the line are taken, unless otherwise
  indicated, from the _Statesman’s Year Book_, 1903, _passim_.

  [37] _Article 38_; “The Trade of the Mesopotamian Valley,” in
  _Commerce Reports_, No. 280 (Washington, 1912), pp. 1050–1065, and
  No. 256 (1913), pp. 350–358; Karl Baedeker, _Palestine and Syria,
  with the chief routes through Mesopotamia and Babylonia_ (fourth
  edition, Leipzig, 1906), pp. 351–411.

  [38] Valentine Chirol, _The Middle Eastern Question, or Some
  Political Problems of Indian Defence_ (New York, 1903), pp. 179–182.

  [39] This is the distance by the Tigris and the Shatt-el-Arab; as the
  crow flies, the distance is about 150 miles shorter.

  [40] Regarding the Lynch Brothers see David Fraser, _The Short Cut to
  India_ (London, 1909), pp. 42 _et seq._; _Mesopotamia_, p. 30; _The
  Near East_, August 11, 1916, p. 358; _infra_, pp. 190–191.

  [41] _Article 1_, which describes in detail the route of the Bagdad
  Railway and its branches.

  [42] Chirol, _op. cit._, p. 179; _Supplement to Daily Consular and
  Trade Reports_, Annual Series (Washington, 1915).

  [43] The distances on the Bagdad Railway may be estimated as follows:

        Haidar Pasha to Ismid    91 kilometres
        Ismid to Eski Shehr     174     ”
        Eski Shehr to Konia     444     ”
        Konia to Basra        2,264     ”
        Branch lines, about     800     ”
                                ——-
        Total                 3,773 kilometres,

  or approximately 2,400 miles. This does not include the section of
  the Anatolian Railway from Eski Shehr to Angora, a distance of 311
  kilometres, or 194 miles additional. The Atchison, Topeka and Santa
  Fé Railway from Chicago to Los Angeles is 2,246 miles in length.
  The distance from Chicago to San Francisco _via_ the Chicago and
  Northwestern-Union Pacific system is 2,261 miles. _Official Guide of
  the Railways of the United States_ October, 1921, pp. 679, 825.

  [44] _Cf., e.g._, T. W. Overlach, _Foreign Financial Control
  in China_ (New York, 1919), _passim_; _La Gaceta Oficial_ of
  the Republic of Cuba for the years 1911 and 1912, regarding the
  _Ferrocarril de la Costa Norte de Cuba_; the _Statesman’s Year Book_,
  1903, p. 1044.

  [45] The average population per square mile in eastern Anatolia was
  27, in northern Syria 31, in Mesopotamia 13.

  [46] _Diplomatic and Consular Reports_, 1903, No. 3140, pp. 26–27;
  Sir William Willcocks, _The Recreation of Chaldea_ (Cairo, 1903).

  [47] This financial assistance was granted at the rate of 11,000
  francs per kilometre, payable annually throughout the ninety-nine
  years of the concession. The obligation was capitalized and met by
  the issue of 4% bonds as here described.

  [48] _Bagdad Railway Loan Contract_, March 5, 1903. M. Léon Berger,
  President of the Ottoman Public Debt Administration, and a French
  citizen, was one of the signatories of this document. The bonds of
  the loan were issued in denominations of 500 francs, 408 marks, 20
  pounds sterling, 22 pounds Turkish, and 245 Dutch florins, in order
  to facilitate their sale in the international securities markets.
  The _Deutsche Bank_ was made fiscal agent for all transactions in
  connection with the loan, with the single qualification that it was
  to appoint as its Paris agent the Imperial Ottoman Bank, representing
  the French interests in the enterprise. The syndicate apparently made
  a profit of over 2,500,000 francs on the transaction, as the bonds
  were delivered to the concessionaires, under _Article 35_ of the
  Convention, valued at 81–1/2% of par but were sold at 86.40.

  [49] _Articles 35_ and _37_.

  [50] _Articles 6, 10, 22, 27._

  [51] _Cf._ W. A. Dunning, _Reconstruction, Political and Economic,
  1865–1877_ (New York, 1907), pp. 145, 227; H. V. Poor, _Manual of the
  Railroads of the United States_ (New York, 1869), pp. xlvi-xlvii.

  [52] _Supra_, p. 11.

  [53] _Articles 13, 24, 25, 33_; _Specifications_, Article 4.

  [54] _Articles 9_ and _23_.

  [55] _Infra_, pp. 190–191.

  [56] _Articles 5, 18, 29, 34._

  [57] _Article 29_; _Specifications_, Articles 21, 24, 25, 29, 30.

  [58] _Articles 15, 26, 45_; _Specifications_, Article 26.

  [59] _Articles 20_ and _21_. Another sop to Turkish pride was
  _Article 46_, which required the Company to contribute annually to
  the Constantinople Poorhouse the sum of £500.

  [60] _The Times_, March 14, 1903, contained a report of this secret
  appendix. A denial was issued by the Berlin _National Zeitung_ of
  March 18, 1903, but the existence of the supplementary agreement was
  confirmed by Dr. von Gwinner in 1909 (_op. cit._, p. 1092). Djavid
  Bey, in a memorandum to the author, has stated that the Ottoman
  Government considered this appendix of the utmost importance.

  [61] A proviso of the concession of 1903 was that the _Deutsche Bank_
  was to float an Ottoman Four Per Cent Loan of March, 1903, to an
  amount of about $10,000,000. _Parliamentary Papers_, 1920, No. Cmd.
  964, pp. 57–58.




CHAPTER V

PEACEFUL PENETRATION PROGRESSES


THE FINANCIERS GET THEIR FIRST PROFITS

The convention of March, 1903, marked the beginning, not the end, of
the work of the promoters of the Bagdad Railway. Ahead of Dr. von
Gwinner[1] and his associates lay all sorts of obstacles, some of which
proved to be insurmountable. There were the financial difficulties and
risks attendant upon the task of borrowing and expending the funds for
the construction of the railway—estimated at about one hundred million
dollars. There were the technical difficulties of constructing a line
across obstinate mountain barriers and inhospitable desert plains.
There were the political difficulties of retaining the friendship of
notoriously fickle Ottoman ministers and of preventing diplomatic
opposition on the part of foreign powers. Events proved that this was
to be a thorny path indeed—a path which was to lead through political
intrigue, diplomatic bargaining, a Turkish revolution, and a world war.

The concessionaires began work in a manner indicative of a
determination to succeed in spite of all obstacles. The Bagdad Railway
Company was incorporated in Constantinople, March, 1903, under the
joint auspices of the _Deutsche Bank_ and the Imperial Ottoman Bank,
as provided by their mutual agreement of 1899. Almost immediately
an invitation was extended to British capitalists to participate
in the enterprise. Three-cornered negotiations were conducted by
German, French, and British bankers—under the watchful eyes of their
respective foreign offices—to arrive at some satisfactory plan for
internationalization of the railway. An agreement was reached by the
financiers by which British capital was to share equally in ownership
and control with the German and the French, but the hostile attitude of
the English press and the disapproval of the Balfour Government led to
the abandonment of the proposed tripartite syndicate.[2]

Failing to secure British cooperation, the concessionaires proceeded to
finance the Bagdad Railway by other means. Ten per cent of the stock of
the Company was subscribed by the Ottoman Government, ten per cent by
the Anatolian Railway Company, and the remainder by an international
syndicate headed by the _Deutsche Bank_. The Board of Directors was
enlarged to twenty-seven members, as follows: eight Germans, chosen by
the _Deutsche Bank_; three Germans elected by the Anatolian Railway
Company; eight Frenchmen designated by the Imperial Ottoman Bank; four
Ottomans; two Swiss; one Austrian; and one Italian.[3] The control of
the Bagdad Railway Company thus remained in Turco-German hands, but
French and other interests were too well represented to justify the
criticism that the railway was a purely German enterprise secretly
coöperating with the German Foreign Office. In fact, in 1903 Mr.
Balfour and Lord Lansdowne were as much alarmed by the possibility of
pernicious French activities in the line as they were disturbed by the
predominantly German character of the scheme.[4] Baron von Schoen,
one-time German Foreign Secretary, described the Bagdad Railway as “an
Ottoman enterprise which has an international character under German
guidance.”[5]

The great resources of the _Deutsche Bank_ were now brought into
play to provide the funds for the construction of the first section
of the railway. The necessary capital was to be secured, it will
be recalled,[6] by the sale of an issue of Imperial Ottoman Bagdad
Railway Bonds amounting to 54,000,000 francs. With comparatively
little difficulty the German share of the loan was subscribed, but the
allotment of the Imperial Ottoman Bank and its associates was not so
easily disposed of, because of the decision of the French Government
to exclude the Bagdad Railway Bonds from the Bourse. Nevertheless,
the entire loan was successfully underwritten, and by November, 1903,
preparations had been completed for the construction of the line from
Konia to Bulgurlu, a distance of 200 kilometres.[7]

Building of the railway went forward with great rapidity, and the rails
reached Bulgurlu by early autumn, 1904. On October 25, the Sultan’s
birthday, this first section of the Bagdad Railway was opened to
traffic with pompous ceremonies. And well might the concessionaires
have celebrated! Not only had they passed the first milestone of their
great task, but they had made a comfortable profit on their operations.
By numerous economies the Bagdad Railway Company had saved 3,697,000
francs of the 54,000,000 francs allowed by the Ottoman Government to
defray the costs of construction. The commissions of the bankers in
underwriting the bond issue, it was said, raised the total profit
on the first section of the railway—before a single train had been
operated—to about 6,000,000 francs.[8] This surplus, however, was not
all available for distribution among the concessionaires. A reserve
fund of almost 4,000,000 francs was established to provide for the
subsequent construction of the costly sections across the Taurus and
Amanus mountains. The promoters had to be reimbursed for preliminary
expenditures, such as the expensive surveying of the entire line from
Konia to the Persian Gulf. Included in these “out of pocket” payments
was a large item for _backshish_—gratuities to Ottoman dignitaries.
“Nobody,” said Dr. von Gwinner, “having done business in Turkey
ignores the fact that _backshish_ on the Bosporus ruled supreme and
was hitherto an absolute condition of any contract. We had to pay in
proportion to the importance of a business of some £20,000,000.”[9]
Djavid Bey informs the author that the item of _backshish_ must have
amounted to almost £100,000, “for during the Hamidian régime friendship
between sovereigns was not enough to bring about the granting of a
concession.”

Within nineteen months after the Turkish Government had issued its
bonds to cover the cost of the project, the first section of the Bagdad
Railway, from Konia to Bulgurlu, had been completed. The success of
the concessionaires in this part of the enterprise might have been
taken as a criterion of rapid progress with the further construction
of the line to the Persian Gulf. Such an expectation, however, would
have been premature. Beyond Bulgurlu lay the Taurus mountains and
innumerable engineering difficulties which could be overcome only after
the expenditure of considerable time and money. The Turkish Government,
furthermore, was in no position to issue additional bonds to the amount
of fifty or sixty millions francs to cover the costs of constructing
the second section of the line. Interest and sinking fund charges on
the first issue of Bagdad Railway bonds were a serious drain on the
treasury; additional charges of a like character could be met only by
an increase of the customs revenues of the Empire. Such an increase
could not be effected, however, except by international agreement,
because under existing treaties between Turkey and the Great Powers all
import duties were fixed at eight per cent _ad valorem_.[10]

In 1903, coincident with the first issue of bonds for the Bagdad
Railway, the Ottoman Government had requested permission to increase
these duties to eleven per cent but had been unable to obtain the
consent of the interested nations. It was not until 1906, after
prolonged and irritating negotiations, that the Powers agreed to a
three per cent increase, effective in July of the following year. Even
then, however, the higher duties were assented to under a number of
restrictions which rendered difficult the diversion of the increased
revenue to the payment of railway guarantees; elaborate regulations
were incorporated in the treaties prescribing expensive reform of
the government of Macedonia and costly readjustments in the customs
administration.[11]

By 1908, nevertheless, Turkish fiscal affairs were in a sufficiently
satisfactory state to enable the Government to conclude arrangements
for the construction of succeeding sections of the Bagdad Railway. On
June 2 of that year an imperial _iradé_ was granted authorizing the
extension of the line from Bulgurlu to Aleppo and thence eastward to
El Helif (near Nisibin), a distance of some eight hundred and forty
kilometres. The completion of this portion of the line would bring
the railway to a point about eleven hundred miles from Constantinople
and only a little over seven hundred miles from Basra. Arrangements
were effected for the immediate issue of the Imperial Ottoman Bagdad
Railway Four Per Cent Loans, Second and Third Series, to an amount of
one hundred and eight million and one hundred and nineteen million
francs respectively, to provide the capital necessary for the building
of the railway. Interest and sinking fund payments on these loans were
guaranteed from the surplus of net revenues accruing to the Imperial
Government from the Ottoman Public Debt. In case of emergency, certain
taxes (notably the cattle tax) of the vilayets of Konia, Adana, and
Aleppo were pledged for this purpose.[12]

Only a month after the conclusion of this convention the Near East
was thrown into a state of turmoil as a result of the outbreak of the
first of the Young Turk revolutions. Under these circumstances it
appeared inexpedient to the Bagdad Railway Company to push construction
of its line until such time as a reasonable degree of security should
be restored. It was not until December, 1909, therefore, after the
deposition of Abdul Hamid, that good friend of German enterprise in
Turkey, that a construction company was formed to build the railway
across the Taurus and Amanus mountains. During the autumn of the same
year a Franco-German syndicate underwrote the second and third series
of Bagdad Railway loans, thereby providing the necessary funds for the
work.[13]


THE BANKERS’ INTERESTS BECOME MORE EXTENSIVE

The years 1904 to 1909 were lean years, judged by actual progress in
the laying of rails from Bulgurlu to Bagdad and Basra. Nevertheless,
they were years characterized, on the part of the investors interested
in the consummation of the great enterprise, by every possible
activity to prepare the way for eventual success on a grand scale. In
the spring of 1906, for example, Dr. Karl Helfferich was appointed
assistant general manager of the Anatolian Railways, and one year
later was elected a managing director of the _Deutsche Bank_ with
general supervision over all of the Bank’s railway enterprises in
the Near East. The appointment of Dr. Helfferich—who, although he
was only thirty-four years of age, had achieved an international
reputation—aroused widespread comment and turned out to be an event
of first-rate importance in the history of the Bagdad Railway. As a
young professor of political science in the University of Berlin, Dr.
Helfferich won general recognition as an unusually able economist.
He was persuaded to enter the Government service in 1901 and became
assistant secretary in the Colonial Department of the Ministry of
Foreign Affairs. He was known to be in the good graces of the Emperor
and of Prince von Bülow, and it was said that he became their chief
adviser on Near Eastern affairs.[14] The choice of such a distinguished
person as directing genius of the Anatolian and Bagdad Railways gave
renewed confidence in Germany that the Bagdad plan would succeed. In
Great Britain the appointment was considered an ominous sign that a
very real connection existed between the economic enterprises of the
_Deutsche Bank_ and the Near Eastern activities of the German Foreign
Office.[15]

In 1907 the Anatolian Railway Company, under a contract with the
Turkish Government, completed arrangements for the irrigation of the
desert plain southeast of Konia. It was planned to water artificially
about one hundred and fifty thousand acres of arid land, thus rendering
the region independent of weather conditions. The effects of such
an improvement would be far-reaching. Much idle land would be made
available for profitable farming, and the yield of soil already under
cultivation would be developed materially. Increased production
might lead to a surplus of agricultural products for export, and the
greater purchasing power of a prosperous Anatolian farming class would
stimulate import trade. Agriculture, commerce, and manufacturing alike,
therefore, could be served. The Anatolian Railway Company issued some
135,000 new shares of stock to defray its part of the expenses, hoping
to be richly compensated by increased traffic on the railway. The
Imperial Ottoman Treasury issued £800,000 of Konia Irrigation Bonds,
an outlay which it hoped to offset by increased taxes from the Konia
district, by rentals and sales of irrigated lands, and by decreased
guarantees to this section of the railway.[16]

A number of German banks, meanwhile, were pushing their financial
operations in the Near East. The success of the _Deutsche Palästina
Bank_[17] encouraged the formation of other similar institutions. The
_Nationalbank für Deutschland_, in 1904, founded the _Banque d’Orient_,
with offices in Hamburg, Athens, Constantinople, Salonica, and Smyrna.
The following year the _Dresdner Bank_, in coöperation with other
large Austro-German financial institutions, inaugurated the important
_Deutsche Orientbank_, with a capital stock of sixteen million marks.
This latter bank took over the Hamburg and Constantinople offices of
the _Banque d’Orient_ and established a large number of branches of its
own, including those at Alexandria, Cairo, and Smyrna. The _Deutsche
Orientbank_ became an active promoter of industrial enterprises in
Asiatic Turkey; for example, in 1908 it organized _La Société pour
Enterprises Electriques en Orient_, a company which proceeded to take
over the surface railways as well as the electric light and power
concession of Constantinople. In 1908 the _Deutsche Bank_ itself
formally opened an office in Constantinople for the transaction of a
general banking business.[18]

The entry of these German banks into the Near Eastern field was of
no small importance to the British and French financial institutions
already there. The German bankers allowed liberal rates of interest
on time and check deposits and permitted reasonable overdrafts at
low rates. These practices were in sharp contrast with the rigid
regulations of the older-established banks. The _Deutsche Bank_
undertook to collect claims of local merchants against the Turkish
Government; through its influence in the Government departments it cut
red tape and secured payments which otherwise might have been delayed
for years. Constantinople business men welcomed their emancipation
from the ultra-conservative methods of the older institutions, and it
was not long before a very thriving business was being transacted by
the German banks and their agencies in the Near East.[19] Here was
a high-powered bomb to disturb the quiet which heretofore had ruled
in the banking community of Constantinople and of Asiatic Turkey.
Germans were disturbing the financial, as well as the commercial and
industrial, _status quo_ in the Near East!

The advance of the German banks in Turkey was almost certain to be the
first step in a more general industrial and commercial penetration.
This will be the more readily understood if one recalls the close
coöperation which characterized the relationships between the German
banks and the business interests of the empire. This coöperation which
amounted, in effect, to financial interdependence—was one of the
striking features of the German economic advance in the generation
before the Great War. It strengthened German industrial enterprises
at home and promoted German trade and investments abroad. If a great
business needed capital, the banks furnished the necessary funds by
the purchase of securities which made them at once creditors and
copartners in that business. Sooner or later this connection would
find expression in the appointment of a representative of the bank on
the supervisory council of the industrial enterprise; occasionally a
“captain of industry” would be elected to the board of directors of
the bank. Although this procedure of interlocking directorates was
not unique to Germany—it was an established practice in the United
States, certainly—there was no country in which these alliances
were so far-reaching, or in which financial power was so centrally
controlled, as in the German Empire. In Germany finance and industry
were wedded—permanently united for better or for worse.[20]

Of this alliance of banking and business the _Deutsche Bank_, chief
promoter of the Bagdad Railway, was a shining example. Its industrial
connections were too numerous to catalogue. It enjoyed intimate
financial relations with hundreds of companies engaged in every
important branch of manufacturing in Germany; it was represented on the
directorates of the North German Lloyd and Hamburg-American steamship
lines; it was the organizer of and chief stockholder in the German
Petroleum Company. It was the owner of a number of overseas banking
corporations stretching their activities from South America on the
west to China on the east. The officers of the _Deutsche Bank_ firmly
believed that the export of capital and the export of commodities
should go hand in hand. The other banks associated in the Bagdad
Railway enterprise likewise were closely affiliated with important
industrial enterprises. For example, the _Dresdner Bank_ held the
vice-chairmanship of Ludwig Loewe & Company, prominent manufacturers
of munitions, and the chairmanship of the Orenstein Koppel Company,
manufacturers of railway supplies. The _Bank für Handel und Industrie_
possessed interests in the _Allgemeine Elektrizitäts-Gesellschaft_,
the German General Electric Company. A still further evidence of this
close association of financial and industrial interests was furnished
in January, 1905, when the chief German banks entered into a “community
of interests” with August Thyssen and Hugo Stinnes, the steel and coal
barons of Germany.[21]

If German business men were likely to be interested in the economic
development of Asia Minor, what was the nature of this interest?


BROADER BUSINESS INTERESTS DEVELOP

Speaking to the Reichstag in March, 1908, Baron von Schoen, Foreign
Secretary of the Empire, explained a few of the opportunities which
the Bagdad Railway opened to German industry and commerce. “The
advantages,” he said, “which accrue to Germany from this great
enterprise, conceived on a grand scale, are obvious. In the first
place, there arises the prospect of considerable participation of
German industry in the furnishing of rails, rolling stock, and other
railway materials. Furthermore, German engineers, German construction
workers, and German contractors are very likely to find remunerative
occupation in the construction of the railway. Finally, it is certain
that with the rising civilization and the higher standard of living of
the inhabitants of the country, a new market will be made available.
That this territory will be opened up not merely for us, but also for
other nations, we can allow without envy.... What we have in view is
the development of regions that seem to be worth developing; we wish
to coöperate in awakening from a sleep of a thousand years an ancient
flourishing civilized region, thereby creating a new market for
ourselves and others.”[22]

This same idea had been advanced by others on other occasions. The
_Alldeutsche Blätter_ of December 17, 1899, had prophesied that the
construction of the railway by a German-controlled syndicate would
result in the purchase of some eighty million dollars’ worth of German
products and that, once completed, the railway would open to German
business an enormous and wealthy market. Lord Ellenborough, speaking in
the House of Lords of the United Kingdom, on May 5, 1903, expressed the
opinion that “the capital disbursed in constructing the railway would
be largely spent on German steel industries, and on salaries to German
engineers and German surveyors, so that even if the railway, as a
railway, were a failure, it would not be a total loss to Germany.”[23]
The British Consul General at Constantinople pointed out, in 1903,
that, in addition to all of the aforementioned advantages, there would
be innumerable special opportunities for the remunerative investment of
German capital in the regions traversed by the railway.[24]

Events seemed to establish the wisdom of these expressions of opinion.
Rails for the Bagdad line were ordered in Germany from the Steel
Syndicate (_Stahlwerksverband_). Transportation of materials from
Europe to the Near East was arranged for through German steamship
companies. German engineers were given the executive positions in
the construction and operation of the railway. Important subsidiary
companies were formed for the construction of port and terminal
facilities, for the building of irrigation works, and for other
purposes incidental to the railway proper. German banks established
branches on the ground in order to take advantage of other
opportunities for the profitable investment of surplus funds.[25]

There was much evidence, however, to indicate that the preëminently
German character of the railway was not preserved. An English observer,
after a trip over the Anatolian lines in 1908, wrote that he noted a
great predominance of Turkish, Greek, and Italian employees over the
Germans. “The fact is,” he maintained, “that the people who run the
line, though Germans, care first for their own pockets and next for
Germany. They buy or employ what is cheapest and most suitable and
do not care a finger-snap for the origin of an article or a servant.
Patriotism occupies a small place in the calculations of promoters. The
tendency to deal with the Fatherland must always be strong, but it is
founded chiefly on the fact that the German knows the goods available
in his own country better than the goods of other countries and that
credit and banking facilities are more easily obtained at home. The
master impulse in every German engaged in business in Turkey, as in
business men of every other nationality, is to make money for himself
as soon as possible.” This same observer pointed out that there was an
astonishing absence of German employees in even the more responsible
positions of the Anatolian Railway and that the great majority of the
unskilled laborers were Italians.[26]

Ultra-patriotic Germans, furthermore, denounced Dr. von Gwinner and his
associates for not making the Bagdad Railway an exclusively Teutonic
enterprise. A speaker at a Berlin branch of the Pan German League
had this to say of the situation: “The Bagdad Railway, which in its
origins was entirely German, has, thanks to the criminal negligence of
the _Deutsche Bank_, become almost wholly French. The German schools
along the line of the Railway, which were established by von Siemens,
have fallen into decay. The officials of the Railway speak French.
The ordinary language for transacting the business of the Railway
is French, although the French share of the capital is only thirty
per cent. The German engineers may as well be called home to-day as
to-morrow.”[27]

Nevertheless, the rapid expansion of German financial interests in the
Near East and the established policy of the German banks to encourage
and assist export trade were factors in a remarkable development
of German trade in the Ottoman Empire, as will be indicated by the
following table:[28]

           EXPORTS FROM   IMPORTS TO
            TURKEY TO     TURKEY FROM
  YEAR    GERMANY—MARKS  GERMANY—MARKS

  1900     30,400,000       34,400,000
  1901     30,000,000       37,500,000
  1902     36,500,000       43,300,000
  1903     37,700,000       50,200,000
  1904     43,500,000       75,300,000
  1905     51,600,000       71,000,000
  1906     55,000,000       68,200,000
  1907     55,100,000       81,500,000
  1908     47,600,000       64,000,000
  1909     57,300,000       78,900,000
  1910     67,400,000      104,900,000
  1911     70,100,000      112,800,000

This table eloquently describes the nature of the advance of German
economic interests in Turkey. It does not, however, tell the whole
story. Was this advance the result of a general increase of prosperity
in the Ottoman Empire in which the Germans shared in common with other
traders? Or was the increase in German trade out of proportion to the
progress of other nationals—perhaps at the expense of the French and
British? The following tables will help answer these questions:[29]

                         EXPORTS FROM TURKEY
           TO UNITED                                   TO AUSTRIA
            KINGDOM       TO FRANCE     TO ITALY         HUNGARY
  YEAR       MARKS          MARKS         MARKS           MARKS

  1900   118,760,000     86,220,000     22,520,000     35,220,000
  1901   122,000,000                    26,120,000     31,540,000
  1902   130,520,000     83,040,000     28,980,000     35,580,000
  1903   127,400,000     81,200,000     38,120,000     39,900,000
  1904   122,760,000     73,120,000     31,300,000     39,120,000
  1905   118,960,000     80,780,000     42,240,000     37,640,000
  1906   129,440,000     91,600,000     45,100,000     39,300,000
  1907   136,600,000     95,320,000     50,480,000     34,640,000
  1908   109,220,000     70,760,000     44,580,000     34,360,000
  1909   109,320,000     79,000,000     59,080,000     36,600,000
  1910   100,660,000     77,000,000     48,000,000     43,340,000

                            IMPORTS TO TURKEY
                                                          FROM
          FROM UNITED       FROM                         AUSTRIA
            KINGDOM        FRANCE       FROM ITALY       HUNGARY
  YEAR       MARKS          MARKS          MARKS          MARKS

  1900   102,920,000     29,800,000     29,720,000     53,440,000
  1901   128,220,000     37,880,000     43,800,000     57,100,000
  1902   123,980,000     37,200,000     40,400,000     61,380,000
  1903   114,020,000     36,640,000     45,360,000     65,120,000
  1904   151,960,000     40,880,000     53,280,000     77,600,000
  1905   139,300,000     42,420,000     57,200,000     76,660,000
  1906   167,040,000     47,300,000     70,900,000     92,620,000
  1907   147,380,000     46,380,000     63,040,000     89,920,000
  1908   145,260,000     51,600,000     58,700,000     69,240,000
  1909   156,280,000     54,600,000     67,740,000     77,040,000
  1910   177,160,000     58,400,000     94,000,000    107,300,000

Certain important conclusions may be drawn from these statistics:

1. British trade continued during the decade 1900–1910 to dominate
the Near Eastern market. With total imports and exports in the latter
year of over 277,000,000 marks it was in no immediate danger of being
outstripped by its nearest rivals—a German trade of about 172,000,000
marks and an Austro-Hungarian trade of about 150,000,000 marks.

2. France, whose Near Eastern trade in 1900 had proudly held a
position second only to that of the United Kingdom, was being obliged
to accept a less prominent place in the economic life of the Ottoman
Empire. During the first ten years of the new century French merchants
obviously were being outmaneuvered by Germans, Austro-Hungarians, and
Italians. In spite of a total increase of 17% in exports and imports
between France and Turkey it was apparent that French trade was not
keeping the pace; during the same period Austro-Hungarian trade showed
an increased valuation of 81%, German trade of 166%.

3. Although it continued to dominate the Near Eastern market, British
commerce, likewise, was losing ground. Between 1900 and 1910 it showed
an increase of only 25% as compared with the Italian record of 172%
during the same period. During the decade British exports, although
showing an increased valuation, fell off from 35% to 22–1/2% of the
total import trade of Turkey; for the same period German exports
achieved not only an absolute gain of almost eighty million marks, but
also a relative increase from 2–1/2% to 11–1/2% of the whole.

4. The advance of German trade was not equal to the advance of Italian
trade in the Ottoman Empire during the same period. This explains, in
part, the rapidly increasing political interest of Italy in the Near
East and seems to set at rest the notion that the Germans acquired a
stranglehold on exports and imports from and to Turkey.

5. Looking at the question from a purely political standpoint, one’s
attention is struck by the fact that commercial laurels in the Ottoman
Empire were going to the nationals of the Triple Alliance powers.
Economically, Turkey was leaning toward the Central Powers. Few
international alliances are not based upon coincidence of economic
interests; it appeared that a solid foundation was being laid for the
eventual affiliation of Turkey with the Triple Alliance.


SEA COMMUNICATIONS ARE ESTABLISHED

Exports and imports, however, are not the only items which enter into
the international balance sheet. As has been so amply demonstrated in
the experience of the British Empire, ocean freights may constitute
one of the chief items in the prosperity of a nation which lives
upon commerce with other nations. It was not surprising, therefore,
that upon the heels of German banks and German merchants in the Near
East closely followed those other great promoters of German economic
expansion, the steamship companies. The success of the _Deutsche
Levante Linie_, established in 1889,[30] indicated that there was room
for additional service between German ports and the cities of the
Aegean and the Mediterranean. Accordingly, in 1905, the Atlas Line, of
Bremen, inaugurated a regular service from the Baltic to Turkish ports.
One line was to ply between Bremen and Smyrna, with Rotterdam, Malta,
Piraeus, Salonica, and Constantinople as ports of call. Another of this
same company’s lines was to carry freight and passengers from Bremen to
the Syrian city of Beirut. During the same year the North German Lloyd
was responsible for the formation of the _Deutsche Mittelmeer Levante
Linie_, providing service between Marseilles and Genoa and Smyrna,
Constantinople, Odessa, and Batum.[31] The considerable increase of
trade between Germany and Turkey made a very real place for these
lines, especially in the transportation of such commodities as could
not be expected to bear the heavy charges of transportation by rail
through the Balkans and overland to German cities. These lines were
put into operation to provide for a traffic already in existence and
waiting for them.

Such was not the case, however, with the establishment of German
steamship service to the Persian Gulf. Here British trade had been
dominant for centuries. The German railway invasion had not as yet
reached Mesopotamia, and German trade in this region was negligible.
The establishment of a German steamship service to Basra would be
equivalent to the throwing out of an advance guard and reconnaissance
expedition on behalf of German trade. Incidentally it would mean
the destruction of the practical monopoly which had been enjoyed by
the British in the trade of Irak. It was considered of no slight
importance, therefore, when, in April of 1906, the Hamburg-American
Line announced its intention of establishing a regular service between
European ports and the Persian Gulf. An office of the Company was
immediately opened at Basra, and in August the first German steamer,
with a German cargo, made its way up the Shatt-el-Arab. Soon afterward
the Hamburg-American Line inaugurated, also, a service between British
ports and Mesopotamia, and it provided a regular schedule of sailing
dates, a luxury to which merchants doing business in the Near East had
not heretofore been accustomed. With the aid of a government subsidy
the German company cut freight rates in half. This rude disturbance of
the _status quo_ in the shipping of the Persian Gulf dealt a severe
blow to British companies engaged in the carrying trade between
European ports and Mesopotamia. After a futile rate war the British
lines, represented by Lord Inchcape, came to an agreement, in 1913,
with their German competitors, ending a rivalry which had been the
cause of considerable concern on the part of their respective foreign
offices.[32]

In order to coöperate with the attempts of Germans to have a share in
the trade of the Mesopotamian valley, the German Government established
a consulate at Bagdad in 1908. The services of this consulate,
supplementing the pioneer work of the Hamburg-American Line, had
immediate results in the development of commercial relationships with
the Land of the Two Rivers. The value of exports from Basra to Germany
increased from about half a million dollars in 1906 to slightly in
excess of a million dollars in 1913; German goods received at Basra
during the same period increased from about half a million dollars
to almost nine million dollars. Herr von Mutius, the German Consul
at Bagdad, conducted an active campaign of education and propaganda,
urging upon business men at home the importance of participating
further in the development of the economic resources of the land of the
Arabs.[33]

The establishment of steamship communication between Europe and Asiatic
Turkey was welcomed by the Bagdad Railway Company. To widen the scope
of usefulness—and, consequently, to increase the revenues—of the
railway it was essential that every feeder for freight and passenger
service be utilized. This was a consideration in the agreement
with the Smyrna-Cassaba line and in the purchase, in 1906, of the
Mersina-Tarsus-Adana Railway.[34] The establishment of connections
with the former system developed a satisfactory volume of traffic with
Smyrna. The acquisition of the latter line provided direct connections
with the Mediterranean coast.

Nevertheless, the promoters of the Bagdad Railway were by no
means satisfied with their terminal ports. Constantinople was at
a disadvantage as compared with Smyrna in the trade of Anatolia.
Smyrna was within reach of the Bagdad system only over the tracks
of a French-owned line which might not always be in the hands of
well-disposed owners. The prospects that the Railway soon would reach
Basra were not very bright. Mersina was limited in its possibilities of
development—shut off by the mountains from Anatolia, on the north, and
Syria, on the south, it was the natural outlet only for the products of
the Cilician plain.

The port which the company sought to bring under its control was
Alexandretta, on the Mediterranean, seventy miles from Aleppo. Article
12 of the concession of 1903 assured preference to the Bagdad Railway
Company in the award of a “possible extension to the sea at a point
between Mersina and Tripoli-in-Syria.” The construction of a branch
from the main line to Alexandretta would provide the Railway with
sea communications for the valuable trade of northern Syria and the
northern Mesopotamian valley, then almost entirely dependent upon the
caravan routes centering in Aleppo. Accordingly, negotiations were
begun in the spring of 1911 looking toward the building of a branch
line to Alexandretta and the construction of extensive port facilities
at that harbor.

Serious financial difficulties were encountered, however, in the
promotion of this plan. The Young Turk budget of 1910 had announced
that no further railway concessions carrying guarantees would be
granted. Even had the Government been disposed to depart from its
avowed intention, it would have been unable to do so. Suffering from
the usual malady of a young government—lack of funds—it was running
into debt continually and finding it increasingly difficult to borrow
money. Early in 1911 the Imperial Ottoman Treasury addressed a request
to the Powers for permission to increase the customs duties from eleven
to fourteen per cent. _ad valorem_. Great Britain immediately announced
its determination to veto the proposed revision of the revenues, unless
the increase were granted with certain important qualifications. Sir
Edward Grey informed the House of Commons, March 8: “I wish to see
the new régime in Turkey strengthened. I wish to see them supplied
with resources which will enable them to establish strong and just
government in all parts of the Turkish Empire. I am aware that money is
needed for these purposes, and I would willingly ask British trade to
make sacrifices for these purposes. But if the money is to be used to
promote railways which may be a source of doubtful advantage to British
trade, and still more if the money is going to be used to promote
railways which will take the place of communications which have been in
the hands of British concessionaires [_i.e._, the Lynch Brothers], then
I say it will be impossible for us to agree to that increase of the
customs duty until we are satisfied that British trade interests will
be satisfactorily guarded.”[35] This clear pronouncement of British
policy made it plain that no increased Turkish customs revenues could
be diverted to the proposed Alexandretta branch. It was even doubtful
if further funds would be forthcoming for the construction of the main
line beyond El Helif.

This complicated domestic and international situation led to the
conventions of March 21, 1911, between the Imperial Ottoman Government
and the Bagdad Railway Company. One of these conventions provided for
the construction of a branch line of the Bagdad Railway from Osmanie,
on the main line, to Alexandretta, but without kilometric guarantee or
other subsidy from the Turkish Government. A second convention leased
for a period of ninety-nine years to the Haidar Pasha Port Company
the exclusive rights of constructing port and terminal facilities at
Alexandretta—including quays, docks, warehouses, coal pockets, and
elevators. As in the case of the Bagdad Railway itself, public lands
were to be at the disposal of the concessionaires without charge,
and private lands were to be subject to the law of expropriation if
essential for the purposes of the Company. Within the limits of the
port the Company was authorized to maintain a police force for the
maintenance of order and the protection of its property.[36]

Because of the refusal of the Powers to permit an increase in the
customs, the Turkish Government was unable to assign further revenues
to the payment of railway guarantees. The Bagdad Railway Company
thereupon agreed to proceed with the construction of the sections
from El Helif to Bagdad without additional commitments from the
Imperial Ottoman Treasury. The Company likewise renounced its right
to build the sections beyond Bagdad, including its concession for the
construction of port works at Basra, with the proviso, however, that
this section of the line, if constructed, be assigned to a Turkish
company internationally owned and administered.[37] This surrender by
the Bagdad Railway Company of its rights to the pledge of additional
revenues by the Ottoman Treasury and its surrender of its hold on the
sections of the railway beyond Bagdad are by far the most important
provisions of the conventions of March 21, 1911.

German opinion, as a whole, considered these self-denying contracts
of the Company an indication of the willingness of the _Deutsche
Bank_ and the German Government to go more than half way in removing
diplomatic objections to the construction of the Bagdad Railway.[38]
There were Englishmen, however, who felt that the conventions of 1911
were a mere gesture of conciliation; in their opinion the renunciation
of these important rights was bait held out to win foreign diplomatic
support and to induce the participation of foreign capital in the
Railway and its subsidiary enterprises. Lord Curzon, for example,
expressed to the House of Lords his belief that technical and financial
difficulties made it impossible for the German bankers to proceed with
the construction of the Bagdad line without the assistance of outside
capital. He was firmly of the opinion that no railway stretching from
the Bosporus to the Gulf could be financed by a single Power.[39]

The unsettled political conditions in Turkey, meanwhile, had delayed,
but not halted, construction of the Bagdad Railway. The years 1910
and 1911 were marked by progress on the sections in the vicinity of
Adana. From that Cilician city the railway was being laid westward
to the Taurus Mountains, eventually to pass through the Great Gates
and meet the tracks already laid to Bulgurlu. Eastward the line was
being constructed in the direction of the Amanus mountains, although
there seemed to be little chance for an early beginning of the
costly tunneling of the barrier. During 1911 and 1912 attention was
concentrated on the building of the sections east of Aleppo, which
in 1912 reached the Euphrates River. The branch line to Alexandretta
was completed and opened to traffic November 1, 1913.[40] Financial
difficulties in the way of further construction of the main line
were overcome in the latter part of 1913, when the _Deutsche Bank_
disposed of its holdings in the Macedonian Railways and the Oriental
Railways to an Austro-Hungarian syndicate. The funds thus obtained
were re-invested in the Bagdad Railway, and the necessity was obviated
for a further sale of securities on the open market.[41] In 1914 the
Amanus tunnels were begun, a great steel bridge was thrown across the
Euphrates, the sections east of Aleppo were constructed almost to Ras
el Ain, in northern Mesopotamia. In addition, rails were laid from
Bagdad north to Sadijeh, on the Tigris, before the outbreak of the
Great War.[42]

Thus far we have considered the Bagdad Railway almost entirely as a
business undertaking. In its inception, in fact, it was generally thus
regarded throughout Europe. As time passed, however, the enterprise
overstepped the bounds of purely economic interest and entered the
arena of international diplomacy. The greatest usefulness of the Bagdad
Railway was in the economic services it was capable of rendering the
Ottoman Empire and, further, all mankind. Its widest significance
is to be sought in the part it played in the development of German
capitalistic imperialism. Its greatest menace was its consequent
effects upon the relations between Turkey, Germany, and the other Great
Powers of Europe. The succeeding chapters will deal with the political
ramifications of the Bagdad enterprise.


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Dr. Arthur von Gwinner (1856- ) is one of the most distinguished
of modern financiers. He was born, appropriately enough, at
Frankfort-on-the-Main when that city was a center of international
finance. His father, a lawyer, was an intimate friend of Schopenhauer
and the latter’s executor and biographer. In 1885 young Gwinner
married a daughter of Philip Speyer and thus became a member of one
of the famous families of bankers in Europe and America. For a time
he conducted a private banking business in Berlin, but in 1894 he
became an active director of the _Deutsche Bank_. Two years later he
was sent to America to supervise the reorganization of the Northern
Pacific Railway by its European creditors; and while he was in the
United States, he formed lasting friendships with J. Pierpont Morgan
and James J. Hill. In 1901 he succeeded Dr. von Siemens as the guiding
spirit of the _Deutsche Bank_, which under his administration made
even more remarkable progress than under his capable predecessor. As
managing director of the _Deutsche Bank_ he became president of the
Anatolian and Bagdad Railway Companies. It was in 1909 that Dr. von
Gwinner’s father received from the Kaiser the patent of hereditary
nobility—an honor said to have been intended as much for the
distinguished son as for the distinguished sire. Intellectually, Dr.
von Gwinner is an international man: he quotes Dickens and Shakespeare
and Molière, Goethe and Schiller and Lessing, with almost equal
facility. His delightful personality stands out in all the Bagdad
Railway negotiations.

[2] _Infra_, Chapter IX. The French bankers also shared in the
ownership of the construction company. A. Géraud, “A New German Empire:
the Story of the Bagdad Railway,” in _The Nineteenth Century_, Volume
75 (1914), p. 967; _Report of the Bagdad Railway Company_, 1903, pp. 4,
8.

[3] Among the German members were Dr. von Gwinner; Dr. Karl Testa,
representative of the German bondholders on the Ottoman Public
Debt Administration; Dr. Alfred von Kaulla, a director of the
_Württembergische Vereinsbank_, and original concessionaire of the
Anatolian Railways; Dr. Karl Schrader, a member of the Reichstag; Dr.
Kurt Zander, general manager of the Anatolian Railway Company. The
directors nominated by the French interests were Count A. D’Arnoux,
Director General, and M. Léon Berger, French member, of the Ottoman
Public Debt Administration; MM. J. Deffes, G. Auboyneau, P. Naville,
Pangiri Bey, and A. Vernes, of the Imperial Ottoman Bank, the
last-named being vice-president of the Bagdad Railway Company; M. L.
Chenut, a member of the Ottoman _Régie Générale de chemins de fer_.
The Turkish members of the Board were Hamdy Bey, representative of the
Ottoman bondholders on the Public Debt Administration; Hoene Effendi,
under-secretary in the Ministry of Posts and Telegraphs; and two
Constantinople bankers. The Swiss were Herr Abegg-Arter, president of
the _Schweizerische Kreditanstalt_, of Zurich, and M. A. Turrettini,
of _L’Union financière de Genève_. The Austrian was Herr Bauer, of the
_Wiener Bankverein_, and the Italian was Carlo Esterle, of the Italian
Edison Electric Company, of Milan. There were few important changes in
the personnel of the Board of Directors between 1903 and 1914, perhaps
the most notable being the election of Dr. Karl Helfferich, in 1906.
_Cf._ _Reports of the Bagdad Railway Company_, 1903, _et seq._

[4] _Cf._ _Parliamentary Debates, House of Commons_, fourth series,
Volume 120 (1903), p. 1371. During the Great War a conspicuous German
general complained that the Swiss in charge of the operation of the
Railway was more interested in the commercial than in the strategic
value of the line and did not coöperate with the military authorities.
_Cf._ Field Marshal Liman von Sanders, _Fünf Jahre Türkei_ (Berlin,
1919), p. 40.

[5] _Verhandlungen des Reichstages, Stenographische Berichte, XII
Legislaturperiode, 1 Session_, Volume 231 (1908), p. 4253c.

[6] _Supra_, p. 77.

[7] Paul Imbert, “Le chemin de fer de Bagdad,” in _Revue des deux
mondes_, Volume 197 (1907), p. 672. The _Deutsche Bank_, with its
capital and surplus of about $75,000,000, was the foremost of the
German banks. Associated with it in the Bagdad Railway enterprise were
a number of other financial institutions, including, it is said, the
_Dresdner Bank_ and the _Darmstädter Bank_, ranking second and fourth
respectively among the great banks of the German Empire. Riesser, _op.
cit._, pp. 642–644.

[8] _Supra_, Chapter IV, Note 48; Fraser, _op. cit._, pp. 48–49;
Jastrow, _op. cit._, p. 94; _Report of the Bagdad Railway Company_,
1904, p. 3; 1905, p. 4.

[9] Von Gwinner, _loc. cit._, p. 1088.

[10] _Corps de droit ottoman_, Volume III, pp. 221–228.

[11] _Turkey in Europe_, pp. 128–129; _The Quarterly Review_, Volume
228 (1917), pp. 510–511; _Parliamentary Debates, House of Commons_,
fourth series, Volume 159 (1906), pp. 1338, 1359; _ibid._, Volume 162
(1906), p. 1419; Volume 178 (1907), p. 321; _ibid._, fifth series,
Volume 53 (1913), p. 368.

[12] _Société Impériale Ottomane du Chemin de fer de Bagdad—Convention
Additionelle_ (Constantinople, 1908); _Parliamentary Papers_, No. Cd.
5636, Volume CIII (1911); _Report of the Bagdad Railway Company_, 1908,
pp. 4–5; 1909, p. 4; _Bagdad Railway Loan Contract, Second and Third
Series_, June 2, 1908; _Report of the Deutsche Bank_, 1909, p. 12.

[13] _Report of the Deutsche Bank_, 1909, p. 12.

[14] _Report of the Bagdad Railway Company_, 1906, p. 4; K. Helfferich,
_Die Vorgeschichte des Weltkrieges_, pp. 131–132; Dr. Helfferich’s
reputation was based largely upon his writings on two important
subjects: the gold monetary standard; government promotion of foreign
trade. _Cf._ _Germany and the Gold Standard_ (London, 1896); _Beiträge
zur Geschichte der deutschen Geldreform_ (Leipzig, 1901). See the
enthusiastic appreciation of Dr. Helfferich’s services voiced by his
associates of the _Deutsche Bank_ upon the occasion of his appointment
as Secretary of State for the Imperial Treasury, January, 1915. _Report
of the Deutsche Bank_, 1915, pp. 11–12; _Report of the Bagdad Railway
Company_, 1914, p. 8.

[15] _The Times_, October 25, 1905, commenting upon the proposed
appointment of Helfferich.

[16] _Report of the Anatolian Railway Company_, 1907, p. 7; H. C.
Woods, “The Bagdad Railway and Its Tributaries,” in _The Geographical
Journal_, Volume 50 (1917), pp. 32 _et seq._; _Parliamentary Papers_,
No. Cmd. 964 (1920). The irrigation system thus planned was completed
before the outbreak of the Great War. It justified the sanguine
expectations of its promoters, for the agricultural yield of the
irrigated lands increased from five to fifteen fold over the former
production. In 1911 a similar irrigation project was gotten under way
in Cilicia. _Diplomatic and Consular Reports_, No. 4835 (1911), pp.
18–19.

[17] _Cf._ _supra_, p. 37.

[18] Riesser, _op. cit._, p. 454; _Report of the Dresdner Bank_,
1905, p. 6; _Diplomatic and Consular Reports_, No. 3553 (1905), p.
29; _Report of the Deutsche Bank_, 1908, p. 10. The Bagdad office of
the _Deutsche Bank_ was not established until 1914, just before the
outbreak of the War. _Ibid._, 1914, p. 9.

[19] The principal bank in Turkey before the War was the Imperial
Ottoman Bank. This institution was owned by French and British
capitalists, the French interest being predominant and in control. It
was a quasi-public bank, founded in 1863, and enjoying since then a
monopoly of bank-note issues. Its central office was at Constantinople,
but it maintained a branch in practically every important city
of Asiatic Turkey, including Smyrna, Jerusalem, Jaffa, Aleppo,
Alexandretta, Beirut, Damascus, Basra, Bagdad, and Mosul. The capital
stock of the Imperial Ottoman Bank was £10,000,000 sterling. A British
bank of some importance was The Eastern Bank, Ltd., of which the
Right Honorable Lord Balfour of Burleigh was chairman—the same Lord
Balfour who was Secretary for Scotland in the ministry of his namesake,
Arthur J. Balfour, in 1903, when the British Government quashed the
participation of English capitalists in the Bagdad Railway. The head
office of the Eastern Bank was in London, and it maintained branches in
Basra and Bagdad, although its principal sphere of activity was India.
Sir Ernest Cassell’s National Bank of Turkey was not established until
1909. _Cf._ Caillard, _loc. cit._, p. 439; weekly advertisements of
these banks in _The Near East; Parliamentary Debates_, Index for 1903,
p. v; _Turkey in Europe_, p. 36.

[20] D. S. Jordan, “The Interlocking Directorates of War,” in _The
World’s Work_, July, 1913, p. 278; H. Hauser, _Les Méthodes Allemandes
d’Expansion Économique_, seventh edition (Paris, 1917), _passim_;
Riesser, _op. cit._, pp. 366–367.

[21] Riesser, _op. cit._, pp. 373–375, 432, 474, 745–746.

[22] _Verhandlungen des Reichstages, Stenographische Berichte, XII
Legislaturperiode, 1 Session_, Volume 231 (1908), p. 4253c. The speech
of the Secretary was followed by “Bravos” from the National Liberals.

[23] _Parliamentary Debates, House of Lords_, fourth series, Volume 121
(1903), p. 1340.

[24] _Diplomatic and Consular Reports_, No. 3140 (1903), p. 40.

[25] _Supra_, pp. 98–99, _Report of the Deutsche Bank_, 1909, p. 12;
_Stenographische Berichte, XII. Legislaturperiode, 2 Session_, Volume
260 (1910), p. 2181d, statement by Baron von Schoen.

[26] Fraser, _op. cit._, pp. 16–17, 18–20. _Cf._, also, _Report of the
Bagdad Railway Company_, 1911, p. 4.

[27] _Staatsbürger Zeitung_ (Berlin), March 3, 1912.

[28] Compiled from the _Statistisches Jahrbuch für das deutsche Reich_,
1900–1914, as corrected for 1900–1905 according to the _Statistisches
Handbuch für das deutsche Reich_, Volume 2, pp. 506–510. A remarkable
increase of German exports to Turkey—an increase of 50%—is to be
noted in the year 1904, during which the first section of the Bagdad
Railway was constructed. Undoubtedly this increase is to be partially
accounted for by the purchase in Germany of materials for right of way
as well as rolling stock for the railway. This factor should not be
over-estimated, however, as a glance at the following tables will show
that imports into Turkey from other European countries during the same
year likewise showed increases, without exception. The general falling
off in trade during 1908 may be attributed, in part, at any rate, to
the Young Turk Revolution of that year.

[29] Compiled from _Diplomatic and Consular Reports_, Nos. 2950 (1902),
3533 (1905), 4188 (1908), and 4835 (1910–1911).

[30] _Supra_, p. 36.

[31] _Diplomatic and Consular Reports_, No. 3533 (1905), p. 27; _Turkey
in Europe_, pp. 86–87.

[32] _Mesopotamia_, pp. 99–101; Schaefer, _op. cit._, p. 22. Regarding
British interests in the Persian Gulf, _cf._, a detailed statement
by Lord Lansdowne to the House of Lords, May 5, 1903. _Parliamentary
Debates, House of Lords_, fourth series, Volume 121 (1903), pp.
1347–1348.

[33] “Bagdad: Handelsbericht des kaiserlichen Konsulats für das Jahr
1908–1909,” in _Deutsches Handels-Archiv_, 1910, part 2, pp. 27–35;
also, “Bericht über den Handel in Basra und Bagdad für das Jahr 1910,”
_ibid._, 1912, part 2, pp. 263–270; _Mesopotamia_, p. 108.

[34] _Cf._ _supra_, pp. 59–60; _Report of the Bagdad Railway Company_,
1906, p. 4, 1908, pp. 7–8; _Diplomatic and Consular Reports_, No. 3533
(1905), p. 29. The Mersina-Adana line was formally incorporated in the
Bagdad system in 1908. _Cf._ _Deuxième convention additionelle à la
convention du chemin de fer de Bagdad_ (Constantinople, 1910).

[35] _Parliamentary Debates, House of Commons_, fifth series, Volume 22
(1911), pp. 1284–1285.

[36] _Quatrième convention additionelle à la convention du 5 Mars,
1903, relative au chemin de fer de Bagdad_ (Constantinople, 1911).
H. F. B. Lynch (of the firm of Lynch Brothers), “The Bagdad Railway:
the New Conventions,” in the _Fortnightly Review_, new series, Volume
89 (1911), pp. 773–780. Mr. Lynch explains that his summary of the
Alexandretta port concessions is based upon an authentic article
appearing in _La Turquie_, a Constantinople newspaper, of March 21,
1911. _Diplomatic and Consular Reports_, No. 4835 (1911), p. 16; _The
Times_ (London), March 23, 1911.

[37] _Stenographische Berichte, XII. Legislaturperiode, 2 Session_,
Volume 266 (1911), pp. 5984c _et seq._; _Troisième convention
additionelle à la convention du 5 Mars, 1903, relative au chemin de fer
de Bagdad_ (Constantinople, 1911); _Parliamentary Debates, House of
Commons_, fifth series, Volume 23 (1911), pp. 582–583, statement by Sir
Edward Grey.

[38] See speeches of Herr Scheidemann and Herr Bassermann before
the Reichstag, March 30, 1911. _Stenographische Berichte, XII.
Legislaturperiode, 2 Session_, Volume 266 (1911), pp. 5980 _et seq._

[39] _Parliamentary Debates, House of Lords_, fifth series, Volume 23
(1911), p. 589.

[40] D. Chatir, “L’État actuel du chemin de fer de Bagdad,” in
_Questions diplomatiques et coloniales_, Volume 36 (1913), pp. 279–281;
_Report of the Bagdad Railway Company_, 1910, p. 4, 1911, p. 4, 1913,
pp. 3–5, 1914, pp. 6–8.

[41] _Report of the Deutsche Bank_, 1913, pp. 11–12.

[42] _Report of the Bagdad Railway Company_, 1914, pp. 6–8. It was not
until September, 1918, that the Amanus tunnels were completed, the
first train being operated through to Aleppo just before the capture of
that city by Lord Allenby’s army. Von Sanders, _op. cit._, p. 42.




CHAPTER VI

THE BAGDAD RAILWAY BECOMES AN IMPERIAL ENTERPRISE


POLITICAL INTERESTS COME TO THE FORE

It was asserted times without number that the Bagdad Railway was an
independent financial enterprise, unconnected with the political aims
of the German Government in Turkey and in no sense associated with an
imperialist policy in the Near East. At the time the concession of
1903 was granted Dr. Rohrbach expressed the belief that political and
diplomatic considerations were quite outside the plans and purposes
of the promoters of the Railway.[1] Herr Bassermann, leader of the
National Liberal Party, announced to the Reichstag that, although
German capital was predominant in the Railway, there was no intent on
the part of the owners or on the part of the Government to build with
any political _arrière-pensée_. Baron von Schoen, Imperial Secretary
for Foreign Affairs, reiterated this idea with emphasis. He pointed
out that the Bagdad convention of 1903 was _not a treaty_ between
Germany and Turkey, _but a contract_ between the Ottoman Government
and the Anatolian Railway Company. He maintained that if the railway
were considered, properly, as a purely economic enterprise, “all the
fantastic schemes that are from time to time being attached to it
would evaporate.”[2] A British journalist wrote in 1913: “Gwinner, it
may be assumed, is not building the Bagdad Railway for the purposes of
the German General Staff. What chiefly keeps him awake of nights is
how to extract dividends from it for the _Deutsche Bank_ and how best
to promote the golden opportunities which await the strategists of the
German trading army in the Near East.”[3]

The German Government, nevertheless, had been interested in the
Bagdad plan almost from its inception. The visits of the Emperor to
Constantinople and Palestine; the appointment of German military
and consular officers to the technical commission which surveyed
the line in 1899; the enthusiastic support of the German ambassador
all contributed to the success of the enterprise. In fact, the
German Government was almost too solicitous of the welfare of the
concessionaires; assistance, it was said, bordered upon interference.
During the early stages of the negotiations of 1898–1899 Dr. von
Siemens complained that the German embassy was jeopardizing the success
of the project by insisting that the issuance of the concessions
should be considered a diplomatic, as well as a business, triumph.
Dr. von Gwinner, also, was discontented with the tendency of the
German Government to urge strategic, rather than purely economic,
considerations. There was a widespread belief in Germany, as well as
elsewhere in Europe, that the Imperial Foreign Office nurtured the
Bagdad Railway and its affiliated enterprises with a full realization
that “the skirmishes of the political advance guard are fought on
financial ground, although the selection of the time and the enemy, as
well as the manner in which these skirmishes are to be fought, depends
upon those responsible for our foreign policy. Much more than ever
before Germans will have to bear in mind that industrial contracts,
commercial enterprises, and capital investments are conveying from
one country to another not only capital and labor, but also political
influence.”[4]

Had the German Government been disposed to pursue a different policy
in the Near East, had it refused to link its political power with the
economic interests of its nationals, it would have been standing out
against an accepted practice of the Great Powers. Lord Lansdowne,
British Secretary of State for Foreign Affairs, informed the House of
Lords, in May, 1903, that it was impossible for the Foreign Office
to dissociate commercial and political interests. He doubted whether
British success in the Middle and Far East could have been achieved
without careful diplomatic promotion of British economic interests in
those regions.[5] Through financial control Russia and Great Britain
effectually throttled Persian reform and nationalist aspirations.
The pioneer activities of French capital in Tunis and Morocco are
outstanding instances of modern imperial procedure. Such also is the
use by the Government of the French Republic of its power to deny
listings on the Paris Bourse for the purpose of forcing political
concessions—a procedure which a French banker described to the author
as “a species of international blackmail.”[6] A prominent historian
and economist has described the Franco-Russian alliance as a “bankers’
creation.”[7] What other powers had been doing it was to be expected
that Germany would do. The ownership and operation of the Bagdad
Railway by a predominantly German company was an important factor in a
notable expansion of German commercial and financial activities in the
Near East. In an age of keen competition for economic influence in the
so-called backward areas of the world, this growth of German interests
in Turkey was almost certain to influence the diplomatic policy of
Germany toward the Ottoman Empire. The political aspirations of the
diplomatists were reënforced by the economic interests of the bankers.

Had the German Government not voluntarily taken the Bagdad enterprise
under its wing, it might have been compelled to do so. Popular
dissatisfaction with a “weak” policy toward investments in backward
countries may force the hand of an unwilling government. Whether this
dissatisfaction be spontaneous or created by an interested press or
both, it is certain to be powerful, for there are few governments
which can resist for long the clamor for vigorous fostering of the
nation’s interests and rights abroad. And there was no lack of
popular enthusiasm in Germany for the Bagdad Railway. The fact that
French capital had been invested in the undertaking was usually
forgotten. The grand design came to be referred to, affectionately,
as _unser Bagdad_ and, somewhat flamboyantly, as the “B. B. B.”
(Berlin-Byzantium-Bagdad). German publicists of imperial inclinations
contemplated the Railway with reverent amazement, as though hypnotized.
The project speedily became an integral part of the national
_Weltanschauung_—a means of enabling Germans to compete for the rich
commerce of the Orient, to appropriate some of its enormous wealth, to
develop some of its apparently boundless possibilities. As a branch
of _Weltpolitik_ it held out alluring inducements for the exercise
of political influence in the East—an influence which would serve at
once to discomfit the Continental rivals of Germany and to promote the
_Drang nach Osten_ of her Habsburg ally.

The political aims of the German Empire in Turkey, however, were not
concerned with colonization or conquest. It was not proposed, for
example, to encourage German colonization of the regions traversed
by the Bagdad Railway. During the last two decades of the nineteenth
century, it is true, attempts had been made to stimulate German
settlements in Syria and Mesopotamia. But later, when the problem
of German oversea migration had become less acute, all proposals for
German colonization in the Near East were abandoned.[8]

The difficulties in the way of European settlement of Asiatic Turkey
were almost insurmountable. Mesopotamia is unbearably hot during the
summer and is totally unfit for colonization by Europeans. During July
and August the thermometer registers between 100 and 120 almost every
day, and the heat is particularly oppressive because of the relatively
high humidity. The total number of Europeans resident in Mesopotamia
before the War was not in excess of 200, who were almost all
missionaries, engineers, consuls, or archæologists. Palestine is more
suitable as a place of residence, but the country is not particularly
alluring; a few German agricultural colonies, chiefly Jewish, were
established there, but they were comparatively unimportant in size,
wealth, and political influence. In Anatolia the climate is tolerable,
but not healthful for western Europeans. The plateau is subject to
sudden and extreme changes in temperature in both winter and summer,
and, consequently, pneumonia and malaria are almost epidemic among
foreigners. To the German who was considering leaving the Fatherland to
seek his fortune abroad, Mesopotamia, Syria, and Anatolia were by no
means as attractive as Wisconsin, Minnesota, and the Dakotas. Turkey
offered few inducements to compare with the lure of the United States
or of South America.[9]

In addition to these natural difficulties, there existed the pronounced
opposition of the Turks to foreign colonization of their homeland. This
opposition was so deep-rooted that General von der Goltz warned his
fellow countrymen not to migrate to the Near East if friendly relations
were to be maintained with the Ottoman Empire. Paul Rohrbach said
that colonization of Turkey-in-Asia by Europeans was quite out of the
question. H. F. B. Lynch, of the English firm of Lynch Brothers, one of
the most pronounced opponents of the Bagdad Railway, declared that fear
of German settlement of Asia Minor was sheer nonsense, that no such
plan was in contemplation by the promoters of the Bagdad enterprise,
and that the reports of such intentions were the work of ignorant
chauvinists. It will be recalled, also, that a secret annex to the
concession of 1903 pledged the _Deutsche Bank_ not to encourage German
or other foreign immigration into Turkey.[10]

Germans denied, likewise, that they had any intention of utilizing
the Bagdad Railway as a means of acquiring an exclusive sphere of
economic interest in the Ottoman Empire. Attention was continually
directed to Articles 24 and 25 of the Specifications of 1903, which
decreed that rates must be applicable to all travelers and consignors
without discrimination, and which prohibited the concessionaires
from entering into any contract whatever with the object of granting
preferential treatment to any one. Arthur von Gwinner, President of
the Bagdad Railway, stated that his company had loyally abided by
its announced policy of equality of treatment for all, regardless of
nationality or other considerations, and he challenged the critics of
the enterprise to cite a single instance in which the contrary had
been the case. Dr. Rohrbach wrote, in 1903, that it was “unthinkable
that Germans should seek to monopolize the territories of the Turkish
Empire for the purposes of economic exploitation.” Somewhat later he
again stressed this point: “Germany’s political attitude to Turkey is
unlike that of all other European powers because, in all sincerity, we
ask not a single foot of Turkish territory in Europe, Asia, or Africa,
but have only the wish and the interest to find in Turkey—whether
its domination be in future restricted to Asia or not—a market and
a source of raw materials for our industry; and in this respect we
advance no claim on other nations than that of the unconditional open
door.” Baron von Schoen pledged the Government to a policy of equal and
unqualified opportunity for all in the regions to be opened up by the
Railway.[11]

Furthermore, there is little reason to believe that the Germans had any
intention of establishing a protectorate over Asiatic Turkey. Their
determination to respect the territorial integrity of the Ottoman
Empire was due, of course, not to magnanimity on their part as much as
to expediency. Protectorates are expensive. For the same reason it may
be doubted that there was any intention of maintaining an extensive
military control over Turkey. German aims were to be served by the
economic, military, and political renaissance of Turkey-in-Asia. A
strong Turkey economically would be a Turkey so much the better able
to increase the production of raw materials for the German market as
well as to provide an ever more prosperous market for the products of
German factories. A powerful Turkish military machine might strike some
telling blows, in alliance with German arms, in a general European war;
in the event of a Near Eastern conflict it might be utilized to menace
the southern frontier of Russia or to strike at British communications
with India. A politically strong Ottoman Empire might offer serious
resistance to the Russian advance in the Middle East and might menace
Britain’s hold on her Mohammedan possessions.

On the other hand, a Turkey in subjection would be an unwilling
producer and a poor customer. The occupation of Turkey by German armed
forces would seriously deplete the ranks of the German armies on the
Russian and French frontiers, and in time of war would confront the
German General Staff with the additional problem of maintaining order
in hostile Mohammedan territory. The conquering of Turkey would bring
the German Empire into the ranks of European powers with Mohammedan
subjects, thus exposing it to the menace, common to Great Britain,
France, and Russia, of a Pan-Islamic revival. For all of these reasons
the obvious German policy was not only to respect the territorial
integrity of Turkey, but to defend it against the encroachments of
other powers. “Not a penny for a weak Turkey,” said Rohrbach, “but for
a strong Turkey everything we can give!”[12]

In its political aspects the Bagdad Railway was something more than
a railway. It was one phase of the great diplomatic struggle for
the predominance of power, one pawn in the great game between the
Alliance and the Entente, one element of the Anglo-German rivalry on
the seas. The development of closer relations, political and economic,
between Germany and Turkey was in accord with the spirit of an era of
universal preparedness—preparedness for pressing economic competition,
preparedness for the expected great European war in which every nation
would be obliged to fight for its very existence. Through control of
the economic resources of the Ottoman Empire, German diplomacy sought
to arrive at an _entente cordiale_ or a formal military alliance with
the Sultan. Through support of the chief Mohammedan power Germany
might throw tempting “apples of discord” into the colonial empires of
her chief European rivals, for Great Britain ruled about eighty-five
million subject Mohammedans, Russia about seventeen million, France
about fifteen million; but Germany possessed almost none.[13] Friedrich
Naumann wrote in 1889, in connection with the Kaiser’s pilgrimage
to the Near East: “It is possible that the world war will break out
before the disintegration of the Ottoman Empire. Then the Caliph of
Constantinople will once more uplift the standard of the Holy War.
The Sick Man will raise himself for the last time to shout to Egypt,
the Soudan, East Africa, Persia, Afghanistan, and India, ‘War against
England.’ It is not unimportant to know who will support him on his bed
when he utters this cry.”[14]

This menace to the British Empire was no more serious than another
which was frankly espoused by certain supporters of the Bagdad plan—the
possibility, even without a preponderance of naval power, of severing
the communications of the empire in time of war. Dr. Rohrbach, for
example, put it this way: “If it comes to war with England, it will
be for Germany simply a question of life and death. The possibility
that events may turn out favorably for us depends wholly and solely
upon whether we can succeed in putting England herself in a precarious
position. That cannot be done by a direct attack in the North Sea; all
idea of invading England is purely chimerical. We must, therefore, seek
other means which will enable us to strike England in a vulnerable
spot.... England can be attacked and mortally wounded by land from
Europe in only one place—Egypt. The loss of Egypt would mean not only
the end of her dominion over the Suez Canal and of her communications
with India and the Far East, but would probably entail, also, the loss
of her possessions in Central and East Africa. We can never dream,
however, of attacking Egypt until Turkey is mistress of a developed
railway system in Asia Minor and Syria, and until, through the
extension of the Anatolian Railway to Bagdad, she is in a position to
withstand an attack by England upon Mesopotamia.... The stronger Turkey
grows the more dangerous does she become for England.”[15]

It is only fair to add, however, that Dr. Rohrbach was not an
authorized spokesman of the German people, the German Government, or
the Bagdad Railway Company. His views were personal and are to be
given weight only in so far as they influenced or reflected public
opinion in Germany; to estimate their importance by such a standard
is no simple task. But whatever its true significance, Dr. Rohrbach’s
interest in the Bagdad Railway was certainly a source of great
annoyance to Dr. von Gwinner, who was constantly called upon to explain
irresponsible, provocative, and bombastic statements from Rohrbach’s
pen. It is well to recall that the writings of publicists are sometimes
taken too seriously.[16]

It would have been foolhardy, nevertheless, to discard these
possibilities as purely imaginary. Once the Bagdad Railway was
constructed and its subsidiary enterprises developed, there would have
existed the great temptation to utilize economic influence for the
promotion of strategic and diplomatic purposes. In an era of intensive
military and economic preparedness for war the observance of the
niceties of international relationships is not always to be counted
upon. In such circumstances the wishes of the business men—whether
they were imperialistic or anti-imperialistic—may be over-ruled by
the statesmen and the soldiers. The chance to strike telling blows at
French prestige in the Levant; the opportunity to embarrass Russia by
strengthening Turkey; the possibility of menacing the communications
of the British Empire; the likelihood of recruiting Turkish military
and economic strength in the cause of Germany,—these were alluring
prospects for discomfiting the Entente rivals of the German Empire.

At the same time it should be mentioned that promotion of the Bagdad
Railway would serve to weld firmer the Austro-German alliance. Austrian
ambitions in the Near East centered in the Vienna-Salonica railway
and were distinct from the Berlin-to-Bagdad plan of the Germans;
nevertheless circumstances served to promote a community of interest.
First, the routes of the railways through the Balkans coincided in
part: the Austrian railway ran _via_ Belgrade and Nish to Salonica;
traffic “from Berlin to Bagdad” followed the same line to Nish, where
it branched off to Sofia and Constantinople. Second, Austrian, as
well as German, trade would be carried over the Bagdad lines to the
Orient, and Austrian industries would be able to secure raw materials
from Anatolia and Mesopotamia. If the railway was to run from Berlin
to Bagdad, it also was to run from Vienna to Bagdad. Third, similarly,
German industry was to profit by the Austrian railway to Salonica, for
it opened a new route to German commerce to the Aegean. “Germany’s road
to the Orient lay, literally as well as figuratively, across the Balkan
Peninsula.”[17] The _Drang nach Osten_ was near to the hearts of both
allies!

It was not without warning that the German nation permitted itself
to be drawn into the imperial ramifications of the Bagdad Railway.
Anti-imperialists sensed the dangers connected with such an ambitious
project. Herr Scheidemann, leader of the Social Democrats in the
Reichstag, for example, warned the German people that the railway was
certain to raise increasingly troublesome international difficulties,
and he expressed the fear that the German protagonists of the plan
would come to emphasize more and more its political and military,
rather than its economic and cultural, phases.[18] Karl Radek,
also a Socialist, wrote that “The Bagdad Railway possessed great
political significance from the very moment the plan was conceived.”
He prophesied that German economic penetration in Turkey would prove
to be only the first step toward a formal military alliance, which,
in turn, would heighten the fear and animosity of the Entente Powers.
“The Bagdad Railway,” he said, “constitutes the first great triumph of
German capitalistic imperialism.”[19] Business men and politicians of
imperialist inclinations did not deny the charges of their pacifist
opponents. Herr Bassermann, so far from deprecating a greater political
influence in the Ottoman Empire, came to glory in it. Baron von Schoen
qualified his earlier statements with the following enunciation of
policy: “With reference to the attitude of the Imperial Government, it
goes without saying that we are giving the enterprise our full interest
and attention and will make every effort to further it.”[20]

The political potentialities of the Bagdad Railway aroused the fear and
opposition of the other European Powers. Exaggerated charges were made
as to the intentions of the German promoters and the German Government,
and there was a widespread feeling that there was something sinister
about the plan. Professor Sarolea sounded a prophetic warning when he
wrote, “The trans-Mesopotamian Railway ... will play in the Near East
the same ominous part which the Trans-Siberian played in the Far East;
with this important difference, however, that whilst the Far Eastern
conflict involved only one European Power and one Asiatic Power, the
Near Eastern conflict, if it breaks out, must needs involve all the
European powers, must force the whole Eastern Question to a crisis, and
once begun, cannot be terminated until the map of Europe and Asia shall
be reconstructed.”[21]


RELIGIOUS AND CULTURAL INTERESTS REËNFORCE POLITICAL AND ECONOMIC
MOTIVES

Along with economic and political motives for imperialist ventures
there frequently goes a religious motive. That such should be the case
in the Near East was to be expected because of the religious appeal
of the Ottoman Empire as the homeland of the Jews, the birthplace of
Christianity, the cradle of Mohammedanism. It was small wonder, then,
that the Bagdad Railway, which promised to link Central European cities
with the holy places of Syria and Palestine, should have been supported
enthusiastically by German missionaries and other German Christians.

German Protestant missions were represented in the Holy Land as early
as 1860, when the Kaiserswerth Deaconesses established themselves in
Jerusalem. Shortly thereafter the _Jerusalems-Verein_ began work in
Jerusalem and Bethlehem, and about this same time, 1869, Lutheran
missionaries calling themselves Templars settled near Jaffa. Under
William II additional impetus was given to German religious activities
in the Near East. The _Jerusalems-Verein_, which was taken under
the special patronage of the Kaiserin Auguste Victoria, supported a
Lutheran clergyman in Jerusalem and was responsible for the erection in
the Holy City of the Church of the Redeemer. This same society rapidly
spread its activities throughout all of Palestine, and in 1910 it
dedicated the famous Kaiserin Auguste Victoria _Stiftung_,[22] erected
on the Mount of Olives by the Hohenzollern family at a cost in excess
of half a million dollars. The Evangelical Union, organized in 1896,
established a large orphanage in Jerusalem, together with schools
and related institutions, and proved to be a very useful auxiliary
to the work of the Deaconesses in maintaining schools, dispensaries,
and hospitals. Also in 1896 there was founded the _Deutsche Orient
Mission_, which rendered its services particularly in Cilicia, and
which kept up the interest of its supporters at home by the publication
in Berlin of a monthly periodical, _Der Christliche Orient_. It was
estimated that, during the early years of the twentieth century,
the German Protestant societies maintained in Turkey-in-Asia about
450 missionaries and several hundred native assistants at a cost of
hundreds of thousands of dollars. By 1910 the Germans occupied a
conspicuous position in evangelical missions in the Near East.[23]

The German Catholics were no less zealous than their Protestant
compatriots. Although for centuries Italian and French members of
the Franciscan order had been preëminent in Catholic missions in
Turkey, there was a marked tendency during the last decade of the
nineteenth century and the first decade of the twentieth for German
members of other religious orders to take an interest in the Near
East. This may have been merely the result of a general increase in
missionary activity connected with the increasing imperial activities
of the German Government. It may have been due to the announced
intention of the German Foreign Office to protect Christian missions
and missionaries and to the vigorous fulfilment of that promise
after the murder of two German Catholic priests in the Chinese
province of Shantung. It may have been a natural consequence of the
fact that the Prefect of the Propaganda from 1892–1902 was a famous
German cardinal.[24] In any event, under the guiding ægis of the
_Palästinaverein_, a society for the promotion of Catholic missions
in the Holy Land, German Lazarists, Benedictines, and Carmelites
established and maintained schools, hospitals, and dispensaries, as
well as churches, in Syria and Palestine.[25]

Even Jewish religious interests in Palestine promoted Teutonic peaceful
penetration in Turkey. As part of the Zionist activities of _L’Alliance
Israelite Universelle_, agricultural colonies were founded by German
Jews in the vicinity of Jaffa, Jerusalem, and Haifa. These colonists
appeared to be proud of their German nationality and were an integral
part of the German community in the Holy Land.[26]

The German Government had no intention of overlooking the political
possibilities of this religious penetration. Promotion of missionary
activities might be made to serve a twofold purpose: first, to win the
support, in domestic politics, of those interested in the propagation
of their faith in foreign lands—more particularly to hold the loyalty
of the Catholic Centre party; second, to further one other means of
strengthening the bonds between Germany and the Ottoman Empire.

An excellent illustration of the inter-relation among economic,
political, and religious aspects of modern imperialism is to be found
in the visit of William II to Turkey in 1898. On the morning of October
31—the anniversary of the posting of Luther’s ninety-five theses at
Wittenberg—the Emperor participated in the dedication of the Lutheran
Church of the Redeemer in Jerusalem. During the afternoon of the same
day he presented the supposed site of the Assumption of the Virgin
Mary to the German Catholics of the Holy City, for the construction
thereon of a Catholic memorial church, and he telegraphed the Pope
expressing his hope that this might be but one step in a steady
progress of Catholic Christianity in the Near East. The Kaiser likewise
might have visited the German Jewish communities in the vicinity of
Jerusalem, but perhaps he felt, as a French writer put it, that such a
visit “between his devotions at Gethsemane and at Calvary would have
created a public scandal.”[27] Nevertheless he did not hesitate, a week
later, at Damascus, to assure “three hundred million Mohammedans” that
the German Emperor was their friend. Yet with all this pandering to
religious interests—to the Protestants of Prussia, to the Catholics of
South Germany, to his Moslem hosts—the Kaiser found time ostentatiously
to promote the German Consul at Constantinople to the rank of Consul
General. And upon his return home he justified all of these activities
on the ground that his visit “would prove to be a lasting source of
advantage to the German name and German national interests.”[28]

This curious admixture of religion and diplomacy was made the more
complicated when the Imperial Chancellor informed the Reichstag, on
December 7, 1898, that one of the purposes of the Emperor’s visit to
His Ottoman Majesty was to make it plain that the German Government
did not propose to recognize anywhere “a foreign protectorate over
German subjects.” This served notice to France that Germany would
not respect the French claim to exclusive protection of Catholic
missionaries in the Ottoman Empire. “We do not lay claim,” said Prince
von Bülow, “to a protectorate over all Christians in the East. But
only the German Emperor can protect German subjects, be they Catholics
or Protestants.”[29] This pronouncement was received in France with
undisguisedly poor grace. One writer in a prominent fortnightly
magazine frankly expressed his disgust: “Germany possesses military
power; she possesses economic power; she proposes to acquire maritime
power. But she needs the support of moral power. On the world’s stage
she aspires to play the part of Principle. To base her world-wide
prestige upon the protection of Christianity, Protestant and Catholic;
to centralize the divergent sources of German influence; to have all
over the globe a band of followers, at once religious and economic in
their interests, who will propagate the German idea, consume German
products, and, while professing the gospel of Christ, will preach the
gospel of the sacred person of the Emperor—these are the ultimate ends
of the world policy of William II.”[30]

Closely allied with the spread of German missions was the propagation
of _das Deutschtum_—that is, the spread of the German language,
instruction in German history and ideals, appreciation of the character
of German civilization. German religious schools in the Near East were
dynamos of German cultural influence. The _Jerusalems-Verein_ alone,
for example, maintained, in 1902, eight schools with more than 430
pupils. In these schools German was taught. This also was the case
with the Catholic schools, under German influence. Even the Jews—a
large number of whom had emigrated from Germany because of anti-Semitic
feeling there—carried with them their German patriotism. The
_Hilfsverein der deutschen Juden_, the German section of _L’Alliance
Israélite Universelle_, not only taught German in its own schools, but
made a strenuous effort to have German adopted as the official language
of all Zionist schools in the Near East.[31]

It should be pointed out that this injection of nationalism into
religious education was an obvious imitation of the French method of
spreading imperial influence in Syria and Palestine. And it was frankly
admitted to be an imitation. “A policy of German-Turkish culture,”
wrote Dr. Rohrbach, “deserves to be pressed with renewed ardor. We must
endeavor to make the German language, and German science, and all the
great positive values of our energetic civilization, duties faithfully
fulfilled—active forces for the regeneration of Turkey by transplanting
them into Turkey. To do this we need above everything else a system
of German schools, which need not rival the French in magnitude, but
which must be planned on a larger scale than that of the now existing
schools. No lasting and secure cultural influences are possible without
the connecting link of language. The intelligent and progressive young
men of Turkey should have an abundant opportunity to learn German....
We can give the Turks an impression of our civilization and a desire to
become familiar with it only when we teach them our language and thus
open the door for them to all of our spiritual possessions. In doing
this we are not aiming to Germanize Turkey politically or economically
or to colonize it, but to introduce the German spirit into the great
national process of development through which that nation, which has
a great future, happens to be passing.”[32] French methods were to be
paid the compliment of imitation.

The sentimental appeal of the Bagdad Railway was more than a religious
and cultural appeal alone. The Great Plan was assiduously promoted
by a patriotic and Pan-German press. It caught the interest of the
ordinary workaday citizen, whose imagination was fired by the sweeping
references to “our” trade, “our” investments, “our” religious interests
in the Near East; the Bagdad Railway was the very heart of all these
interests. Here was a railway which was to revive a medieval trade
route to the East, which was to traverse the route of the Crusades.
Here was a country which had been the much-sought-after empire of
the great nations of antiquity, Assyria, Chaldea, Babylon, Persia,
Greece, Rome. Here had risen and fallen the great cities of Nineveh,
Babylon, and Hit. To these regions had turned the longing of the great
conquerors, Sargon, Sennacherib, Nebuchadnezzar, Alexander, Saladin.
With such materials some German Kipling might evolve phrases far more
alluring than Fuzzy Wuzzy, and Tommy Atkins, and the White Man’s
Burden.[33]


SOME FEW VOICES ARE RAISED IN PROTEST

Not all Germans were dazzled by the Oriental glamor of the Bagdad
Railway plan. Herr Scheidemann, leader of the Social Democrats in
the Reichstag, time and time again sounded warnings against the
complications almost certain to result from the construction of the
railway. Speaking before the Reichstag in March, 1911, for example,
he said: “We are the last to misjudge the great value of this road
to civilization. We know its economic significance: we know that it
traverses a region which in antiquity was a fabulously fertile country,
and we welcome it as a great achievement if the Bagdad Railway opens
up that territory. And if, by gigantic irrigation projects, the land
can be made into a granary for Europe, as well as a land to which we
could look for an abundant supply of raw materials, such as cotton,
that would be doubly welcome.” But that is not all, continued Herr
Scheidemann. German capitalists would not be able to overlook the
military-strategic interests of the line, for only the establishment
of a strong centralized government in Turkey “can offer European
capitalism the necessary security for the realization of its great
capitalistic plans.” This military strengthening of Turkey would be
almost certain, he pointed out, to arouse the opposition of Great
Britain, Russia, and France. Particularly was he desirous of avoiding
any additionally irritating relations with Great Britain, for the
traditional friendship with that nation had already been seriously
compromised by colonial and naval rivalries.[34] Similar warnings were
uttered by other Socialists and anti-imperialists.

Quite different in character was the objection raised to the Bagdad
Railway by a certain type of more conservative German. An aggressive
policy in the Near East naturally would have been distasteful to
the diplomatists of the old school, who were disposed to adhere to
the Bismarckian principles of isolating France on the Continent
and avoiding commercial and colonial conflicts overseas. According
to their point of view, German ventures in the Ottoman Empire were
certain to lead to two complications: first, the support of Austrian
imperial ambitions in the Balkans; second, a German attempt to
maintain a dominant political position at Constantinople. Under such
circumstances, of course, it would not be possible to bring about a
divorce of the newly married France and Russia, for Russian interests
in the Near East would brook no compromise on the part of the Tsar’s
Government. In addition, it was feared, the establishment of German
ports on the Mediterranean and on the Persian Gulf would strengthen
British antipathy to Germany, already augmented by naval and commercial
rivalry. The final outcome of such a situation undoubtedly would be the
formation of a Franco-British-Russian coalition against the Central
Powers.

During the Great War these views were given wide publicity by Prince
Lichnowsky, former German ambassador to Great Britain. In a memorandum,
written for a few friends but subsequently published broadcast in
Europe and America,[35] the Prince vehemently denounced the _Drang nach
Osten_ as the greatest of German diplomatic mistakes and as one of the
principal causes of the Great War. “We should have abandoned definitely
the fatal tradition of pushing the Triple Alliance policies in the
Near East,” he said; “we should have realized that it was a mistake
to make ourselves solidary with the Turks in the south and with the
Austro-Magyars in the north; for the continuance of this policy ...
was bound in time, and particularly in case the requisite adroitness
should be found wanting in the supreme directing agencies, to lead
to the collision with Russia and the World War. Instead of coming to
an understanding with Russia on the basis of the independence of the
Sultan; ... instead of renouncing military and political interference,
confining ourselves to economic interests in the Near East, ... our
political ambition was directed to the attainment of a dominant
position on the Bosporus. In Russia the opinion arose that the way
to Constantinople ran _via_ Berlin.” This was the “fatal mistake, by
which Russia, naturally our best friend and neighbor, was driven into
the arms of France and England.” Furthermore, maintained the Prince,
a policy of Near Eastern expansion is contrary to the best commercial
and industrial interests of the empire. “‘Our future lies on the
water.’ Quite right”; therefore it does not lie in an overland route to
the Orient. The _Drang nach Osten_ “is a reversion to the Holy Roman
Empire.... It is the policy of the Plantagenets, not that of Drake
and Raleigh.... Berlin-Bagdad is a blind alley and not the way into
the open, to unlimited possibilities, to the universal mission of the
German nation.”[36]

There may have been another reason for the opposition of Prince
Lichnowsky to the Bagdad Railway. As the owner of large Silesian
estates he was agrarian in his point of view. If it were true, as was
maintained, that after the opening of Mesopotamia to cultivation,
the Railway would be able to bring cheap Turkish grain to the German
market, the results would not be to the liking of the agricultural
interests of the empire. As Herr Scheidemann informed the Reichstag,
there was something anomalous in the Conservative support of the
Bagdad Railway on this score, because it was “in most violent
contrast to their procedure in their own country, where they have
artificially raised the cost of the necessaries of life by incredibly
high protective tariffs, indirect taxation, and similar methods.”[37]
Perhaps Prince Lichnowsky was somewhat more intelligent and far-sighted
than his land-owning associates!

There were some Germans who were not opposed to the Bagdad Railway
enterprise, but who were opposed to the extravagant claims made for
it by some of its friends and protagonists. A typical illustration of
this is the following statement of Count zu Reventlow, shortly before
the outbreak of the war: “Great Britain, Russia, and France, in order
to interpose objections, made use of the expedient of identifying
the _Deutsche Bank_ with the German Government. To this there was
added the difficult and complicating factor that in Germany itself,
in many quarters, the aim and the significance of the railway plan
were proclaimed to the world, partly in an inaccurate and grossly
exaggerated manner.... In this respect great mistakes were made among
us, which it was in no way necessary to make. The more quietly the
Railway could have been constructed the better.... That it would be
possible to make Turkey a dangerous threat against Egypt and India,
after the development of its railway system, was correct, to be sure,
but it was imperative not to say anything of that kind as long as Great
Britain still had means to hinder and prevent the construction of the
railway.” Similar opinions were expressed from time to time on the
floor of the Reichstag.[38]

The Bagdad Railway, however, was a triumphant enterprise which
would brook no opposition. In the army of its followers marched the
stockholders and directors of the _Deutsche Bank_—such men as Edward
B. von Speyer, Wolfgang Kapp, Karl von Siemens, Karl Helfferich,
Arthur von Gwinner—good patriots all, with a financial stake in the
Railway. Then there came the engineers and contractors who furnished
the materials and constructed the line and who shared in the profits of
its subsidiary enterprises—mines, oil wells, docks, wharves, irrigation
works. Next came the shipping interests—the subsidized services of
Herr Ballin and the Hamburg-American Line included—which were at once
the feeders and the fed of the Railway. There were also the German
traders who sought in the Near East a market for their products and
the German manufacturers who looked to this newly opened territory
for an uninterrupted supply of raw materials. In the line of march,
too, were the missionaries, Catholic and Protestant, who sought to
promote a renaissance of the Holy Land through the extension of German
influence there. Bringing up the rear, although by no means the least
important, were the soldiers and the diplomatic and consular officers,
those “parasites” of modern imperialism who almost invariably will be
found in cordial support of any movement for political and economic
expansion. In the reviewing stand, cheering the marchers, were the
great mass of average patriotic citizens who were thrilled with “their”
Bagdad Railway and “their” _Drang nach Osten_. And the chief of the
reviewers was His Imperial Majesty, William II.[39]

If there was a preponderance of opinion in Germany favorable to the
Bagdad Railway, there was by no means a similar favorable sentiment in
the rest of Europe. Statesmen in the other imperial nations were not
unaware of the potentialities of railways constructed in the backward
nations of the world. They knew that “railways are the iron tentacles
of latter-day expanding powers. They are stretched out caressingly at
first. But once the iron has, so to say, entered the soul of the weaker
nation, the tentacles swell to the dimensions of brawny arms, and the
embrace tightens to a crushing grip.”[40] Russia, Great Britain and
France, therefore, were gradually led to obstruct the progress of the
railway by political and economic means—at least until such time as
they could purge the project of its political possibilities or until
they could obtain for themselves a larger share of the spoils.

Thus the Bagdad Railway was an imperial enterprise. It became an
important concern of the Foreign Office, a matter of national
prestige. It was one of the stakes of pre-war diplomacy. Its success
was associated with the national honor, to be defended, if need be,
by military force and military alliances. The Railway was no longer a
railway alone, but a state of mind. Professor Jastrow called it “the
spectre of the twentieth century”![41]


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] _Die Bagdadbahn_, p. 46.

[2] _Stenographische Berichte, XII Legislaturperiode, 1 Session_,
Volume 231 (1908), pp. 4226a, 4253c.

[3] Wile, _op. cit._, pp. 39–40.

[4] Riesser, _op. cit._, p. 543; _The Quarterly Review_, Volume 235
(1921), p. 315.

[5] _Parliamentary Debates, House of Lords_, Volume 121 (1903), p. 1348.

[6] For an interesting discussion of this point see George von Siemens,
“The National Importance of the Bourse,” in _The Nation_ (London),
October 6, 1900. _Cf._, also, W. M. Shuster, _The Strangling of Persia:
a Record of European Diplomacy_ and _Oriental Intrigue_ (New York,
1912).

[7] W. M. Sombart, _Die deutsche Volkswirtschaft in neunzehnten
Jahrhundert_ (second edition, Berlin, 1909), p. 184.

[8] Regarding early German interest in Near Eastern colonization _cf._
K. A. Sprenger, _Babylonien, das reichste Land in der Vorzeit und das
lohnendste Kolonisationsfeld für die Gegenwart_ (Heidelberg, 1886);
Paul Dehn, _Deutschland und die Orientbahnen_ (Munich, 1883); K.
Karger, _Kleinasien, ein deutsches Kolonisationsfeld_ (Berlin, 1892);
_Deutsche Ansprüche an das türkischen Erbe_ (Munich, 1896), a symposium
including an article by von Moltke.

[9] C. Nawratski, _Die jüdische Kolonisation Palästinas_ (Munich,
1914); _Syria and Palestine_, p. 59; _Mesopotamia_, pp. 6–7, 11;
_Anatolia_, pp. 4–7.

[10] _Supra_, p. 84; H. F. B. Lynch, “The Bagdad Railway,” in
the _Fortnightly Review_, March 1, 1911, pp. 376–377; A. Brisse,
“Les intérêts de l’Allemagne dans l’Empire Ottoman,” in _Revue de
Géographie_, June, 1902, pp. 486–487; P. Rohrbach, _Die Bagdadbahn_,
pp. 17–21, 35.

[11] _Stenographische Berichte, XII Legislaturperiode, 1 Session_,
Volume 231 (1908), p. 4253c; P. Rohrbach, _Die Bagdadbahn_, p. 16, and
_Deutschland unter den Weltvölkern_, pp. 51–53; Von Gwinner, _loc.
cit._, p. 1090.

[12] _Die Bagdadbahn_, p. 16. _Cf._, also, R. Henry, _Des Montes
Bohèmes au Golfe Persique; l’Asie Turque et le Chemin de fer de
Bagdad_ (Paris, 1908), p. 509 _et seq._; C. H. Becker, _Deutschland
und der Islam_ (Stuttgart and Berlin, 1914); Ernst Jäckh, _Die
deutsch-türkische Waffenbrüderschaft_ (Stuttgart and Berlin, 1915).

[13] H. A. Gibbons, _The Reconstruction of Poland and the Near East_
(New York, 1917), pp. 109–110.

[14] Quoted by Marriot, _op. cit._, p. 356.

[15] _Die Bagdadbahn_, pp. 18–19.

[16] In this connection see an important statement by Sir Thomas
Barclay in the _Proceedings of the Central Asian Society_ (London),
March 1, 1911, pp. 21–22, and the opinion of Karl Helfferich, _Die
deutsche Türkenpolitik_, p. 14.

[17] Von Reventlow, _op. cit._, p. 343. Regarding the so-called _Drang
nach Osten_ and the coincidence of Austrian and German interests in the
Near East _cf._ M. Meyer, _Balkanstaaten, Bagdadbahn_ (Leipzig, 1914);
J. W. Headlam, “The Balkans and Diplomacy,” in the _Atlantic Monthly_
(Boston), January, 1916, pp. 124 _et seq._; N. and C. R. Buxton, _The
War and the Balkans_ (London, 1915); M. I. Newbigin, _Geographical
Aspects of Balkan Problems_ (London, 1915); Evans Lewin, _The German
Road to the East_ (New York, 1917), Chapters VIII, IX, X; P. N.
Milyoukov, _The War and Balkan Politics_ (Cambridge, 1917).

[18] _Stenographische Berichte, XII Legislaturperiode, 2 Session_,
Volume 266 (1911), p. 5984c.

[19] _Der deutsche Imperialismus und die Arbeiterklasse_ (Bremen,
1912), pp. 33, 53.

[20] _Stenographische Berichte, XII Legislaturperiode, 2 Session_,
Volume 266 (1911), p. 5984c, Volume 231 (1908), p. 4253c.

[21] Charles Sarolea, _The Anglo-German Problem_ (London, 1912), p. 252.

[22] A _Stiftung_ is a general religious establishment, this particular
one serving manifold purposes as school, hospice, home, hospital, etc.

[23] J. Richter, _A History of Protestant Missions in the Near East_
(New York, 1910), pp. 258–270, 416–419; L. M. Garnett, _Turkey of the
Ottomans_ (London, 1911), Chapters VII-IX; H. C. Dwight, H. A. Tupper,
and E. M. Bliss, _Encyclopedia of Missions_ (second edition, New York,
1910), pp. 260, 263, 720; _New Schaff-Herzog Encyclopedia of Religious
Knowledge_ (New York, 1912), Volume XII, pp. 39–41.

[24] Cardinal M. H. Ledochowski (1822–1902). _Cf._ _Catholic
Encyclopedia_ (New York, 1912), Volume IX, pp. 111–112. French
Catholics openly charged that Cardinal Ledochowski used his official
position as director of all Catholic missions to promote German
religious and political interests at the expense of those of France.
_Cf._ an article “La Politique Allemande et le Protectorat des Missions
Catholiques,” in the _Revue des deux mondes_, Volume 149 (1898), pp.
11–12.

[25] On the general subject of German Catholic missions in the Near
East consult W. Koehler, _Die katholische Kirchen des Morgenlandes_
(Darmstadt, 1898); H. M. Krose, _Katholische Missionsstatistik_
(Freiburg, 1908); L. Bréhier, article “Turkish Empire-Missions,” in the
_Catholic Encyclopedia_, Volume XV, pp. 101–102; L. Bertrand, “La Melée
des Religions en Orient,” in the _Revue des deux mondes_, Volume 53
(1909), pp. 830–861.

[26] _The Jewish Encyclopedia_ (New York, 1906), Volume XII, pp. 286
_et seq._; Sir C. W. Wilson, _Handbook for Asia Minor_ (London, 1895),
pp. 240 _et seq._

[27] Etienne Lamy, “La France du Levant: le Voyage de l’Empereur
Guillaume II,” in _Revue des deux mondes_, Volume 151 (1899), pp.
336–337; see also Volume 150 (1898), pp. 421–440, 880–911. Further
observations on the religious aspects of the Kaiser’s trip to Palestine
are to be found in _The Times_, November 23, 1898; _Annual Register_,
1898, pp. 255–257; W. von Hohenzollern, _My Memoirs_, 1878–1918, pp.
210–211.

[28] _Annual Register_, 1898, pp. 257–258.

[29] _Ibid._, p. 261. Regarding the French protectorate of Catholics in
the Near East _cf._ _infra_, Chapter VII.

[30] “La Politique Allemande et le Protectorat des Missions
Catholiques,” in _Revue des deux mondes_, Volume 149 (1898), pp. 8–9.

[31] L. Bertrand, “Les Écoles d’Orient: I. Les Écoles Chrétiennes
et Israelites,” in _Revue des deux mondes_, Volume 52, new series
(1909), pp. 755–794; H. M. Kallen, _Zionism and World Politics_ (Garden
City, N. Y., 1921), pp. 117 _et seq._; A. Paquet, _Die jüdische
Kolonien in Palästina_ (Weimar, 1915); M. Blanckenhorn, _Syrien und
die deutsche Arbeit_ (Weimar, 1916), pp. 26–30; C. Nawratzki, _Die
jüdische Kolonisation Palästinas_ (Munich, 1914); M. Franco, _Essai sur
l’histoire des juifs de l’empire ottoman depuis les origines jusqu’à
nos jours_ (Paris, 1897); G. Corneilhan, _La judaisme en Egypte et en
Syrie_ (Paris, 1889).

[32] _German World Policies_, pp. 229–231. On this same general
subject consult an article by “Immanuel,” entitled “Die Bagdadbahn
ein Kulturwerk in Asien,” in _Globus_, Volume 81 (1902), pp. 181–185;
M. Hartmann, _Islam, Mission, Politik_ (Leipzig, 1912). It should be
pointed out that the Anatolian Railway itself established two schools,
at Haidar Pasha and Eski Shehr, for the instruction of its employees in
German and other subjects. Bohler, _loc. cit._, p. 275.

[33] That Germans were not unfamiliar with the spectacular history of
this region is evidenced by the popularity of General von Moltke’s
writings on Turkey, which were published in several large editions,
apart from his collected works, between 1900 and 1911. _Cf._, _e.g._,
H. K. B. (Graf von) Moltke, _Briefe über Zustände und Begebenheiten
in der Türkei aus den Jahren 1835 bis 1839_, seventh edition, with
explanatory notes by G. Hirschfeld (Berlin, 1911). Of this work H.
S. Wilkinson, Professor of Military History at Oxford University,
wrote in the _Encyclopedia Britannica_ (eleventh edition), “No other
book gives so deep an insight into the character of the Turkish
Empire” (Volume 18, p. 678). It is interesting to note, also, that
Moltke himself was a firm believer in the great military utility of
all railways. For the history of the Near East _cf._ Jastrow, _op.
cit._, pp. 31–81; A. R. Hall, _The Ancient History of the Near East_
(fourth edition, London, 1919), Chapters V, VIII, IX, X, XII; W. A.
and E. T. A. Wigram, _The Cradle of Mankind_ (London, 1914). A curious
sidelight on this phase of the question is the assertion of Baron von
Hertling, in 1907, that Germany’s chief interest in the Bagdad Railway
was scientific—geographic, geological, archæological—not military or
economic! Quoted by Dawson, _The Evolution of Modern Germany_, p. 346.

[34] _Stenographische Berichte, XII Legislaturperiode, 2 Session_,
Volume 266 (1911), p. 5980c.

[35] Karl Maximilan, sixth Prince, Lichnowsky (1860- ) had been a
member of the German diplomatic service since his youth. He was
attached to the embassy at London when he was but twenty-five and
later served at Constantinople, Bucharest, and Vienna and in the
Foreign Office at Berlin. He resigned in 1904 to devote himself to the
management of his large estates in Silesia, but he was recalled in
1912 to become German ambassador to Great Britain, succeeding Baron
Marschall von Bieberstein, who had died after only a few months’
service at his new post. Prince Lichnowsky’s memorandum _My London
Mission, 1912–1914_ was written only to justify the Prince before a
small circle of his acquaintances. Fugitive copies reached the press,
however, and the full text was published in the Berlin _Börsen-Courier_
of March 21, 1918. The quotations here given are from the translation
of Munroe Smith, _The Disclosures from Germany_ (New York, 1918).

[36] _The Disclosures from Germany_, pp. 37–41, 127.

[37] _Stenographische Berichte, XII Legislaturperiode, 2 Session_,
Volume 226 (1911), p. 5980c. _Cf._, also, W. H. Dawson, _The Evolution
of Modern Germany_, pp. 346 _et seq._

[38] Von Reventlow, _op. cit._, p. 340; _Stenographische Berichte, XII
Legislaturperiode, 2 Session_, Volume 226 (1911), p. 5994b.

[39] Regarding the Emperor’s personal interest in the Bagdad Railway
consider the following Reuter dispatch, published in _The Near East_,
December 6, 1911, p. 143: “By desire of the German Emperor, Herr
Gwinner, director of the _Deutsche Bank_, will give an address on the
Bagdad Railway before the Emperor and a number of invited guests, in
the Upper House of the Prussian Diet soon after the Emperor’s return to
Berlin, December 8.”

[40] E. J. Dillon, quoted by Lothrop Stoddard, _The New World of
Islam_, p. 98.

[41] Jastrow, _op. cit._, p. 9.




CHAPTER VII

RUSSIA RESISTS AND FRANCE IS UNCERTAIN


RUSSIA VOICES HER DISPLEASURE

Russian objections to the Bagdad Railway were put forth as early as
1899, the year in which the Sultan announced his intention of awarding
the concession to the _Deutsche Bank_. The press of Petrograd and
Moscow roundly denounced the proposed railway as inimical to the
vital economic interests of Russia. It was claimed that the new line
would offer serious competition to the railways of the Caspian and
Caucasus regions, that it would menace the success of the new Russian
trans-Persian line, and that it might prove to be a rival even of the
Siberian system.[1] The extension of the existing Anatolian Railway
into Syria, it was asserted, would interfere with the realization of
a Russian dream of a railway across Armenia to Alexandretta—a railway
which would give Russian goods access to an all-year warm water port
on the Mediterranean. The Mesopotamian sections of the line, with
their branches, might open to German competition the markets of Persia
and, later, of Afghanistan. If German capital should develop the
grain-growing possibilities of the Tigris and Euphrates valleys, what
would happen to the profits of the Russian landed aristocracy? And if
the oil-wells of Mesopotamia were as rich as they were said to be, what
would be the fate of the South Russian fields? The Tsar was urged to
oppose the granting of the kilometric guarantee to the concessionaires,
on the ground that the increased charges on the Ottoman Treasury would
interfere with payment of the indemnity due on account of the War of
1877.[2]

Russian objections to the Bagdad Railway did not meet with a
sympathetic reception in England. _The Engineer_, of August 11, 1899,
in an editorial “Railways in Asia Minor,” for example, expressed
its firm opinion that many of the demands for the protection of
Russian economic interests in Turkey were specious. “The world has
yet to learn,” ran the editorial, “that Russia allows commercial
considerations to play any great part in her ideas of constructing
railways; the Imperial authorities are influenced mainly by the policy
of political expediency. The commercial competition thus foreseen by
Russia is put forward merely as a stop-gap until Russia can get time
and money to repeat in Asia Minor the methods of which she has made
such success in Persia and the Far East.” Other British opinion was of
like character.

The Russian claim for exclusive control of railway construction in
northern Anatolia met with equally bitter denunciation. The London
_Globe_, of August 10, 1899, characterized as “impudence” the intention
of the Russian Government “to regard Asiatic Turkey as a second
Manchuria, on the pretence that the whole country has been mortgaged to
Russia for payment of the Turkish war indemnity. If this preposterous
claim were admitted, not only the development of Asia Minor but the
opening of another short-cut to the East might be delayed until the
end of the next century. Russia had so many ambitious and costly
projects on hand at present that her nearly bankrupt treasury could not
meet any fresh drain, and especially one of such magnitude as that
in question. The policy of her Government, therefore, is to preserve
Asia Minor as a _tabula rasa_ on which the Russian pen can write as it
pleases hereafter. It is a cool project, truly, but the success which
has attended similar Russian endeavors in the Far East will not, we
undertake to predict, meet with repetition.”

The Russian Government, meanwhile, was interposing serious
objections to the Bagdad Railway. M. Zinoviev, the Tsar’s minister
at Constantinople, informed the Sublime Porte that the proposed
extension of the Anatolian Railways from Angora across Armenia to
Mosul and Bagdad would be a strategic menace to the Caucasus frontier
and, as such, could not be tolerated. If Russian wishes in the matter
were not respected, immediate measures would be taken to collect all
arrears—amounting to over 57,000,000 francs—of the indemnity due
the Tsar under the Treaty of Berlin (1878). The outcome of these
demands was submission by the Sultan’s Government. The proposed
Angora-Kaisarieh-Diarbekr route was abandoned in favor of one extending
from Konia, through the Cilician Gates of the Taurus Mountains, to
Adana, Aleppo, and Mosul—the latter being the route over which the
Bagdad Railway actually was constructed. The discussions between the
Russian and Ottoman Governments subsequently were crystallized and
confirmed by the so-called Black Sea Agreement of 1900, which pledged
the Sultan to award no further concessions for railways in northern
Anatolia or Armenia except to Russian nationals or to syndicates
approved by the Tsar, and, furthermore, to award such Russian
concessionaires terms at least as favorable as those to be granted the
Bagdad Railway Company.[3]

The agreement thus reached, however, satisfied Russia only temporarily.
In December, 1901, M. Witte, Imperial Minister of Finance at
Petrograd, stated categorically that he considered the construction
of the Bagdad Railway by any Power other than Russia a menace to the
imperial interests of the Tsar. Proposals for the internationalization
of the line he asserted to be chimerical; in his opinion the nationals
of one Power would be certain to control the administration of the
enterprise. The Tsar was determined that Russian capitalists should
have nothing to do with the Railway; Russian capital, for a time at
least, should be conserved for industrial development at home. “The
Government of Russia,” he concluded, “is more interested in devoting
its available resources to the construction of new railways within
the Empire than it is in promoting an enterprise destined to offer
competition to Russia’s railways and industries.”[4] In 1902 and again
in 1903, M. Witte made similar statements, asserting that he saw no
reason for changing his point of view.[5]

Witte’s words carried weight in Russia. As an erstwhile railway
worker he knew the great economic importance of railways. During his
régime as Minister of Finance (1893–1903) an average of 1,400 miles
of rails was laid down annually in Russia; the Transcaspian and
Transcaucasian systems were constructed, and the Siberian Railway was
pushed almost to completion. He foresaw that one day these railways
would be powerful weapons in the commercial and political expansion of
an industrialized Russia. As an official in charge of troop movements
during the Russo-Turkish War of 1877 he had learned to understand the
function of railways in offensive and defensive warfare. Although he
considered it wasteful to construct railways for military purposes
alone, he believed that every railway was of strategic value; in fact,
he looked upon railways as the most important single factor in national
preparedness. As the foremost protagonist of Russia’s tariff war with
the German Empire he was opposed to any plan which promised to promote
German commerce and to open up new resources and new markets to German
industry. As a native of the Caucasus region and as an ardent advocate
of colonial expansion Witte looked forward to the time when Russia
herself—possessed of capital for the purpose—should dominate the
transportation system of Asiatic Turkey.[6]

It is questionable, however, if the Bagdad Railway really threatened
any important Russian economic interests. The railways of southern
Russia, so far from being injured by competition with the proposed
new railways of Turkey, would be almost certain to profit from any
increase of trade in the region of the Black Sea. The Russian dream of
a railway to Alexandretta was still very much of a dream; but even if
the contrary had been the case, its construction for peaceful purposes
would not have been hindered by the Bagdad plan. The claim that a
trans-Mesopotamian railway would compete with the Far Eastern traffic
of the Siberian Railways was purely fantastic; it overlooked the
obvious fact that an ideal shipping route, like a straight line, is the
shortest distance between two points. It would be at least a generation
before Mesopotamian grain and oil could play a prominent part in the
Russian market.[7]

But with Russian political interests the case was different. Ever
since the days of Peter the Great, the Russian Tsars had persistently
and relentlessly continued their efforts to obtain a “window” on the
Mediterranean. This historical trend toward the open sea led to a
well-defined intention on the part of Russia, in one way or another,
to take Constantinople from the Turks. The dynastic interests of
Russia were reënforced by commercial considerations. “Most of Russia’s
southern trade is bound to pass through the Bosporus. Her wheat and
hides, her coal and oil cannot reach the European markets any other
way; her manganese and petroleum are inaccessible to other nations
if they cannot find an outlet from the Caucasus to the Dardanelles.”
During the Turco-Italian War the closing of the Straits for a few days
was said to have cost Russian shipping about eight million francs.[8]
Bonds of religion and race enlisted Russian sympathy in the struggle
of the Balkan states to win independence from Turkey—a cause which
harmonized with the Russian ambition to bring about the disintegration
of Turkey-in-Europe. The rise of German influence at Constantinople—of
which the Anatolian and Bagdad Railway concessions were a tangible
manifestation—had been a source of annoyance to Russia, not only
because it prevented Russian domination of Turkish affairs and because
it strengthened the position of Austria-Hungary in the Balkans, but
also because it tended to strengthen Turkish military power. It was
annoying enough to witness the rising political and economic power of
Germany in the Near East; it was more annoying to realize that, under
German guidance, the Turks might experience an economic and military
renaissance which would end once and for all the Russian hope of
possessing ancient Byzantium.

Strategically the construction of the Bagdad Railway was a real menace
to Russian ambitions in the Near East. The completion of the line would
enable the Ottoman Government to effect a prompt mobilization along
the Armenian front. For example, the Fifth Turkish Army Corps, from
Damascus, and the Sixth Corps, from Bagdad—which in the War of 1877
arrived on the field after a series of forced marches, minus a large
number of its effectives, too late to save Kars or to raise the siege
of Erzerum—could be brought quickly by rail from Syria and Mesopotamia
to Angora for the defence of northern Anatolia. In the event of a
Russo-Turkish war such a maneuver would render extremely precarious a
Russian invasion of Armenia or a Russian advance on Constantinople
along the south shore of the Black Sea. In a general European war in
which both Russia and Turkey might be involved the existence of this
railway line would make possible a Turkish stroke at the southern
frontier of Russia, thus diverting troops from the European front. That
the German General Staff was not ignorant of these possibilities is
certain because of the presence in Turkey, during this time, of General
von der Goltz.[9]

The Russian Government and the Russian press were fully aware of the
menace of the Bagdad Railway to Russian imperial interests. That the
Tsar did not offer serious resistance to the construction of the line
was due to the rise of serious complications in the Far East, the
crushing defeats of his army and navy in the War with Japan, friction
with Great Britain in Persia and in Central Asia, and the outbreak of
a revolutionary movement at home. But the Russian press called upon
French citizens to show their loyalty to the Alliance by refusing to
participate in the financing of the Railway.[10]

The plaintive call of the Russians, however, did not fall on altogether
sympathetic ears in the Republic; a conflict of interests led some
French citizens to invest in the Railway even though it was denounced
by their Government.


THE FRENCH GOVERNMENT HESITATES

The position of France in the Bagdad Railway controversy was anomalous.
In addition to political, economic, and religious reasons for opposing
the construction of the trans-Mesopotamian railway, the French had many
historical and sentimental interests which influenced the Government
of the Republic to resist German penetration in the Near East. French
patriots recalled with pride the rôle of France in the Crusades;
they remembered that Palestine itself was once a Latin kingdom; they
believed that Christians in the Levant looked to France as their
protector and that this protection had received formal recognition
under the Capitulations, negotiated by Francis I and renewed and
extended by his successors from Henry IV to Louis XV. They knew that
the French language was the language not only of the educated classes
in Turkey, but, also, in Syria, of the traders, so that it could be
said that a traveler in Syria might almost consider himself in a French
dependency. They were proud of the fact that the term “Frank” was the
symbol of Western civilization in the Near East. They were aware of the
far-reaching educational work of French missionaries. France, to their
mind, had done a great work of Christian enlightenment in the Moslem
stronghold, Turkey. Was the Government of the Republic to be backward
in asserting the interests of France, when Bourbons and Bonapartes had
so ably paved the way for the extension of French civilization in the
Holy Land? Reasoning of this kind was popular in France during 1898 and
1899, when the Kaiser’s visit to Abdul Hamid was still under discussion
and when the first indications were given that a German company was
to be awarded a concession for the construction of a railway from
Constantinople to the Persian Gulf.

On the other hand, however, there was a considerable and a powerful
group in France which urged the French Government, if not to support
the project of the Bagdad Railway, at least to put no obstacles in its
way. The members of this group were French financiers with investments
in Turkey. They believed that the construction of the Railway would
usher in a new era of prosperity in the Ottoman Empire which would
materially increase the value of the Turkish securities which they
owned. If the interests of these financiers were not supported by
historical traditions and nationalist sentiment, they were tangible and
supported by imposing facts. It was estimated, in 1903, that French
investors controlled three-fifths, amounting to a billion and a half
of francs, of the public obligations of the Imperial Ottoman Treasury.
French promoters owned about 366 million francs in the securities of
Turkish railroads and over 162 millions in various industrial and
commercial enterprises in Asia Minor. French banks had approximately
176 million francs invested in their branches in the Near East. The
total of all French investments in Turkey was more than two and a
half billion francs.[11] The French-controlled Imperial Ottoman Bank,
the French-owned Smyrna-Cassaba Railway, and the French-administered
Ottoman Public Debt Council all favored the promotion of the Bagdad
Railway idea.

For a time, the French Government decided to follow the lead of
the financial interests. French bankers, in 1899, had entered into
an agreement with the _Deutsche Bank_ to operate the Anatolian and
Smyrna-Cassaba systems under a joint rate agreement, to coöperate
in the construction of the Bagdad Railway, and to attempt to secure
diplomatic support for their respective enterprises.[12] At the request
of the Imperial Ottoman Bank, M. Constans, the French Ambassador at
Constantinople, adopted a policy of “benevolent neutrality” toward the
negotiations of the _Deutsche Bank_ with the Ottoman Ministry of Public
Works. This course was approved by M. Delcassé, Minister of Foreign
Affairs, who considered the Bagdad Railway harmless because French
capitalists were to participate in its construction and operation. Just
how much this diplomatic non-interference assisted the _Deutsche Bank_
in obtaining the concessions of 1899 and 1903 is an open question. It
is extremely doubtful if French objections could have blocked the
award of the concessions, although M. Chéradame subsequently maintained
that the consummation of the plans of the _Deutsche Bank_ would have
been impossible without the tacit coöperation of the French embassy at
Constantinople.[13]

Between 1899 and 1902 the proposed Bagdad Railway was discussed
occasionally by French publicists, but it could not have been
considered a matter of widespread popular interest. In the spring of
the latter year, however, immediately after the award of the first
Bagdad concession by the Sultan, a bitter protest was voiced in the
Chamber of Deputies against the policy of the French Government.
M. Firmin Fauré, a deputy from Paris, introduced a resolution that
“the issue of debentures, stocks, or bonds designed to permit the
construction of the Bagdad Railway shall not be authorized in French
territory except by vote of the Chamber of Deputies.” In a few words
M. Fauré denounced the Bagdad Railway plan as a menace to French
prestige in the Near East and as a threat against Russian security in
the Caucasus. He believed, furthermore, that Bagdad Railway bonds would
be an unsafe investment: “It is a Panama that is being prepared down
there. Do you choose, perchance, my dear colleagues, to allow French
capital to be risked in this scheme without pronouncing it foolhardy?
Do you choose to allow the great banks and the great investment
syndicates to realize considerable profits at the expense of the
small subscribers? If that is how you attend to the defence of French
capital, well and good, but you will permit me to disagree with you.”
He warned the members of the Chamber that they would not dare to stand
for reëlection if they thus allowed the interests of their constituents
to be prejudiced.[14]

M. Delcassé, Minister of Foreign Affairs, objected to the resolution.
He denied that French diplomacy had assisted the German bankers in
securing the Bagdad Railway concession.[15] But the concession was a
_fait accompli_, and it also was a fact that French financiers felt
they could not afford to refuse the offer of participation with the
German concessionaires. “I venture to ask how it can be prevented, and
I inquire of the Chamber whether, when such an enterprise has been
arranged and decided upon, it is not preferable that French interests,
so considerable in the East, should be represented therein.” He
promised that every possible precaution would be taken to assure French
capitalists a share in the enterprise equal to that of any other power.
The Minister was upheld, the motion being defeated by a vote of 398 to
72.[16]

Less than two years later, in October, 1903, the Paris Bourse, at the
instigation of the French Government, excluded all Bagdad Railway
securities from the privileges of the Exchange. This change in policy
was not so much the result of a _volte face_ on the part of M. Rouvier
and M. Delcassé as it was a consequence of a persistent clamor on the
part of the French press that the construction of the Bagdad Railway,
which was popularly considered a serious menace to French interests,
should be obstructed by every effective method at the disposal of the
Government.[17]


FRENCH INTERESTS ARE BELIEVED TO BE MENACED

The commercial interests of southern France were opposed to
participation in the Bagdad Railway by the French Government or by
French capitalists. Business men were fearful, for example, lest “the
new route to India” should divert traffic between England and the East
from the existing route across Europe _via_ Calais to Marseilles and
thence by steamer to Suez, to a new express service from Calais to
Constantinople _via_ Ostend, Cologne, Munich, and Vienna. Thus the
importance of the port of Marseilles would be materially decreased,
and French railways would lose traffic to the lines of Central Europe.
Also, there was some feeling among the manufacturers of Lyons that the
rise of German economic power in Turkey might interfere with the flow
to France of the cheap raw silk of Syria, almost the entire output of
which is consumed in French mills. The fears of the silk manufacturers
were emphasized by one of the foremost French banks, the _Crédit
Lyonnais_, which maintained branches in Jaffa, Jerusalem, and Beirut,
for the purpose of financing silk and other shipments. This bank had
experienced enough competition at the hands of the _Deutsche Palästina
Bank_ to assure it that further German interference was dangerous.[18]

From the political point of view there was more to be said for
the French objections. Foremost among serious international
complications was the strategic menace of the Railway to Russia. The
Bagdad enterprise was described as the “anti-Russian maneuver _par
excellence_.” To weaken Russia was to undermine the “foundation stone
of French foreign policy,” for it was generally conceded that “the
Alliance was indispensable to the security of both nations; it assured
the European equilibrium; it was the essential counterbalance to the
Triple Alliance.”[19] Then, too, the question of prestige was involved!
In the great game of the “balance of power” an imperial advance by
one nation was looked upon as a humiliation for another! Thus a
German success in Turkey, whether gained at the expense of important
French interests or not, would have been considered as reflecting
upon the glory of France abroad! There was also a menace to France in
a rejuvenated Turkey. A Sultan freed from dependence upon the Powers
might effectively carry on a Pan-Islamic propaganda which would lead to
serious discontent in the French colonial empire in North Africa. What
would be the consequences if the Moors should answer a call to a Holy
War to drive out the infidel invaders?[20]

Still more fundamental, perhaps, than any of these reasons was the fear
among far-sighted French diplomatists that the Bagdad Railway would
be but the first step in a formal political alliance between Germany
and Turkey. The French, more than any other European people, have been
schooled in the political ramifications of foreign investments. The
very foundations of the Russian Alliance, for example, were loans of
French bankers to Russian industries and to the Tsar. Might not Baron
Marschall von Bieberstein and Karl Helfferich, Prince von Bülow and
Arthur von Gwinner, tear a leaf out of the book of French experience?
Certainly the way was being paved for a Turco-German alliance, and M.
Deschanel eloquently warned his colleagues in the Chamber of Deputies
that there were limitless possibilities in the situation. Speaking in
the Chamber on November 19, 1903, he said: “Behold a railway that can
divert from the Suez Canal a part of the traffic of the Far East, so
that the railways of Central Europe will become the competitors of
Marseilles and of our French railways! Behold a new colonial policy
which, instead of conquering territories by force of arms, makes war
with funds; possesses itself of the means of communication; crushes
out the life of states, little by little, by the artifices of the
financiers, leaving them only a nominal existence! And we, who possess
the world’s greatest fund of _capital, that supreme weapon of modern
conquest_, we propose to place it at the disposal of foreign interests
hostile to our fundamental and permanent foreign policies! Alas, it is
not the first time that our capital has gone to nourish rival, even
hostile, schemes!”[21]

Religious interests supported the political and economic objections to
the construction of the Bagdad Railway. French Clericals were fearful
lest this railway become the very backbone of German interests in the
Ottoman Empire, thus strengthening German missionary activities and
jeopardizing the time-honored protectorate of France over Catholics
in the Near East. As early as 1898 an anonymous writer sounded a
clarion call to Catholics and nationalists alike that German economic
penetration in Turkey was a matter of their common concern: “Preeminent
in the Levant, thanks to the friendship of the Sultan and to the
progress of the commerce of her nationals, Germany, if she gathers in,
besides, our religious heritage, will crown her formidable material
power with an enormous moral power; she will assume in the world the
eminent place which Charlemagne, St. Louis, Francis I, Richelieu, Louis
XIV, and Napoleon have assured to our country. The ‘nationalization’ of
missions will inaugurate a period of German supremacy in the Orient,
where the name of France has been so great and where it still is so
loved.”[22]

France occupied a unique position in the Near East. For centuries she
had been recognized as shouldering a special responsibility in the
protection of Catholics and of Catholic missions in the Ottoman Empire.
This protectorate—which as late as 1854 had provided the occasion for a
war between the empire of Napoleon III and Russia—had been acquired not
by military conquest alone, but by outstanding cultural and religious
services as well.[23]

Certainly at the end of the nineteenth century French missions held
a preëminent position in Turkey. French Jesuits and Franciscans
maintained elementary, secondary, and vocational schools in Aleppo,
Damascus, Beirut, Jerusalem, and numerous smaller towns throughout
Syria and Palestine. A Jesuit school established at Beirut in 1875
rapidly expanded its curricula until it obtained recognition as a
university, its baccalaureate degree being accredited by the French
Ministry of Public Instruction early in the decade of the eighties.
The medical faculty of this Jesuit University—said to have been
founded under the patronage of Jules Ferry and Léon Gambetta—was
given authority to grant degrees, which were recognized officially by
France in 1888 and by Turkey in 1898. In addition to the classical and
medical courses, instruction was given in law, theology, philosophy,
and engineering. A preparatory school, conducted in connection with
the university, had an enrollment of about one thousand pupils. By
1907 it was estimated that over seventy thousand Syrian children were
receiving instruction in French religious schools. In addition to these
educational accomplishments mention should be made of the work of the
Sisters of St. Joseph of the Apparition and the Society of St. Vincent
de Paul, who made Jerusalem, Bethlehem, and other towns centers of
French religious and philanthropic activity.[24]

The progress of German missions and schools was a challenge to the
paramount position of France in the cultural development of the Near
East. And it was not a challenge which was passed unanswered. To
counteract the influence of German schools established, with the aid of
the Railway Company, at a few of the more important points along the
Anatolian lines, French missionary schools were established at Eski
Shehr, Angora, and Konia.[25]

Furthermore, German missions seemed to bring with them an additional
threat—an attempt to discredit the French claim to an exclusive
protectorate over Catholics in the Ottoman Empire. As early as 1875 the
German Government declared that “it recognized no exclusive right of
protection of any power in behalf of Catholic establishments in the
East,” and that “it reserved its rights with regard to German subjects
belonging to any of these establishments.”[26] This position appeared
to be strengthened by Article 62 of the Treaty of Berlin (1878), which
affirmed that “ecclesiastics, pilgrims, and monks of all nationalities
traveling in Turkey shall enjoy the same rights, advantages, and
privileges. The official right of protection of the diplomatic and
consular agents of the Powers in Turkey is recognized, with regard both
to the above-mentioned persons and to their religious, charitable, and
other establishments in the Holy Places and elsewhere.”[27]

In 1885 it was proposed that the Sultan should appoint his own emissary
to the Vatican, thus rendering supererogatory the time-honored
procedure of transacting all affairs of the Church through the French
embassy at Constantinople. French Catholics immediately charged that
this proposal emanated from Berlin and did everything possible to
oppose its acceptance. Italian and German influences in Rome heartily
supported the idea of direct communications between the Vatican and the
Porte, but Pope Leo XIII and Cardinal Rampolla finally decided against
maintaining diplomatic relations with the Infidel.[28]

Largely as a result of Italian insistence that the rights of the
diplomatic and consular agents of the Kingdom be given recognition, it
was considered advisable for the Pope to state definitely his position
on the French protectorate. This he did in an encyclical of May 22,
1888, _Aspera rerum conditio_, which informed all Catholic missionaries
in the Levant that “the Protectorate of the French Nation in the
countries of the East has been established for centuries and sanctioned
even by treaties between the empires. Therefore there must be
absolutely no innovation in this matter; this Protectorate, wherever it
is in force, is to be religiously preserved, and the missionaries are
warned that, if they have need of any help, they are to have recourse
to the consuls and other ministers of France.”[29] In a letter dated
August 1, 1898, addressed to Cardinal Langénieux, Archbishop of Rheims,
Leo XIII again confirmed this opinion: “France has a special mission in
the East confided to her by Providence—a noble mission consecrated not
alone by ancient usage, but also by international treaties.... The Holy
See does not wish to interfere with the glorious patrimony which France
has received from its ancestors, and which beyond a doubt it means
to deserve by always showing itself equal to its task.”[30] No more
sweeping confirmation of French rights could have been desired.

The German Government, however, was by no means willing to accept these
pronouncements as final. In the name of nationalism German unification
was accomplished; in the name of nationalism German missionaries abroad
must look to their own Government for protection. To admit a foreign
claim to the protectorate of Germans was to stain the national honor.
To accede to the French pretension that Catholic Germans occupied an
inferior position in the East was to decrease the prestige of German
citizenship. The Shantung incident was a noisy demonstration of the
intention of the German Empire to recognize no such distinctions.
The visit of the Kaiser to the Sultan in the same year, 1898, was
directly concerned with the determination of _Wilhelmstrasse_ to
assert the secular rights of German missionaries, Catholics as well as
Protestants.[31]

French Catholics denied the German claims and worked upon national
sentiment at home to add to the growing fear of German imperial
aggrandizement. “Catholic missions,” it was asserted, “by their very
nature and purpose are a supra-national institution, similar to the
sovereign majesty of the Pope.” What could be the purpose of the
Germans in asserting the doctrine of the “nationalization of missions,”
if it were not to undermine French influence in Turkey? How great would
be the national humiliation if the protectorate of the Faithful in
the East should pass from the hands of Catholic France to Protestant
Prussia! The Germans, too, were prejudicing the Holy See against the
Republic. A notoriously pro-German party at the Vatican, supported
by their political allies, the Italians, were winning the sympathies
of the Pope by insinuating references to “red France,” “schismatic
Russia,” and “heretical England”! Thus was a dark plot being hatched
against France and against the unity of Christendom![32]

This situation was not without its advantages to the French Clericals.
Between the years 1899 and 1905, when the Bagdad Railway controversy
was at its height, a serious domestic controversy was raging in France.
In a bitter fight to extirpate Clericalism the Republican ministries of
Waldeck-Rousseau and Émile Combes had put through law after law to curb
the power of the Church and to break up the influence of the religious
orders. The Clericals were waging a losing battle. But perhaps the
last crushing blows might be warded off by resorting to a favorite
maneuver of Louis Napoleon—the diversion of popular attention from
domestic affairs to foreign policy. If Republicans and Monarchists,
Socialists and bourgeois Liberals, Radicals and Conservatives,
Free-Masons and Clericals, could be aroused against the German advance
in Turkey, a common outburst of national pride might obscure, for a
time at least, the domestic war on organized Catholicism. Therefore
Clerical writers in France warned of the menace of the Bagdad Railway
to the Russian Alliance, to the advance of French commerce, and to
the ancient prerogatives in the East. “It is Germany, preëminent at
Constantinople,” said an anonymous writer in the _Revue des deux
mondes_, “which blocks the future of Pan-Slavism in the East; it
is Germany, installed in Kiao-chau, which can forestall Muscovite
expansion toward the Pacific; it is Germany which, in the East and
Far East, seeks to undermine our religious protectorate. Faced by the
same adversary, it is natural that France and Russia should build up
a common defence.” That France should not desert her ally Russia or
her own prerogatives in the protectorate of Near Eastern missions is
self-evident. “The protectorate over Catholics is for us, in short, a
source of material advantage!”[33]


THE BAGDAD RAILWAY CLAIMS FRENCH SUPPORTERS

The Bagdad Railway was not without friends in France. The French
chairman of the Ottoman Public Debt Administration was an enthusiastic
supporter of the project and served on the Board of Directors of
the Bagdad Railway Company, for he believed that widespread railway
construction was essential to the establishment, upon a firm basis, of
Turkish credit. The French-controlled Imperial Ottoman Bank, as early
as 1899, had agreed to participate in the financing of the Bagdad line,
and an officer of the bank had accepted the position of vice-president
of the Bagdad Railway Company at the time of its incorporation in 1903.
The French owners of important railways in Anatolia and Syria believed
it would be suicidal for them to obstruct the plans of the _Deutsche
Bank_ and preferred to coöperate with the German concessionaires.
Unless the French opponents of the Bagdad Railway were prepared
to offer these interests material compensation for resisting its
construction, it was hardly likely that, hard-headed business men as
they were, they would jeopardize the security of their investments
for the sake of such intangible items as international prestige and
protectorates of missions.

There were two important groups of French-owned railways in
Turkey-in-Asia. In Anatolia there was the important Smyrna-Cassaba
system, extending east and north-east from the French-developed port
of Smyrna. At Afiun Karahissar the main line of this system from
Smyrna connected with the Anatolian line from Constantinople to Konia.
Therefore a route for French trade already existed to all of Asia
Minor; and when the Bagdad Railway was completed, direct service could
be instituted from Smyrna to Adana, Aleppo, Mosul, Bagdad, and Basra.
The second group of French railways was the Syrian system, owned by _La
Société Ottomane du Chemin de fer Damas-Hama et Prolongements_. This
company operated railway lines from Aleppo to Damascus, from Tripoli
to Homs, from Beirut to Damascus, from Jaffa to Jerusalem, and between
other less important points. After the completion of the Bagdad Railway
this group of railways would have direct connections, at Aleppo,
with all of Europe _via_ Constantinople and with the Indies _via_
Basra and the Persian Gulf. Perhaps the French interests controlling
these railways were chagrined at their inability to secure the
trans-Mesopotamian concession for themselves. But faced with the _fait
accompli_ of the German concession, they realized that coöperation with
the Bagdad Railway would make their lines an integral part of a greater
system of rail communications within Turkey and also between Turkey and
the nations of Europe and Farther Asia. Refusal to coöperate would be
cutting off their noses to spite their faces.[34]

French bankers were disposed to look at the Bagdad enterprise in
much the same light. The economic renaissance of Turkey, which it
was hoped would be an effect of improved rail communications, would
increase the value of their earlier investments in that country. But,
in addition, the Bagdad Railway offered handsome profits in itself:
profits of promoting the enterprise and floating the various bond
issues; profits of the construction company, in which French capital
was to participate; profits of the shareholders when the Railway should
become a going concern. True, the Council of Ministers had requested
the Bourse to outlaw the Bagdad securities. But, after all, when
profits are at stake, what is a mere resolution of the Cabinet among
friends? A syndicate of French financiers invested heavily in the
bonds and stock of the Bagdad Railway Company, the hostility of their
Government notwithstanding. And it was said that one of the bankers
who participated in the syndicate was none other than M. Rouvier,
Minister of Finance in the Cabinet of M. Combes, and subsequently Prime
Minister.[35]

Many intelligent French students of foreign affairs felt that a merely
obstructionist policy on the part of France toward the Bagdad Railway
would be futile and, in the end, disastrous. In spite of the many
historical and sentimental attachments of France in the Near East, she
really had no vital interests which were jeopardized by the Bagdad
enterprise. It was urged, therefore, that she should play the rôle
of conciliator of the divergent interests of Russia, Great Britain,
Germany, and Turkey. A forward-looking program, it was suggested, would
be to urge these nations to reach a full and equitable agreement in
the promotion of “a project unquestionably valuable in the progress of
the whole human race.” National material interests should be merged in
“the superior interests of civilization.” Mere self-interest demanded
this of France, because, should a war break out over the Near Eastern
question, France would most certainly become involved.[36]

As regards the claims of Russia to influence French policy in the
Bagdad Railway affair, there was a considerable amount of irritability
exhibited by French publicists. It was pointed out, for example, that
M. Witte was unwilling to accept “internationalization” of the Railway
at a time when the German and French bankers were prepared to effect
a satisfactory settlement on that basis. It was asserted, also, that
Russian strategic interests were adequately safeguarded when the
northern route was abandoned by the Black Sea Basin Agreement of 1900.
So far from decreased difficulties of Turkish mobilization constituting
a menace to Russia, “Russia still had both the power and, apparently,
the inclination to be a formidable menace to Turkey.”[37] How could the
Colossus of the Caucasus tremble before the Sick Man!

One French writer was frank in advocating that France should pursue
a course independent of Russia in this instance. “The St. Petersburg
press,” he wrote, “has asserted vehemently that we are unjust to
support an enterprise which will injure considerably the economic
interests of Russia, which will seriously prejudice its grain trade,
and create a ruinous competitor to Russian railways now projected. Of
what use is the Franco-Russian Alliance if our policy runs counter to
Russian interests?

“We are particularly pleased to answer the question. The Franco-Russian
Alliance does not imply complete servility on the part of France toward
Russia, or annihilation of all free will, or perpetual agreement on
matters of finance. After having furnished our ally with almost seven
billion francs, we find ourselves called upon to support her policies
in the Far East, although we ourselves were abandoned and isolated in
the Fashoda affair. It will be well for us now to think of ourselves
somewhat, although respecting scrupulously, even cordially, the clauses
of the contract of alliance.... It is in our own interests to coöperate
with Germany in the Bagdad enterprise. It is extremely regrettable that
we cannot carry it out ourselves; but since it is otherwise, we should
make the most of the conditions.”[38]

It is said that M. Delcassé, French Minister of Foreign Affairs,
certainly no friend of German imperial designs, never really was
hostile to the Bagdad Railway and its affiliated enterprises. As
Bismarck welcomed French colonial activities in Africa and China as a
means of diverting French attention from the Rhine and the Vosges, so
Delcassé hoped that the colossal Bagdad plan would absorb all German
imperial inclinations, leaving Morocco an exclusive sphere of French
influence. In the construction of railways in the Ottoman Empire,
Germany might satisfy her “irresistible need for expansion,” without
menacing vital French interests. And all the while the _Quai d’Orsay_,
through the French representatives on the Board of Directors of the
Bagdad Railway Company, could be kept fully informed of the progress
of the German concessionaires and the purpose of the German diplomatic
agents interested in the success of the project.[39]

There were other ardent French nationalists who felt very much the same
way about it. However, in their opinion, it would be unwise to gamble
on the complete absorption of Germany in her _Bagdadbahn_. It would be
wiser, perhaps, to withhold financial support until such time as the
German Foreign Office was willing to execute a formal treaty conferring
upon France an exclusive sphere of interest in Morocco. Bagdad was to
be had for the asking—but in exchange for Morocco! It is said that
in 1905, after the fall of Delcassé and on the eve of the Algeciras
Conference, M. Rouvier, Prime Minister of France, approached the
German ambassador in Paris with a view to negotiating a Franco-German
agreement granting Germany a free hand in Turkey in return for
recognition of the special interests of France in Morocco.[40]

M. André Tardieu revived this suggestion two years later. “Germany
needs capital,” he said. “And when one needs capital, it is to France
that one comes in search of it. It is inevitable, necessary, therefore,
that Germany come to us. She will be obliged to come to us sooner or
later to seek our capital for the Bagdad enterprise. Germany has the
concession. She has commenced the lines. But all the sections requiring
the greatest engineering skill are still to be constructed, and she
has not the money to construct them.” If France agrees to let Germany
have the necessary funds, it will be on the condition that Germany
allow France important compensations. “Where will these compensations
be sought? I have no hesitation in saying, in Morocco. The Act of
Algeciras must be set aside, and France must have a free hand in
Morocco! An agreement upon the Bagdad question would be mischievous if
it concerned Bagdad alone, for, the Germans having the concession in
their pockets, the positions of the negotiators would not be equal. On
the other hand, if the agreement is for two purposes, if it refers to
Bagdad _and_ Morocco, I believe, I repeat, it would be both practicable
and desirable.”[41]

The proposal that French consent to the Bagdad Railway could be
purchased with compensations in North Africa met with no enthusiasm
in Germany. Herr Bassermann, leader of the National Liberals in the
Reichstag, urged the Foreign Office to meet any such diplomatic
maneuver on the part of France with a sharp rebuff.[42] At the time
of the Agadir crisis, furthermore, Baron Marschall von Bieberstein is
said to have warned Bethmann-Hollweg that Germany would have to stand
firm on Morocco, for “if, notwithstanding Damascus and Tangier, we
abandon Morocco, we lose at one blow our position in Turkey, and with
it the advantages and prospects for the future which we have acquired
painfully by years of toil.”[43]

It was not until 1914 that an agreement was reached between France and
Germany on Asiatic Turkey. For more than ten years, then, the Bagdad
Railway was a stinging irritant in the relations between the Republic
and the Empire. It aggravated an open wound which needed, not salt, but
balm. We shall return later to consider its consequences. But in the
meantime we must turn our attention to Great Britain, standing astride
the Persian Gulf and blocking the way.


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Regarding Russian railways in the Near East _cf._ the article
“Russia—Railways,” in the _Encyclopedia Britannica_, 11th edition,
Volume 23, p. 891. The trans-Persian railway from Resht, a Persian
port on the Caspian, to Teheran was completed in September, 1899.
_Cf._ “Russia’s Tightening Grip on Persia,” in _The Globe_ (London),
August 24, 1899; also “Russian Railways in Asia,” _The Financial News_
(London), August 14, 1899. The Bagdad Railway frequently was referred
to in the French and Russian press as the _Petit Transasiatique_.

[2] Foreign correspondence of _The Globe_, July 28, 1899; _Commerce_
(London), August 2, 1899; articles quoted from the _Novoe Vremya_ in
_The Globe_, August 10, 1899; _The Engineer_ (London), August 11, 1899;
_The Observer_, August 13, 1899; R. Henry, “L’intérêt française en Asie
occidentale—Le chemin de fer de Bagdad et l’alliance franco-russe,” in
_Questions diplomatiques et coloniales_, Volume 15 (1903), pp. 673–688.

[3] _Corps de droit ottoman_, Volume IV, pp. 64 _et seq._; Paul Imbert,
“Le chemin de fer de Bagdad,” in _Revue des deux mondes_, 5 period,
Volume 38 (1907), pp. 657–659.

[4] Quoted by Georges Mazel, _Le chemin de fer de Bagdad_ (Montpelier,
1911), p. 324. It should be remembered that Russia at this time was
experiencing the Industrial Revolution. _Cf._ James Mavor, _An Economic
History of Russia_, Volume II (Toronto, 1914), Book VI.

[5] _Annual Register_, 1902, p. 323; 1903, pp. 293–294.

[6] _Memoirs of Count Witte_, edited and translated by A. Yarmolinsky
(Garden City, 1921), pp. 75 _et seq._; G. Drage, _Russian Affairs_
(London, 1904), pp. 507 _et seq._; A. Sauzède, “Le développement des
voies ferrées en Russie,” in _Questions diplomatiques et coloniales_,
Volume 37 (1914), pp. 272–281; F. H. Skrine, _The Expansion of Russia_
(Cambridge, 1904), _passim_.

[7] Bohler, _loc. cit._, pp. 294–295; Gervais-Courtellemont, “La
question du chemin de fer de Bagdad,” in _Questions diplomatiques et
coloniales_, Volume 23 (1907), pp. 499–507.

[8] Baron S. A. Korff, _Russia’s Foreign Relations during the Last Half
Century_ (New York, 1922), pp. 133–134.

[9] Rohrbach, _Die Bagdadbahn_, pp. 10–13; Imbert, _loc. cit._, p. 678.
Enthusiastic Turks believed that, with adequate rail communications,
Erzerum might be transformed into a Turkish Belfort. _Cf._ Mazel, _op.
cit._, p. 37. Had the Bagdad Railway and the projected railways of
northern Anatolia been completed before the outbreak of the Great War,
the Turks could have made a more effective defence in the Caucasus
campaign of the Grand Duke Nicholas in 1916.

[10] For a general statement of the attitude of Russia and the Balkan
States to the Bagdad Railway _cf._ Alexandre Ilitch, _Le chemin de fer
de Bagdad, ou l’expansion de l’Allemagne en Orient_ (Brussels, Paris,
Leipzig, 1913), pp. 100–107, 121–123.

[11] Bohler, _loc. cit._, pp. 273–289; _cf._, also, P. Rohrbach,
_German World Policies_, pp. 223–224.

[12] _Supra_, pp. 59–60.

[13] Chéradame, _op. cit._, pp. 267 _et seq._; _The Times_, August 10,
1899; K. Helfferich, _Die Vorgeschichte des Weltkrieges_, p. 124.

[14] _Journal Officiel, Débats parlementaires, Chambre des Députés_,
March 25, 1902, p. 1468.

[15] According to M. Deschanel, this was sophistry. The French
Government, if it was not guilty of an error of commission, certainly
was guilty of a sin of omission. It was the opinion of M. Deschanel
that the French Ambassador at Constantinople should have done
something to put the French Government on record as opposed to the
Bagdad Railway. M. Deschanel was not certain, however, that the French
Ministry had not consented to the participation of French capital
in the plan. “How can one imagine,” he said, “that an institution
such as the Ottoman Bank became involved in an enterprise of such
great political and military importance without the approval of our
Foreign Office?... How is it that the Ottoman Bank is a party to this
enterprise, and how is it that the Board of Directors for the first
section of the line has French representatives, when only a word from
the Government could have prevented it?” _Ibid._, November 20, 1903, p.
2798.

[16] _Ibid._, March 25, 1902, pp. 1468 _et seq._

[17] Victor Bérard, “Le Discours du Chancelier,” in the _Revue de
Paris_, December 15, 1906.

[18] The _Revue Bleue_, April 6, 1907, p. 429; _Syria and Palestine_,
p. 126. Many of the claims that the Bagdad Railway jeopardized French
prosperity were purely fantastic. It was maintained that the opening
of the great Mesopotamian granary would cripple French agriculture,
already seriously handicapped by the competition of the new world. To
this was added the suggestion that development of cotton-growing in
Turkey would stifle the infant efforts at the cultivation of cotton
in the French colonies. It is incredible that Mesopotamian grain
and cotton would have interfered with the flourishing prosperity of
the French peasantry; in any event, any such danger was at least a
generation removed. France raised high tariff barriers against foreign
competition in the home market for agricultural products; she was not
an exporter of grain.

[19] _Journal Officiel, Débats parlementaires, Chambre des Députés_,
March 25, 1902, pp. 1467 _et seq._

[20] _Cf._, M. Montbel, “Les puissances coloniales devant l’Islam,” in
_Questions diplomatiques et coloniales_, Volume 37 (1914), pp. 348–362.

[21] _Journal Officiel, Débats parlementaires, Chambre des Députés_,
November 20, 1905, p. 2798. The italics are mine.

[22] _Revue des deux mondes_, Volume 149 (1898), p. 29.

[23] Sources of the treaties granting special privileges to France are
sighted in Note 3, Chapter II. Regarding the origins and nature of
the French protectorate over Roman Catholic missions see the article
“Capitulations” in the _Encyclopedia Britannica_, previously cited; J.
Brucker, “The Protectorate of Missionaries in the Near East,” in the
_Catholic Encyclopedia_, Volume XII, pp. 488–492; A. Schopoff, _Les
Réformes et la Protection des Chrétiens en Turquie, 1673–1904_ (Paris,
1904); _Livre de propagande de l’alliance française, 1883–1893_ (Paris,
1894), especially pp. 35 _et seq._; Viscomte Aviau de Piolant, _La
défense des intérêts catholiques en Terre Sainte et en Asie Mineure_
(Paris, 1886).

[24] _Syria and Palestine_, pp. 43–45, 54–55; L. Bréhier, “Turkish
Empire—Missions,” in _Catholic Encyclopedia_, Volume XV, pp. 101–102;
J. Atalla, “Les solutions de la question syrienne,” in _Questions
diplomatiques et coloniales_, Volume 24 (1907), p. 472.

[25] _Bulletin de la Chambre de Commerce française de Constantinople_,
June 30, 1897, pp. 112–113, November 30, 1897, p. 149.

[26] Brucker, _loc. cit._, p. 490.

[27] It should be added that the Treaty also stipulated that “the
acquired rights of France are explicitly reserved, and there shall be
no interference with the _statu quo_ in the Holy Places.” E. Hertslet,
_The Map of Europe by Treaty_, Volume IV (London, 1891), p. 2797.

[28] _Revue des deux mondes_, Volume 149, (1898), pp. 24–25; Brucker,
_loc. cit._, p. 491.

[29] _Catholic Encyclopedia_, Volume XII, p. 491. The rôle of the
Italians in this controversy is of considerable interest. The desire
of the Italian Government to assert its right to protect its own
citizens abroad was a manifestation of the Italian nationalism which
brought about the establishment of the Kingdom; at the same time it
was an expression of that anti-Clerical tendency which characterized
Italian politics from the days of Cavour to the outbreak of the Great
War. Undoubtedly, also, there was an economic side to the question.
It will be recalled that Italian trade with the Ottoman Empire
grew more rapidly than that of any other power after the opening
of the twentieth century. (_Supra_, pp. 105–106.) This growth was
due, in no small degree, to the earlier rise of Italian missionary
activity in Turkey. This growth of missions and schools, as well as
of commercial establishments, was irritating to patriotic Frenchmen.
_Cf._ two articles by René Pinon, “Les écoles d’Orient,” in _Questions
diplomatiques et coloniales_, Volume 24 (1907), pp. 415–435, 487–517.
Italian missionaries, charged M. Pinon, were encouraged in every way to
ignore the French protectorate, appealing only to Italian diplomatic
and consular representatives. “Official Italy, Catholic and papal
Italy, free-mason Italy and clerical Italy, all are working together in
a common great patriotic effort for the spread of the Italian language
and the rise of the national power” (p. 500). Annoying as this is, says
M. Pinon, it should be “a singular lesson for certain Frenchmen!” That
there was no love lost on the Italian side of the controversy may be
gathered from an analysis of the Italian press comments which appeared
in _Questions diplomatiques et coloniales_, Volume 37 (1914), p. 495.

[30] Brucker, _loc. cit._, p. 491. Inasmuch as the protectorate of
Catholic missions involved a considerable responsibility for France,
one may ask why the French Government should have been so solicitous
that no other nation be allowed to share the burden. The answer is
suggested by the _Catholic Encyclopedia_, which states that the system
of religious protectorates is almost invariably subject to the abuse
that “the protectors will seek payment for their services by trammeling
the spiritual direction of the mission or by demanding political
services in return.” Volume XII, p. 492.

[31] _Supra_, pp. 134–135.

[32] _Revue des deux mondes_, Volume 149 (1898), p. 39. The “pro-German
party” was said to consist of Cardinals Ledochowski, Hohenlohe,
Galimberti, and Kapp. _Ibid._, pp. 11–12; Reinsch, _op. cit._, p. 269.

[33] _Revue des deux mondes_, Volume 149 (1898), pp. 36–40. On this
whole subject see, also, C. Lagier, _Byzance et Stamboul: nos droits
françaises et nos missions en Orient_ (Paris, 1905); Hilaire Capuchin,
_La France Catholique en Orient durant les trois-derniers siècles_
(Paris, 1902); A. Schopoff, _Les Réformes et la Protection des
Chrétiens en Turquie_ (Paris, 1904).

[34] G. Saint-Yves, _Les Chemins de fer françaises dans la Turquie
d’Asie_ (Paris, 1914).

[35] The French and Belgian banks principally interested were: the
Imperial Ottoman Bank, the _Banque de l’Union Parisienne_, and the
_Banque Internationale de Bruxelles_. _Cf._ article “Ou en est la
question du chemin de fer de Bagdad,” in _Questions diplomatiques
et coloniales_, Volume 24 (1907), pp. 167–171; E. Letailleur, _Les
capitalistes français contre la France_ (Paris, 1916), pp. 72–110. M.
Rouvier visited Turkey in 1901, at the request of the Ottoman Public
Debt Administration, to suggest improvements in the fiscal system of
the Empire. (_Corps de droit ottoman_, Volume IV, p. 110.) It was at
this time, probably, that he learned enough of the Bagdad Railway to
persuade him of the wisdom of investing in its securities.

[36] Gervais-Courtellemont, _loc. cit._, p. 507; Imbert, _loc. cit._,
p. 682.

[37] Gervais-Courtellemont, _loc. cit._, p. 507; Bohler, _loc. cit._,
p. 294.

[38] Bohler, _loc. cit._, pp. 293–295.

[39] Mazel, _op. cit._, pp. 315–322.

[40] K. Helfferich, _Die deutsche Türkenpolitik_, p. 18.

[41] “La politique extérieure de l’Allemagne,” in _Questions
diplomatiques et coloniales_, Volume 23 (1907), pp. 340–341.

[42] _Stenographische Berichte, XII Legislaturperiode, 1 Session_,
Volume 231 (1908), pp. 4226 _et seq._

[43] Quoted by the _Annual Register_, 1913, p. 326.




CHAPTER VIII

GREAT BRITAIN BLOCKS THE WAY


EARLY BRITISH OPINIONS ARE FAVORABLE

The idea of a trans-Mesopotamian railway was not new to informed
Englishmen. As early as 1831 a young British army officer, Francis
R. Chesney, who had seen service in the Near East, became impressed
with the desirability of constructing a railway from the Mediterranean
to the Persian Gulf. From 1835 to 1837—while Moltke was in Turkey
studying military topography—Chesney was engaged in exploring the
Euphrates Valley and upon his return to England brought glowing tales
of the latent wealth of ancient Babylonia. It was not until twenty
years later, however, that his plan for a Mesopotamian railway was
taken up as a practical business proposition. In 1856 Sir William
Andrew incorporated the Euphrates Valley Railway Company, appointed
General Chesney as chief consulting engineer, and opened offices at
Constantinople to carry on negotiations for a concession from the
Imperial Ottoman Government. The plans of the Company were supported
enthusiastically by Lord Palmerston, by Lord Stratford de Redcliffe,
British ambassador at Constantinople, and by the Turkish ambassador in
London. The following year the Sultan granted the Euphrates Valley
Company a concession for a railway from the Gulf of Alexandretta to the
city of Basra, with the understanding that the Ottoman Treasury would
guarantee a return of six per cent upon the capital invested in the
enterprise. The promoters, however, experienced difficulty in raising
funds for the construction of the line, and the project had to be
abandoned.[1]

Lord Palmerston, in the meantime, was busily opposing the Suez Canal
project. De Lesseps was handicapped by the obstructionist policies of
British diplomacy as well as by the unwillingness of British financiers
to invest in his enterprise. Palmerston frankly informed the great
French engineer that in the opinion of the British Government the
construction of the Canal was a physical impossibility; that if it
were constructed it would injure British maritime supremacy; and that,
after all, it was not so much a financial and commercial venture as a
political conspiracy to provide the occasion for French interference in
the East![2]

Nevertheless the Suez Canal was completed in 1869, and immediately
thereafter the question of a Mesopotamian railway was again brought to
the fore in England. The advance of the Russians in the Near East and
the control by the French of a short all-water route to the Indies gave
rise to serious concern regarding the maintenance of communication with
British India. In 1870 a British promoter proposed the construction of
a railway from Alexandretta _via_ Aleppo and Mosul to Bagdad and Basra.
Such a railway, as Sir William Andrew had pointed out, would assure
the undisturbed possession of India, for the “advancing standard of
the barbarian Cossack would recoil before those emblems of power and
progress, the electric wire and the steam engine, and his ominous tread
would be restrained behind the icy barrier of the Caucasus.”[3] Also
it would render Great Britain independent of the French-owned Suez
Canal by providing an alternative route to the East, making possible
more rapid transportation of passengers, mails, and troops to India.
This plan seemed desirable of execution from so many points of view
that a special committee of the House of Commons, presided over by
Sir Stafford Northcote, was appointed “to examine and report upon the
whole subject of railway communication between the Mediterranean, the
Black Sea, and the Persian Gulf.” This committee reported that the
construction of a trans-Mesopotamian railway was a matter of urgent
imperial concern and recommended a plan which would have involved
the investment of some £10,000,000. The necessity of providing an
alternative route to India was obviated, however, by Disraeli’s
purchase, in 1875, of a controlling interest in the Suez Canal at a
cost of less than half that sum.[4]

For the forty years during which, at intervals, these projects were
under discussion Germany was not even an interested spectator in Near
Eastern affairs. Domestic problems of economic development and national
unification were all-absorbing, and capitalistic imperialism was quite
outside the scope of German policies. France and Russia, not Germany,
were the disturbers of British tranquillity in the Orient.

When during the last two decades of the nineteenth century there was
a marked increase of German political and economic interests in the
Ottoman Empire, there was little disposition in England to resent the
German advance. As late as 1899, the year in which the preliminary
Bagdad Railway concession was awarded to German financiers, British
opinion, on the whole, was well disposed to Teutonic peaceful
penetration in the Near East. The press was delighted at the prospect
that the advent of the Germans in Turkey would block Russian expansion
in the Middle East. Such eminent imperialists as Joseph Chamberlain and
Cecil Rhodes announced their willingness to conclude an _entente_ with
Germany in colonial affairs. The British Government was more suspicious
of France than of Germany.[5]

During the opening years of the twentieth century, however, the
situation was materially changed. Although there was a continuance
of the cordial relations between the British and German Governments,
there was an undercurrent of hostility to Germany in England (as well
as to England in Germany) which was to be disastrous to the hopes for
an Anglo-German agreement on the Near East. By 1903, the year of the
definitive Bagdad concession, German diplomacy and German business were
under a cloud of suspicion and unpopularity in Great Britain.

The underlying reason for the increasing estrangement between England
and Germany was, as far as the British were concerned, the phenomenal
rise of Germany as a world power. The commercial advance of the German
Empire disturbed the complacent security and the stereotyped methods
of British business. The colonial aspirations of German imperialists
rudely interfered with British plans in Africa and appeared to be
threatening British domination of the East. The German navy bills of
1898 and 1900 constituted a challenge to Britannia’s rule of the waves.
German criticism of English procedure in South Africa had aroused
widespread animosity, in large part because the British themselves
realized that their conduct toward the Boers had not been above
reproach. This animosity was revealed in an aggravated and unreasoning
form in the vigorous denunciation which greeted the Government’s joint
intervention with Germany in the Venezuela affair of 1902. Joseph
Chamberlain, who in 1899 had advocated an Anglo-German alliance, in
1903 was preaching “tariff reform,” directed, among other objectives,
against the menace to the British Empire of the rising industrial
prosperity of Germany. The proposal that British capital should
participate in the Bagdad Railway project was introduced to the British
public at a distinctly inopportune time from the point of view of those
who desired some form of coöperation between England and Germany in the
successful prosecution of the plan.


THE BRITISH GOVERNMENT YIELDS TO PRESSURE

The Bagdad Railway came up for discussion in Parliament on April 7,
1903. Mr. Balfour then informed the House of Commons that negotiations
were being carried on between British and German capitalists, and
between British capitalists and the Foreign Office, for the purpose
of determining the conditions upon which British financiers might
participate in the enterprise. If a satisfactory agreement could be
reached by the bankers, His Majesty’s Government would be asked to
give its consent to a reasonable increase in the customs duties of the
Ottoman Empire, to consider the utilization of the new railway for the
transportation of the Indian mails, and to adopt a friendly attitude
toward the establishment of the eastern terminus of the Bagdad Railway
at or near Koweit.

Coöperation with the German concessionaires on any such basis was
attacked vigorously from the floor of the House. One member declared
it a menace to the existing British-owned Smyrna-Aidin Railway lines
in Turkey, a potential competitor of British maritime supremacy, and
a threat at British imperial interests in Egypt and in the region of
the Persian Gulf. Another member of the House believed that “it was
impossible to divorce the commercial from the political aspect of
the question. What made the House take a real, live interest in it
was the feeling that bound up with the future of this railway there
was probably the future political control of large regions in Asia
Minor, Mesopotamia, and the Persian Gulf.” Another member was certain
the House “knew Mesopotamia was a blessed word. They all felt it was
impossible for this country to oppose the introduction of a railway
through Mesopotamia. The only wonder was that the railway was not
constructed forty or fifty years ago.” At the same time, he felt, it
would be well for Britain to be assured that her participation in the
enterprise would not lead to another “Venezuela agreement”; Germany
must be given to understand that Britain, by control of the Persian
Gulf, held the “trump card” of the deck.

The Prime Minister made it plain, nevertheless, that he favored
coöperation with the German concessionaires provided British capital
were permitted to participate on a basis of equality with any other
power. He believed, also, that an obstructionist policy would be
futile. “I have no doubt that whatever course English financiers may
take and whatever course the British Government may pursue, sooner or
later this great undertaking will be carried out,” said Mr. Balfour.
“It is undoubtedly in the power of the British Government to hamper and
impede and inconvenience any project of the kind; but that the project
will ultimately be carried out, with or without our having a share in
it, there is no question whatsoever.”

“There are three points,” continued Mr. Balfour, “which ought not to be
lost sight of by the House when trying to make up their minds upon this
problem in its incomplete state. They have to consider whether it is or
is not desirable that what will undoubtedly be the shortest route to
India should be entirely in the hands of French and German capitalists.
Another question is whether they do or do not think it desirable that
if there is a trade opening in the Persian Gulf, it should be within
the territories of the Sheik whom we have under our special protection
and with whom we have special treaties [_i.e._, the Sheik of Koweit],
or whether it should be in some other port of the Persian Gulf where
we have no such preferential advantage. The House must also have in
view a third consideration with regard to a railway which goes through
a very rich country and which ... is likely after a certain period of
development to add greatly to the riches of Turkey, and indirectly,
I suppose, greatly to the riches of any other country which is ready
to take advantage of it. Whether the British producer will be able to
take advantage of it is not for me to say; but the House will have to
consider whether he is more likely to be able to take advantage of it
if English capital is largely interested, than if it is confined to
French and German capital. The House will have to calculate whether ...
it will be prudent to leave the passenger traffic in the hands of those
two nations, France and Germany, with whom we are on the most friendly
terms, but whose interests may not be identical with our own.”[6]

Mr. Balfour’s presentation of the case was hailed in Berlin as
eminently lucid and fair. The _National Zeitung_ and the _Vossische
Zeitung_ of April 8 expressed the hope that British participation in
the Bagdad Railway would be approved by Parliament and the press,
in order that the German promoters might have the opportunity
to demonstrate that no political ambitions were connected with
the enterprise. The Russian attitude of refusing even to discuss
internationalization, on the other hand, was roundly denounced.

The London press, however, saw no reason for enthusiasm over the
Prime Minister’s proposal. _The Times_, the _Daily Mail_, the _Daily
Telegraph_, the _Pall Mall Gazette_, and the _National Review_ let
loose a torrent of vituperation against German imperialist activities
in general and the Bagdad Railway in particular. The _Spectator_,
forswearing any thought of prejudice against Germany, constantly
reminded its readers of German unfriendliness during the Boer War and
suggested that the Bagdad negotiations offered the British Government
an admirable opportunity to retaliate.

The _Manchester Guardian_, organ of the old Liberalism, likewise was
opposed to British participation in the Bagdad Railway. Pleading for
continued observance of Britain’s time-honored policy of isolation,
its leading editorial of April 15 said: “Mr. Balfour expressed his
belief that ‘this great international artery had better be in the hands
of three great countries than in the hands of two or of one great
country.’ In other words, England is to be mixed up in the domestic
broils of Asia Minor; every Kurdish or Arab attack on the railway will
raise awkward diplomatic questions, and any disaster to the Turkish
military power will place the whole enterprise in jeopardy. What is
far more important, English participation in railway construction
in Asia Minor will certainly strengthen the suspicions which Russia
entertains regarding our policy. It is the fashion with certain English
politicians to abuse Russia for building railways in Manchuria and
for projecting lines across Persia. Yet Mr. Balfour seems more than
half inclined to pay her policy the compliment of imitation by helping
to build a railway across Mesopotamia to the Persian Gulf—and, worse
still, of imperfect imitation, since the Government is certainly
not prepared to occupy the territory through which the railway will
pass, as Russia does in Manchuria. What vital interests of our own
shall we strengthen by this sudden ardour for railways in Turkey to
counterbalance the certain weakening of our friendly relations with
Russia?”

Violent as was the opposition of the press to any coöperation with the
Germans in the Bagdad Railway, the opposition would have been still
more violent had all of the facts been public property. Mr. Balfour,
however, was keeping the House and the country in complete ignorance
of many of the most important aspects of the situation. Although the
Prime Minister denied that there had been any negotiations between
the British and German Governments regarding the Bagdad enterprise,
he failed to admit that there had been such negotiations between His
Majesty’s Government and German financiers. He made no mention of the
fact, for example, that he and Lord Lansdowne, his Secretary of State
for Foreign Affairs, had attended a meeting at the home of Lord Mount
Stephen at which Dr. von Gwinner, on behalf of the _Deutsche Bank_,
and Lord Revelstoke, on behalf of the interested British financiers,
explained the terms of the proposed participation of British capital
in the Bagdad Railway.[7] The plan was to place the Railway, including
the Anatolian lines, throughout its entire length from the Bosporus
to the Persian Gulf, under international control. Equal participation
in construction, administration, and management was to be awarded
German, French, and British interests to prevent the possibility of
preferential treatment for the goods or subjects of any one country.[8]
To this proposal both Mr. Balfour and Lord Lansdowne gave their
approval, assuring the bankers that no diplomatic obstacles would be
offered by Great Britain to the construction of the Bagdad Railway.
Dr. von Gwinner thereupon returned home to obtain the consent of his
associates to the reapportionment of interests and, perhaps, to consult
the German Foreign Office and the Ottoman minister at Berlin. This was
early in April, 1903.[9]

Persistent rumors in the London press that a Bagdad Railway agreement
had been negotiated brought the subject to the attention of the
Cabinet, which heretofore, apparently, had not been consulted by the
Prime Minister and the Secretary of State for Foreign Affairs. It was
decided that the Prime Minister should make a statement to Parliament—a
statement which, perhaps, might serve as a sort of trial balloon to
ascertain the opinion of the country upon the question. Mr. Balfour’s
presentation of the Bagdad Railway affair to the House of Commons, as
we have seen, however, provoked unfriendly comments from the floor and
was subjected to heavy fire from the press. Thereupon a rebellious
element in the Cabinet—led, presumably, by Joseph Chamberlain, who now
was more interested in the development of the economic resources of the
British Empire under a system of protective and preferential tariffs,
than in coöperation with other nations—persuaded Mr. Balfour not to
risk the life of his Ministry on the question of British participation
in the Bagdad enterprise. Accordingly, the agreement with the _Deutsche
Bank_ was repudiated, and on April 23, 1903, Mr. Balfour informed
the House of Commons that His Majesty’s Government was determined to
withdraw all support, financial and otherwise, which Great Britain
might be in a position to lend the Bagdad Railway. He was convinced,
he said, after a careful examination of the proposals of the German
promoters, that no agreement was possible which would compensate the
Empire for its diplomatic assistance and guarantee security for British
interests.[10]

This announcement was a distinct disappointment to the bankers in
Berlin and in London. The directors of the _Deutsche Bank_ were
stunned by the termination of negotiations which they believed
had been progressing satisfactorily. The British financiers were
chagrined at the sudden decision of their Government to oppose their
participation in a promising enterprise. They were convinced that the
terms offered by the German bankers met every condition imposed by the
Prime Minister. They were agreed on the wisdom of British coöperation
with the _Deutsche Bank_, and they were not a little annoyed at what
appeared to be bad faith on the part of Downing Street. They were
convinced that only a bellicose press frustrated the attempt to make
the Bagdad Railway an international highway.[11]

This, in any event, is the diagnosis of the situation furnished by Sir
Clinton Dawkins, of the Morgan group, one of the British financiers
interested in the project. In a letter to Dr. von Gwinner written on
April 23, 1903, but not made public until six years later, he said,
“As you originally introduced the Bagdad business to us, I feel that
I cannot, upon its unfortunate termination, omit to express to you
personally my great regret at what has occurred. After all you have
done to meet the various points raised, you will naturally feel very
disappointed and legitimately aggrieved. But I am glad to think, and
I feel you will be convinced, that your grievance lies not against
the British group but against the British Foreign Office. The fact is
that the business has become involved in politics here and has been
sacrificed to the very violent and bitter feeling against Germany
exhibited by the majority of our newspapers, and shared in by a large
number of people. This is a feeling which, as the history of recent
events will show you, is not shared by the Government or reflected in
official circles. But of its intensity outside these circles, for the
moment, there can be no doubt; at the present moment coöperation in
any enterprise which can be represented, or I might more justly say
_mis_represented, as German will meet with a violent hostility which
our Government has to consider.”

Sir Clinton thereupon asserted that the effort of Mr. Balfour to quiet
the uproar in Parliament was due to the Prime Minister’s complete
satisfaction with the agreement reached by the financiers. Just as
success seemed assured, a bitter attack was launched on the Government
“by a magazine and a newspaper [The _National Review_ and _The Times_]
which had made themselves conspicuous by their criticisms of the
British Foreign Office on the Venezuela affair. Who instigated these
papers, from whence they derived their information, is a matter upon
which I cannot speak with certainty. My own impression is that the
instigation proceeded from Russian sources. The clamour raised by
these two organs was immediately taken up by practically the whole
of the English press, London having really gone into a frenzy on the
matter owing to the newspaper campaign, which it would have been quite
impossible to counteract or influence. It is, I think, due to you that
you should know the _histoire intime_ of what has passed.”[12]

There was only one London newspaper, the _St. James’s Gazette_, which
came out frankly in favor of British participation in the Bagdad
Railway. In the issue of April 14, 1903, the editor ridiculed the
suggestion of the _Spectator_ that the Foreign Office was obliged to
warn bankers of the financial risks involved in the enterprise. “Why
our contemporary should be so anxious to save financiers, British
or foreign, from making a bad investment of their money, we cannot
imagine. Financiers are generally pretty wide-awake, and the City as
a rule requires no advice from Fleet Street, the Strand, or Whitehall
in transacting its business.” In an editorial entitled “Bagdad and Bag
Everything,” April 22, 1903, the _Gazette_ condemned _The Times_ for
the “curious and alarmist deductions” which that journal drew from
the terms of the Bagdad Railway convention. The suggestion that this
was a deliberate attempt on the part of Germany to ruin British trade
was characterized “as much a figment of a fevered imagination as the
mind-picture of Turkey using ‘this enormous line to pour down troops
to reduce the shores of the Persian Gulf to the same happy condition
as Armenia and Macedonia,’ about which _The Times_ is so suddenly and
unaccountably concerned. The concession is a monument to the German
Emperor’s activity, built on the ruins of the influence which we threw
away, and we do not precisely see what our _locus standi_ in the matter
is. If the interests of the Ottoman Government and of the German
concessionaires be served by the construction of the line, constructed
the line will be, and there’s an end. Whether it ever will, or ever can
pay its way, is the affair only of capitalists who are contemplating
investment in it. It is not the slightest use barking when we cannot
bite, and our power of biting in the present instance is excessively
small.... The Emperor William, like Jack Jones, has ‘come into ’is
little bit of splosh’ in Asia Minor, and it is quite useless to be
soreheaded about it. It is childish to be ever carping and nagging and
‘panicking.’ We question whether the Bagdad Railway—while the rule of
the Sultan endures—is going to do much good or much harm to anybody.
The vision which some Germans have of peaceful Hans and Gretchen
swilling Löwenbrau in the Garden of Eden to the strains of a German
band, is little likely of fulfilment. If trade develops, a fair share
of it will come our way, provided we send good wares and such as the
inhabitants want to buy.” This minority opinion, however, was unheeded
in the outburst of anti-German feeling which followed Mr. Balfour’s
first statement to the House of Commons.

As events turned out, the failure of the Balfour Government to
effect the internationalization of the Bagdad Railway was a colossal
diplomatic blunder. If the proposed agreement of 1903 had been
consummated, the _entente_ of 1904 between France and England would
have taken control of the enterprise out of the hands of the Germans,
who would have possessed, with their Turkish collaborators, only
fourteen of the thirty votes in the Board of Directors. Sir Henry
Babington Smith assures the author that there was nothing in the
arrangement suggested by the _Deutsche Bank_ which would have prevented
eventual Franco-British domination of the line. Surely, as Bismarck is
said to have remarked, every nation must pay sooner or later for the
windows broken by its bellicose press!


VESTED INTERESTS COME TO THE FORE

In addition to the pressure which was brought to bear on the Balfour
Cabinet by the newspapers, there were important vested business
interests which quietly, but effectively, made themselves heard at
Downing Street during the critical days of the Bagdad negotiations of
1903.

It already has been noted that in 1888, as part of the plans of the
Public Debt Administration for the improvement of transportation
facilities in Turkey, the British-owned Smyrna-Aidin Railway Company
was granted permission to construct several important branches to
its main line. For a time this new concession thoroughly satisfied
the owners and directors of the Company, and there was no objection
on their part to the extension and development of the German-owned
Anatolian system. By 1903, however, when the Bagdad concession was
under discussion, the Smyrna-Aidin line demanded the protection of the
British Government against the undue extension of German railways in
the Near East. In particular, it objected to the agreement between the
Anatolian Railway and the Smyrna-Cassaba Railway, by which the latter
joined its tracks with the Anatolian system at Afiun Karahissar and
accepted a schedule of tariffs satisfactory to both lines.[13] The
Smyrna-Aidin Company feared that the Bagdad Railway would develop the
ports of Haidar Pasha, Alexandretta, and Mersina at the expense of
the prosperity of Smyrna, thereby decreasing the relative importance
of the Smyrna-Aidin line and cutting down the volume of its traffic.
Finally, it objected to the payment of a kilometric guarantee to the
German concessionaires while there was no likelihood of its being
similarly favored by the custodians of the public purse. The interests
of the shareholders of the railway were well represented in the House
of Commons by “that watchful dragon of imperial interests”, Mr. Gibson
Bowles.

Mr. Bowles (Conservative member from King’s Lynn, 1892–1906, and
Liberal from the same constituency, 1910–1916) was a frank defender
of the interests of the stockholders of the Smyrna-Aidin Railway.
He believed that investors were entitled to governmental protection
of their investments, whether at home or abroad. He left no doubt,
however, that he took his stand on high grounds of patriotism as well.
He informed the House that “he did not object to the railway, because
all railways were good feeders of ships. But this was not a railway;
it was a financial fraud and a political conspiracy—a fraud whereby
English trade would suffer and a conspiracy whereby the political
interests of England would be threatened. It amounted to a military and
commercial occupation by Germany of the whole of Asia Minor.”[14]

Comparable to the interests of the Smyrna-Aidin Railway were those
of the Euphrates and Tigris Navigation Company, Ltd. Under this name
the Lynch Brothers had been operating steamers on the Tigris and the
Shatt-el-Arab since the middle of the nineteenth century. In the trade
between Bagdad and Basra they enjoyed a practical monopoly. In the
absence of competition they were able to render indifferent service at
exorbitant rates, and there was nothing to disturb their tranquillity
except an occasional complaint from a British merchant. But the old
order was about to change. The Bagdad Railway concession of 1903
(articles 9 and 23) destroyed the monopoly of the Lynch Brothers by
granting to the Railway Company limited rights of navigation on the
Tigris. Construction of the Mesopotamian sections of the Railway,
furthermore, would be almost certain to kill, by competition,
profitable navigation between Bagdad and Basra. The course of the
Tigris is shallow and winding, subject to heavy rises and falls, and
constantly changing with the formation and disappearance of sand
shoals. The river journey from Bagdad to Basra is about five hundred
miles and takes from four to five days by steamer, under favorable
conditions. The distance by land is about three hundred miles and
could be traversed by railway in a single day’s journey, regardless
of weather conditions. For passengers and most classes of freight the
Bagdad Railway promised more economical transportation. The Lynch
Brothers were determined, however, to resist such rude encroachment on
their profitable preserves. In defence of their interests they wrapped
themselves in the Union Jack and called upon their home government
for protection; they were patriotic to the last degree and were
determined “that the custody of a privilege highly important to British
commerce would never pass to Germany except over the dead bodies of
the principal partners.”[15] Overcharge their countrymen they might;
surrender this prerogative to a German railway they would not!

British shipping interests, also, were vigorous in their opposition
to the Bagdad Railway. A trans-Mesopotamian railway, they knew, would
absorb some of the through traffic to the East, and the competition
of the locomotive might compel a general readjustment of freight
rates. Furthermore, it was one of the avowed purposes of the Bagdad
line to acquire the profitable Indian mails concession from the
British Government; this would be equivalent to the withdrawal of a
subsidy from the steamship lines operating to the East. It was not for
their own sake, but for the sake of British commerce, however, that
these shipping interests objected to the construction of the Bagdad
line! They warned the British public that the proposed railway would
adversely affect the traffic passing through the Suez Canal; inasmuch
as the United Kingdom was a stockholder in the Canal, this was the
concern of every English citizen. They pointed out that the kilometric
subsidy which had been guaranteed the Railway was to be paid from an
increase in the customs duties; thus, it was charged, British commerce
would be obliged to contribute indirectly to the dividends of the
_Deutsche Bank_. The improvement of communications between Middle
Europe and the Near East would be almost certain to disturb British
trade with Turkey; the feared and hated “Made in Germany” trade-mark
might exert its hypnotic influence in a region where British commerce
heretofore had been preëminent. If, in addition, the German owners
of the Bagdad Railway should choose to grant discriminatory rates
to German goods, a severe body-blow would be dealt British economic
interests in the Ottoman Empire. The completion of this Railway would
bring with it all sorts of German interference in the Near East and
undermine British commercial and maritime interests in the region.[16]

Many of the charges brought against the Bagdad Railway by the British
shipping interests could not have been substantiated. As early as 1892,
Lord Curzon stated emphatically that, for most commercial purposes, a
trans-Mesopotamian railway would be next to valueless. “If I were a
stockholder in the P. & O. [the Peninsular and Oriental, one of the
Inchcape lines touching at Indian and Persian Gulf ports], I would
not,” he said, “except for the possible loss of the mails, be in the
least alarmed at the competition of such a railway.”[17] Informed
Germans, likewise, did not consider the Bagdad Railway a serious
competitor to the Suez Canal. One authority, for example, wrote: “The
Bagdad Railway taken as a whole is of importance only for through
passenger and postal traffic (in which respect, therefore, it is of
greatest value to the British in their communications with India) and
occasionally for fast freight. The great bulk of the freight traffic,
on the other hand, carrying the import and export trade of the East,
hardly can fall to the Bagdad Railway, which, for a long time at least,
must content itself with the local traffic of certain sections of the
line,” particularly in Cilicia, Syria, and northern Mesopotamia.[18]

The assertion that the cost of constructing and operating the line
would be borne by British commerce was based upon specious reasoning.
Higher customs duties would not be paid by the British merchant, but
by the Turkish consumer. The only harmful effect of the increased
duties would be a general increase of prices of imported commodities
in Turkey, leading, perhaps, to a lesser demand for foreign goods. It
was probable, on the other hand, that this slight disadvantage would be
more than offset by the wider prosperity which the Railway was almost
certain to bring the districts traversed. In any event, whatever burden
might be saddled upon the import trade would have to be borne, in
proportion to the volume of business transacted, by the competitors of
British merchants as well as by British merchants themselves.

Many British business men were shrewd enough to foresee that the Bagdad
Railway might prove to be far from disadvantageous to their interests.
Where was the menace to British prosperity in a railway, German or
otherwise, which promised improved communication with the British
colonies in the Orient? The facilitation of mail service to India; the
development of rapid passenger service to the East; the reduction of
ocean freight rates as a result of healthy competition—all of these
injured no one except the vested interests which had handicapped the
expansion of British commerce by inadequate service and exorbitant
rates. There was no indication that the Bagdad Railway Company
proposed to discriminate against non-German shippers; in any event,
such a course was specifically prohibited by the concession of 1903,
which decreed that “all rates, whether they be general, special,
proportional, or differential, are applicable to all travelers and
consignors without distinction,” and which prohibited the Company
“from entering into any special contract with the object of granting
reductions of the charges specified in the tariffs.”[19] As the British
Chamber of Commerce at Constantinople appropriately pointed out, the
most certain means of avoiding discriminatory treatment was to permit
and encourage the participation of British capital in the enterprise
and to assure the presence of British subjects on the Board of
Directors of the Company.[20]

From an economic point of view, it would appear that the British
Empire had a great deal to gain from the construction of the Bagdad
Railway. In proportion as improved methods of transportation shrink the
earth’s surface, the contacts between mother country and dependencies
will become more numerous. An economic community of interest is more
likely to spring up and thrive with the aid of more numerous and
more rapid means of communication. True, certain interests believed
that the Bagdad Railway threatened their very existence. But would
the British people have been willing to sacrifice the wider economic
interests of the Empire to the vested privileges of a handful of
English capitalists? They would not, of course, if the issue had been
put to them in such simple terms. The problem was complicated by the
obvious fact that it was not alone the economic interests of the empire
which were at stake. The political import of the Bagdad enterprise
overshadowed all economic considerations.


IMPERIAL DEFENCE BECOMES THE PRIMARY CONCERN

British journalists and statesmen, as well as the ordinary British
patriot, have been accustomed to judge international questions from
but one point of view—the promotion and protection of the interests of
that great and benevolent institution, “the noblest fabric yet reared
by the genius of a conquering nation,” the British Empire.[21] Imperial
considerations have been the determining factors in the formulation of
diplomatic policies and of naval and military strategy. The possession
of a far-flung empire has required further imperial conquests to insure
the defence of those already acquired. Strategic necessities have
constituted a “reason for making an empire large, and a large empire
larger.”[22]

India, an empire in itself, is the keystone of the British imperial
system. To defend India it has been considered necessary for Great
Britain to possess herself of vital strategic points along the routes
of communication from the Atlantic seaboard to the Indian Ocean. The
acquisition of Cape Colony from the Dutch at the conclusion of the
Napoleonic Wars enabled the British fleet to dominate the old route to
India, around the Cape of Good Hope. Judiciously placed naval stations
at Gibraltar, Malta, and Cyprus assured the safety of British trade
with the East _via_ the Mediterranean. After a futile attempt to
prevent the construction of the Suez Canal, which temporarily placed
a new and shorter all-water route to India in the hands of the French,
Great Britain proceeded to acquire the Canal for herself. To assure
the protection of the Suez Canal, in turn, it was necessary to occupy
Egypt and the Sudan. Control of Somaliland and Aden, together with
friendly relations with Arabia, turned the Red Sea into a British lake.
Menaced by the Russian advance toward India, Great Britain proceeded
to dominate the entire Middle East: the foreign affairs of Afghanistan
were placed under British tutelage and protection; Baluchistan was
compelled to submit to the control of British agents; parts of Persia
were brought within the sphere of British influence.[23]

Great Britain, apparently, was determined to control every
important route to India. What, then, would be her attitude toward
a trans-Mesopotamian railway, terminating at the only satisfactory
deep-water port on the Persian Gulf? Was the possession of such a
short-cut to India consistent with the exigencies of imperial defence?

Without a satisfactory terminus on the Persian Gulf the Bagdad Railway
would lose its greatest possibilities as a great transcontinental
line; with such a terminus it might become a menace to vital British
interests in that region. British imperialists had been interested in
control of the Persian Gulf since the seventeenth century, when the
East India Company established trading posts along its shores. The
British navy cleared the Gulf of pirates; it buoyed and beaconed the
waters of the Gulf and the Shatt-el-Arab. A favorable treaty with the
Emir of Muscat, in the latter part of the nineteenth century, provided
Great Britain with a “sally port” from which to organize the defence
of the entrance to the Gulf; later, Muscat became a protectorate of
Great Britain. From time to time treaties were negotiated with the Arab
chieftains of southern Mesopotamia, extending British influence up
the Shatt-el-Arab and the Tigris and Euphrates to Bagdad. Under these
circumstances, it was apparent from the very beginning that, whether
or not the Balfour Government consented to British participation in
the Bagdad enterprise, there would be no surrender of the privileged
position enjoyed by Great Britain in the Persian Gulf. Foreign
merchants might be admitted to a share in the Gulf trade, but the
existence of a port under foreign control hardly could be approved.[24]

Lord Lansdowne, Secretary of State for Foreign Affairs, speaking before
the House of Lords, on May 5, 1903, made the position of the Government
clear: “I do not yield to the noble Lord [Lord Ellenborough] in the
interest which I take in the Persian Gulf or in the feeling that this
country stands, with regard to the navigation of the Persian Gulf, in a
position different from that of any other power.... The noble Lord has
asked me for a statement of our policy with regard to the Persian Gulf.
I think I can give him one in a few simple words. It seems to me that
our policy should be directed in the first place to protect and promote
British trade in those waters. In the next place I do not think that
he suggests, or that we would suggest, that those efforts should be
directed towards the exclusion of the legitimate trade of other powers.
In the third place—I say it without hesitation—we should regard the
establishment of a naval base, or of a fortified port, in the Persian
Gulf by any other power as a very grave menace to British interests,
and we should certainly resist it with all the means at our disposal.
I say that in no minatory spirit, because, as far as I am aware, no
proposals are on foot for the establishment of a foreign naval base in
the Persian Gulf.”[25]

Lord Lansdowne might have reminded his hearers that, although the
British Government was disposed to be friendly toward the Bagdad
Railway, measures already had been taken which effectively precluded
any possibility of the construction by the concessionaires, without
British consent, of terminal and port works at Koweit. In 1899,
when the first announcements came from Constantinople regarding the
Bagdad project, Lord Curzon, then Viceroy of India, became alarmed
at the construction of a railway which would link the head of the
Persian Gulf with the railways of Central Europe. Lord Curzon was a
trained imperialist. It was his custom to utter few words; to make no
proclamations from the housetops; to act promptly—and in secret. It
was at the instigation of the Indian Government that Colonel Meade,
British resident in the Persian Gulf region, proceeded to Koweit and
negotiated with the Sheik a clandestine agreement by which the latter
accepted the “protection” of the British Government and agreed to enter
into no international agreements without the consent of a British
resident adviser.[26] When a German technical commission visited Koweit
in 1900 to negotiate for terminal and port facilities, they found the
Sheik suspiciously intractable to their wishes. Thereupon Abdul Hamid
despatched an expedition to Koweit to assert his sovereignty over the
Sheik’s territory, but the presence of a British gunboat rendered both
reason and force of no avail.[27]

“Protection” of Koweit by Great Britain served notice on both Turkey
and Germany that the construction of a railway, owned and controlled by
Germans, to a deep-water port on the Persian Gulf was deemed contrary
to the interests of the British Empire. From first to last British
officials persistently refused to accede to any arrangement which would
thus jeopardize imperial communications. Control of the Persian Gulf,
an outpost of Indian defence, became the keynote of British resistance
to the Bagdad Railway.

During the visit of William II to England in 1907, he was informed by
Lord Haldane, Sir Edward Grey, and other responsible British statesmen,
that their objections to the Bagdad enterprise would be removed if
the sections of the Railway from Bagdad to Basra and the Persian Gulf
were under the administration of British capitalists.[28] In March,
1911, shortly after the Kaiser and the Tsar had reached an agreement
at Potsdam on the Bagdad Railway question, Lord Curzon vigorously
denounced the enterprise as a blow at the heart of Britain’s empire in
India and called upon the Foreign Office to persist in its policy of
blocking construction of the final sections of the line.[29] This was
in accord with a caustic criticism of German and Russian activities in
the Near East, delivered by Mr. Lloyd George to the House of Commons,
during which the future Premier made it plain that, whatever course
Russia might pursue, Great Britain would not compromise her vital
imperial interests in the region of the Persian Gulf.[30] The German
concessionaires learned, to their disappointment and chagrin, that,
on this point, in any event, the British Government stood firm. Even
in 1914, when an international agreement was reached permitting the
construction of the Bagdad Railway, Great Britain subscribed to the
arrangement with the express proviso that the terminus of the line
should be Basra and that the port to be constructed at Basra should
be jointly owned and controlled by German and British capitalists.
Construction of the line beyond Basra was not to be undertaken without
the permission of the British Government.[31]

Although fear of foreign interference in the Persian Gulf region
was the chief political objection raised by Great Britain to the
construction of the Bagdad Railway, it was supplemented by a number
of other objections—all associated, directly or indirectly, with the
defence of India. The Bagdad Railway concession of 1903 provided for
the construction of a branch line from Bagdad to Khanikin, on the
Turco-Persian border. This proposed railway not only would compete
with the British caravan trade between these cities, amounting to
about three-quarters of a million pounds sterling annually, but would,
perhaps, lead to the introduction into the Persian imbroglio of the
influence of another Great Power. Persia lay astride one of the natural
routes of communication to India. The uncertainty of the situation in
Persia already was such as to cause grave concern in Great Britain,
and there were few British statesmen who would have welcomed German
interference in addition to Russian intrigue.[32]

British imperialists, too, had excellent reason to fear that any
increase in the power of the Sultan, such as would be certain to
follow the construction of adequate rail communications in the Ottoman
Empire, might be but the first step in a renaissance of Mohammedan
political ambitions, and, perhaps, a Moslem uprising everywhere against
Christian overlords. Such a situation—had it been sufficiently matured
before the outbreak of the War of 1914—might have been disastrous to
the British position in the East: a rejuvenated Turkey, supported by
a powerful Germany, might have been in a position to menace the Suez
Canal, “the spinal cord of the Empire,” and to lend assistance to
seditious uprisings in Egypt, India, and the Middle East. Why should
Britain not have been disturbed at such a prospect, when prominent
German publicists were boastfully announcing that this was one of the
principal reasons for official espousal of the _Bagdadbahn_?[33] Why
should British statesmen have closed their eyes to such a possibility,
when the recognized parliamentary leader of the Social Democratic Party
in Germany warned the members of the Reichstag that limits must be
placed upon the political ramifications of the Bagdad enterprise, lest
it lead to a disastrous war with Great Britain?[34]

Furthermore, British statesmen were too intimately acquainted with
the dynamics of capitalistic imperialism to accept the assurances
of Germans that the Bagdad Railway, and other German enterprises in
Turkey, were business propositions only. They knew that promises to
respect the sovereignty of the Sultan were courteous formalities of
European diplomatists to cloak scandalous irregularities—it was in
full recognition of the sacred and inviolable integrity of Turkey that
Disraeli had taken possession and assumed the “defence” of Cyprus
in 1878! Furthermore, experienced imperialists knew full well that
economic penetration was the foundation of political control. As Mr.
Lloyd George informed the House of Commons in 1911, the kilometric
guarantee of the Bagdad Railway gave German bankers a firm grip on the
public treasury in Turkey, and such a hold on the imperial Ottoman
purse-strings might lead no one could prophesy where.[35]

British experience in Egypt, however, indicated one direction in which
it might possibly lead. English control in Egypt had been acquired by
the most modern and approved imperial methods. It was no old-fashioned
conquest; the procedure was much more subtle than that. First, Egypt
was weighted down by a great burden of debt to British capitalists;
then British business men and investors acquired numerous privileges
and intrenched themselves in their special position by virtue of the
Anglo-French control of Egyptian finance; the “advice” of British
diplomatists came to possess greater force of law than the edicts
of the Khedive; “disorders” always could be counted upon to furnish
an excuse for military conquest and annexation, should that crude
procedure eventually become necessary.[36] Might not _Wilhelmstrasse_
tear a leaf out of Downing Street’s book of imperial experience?

There is a seeming inconsistency in this description of the British
interests involved in the Bagdad Railway question. If British shipping
might be seriously injured, if the imperial communications were to be
endangered, if undisputed control of the Persian Gulf was essential
to the safety of the Empire, if the defence of India was to be
jeopardized, if a German protectorate might be established in Asia
Minor—if all these were possibilities, how could the Balfour Government
afford to temporize with the German concessionaires, holding out
the hope of British assistance? Were Mr. Balfour and Lord Lansdowne
less fearful for the welfare and safety of the Empire than were the
newspaper editors? Rather, of course, were they convinced that the
very best way of forestalling any of these developments was to permit
and encourage British participation in the financing of the Bagdad
Railway Company.[37] Only thus could British trade hope to share in
the economic renaissance of the Ottoman Empire; only thus could there
be British representatives on the Board of Directors to insist that
the _Deutsche Bank_ confine its efforts to the economic development
of Turkey, excluding all political _arrières pensées_. And it would
not have required an imperialist of the experience of Mr. Balfour to
imagine that dual ownership of the Bagdad Railway might have the same
ultimate outcome as the Dual Control in Egypt. But blind antagonism
toward Germany prevented the average Englishman from seeing the obvious
advantages of not abandoning the Bagdad Railway to the exclusive
control of German and French capitalists.


BRITISH RESISTANCE IS STIFFENED BY THE ENTENTE

One year after the failure of the Bagdad Railway negotiations of
1903, the age-old colonial rivalry of France and Great Britain was
brought to a temporary close by the _Entente Cordiale_. It is not
possible, with the information now at our disposal, to estimate with
any degree of accuracy the influence which the Bagdad Railway exerted
upon British imperialists in the final determination to reach an
agreement with France. One may agree with an eminent French authority,
however, that “neither in England nor in France is the principle of the
understanding to be sought. Rather was it the fear of Germany which
determined England—not only her King and Government, but the whole of
her people—to draw nearer France.”[38] British fear and dislike of
Germany were founded upon the phenomenal growth of German industry and
overseas commerce, the rapid expansion of the German mercantile marine,
the construction of the German navy, and the insistence of German
diplomatists that Germany be not ignored in colonial matters. The
Bagdad Railway did nothing to quiet those fears. It served, rather, to
render precarious Britain’s position in the East.

In March, 1903, when the definitive Bagdad Railway concession was
granted, British imperial affairs were in a far from satisfactory
state. The termination of the Boer War had ended the fear that the
British Empire might lose its hold on South Africa, but the sharp
criticism of British conduct toward the Boers—criticism which came
not only from abroad, but from malcontents at home—had dealt a severe
blow to British prestige. The relentless advance of Russia in China,
Persia, and Afghanistan gave cause for anxiety as to the safety of
Britain’s possessions in the Middle and Far East. And although France
had withdrawn gracefully from the Fashoda affair, it was by no means
certain that Egypt had seen the last of French interference. Added
to all of these difficulties was the proposed German-owned railway
from Constantinople to the Persian Gulf, flanking the Suez Canal and
reaching out to the back door of India.

Under such circumstances it was small wonder that Great Britain took
stock of her foreign policies. The Anglo-Japanese Alliance of 1902
already had ended the British policy of aloofness, and there appeared
to be no sound reason against the negotiation of other treaties
which similarly would strengthen the British position in the East.
The Bagdad Railway negotiations collapsed, but the agreement with
France—which seemed far more difficult of achievement—was consummated
without further delay. Three years later, in 1907, Great Britain
came to an agreement with another of her rivals in the East—Russia.
The Tsar, chastened by military defeat abroad and by revolution at
home, recognized a British sphere of interest in Persia, relinquished
all claims in Afghanistan, and acknowledged the suzerainty of China
over Tibet.[39] The understanding with France had assured the safety
of the Suez Canal from an attack from the Sudan; the agreement with
Russia removed the menace of an attack upon India from the north and
northwest. Germany became Great Britain’s only formidable rival in the
Near East.

Thus the Germans found themselves facing a powerful diplomatic
obstacle to the construction of the Bagdad Railway. Here was another
instance, in their minds, of the “encirclement” of Germany by a hostile
coalition—an “encirclement” not only on the Continent, but in a German
sphere of imperial interest as well. A conspicuous German Oriental
scholar said that the attitude of the other European powers toward
the Bagdad Railway was the best proof of their enmity toward Germany.
“Every single kilometre had to be fought for against the unyielding
opposition of Great Britain, Russia, and France, who desired to
frustrate any increase in the power of Turkey. Great Britain led and
organized this opposition because she feared that India and Egypt
were threatened by the Bagdad Railway.” If one wishes to understand
the diplomatic history of the War, “he needs only to study the
struggle for the Bagdad Railway—he will find a laboratory full of rich
materials.”[40] Here was the tragedy of the Bagdad Railway—it was
one of a number of imperial enterprises which together constituted a
principal cause of the greatest war of modern times!

There were some ardent British imperialists who were out of sympathy
with the popular opposition to the Bagdad Railway and with the
policy of the _Entente_ in obstructing the building of the line. Few
Englishmen were more thoroughly acquainted with the Near East than
Sir William Willcocks.[41] Basing his opinions upon an intimate,
scientific study of conditions in Mesopotamia, he advocated full
British coöperation with the _Deutsche Bank_ in the construction
of the Bagdad Railway, which he considered was the best means of
transportation for Irak. He criticized the British Government for its
short-sighted policy in the protection of the Lynch Brothers and their
antiquated river service; “rivers,” he said, “are for irrigation,
railways for communications.” Furthermore, “You cannot leave the waters
of the rivers in their channels and irrigate the country with them.
For navigation you may substitute railway transport; for the purpose
of irrigation nothing can take the place of water.”[42] He believed
that adequate irrigation of the Mesopotamian Valley would result
in such a wave of prosperity for the country that it would induce
immigration, particularly from Egypt and British India. It was not
inconceivable, under such conditions, that Britain would fall heir to
ancient Mesopotamia when the Ottoman Empire should disintegrate.[43]
Sir William Willcocks was neither pacifist nor visionary; he, himself,
was an empire-builder.

Another British imperialist who believed that Great Britain was
pursuing entirely the wrong course in obstructing German economic
penetration in Turkey was Sir Harry Johnston, novelist, explorer,
lecturer, former member of the consular service. He believed in “The
White Man’s Burden,” in the inevitable overrunning of the habitable
globe by the Caucasian race. But he believed that the task of spreading
white civilization to the four corners of the earth was such an
herculean task, that “what we white peoples ought to strive for, with
speech and pen, is unity of purpose; an alliance throughout all the
world in this final struggle for mastery over Nature. We ought to
adjust our ambitions and eliminate causes of conflict.” His program
for the settlement of the Near Eastern question was: “the promotion of
peace and goodwill among white nations, to start with; and when the
ambitions and the allotment of spheres of influence have been nicely
adjusted, then to see that the educational task of the Caucasian is
carried out in a right, a Christian, a practical, and sympathetic
fashion towards the other races and sub-species of humanity.” Sir
Harry believed that Great Britain was the last country in the world
which ought to oppose the legitimate colonial aspirations of any other
nation. There was every reason for the recognition of the economic and
moral bases of German expansion, and any dog-in-the-manger attitude on
the part of British statesmen, he was sure, would defeat the highest
interests of the Empire.[44]

Applying his principles to the problem of Teutonic aggrandizement in
the Ottoman Empire, Sir Harry Johnston advocated that the western
European nations should acknowledge the Austrian _Drang nach Osten_
as a legitimate and essential part of the German plans for a Central
European Federation and for the economic development of Turkey.
“The Turkish Sultanate would possibly not come to an end, but would
henceforth, within certain limits, be directed and dominated by German
councils. Germany in fact would become the power with the principal
‘say’ as to the good government and economic development of Asia Minor.
Syria might be constituted as a separate state under French protection,
and Judea might be offered to the Jews under an international
guarantee. Sinai and Egypt would pass under avowed British protection,
and Arabia (except the southern portion, which already lies within the
British sphere of influence) be regarded as a federation of independent
Arab States. For the rest, Turkey-in-Asia—less Armenia, which might
be handed over to Russia—would, in fact, become to Germany what Egypt
is to England—a kingdom to be educated, regenerated, and perhaps
transfused and transformed by the renewed percolation of the Aryan
Caucasian. Here would be a splendid outlet for the energies of both
Germany and Austria, sufficient to keep them contented, prosperous,
busy, and happy, for at least a century ahead.” Sir Harry believed
that obstructionist tactics on the part of Great Britain would promote
Prussianism within Germany, whereas, on the other hand, a frank
recognition of Germany’s claims in the Near East would provide Central
Europe with a safety valve which would “relieve pressure on France,
Belgium, and Russia, paving the way for an understanding on Continental
questions. Let us—if we wish to be cynical—welcome German expansion
with Kruger’s metaphor of the tortoise putting out his head. Germany
and Austria are dangerous to the peace of the world only so long as
they are penned up in their present limits.”[45]

One obvious disadvantage of the solution suggested by Sir Harry
Johnston was its total indifference to the wishes of the Ottoman Turks.
Apparently it was out of place to consider the welfare of Turkey in
a discussion of the Bagdad Railway question! Certainly there were
very few European statesmen who cared the least about the opinions
of Turks in the disposition of Turkish property. Among the few was
Viscount Morley, one of the old Gladstonian Liberals. Answering Lord
Curzon, in the House of Lords, March 22, 1911, Lord Morley, a member
of the Asquith cabinet, asserted the right of the Turks to determine
their own destinies: “A great deal of nonsense,” he said, “is talked
about the possible danger to British interests which may be involved
some day or other when this railway is completed, and there have been
whimsical apprehensions expressed. One is that it will constitute a
standing menace to Egypt ... because it would establish [by junction
with the Syrian and Hedjaz railways] uninterrupted communication
between the Bosporus and Western Arabia. _That would hardly be an
argument for Turkey to abandon railway construction on her own soil_,
whereas it overlooks the fact that the Sinai Peninsula intervenes. You
cannot get over this plain cardinal fact, that this railway is made on
Turkish territory by virtue of an instrument granted by the Turkish
Government.... I see articles in newspapers every day in which it is
assumed that we have the right there to do what we please. That is not
so. It is not our soil, it is Turkish soil, and the Germans alone are
there because the Turkish Government has given them the right to be
there.”[46]


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Sir William Andrew, _Memoir on the Euphrates Valley Route_ (London,
1857), _passim_; also _The Euphrates Valley Route to India_ (London,
1882); F. R. Chesney, _Narrative of the Euphrates Expedition_ (London,
1868); _The Proposed Imperial Ottoman Railway_, a prospectus issued by
the promoters (London, 1857); F. von Koeppen, _Moltke in Kleinasien_
(Hanover, 1883).

[2] _Cf._ article “Suez Canal” in _Encyclopedia Britannica_, Volume
26, p. 23. How similar were these objections to those subsequently
advanced in opposition to the Bagdad Railway! _Cf._, _e. g._, a
statement by Lord Curzon, _Parliamentary Debates, House of Lords, fifth
series_, Volume 7 (1911), pp. 583 _et seq._

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

[4] _Parliamentary Debates, House of Lords_, fourth series, Volume 121
(1903), p. 1345; “The Bagdad Railway Negotiations,” in _The Quarterly
Review_, Volume 228 (1917), pp. 489–490; Baron Kuhn von Kuhnenfeld,
_The Strategical Importance of the Euphrates Valley Railway_ (English
translation by Sir C. W. Wilson, London, 1873); V. L. Cameron, _Our
Future Highway to India_, 2 volumes (London, 1880); A. Bérard, _La
route de l’Inde par la vallée du Tigre et de l’Euphrate_ (Lyons, 1887);
F. Jones, _The Direct Highway to the East considered as the Perfection
of Great Britain’s duties toward British India_ (London, 1873).

[5] _Supra_, pp. 66–67.

[6] _Parliamentary Debates, House of Commons_, Volume 120 (1903), pp.
1247–1248, 1358, 1361, 1364–1367, 1371–1374.

[7] Lord Mount Stephen had been president of the Canadian Pacific
Railway and of the Bank of Montreal. Lord Revelstoke was senior partner
in the firm of Baring Brothers & Company and a director of the Bank of
England.

[8] The participation of the three Great Powers was to be on the
basis of 25–25–25%, 15% was to be reserved for minor groups, and 10%
for the Anatolian Railway Company. The provisions of Article 12 of
the concession of 1903 were to be amended to establish a board of
directors of 30, upon which each of the principal participants should
be represented by 8 members. The remaining 6 members of the board were
to be designated by the Ottoman Government and the Anatolian Railway
Company. The directors were to be appointed by the original subscribers
so that sale or transfer of shares could not alter the proportionate
representation thus agreed upon.

[9] For the facts in this and the succeeding paragraph the author is
indebted to Dr. Arthur von Gwinner, managing director of the _Deutsche
Bank_; and to Sir Henry Babington Smith, erstwhile chairman of the
Ottoman Public Debt Administration, a partner of Sir Ernest Cassel,
president of the National Bank of Turkey, and a director of the Bank of
England. Dr. von Gwinner placed at the disposal of the author many of
the records of the _Deutsche Bank_ and of the Bagdad Railway Company,
and Sir Henry Babington Smith graciously volunteered to answer many
puzzling questions.

[10] _Parliamentary Debates, House of Commons_, Volume 121 (1903), pp.
271–272.

[11] The British banking houses interested in the Bagdad enterprise
were Baring Brothers, Sir Ernest Cassel, and Morgan-Grenfell Company.
_Cf._ _The Westminster Gazette_, April 24, 1903; _Stenographische
Berichte, XII Legislaturperiode, 2 Session_, Volume 260 (1910), p.
2181d. The bankers, of course, were not bound by the decision of the
Cabinet to withdraw from the negotiations; they still would have been
at liberty to invest in Bagdad Railway securities, as did the French
bankers. However, it has been the practice of British financiers
to accept the “advice” of the Foreign Office in the case of loans
which may lead to international complications. An analogous case in
American experience was the decision of prominent New York financial
institutions to withdraw from the Chinese consortium in 1913 because
of the avowed opposition of President Wilson to the terms of the loan
contract.

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

[13] _Supra_, pp. 30, 59–60.

[14] _Parliamentary Debates, House of Commons_, Volume 120, pp.
1360–1361; Volume 126, p. 108. The opinions of Mr. Gibson Bowles were
not cordially received by _The Scotsman_, which said, April 9, 1903,
“Mr. Gibson Bowles carried the House in imagination to the banks of the
Euphrates and Tigris. Germany is there seeking by means of a railway to
supersede our trade, and to serve herself heir to the wealth and empire
of ancient Babylon and Assyria. The member for King’s Lynn was, as
usual, not very well posted up on his facts. On this occasion he was so
entirely wrong-headed that no one on the opposition bench would agree
with him.... The outstanding moral of the debate was, indeed, that the
honorable member for King’s Lynn was much in want of a holiday.”

[15] Fraser, _op. cit._, pp. 42–43. The senior member of the firm of
Lynch Brothers was H. F. B. Lynch (1862–1913), who was widely known
as an authority on the Near East and who, as a Liberal member of
Parliament, 1906–1910, was able to call official attention to the
necessity for safeguarding British interests in Persia and Mesopotamia.
That he succeeded in convincing the Government of the importance
of his navigation concession is evidenced by the vigorous protests
filed by the British Government with the Young Turks in 1909, when
the latter attempted to operate competing vessels on the Tigris and
the Shatt-el-Arab. On this point see _Stenographische Berichte, XII
Legislaturperiode, 2 Session_, Volume 260 (1910), pp. 2174d _et seq._
Again in 1913–1914, the British Government refused to consider any
settlement of the Bagdad Railway question which did not adequately
protect the interests of the Lynch Brothers. _Infra_, pp. 258–265. Mr.
Lynch, however, was not an irreconcilable opponent of the _Deutsche
Bank_. He took the point of view that the Germans had rendered Turkey
a great service by the construction of the Anatolian Railways because
of the total lack of natural means of communication in the Anatolian
plateau. He urged that they were making a great mistake, however, to
extend the Anatolian system into Mesopotamia, where the Tigris and
Euphrates provided natural and logical avenues of trade for the Valley
of the Two Rivers. In Mesopotamia, he maintained, what was needed was
a development of the river traffic, not the construction of railways.
_Cf._ H. F. B. Lynch, “The Bagdad Railway,” _Fortnightly Review_, March
1, 1911, pp. 384–386.

[16] It will be recalled that the Hamburg-American Line established
a Persian Gulf service in 1906. _Supra_, pp. 108–109. Regarding the
activities of British shipping and commercial interests in opposing the
Bagdad Railway see _Diplomatic and Consular Reports_, No. 2950 (1902),
pp. 25 _et seq._, No. 3140 (1904), pp. 24 _et seq._; _The Times_, April
24, 1903.

[17] G. N. Curzon, _Persia and the Persian Question_ (2 volumes,
London, 1892), Volume I, p. 635; a similar view was set forth by Sir
Thomas Sutherland, of the P. & O., in a letter to _The Times_, April
27, 1903.

[18] E. Banse, _Auf den Spuren der Bagdadbahn_ (Weimar, 1913), Chapter
XI, _Die Wahrheit über die Bagdadbahn_, a critical analysis of the
value of the Railway in Eastern trade, pp. 145–146. _Cf._, also,
Dr. R. Hennig, “Der verkehrsgeographische Wert des Suez- und des
Bagdad-Weges,” in _Geographische Zeitschrift_, Volume 22 (1916), pp.
649–656.

[19] _Specifications_, Articles 24–25. It might be added that the
Company loyally observed this restriction; C. W. Whittall & Co.,
largest British merchants in Turkey so testified. _Anatolia_, p. 103;
von Gwinner, _loc. cit._, p. 1090. Sir Edward Grey said no complaints
of discrimination against British goods had come to the attention
of the Foreign Office. _Parliamentary Debates, House of Commons,_ 5
Series, Volume 53 (1913), pp. 392–393.

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

[21] Consider the dedication of Lord Curzon’s _Persia and the Persian
Question_: “To the officials, military and civil, in India, whose hands
uphold the noblest fabric yet reared by the genius of a conquering
nation, I dedicate this work, the unworthy tribute of the pen to a
cause, which by justice or the sword, it is their high mission to
defend, but whose ultimate safeguard is the spirit of the British
people.”

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

[23] Regarding the Anglo-Russian rivalry in the Middle East, _cf._
Rose, _op. cit._, Part II, Chapters I-IV; Curzon, _Persia and the
Persian Question_, Volume II, Chapter XXX.

[24] See a statement by Lord Lansdowne, in the House of Lords,
_Parliamentary Debates_, fourth series, Volume 121 (1903), p. 1347, and
a statement by Lord Curzon, _ibid._, fifth series, Volume 7 (1911),
pp. 583–587; also Curzon, _Persia and the Persian Question_, Volume
II, Chapter XXVII. The strategic importance of the Persian Gulf to the
British Empire was realized by foreign observers, as well as by English
statesmen. Writing in 1902, Admiral A. T. Mahan, an American, said,
“The control of the Persian Gulf by a foreign state of considerable
naval potentiality, a ‘fleet in being’ there based upon a strong
military port, would reproduce the relations of Cadiz, Gibraltar,
and Malta to the Mediterranean. It would flank all the routes to
the farther East, to India, and to Australia, the last two actually
internal to the Empire, regarded as a political system; and although
at present Great Britain unquestionably could check such a fleet, so
placed, by a division of her own, it might well require a detachment
large enough to affect seriously the general strength of her naval
position.” A. T. Mahan, _Retrospect and Prospect_ (New York, 1902),
pp. 224–225. Lord Curzon is said to have remarked that he “would not
hesitate to indict as a traitor to his country any British minister who
would consent to a foreign Power establishing a station on the Persian
Gulf.” A. J. Dunn, _British Interests in the Persian Gulf_ (London,
1907), p. 7. See also _The Persian Gulf_ (No. 76 of the Foreign Office
Handbooks); _Handbook of Arabia_, Volume I (Admiralty Intelligence
Division, London, 1916); Lovat Fraser, _India under Curzon and After_
(London, 1911).

[25] _Parliamentary Debates, House of Lords_, fourth series, Volume
121 (1903), pp. 1347–1348. Two observations should be made regarding
this quotation. First, it is included in every book I have consulted
on the Bagdad Railway, written since 1903, but in every instance the
last sentence has been omitted—a sentence which considerably alters
the spirit of the statement. Second, the German press, at the time,
considered that the warning was directed, not at the Bagdad Railway,
but at the rapid and alarming advance of Russia in Persia. _Cf._ an
analysis of foreign press comments in an article by J. I. de La Tour,
“Le chemin de fer de Bagdad et l’opinion anglaise,” in _Questions
diplomatiques et coloniales_, Volume 15 (1903), pp. 609–614—an
excellent digest.

[26] _Cf._ a statement by Lord Cranborne, Under-Secretary of State
for Foreign Affairs, in _Parliamentary Debates, House of Commons_,
fourth series, Volume 101 (1902), p. 129. Although he was less than
forty years of age at the time of his appointment as Governor-General
of India (1898), the Right Honorable George Nathaniel Curzon, Baron
Curzon of Kedleston, even at that early age, had had wide experience
and training of the type so common among the masters of British
imperial destiny. He was educated at Eton and Oxford, and he traveled
widely in the Near East. He served as a member of Parliament from 1886
until 1898. He was Under-Secretary of State for India, 1891–1892;
Under-Secretary of State for Foreign Affairs, 1895–1898; Privy
Councillor, 1895.

[27] _Supra_, p. 34; _The Annual Register_, 1901, pp. 304–305; K.
Helfferich, _Die Vorgeschichte des Weltkrieges_, p. 129.

[28] Viscount Haldane, _Before the War_ (London, 1920), pp. 48–51;
Viscount Morley, _Recollections_ (New York, 1917), p. 238.

[29] _Infra_, pp. 239–244; _Parliamentary Debates, House of Lords_,
fifth series, Volume 7 (1911), pp. 583–587, 589. It is interesting to
contrast this opinion of a German trans-Mesopotamian railway with that
held by the same man when it was proposed that British capitalists
should construct such a line. Writing in 1892, Lord Curzon had this to
say regarding the project: “Its superficial attractions judiciously
dressed up in a garb of patriotism, were such as to allure many
minds; and I confess to having felt, without ever having succumbed
to, the fascination. Closer study, however, and a visit to Syria and
Mesopotamia have convinced me both that the project is unsound, and
that it does not, for the present, at any rate, lie within the domain
of practical politics.” Lord Curzon believed that a Mesopotamian
railway would be practically valueless for military purposes: “The
temperature of these sandy wastes is excessively torrid and trying
during the summer months and I decline to believe that during half the
year any general in the world would consent to pack his soldiers into
third class carriages for conveyance across those terrible thousand
miles, at least if he anticipated using them in any other capacity than
as hospital inmates at the end.” _Persia and the Persian Question_,
Volume I, pp. 633–635.

[30] _Parliamentary Debates, House of Commons_, fifth series, Volume 21
(1911), pp. 241–242.

[31] _Infra_, pp. 258–265.

[32] For the views of a typical British imperialist on the Persian
situation, _cf._, Curzon, _Persia and the Persian Question_, Volume
II, Chapter XXX; a later account is that of the American, W. Morgan
Shuster, _The Strangling of Persia_ (New York, 1912); _cf._, also, H.
F. B. Lynch, “Railways in the Middle East,” in _Proceedings of the
Central Asian Society_ (London), March 1, 1911.

[33] See P. Rohrbach, _Die Bagdadbahn_, p. 18; Reventlow, _op. cit._,
pp. 338–343. That Rohrbach’s frank avowal of the menace of the Bagdad
Railway to India and Egypt was not without influence in Great Britain
is evidenced by the fact that long quotations from _Die Bagdadbahn_
were read into the records of the House of Commons by the Earl of
Ronaldshay, on March 23, 1911. _Parliamentary Debates_, fifth series,
Volume 23, p. 628.

[34] Herr Scheidemann, in an eloquent speech to the Reichstag, March
30, 1911, pleaded with the German Government to be sympathetic with
the position in which Great Britain found herself. No nation with the
imperial responsibilities of Great Britain could afford to neglect to
take precautionary steps against the possibility of the Bagdad Railway
being used as a weapon of offense against Egypt, the Suez Canal, and
India. “Complications upon complications,” he said, “are certain to
arise as a result of the construction of the Bagdad Railway. But
we expect of our Government, at the very least, that in the course
of protecting the legitimate German economic interests which are
involved in the Bagdad Railway, it will leave no stone unturned to
prevent the development of Anglo-German hostility over the matter.
We want to do everything possible to effect a thorough understanding
with England. Only by such a policy can we hope to quiet the fears
of British imperialists that the Railway is a menace to the Empire.”
_Stenographische Berichte, XII Legislaturperiode, 2 Session_, Volume
266 (1911), pp. 5980c-5984b.

[35] _Parliamentary Debates, House of Commons_, fifth series, Volume 21
(1911), pp. 241–242.

[36] _Cf._ H. N. Brailsford, _The War of Steel and Gold_, Chapter III,
“The Egyptian Model.”

[37] _Supra_, pp. 181–182.

[38] André Tardieu, _France and the Alliances_ (New York, 1908), p. 46.
For M. Tardieu’s analysis of the causes of the growing Anglo-German
hostility, _cf._ pp. 48–57. It was in the latter part of April, 1903,
that the Bagdad Railway negotiations fell through. In May, Edward VII
paid an official visit to Paris; in October, an arbitration agreement
was signed by France and Great Britain. The following spring the
treaties constituting the Entente Cordiale were executed. Sir Thomas
Barclay, _Thirty Years’ Reminiscences_ (London, 1906), pp. 175 _et
seq._ For the text of these agreements _cf._ _Parliamentary Papers_,
Volume 103 (1905), No. Cd. 2384.

[39] For the text of the Anglo-Russian Entente, _cf._ _British and
Foreign State Papers_, Volume 100, pp. 555 _et seq._ Regarding the
nature of the Anglo-Russian rivalry in the Middle East and the effect
of the Bagdad Railway in hastening a settlement of that rivalry, _cf._
Edouard Driault, _La question d’Orient depuis ses origines jusqu’à la
paix de Sèvres_ (Paris, 1921), Chapter VIII, and pp. 273 _et seq._;
also Tardieu, _op. cit._, pp. 239–252, and Curzon, _op. cit._, Volume
II, Chapter XXX.

[40] Ernst Jäckh, _Die deutsch-türkische Waffenbrüderschaft_
(Stuttgart, 1915), pp. 17–18.

[41] Sir William Willcocks (1852- ) is one of the foremost authorities
on Egypt, India, and Mesopotamia. As a young man he was employed in
India by the Department of Public Works and for a period of eleven
years, 1872–1883, was engaged in the construction of the famous
irrigation works there. From 1883–1893, he was employed in a similar
capacity by the Egyptian Public Works and was largely responsible for
the development of irrigation in the Nile Valley. In 1898, he planned
and projected the Assuan Dam, which turned out to be the greatest
irrigation work in the East. In 1909, Sir William Willcocks became
consulting engineer to the Ottoman Ministry of Public Works, and was
responsible for the construction, 1911–1913, by the British firm of Sir
John Jackson, Ltd., of the famous Hindie barrage, the first step in the
irrigation of the Valley of the Two Rivers.

[42] _Mesopotamia_, p. 54, and _The Geographical Journal_, August, 1912.

[43] _The Recreation of Chaldea_ (Cairo, 1902). This suggestion led
to the absurd charge by Dr. Rohrbach that Sir William Willcocks was
actively promoting the establishment of a British colonial empire in
southern Mesopotamia. _German World Policies_, pp. 160–161. _Cf._,
also, _Diplomatic and Consular Reports_, No. 3140 (1903), p. 27.

[44] H. H. Johnston, _Common Sense in Foreign Policy_ (London, 1913),
pp. v-vii. A similar opinion was expressed by Colonel A. C. Yate, at
a meeting of the Central Asian Society, May 22, 1911. In answer to an
alarmist paper on the Bagdad Railway which had been read to the society
by André Chéradame, Colonel Yate made a spirited speech in which he
warned his countrymen that M. Chéradame proposed that they should
follow the same mistaken policy which had guided Lord Palmerston in
resistance to the construction of the Suez Canal. “We cannot pick up
every day,” he said, “a Lord Beaconsfield, who will repair the errors
of his blundering predecessors.... Because the German Emperor and his
instruments have adopted and put into practice the plans which Great
Britain rejected [for a trans-Mesopotamian railway], we are now,
forsooth, to pursue a policy which savours partly of ‘sour grapes’
and partly of ‘dog-in-the-manger,’ and which in either aspect will do
nothing to strengthen British hands and promote British interests.”
_Proceedings of the Central Asian Society_ (London), May 22, 1911, p.
19.

[45] Johnston, _op. cit._, pp. 50–51, 61. Sir Harry Johnston made an
extended lecture tour through Germany during 1912 for the purpose
of promoting Anglo-German friendship. For details of this trip see
Schmitt, _op. cit._, pp. 355–356. It is interesting to note how nearly
Sir Harry’s proposals corresponded with the terms of the treaties of
1913–1914. _Infra_, Chapter X. For a similar point of view, _cf._
Angus Hamilton, _Problems of the Middle East_ (London, 1909), pp.
178–180.

[46] _Parliamentary Debates, House of Lords_, fifth series, Volume 7
(1911), pp. 601–602. The italics are mine.




CHAPTER IX

THE YOUNG TURKS ARE WON OVER


A GOLDEN OPPORTUNITY PRESENTS ITSELF TO THE ENTENTE POWERS

The Young Turk revolutions of 1908 and 1909, which ended the reign of
Abdul Hamid in the Ottoman Empire, offered France and Great Britain an
unprecedented opportunity to assume moral and political leadership in
the Near East. Many members of the Committee of Union and Progress,
the revolutionary party, had been educated in western European
universities—chiefly in Paris—and had come to be staunch admirers of
French and English institutions. “Liberty, Equality, Fraternity,”
the slogan of Republican France, became the watch-cry of the new era
in Turkey. Parliamentary government and ministerial responsibility
under a constitutional monarch, the political contribution of
Britain to Western civilization, became the aim of the reformers at
Constantinople. The Ottoman Empire was to be modernized politically,
industrially, and socially according to the best of western European
traditions.[1]

Into this scheme of things German influence fitted not at all. From
the Young Turk point of view the Kaiser was an autocrat who not only
had blocked democratic reform in Germany, but also had propped up
the tottering regime of Abdul Hamid and thus had aided suppression
of liberalism in the Ottoman Empire. As for Baron Marschall von
Bieberstein, he had hobnobbed with the ex-Sultan and was considered
as much a representative of the old order of things as Abdul Hamid
himself. As Dr. Rohrbach described the situation, “the Young Turks,
liberals of every shade, believed that Germany had been a staunch
supporter of Abdul Hamid’s tyrannical government and that the German
influence constituted a decided danger for the era of liberalism. That
thought was zealously supported by the English and French press in
Constantinople. The Young Turkish liberalism showed in the beginning a
decided leaning toward a certain form of Anglomania. England, the home
of liberty, of parliaments, of popular government—such were the catch
phrases promulgated in the daily papers.”[2]

German prestige suffered still further because of the unseemly
conduct of Germany’s allies toward the Young Turk Government. The
revolution of 1908 was less than three months old when Austria-Hungary
annexed Bosnia-Herzegovina. Almost simultaneously, Ferdinand of
Bulgaria—presumably at the instigation and with the connivance of
Austria—declared the independence of Bulgaria from the Sultan and
assumed for himself the title of tsar. To cap the climax, Italy was
intriguing in Tripoli and Cyrenaica with a view to the eventual seizure
of those provinces. Baron Marschall found it impossible to explain
away these hostile moves of the allies of Germany, and he protested
vehemently against the failure of the Foreign Office at Berlin to
restrain Austria-Hungary and Italy. He warned Prince von Bülow that
vigorous action must be taken if Germany’s influence in the Near East
were not to be totally destroyed.[3]

The decline of German prestige at Constantinople could not have been
without effect upon the Bagdad Railway and the other activities of the
_Deutsche Bank_. The Bagdad enterprise, in fact, was looked upon as a
concrete manifestation of German hegemony at the Sublime Porte and as
the crowning achievement of the friendship of those two autocrats of
the autocrats, Abdul Hamid and William II. As such, it was certain to
draw the fire of the reformers. The concession of 1903 had never been
published in Turkey. Only fifty copies had been printed, and these had
been distributed only among high officials of the Palace, the Sublime
Porte, and the Ministries of War, Marine, and Public Works. It was
generally supposed by the Union and Progress party, therefore, that
the summaries published in the European press were limited to what
the Sultan chose to make public. “The secrecy which thus enveloped
the Bagdad Railway concession gave rise to the conviction that the
contract contained, apart from detrimental financial and economic
clauses, provisions which endangered the political independence of
the State.”[4] And Young Turks were determined to tolerate no such
additional limitations on the sovereignty of their country.

The opening, in the autumn of 1908, of the first parliament under
the constitutional regime in Turkey gave the opponents of the Bagdad
Railway their chance. A bitter attack on the project—in which hardly a
single provision of the contract of 1903 escaped scathing criticism—was
delivered by Ismail Hakki Bey, representative from Bagdad, editor of
foreign affairs for a well-known reform journal, and a prominent member
of the Union and Progress party. Hakki Bey denounced the Railway as a
political and economic monstrosity which could have been possible only
under an autocratic and corrupt government; in any event, he believed,
it could have no place in the New Turkey. He proposed complete
repudiation of the existing contracts with the _Deutsche Bank_. In this
proposal he received considerable support from other members of the
parliament.

An equally ringing, but more reasoned, speech was delivered by the
talented Djavid Bey, subsequently to become Young Turk Minister of
Finance. He agreed that the concession of 1903 infringed upon the
economic and administrative independence of the Ottoman Empire; he
condemned the scheme of kilometric guarantees as an unwarranted and
indefensible drain upon the Treasury; he denounced the preponderance
of strategic over business considerations in the construction of the
line; he made it plain that he had no wish to see the extension of
German influence in Turkey. He believed that the Bagdad concession
should be revised in the interest of Ottoman finance and Ottoman
sovereignty. But there must be no repudiation. “We must accept the
Bagdad Railway contract, because there should exist a continuity and
a solidarity between generations and governments. If a revolutionary
government remains true to the obligations of its predecessor—even if
those obligations be contracted by a government of the worst and most
despotic kind—it will arouse among foreigners admiration of the moral
sense of the nation and will accordingly increase public confidence.
Just now, more than at any other time in our history, we Turks need
the confidence of the world.” Everything should be done to effect a
revision of the Bagdad Railway concession, however, and a firm resolve
should be taken never again to commit the nation to such an engagement.

The anti-German and pro-Entente proclivities of the Young Turks were
expressed in tangible ways. In 1909, for example, the Ottoman Navy was
placed under the virtual command of a British admiral, and British
officers continued to exercise comprehensive powers of administration
over the ships and yards almost to the declaration of war in 1914.
In 1909, also, Sir Ernest Cassel accepted an invitation to establish
the National Bank of Turkey, for the purpose of promoting more
generous investment of British capital in the Ottoman Empire. During
the same year Sir William Willcocks was appointed consulting engineer
to the Minister of Public Works, and his plans for the irrigation
of Mesopotamia were put into immediate operation. Sir Richard
Crawford, a British financier, was appointed adviser to the Minister
of Finance; a British barrister was made inspector-general of the
Ministry of Justice; a member of the British consular service became
inspector-general of the Home Office. Later, serious consideration
was given to a proposal to invite Lord Milner to head a commission
to suggest reforms in the political and economic administration
of Anatolia. A French officer was made inspector-general of the
gendarmerie. In June, 1910, a French company was awarded a valuable
concession for the construction of a railway from Soma to Panderma, and
the following year the lucrative contract for the telephone service in
Constantinople was granted to an Anglo-French syndicate.[5]

The Young Turk Government likewise was desirous of doing everything
possible to remove French and British objections to the construction of
railways in the Ottoman Empire. With this end in view they prevailed
upon Dr. von Gwinner to reopen negotiations with Sir Ernest Cassel
regarding British participation in the Bagdad Railway, and they secured
the consent of the _Deutsche Bank_ to a rearrangement of the terms of
the concession of 1903. The latter was to be undertaken in accordance
with British wishes and with due regard to the financial situation of
Turkey. This was followed up, on November 8, 1909, by a formal request
of the Ottoman ambassador at London for a statement of the terms upon
which the British Government would withdraw its diplomatic objections
to the Bagdad enterprise. Simultaneously negotiations were initiated
for “compensations” to French interests, represented by the Imperial
Ottoman Bank.

Until the end of the year 1909, then, the political situation in the
Ottoman Empire under the revolutionary government had been almost
altogether to the advantage of the Entente Powers. During 1910,
however, German prestige began to revive in the Near East, and by the
spring of 1911 German influence in Turkey had won back its former
preëminent position.


THE GERMANS ACHIEVE A DIPLOMATIC TRIUMPH

The Young Turk program, in its political aspects, was not only
liberal, but nationalist. In the fresh enthusiasm of the early months
of the revolution, emphasis was laid upon modernizing the political
institutions of the empire—parliamentary government and ministerial
responsibility and equality before the law were the concern of the
reformers. As time went on, however, liberalism was eclipsed by
nationalism and modernizing by Ottomanizing. By the autumn of 1909
Turkish nationalist activities were in full swing. Revolts in Macedonia
and Armenia were suppressed with an iron hand; there were massacres in
Adana and elsewhere in Anatolia and Cilicia; restrictions were imposed
upon personal liberties and upon freedom of the press; martial law
was declared. Pan-Turkism and Pan-Islamism were revived as political
movements.[6]

The development of an aggressive Turkish nationalism was not viewed
with equanimity by the Entente nations. The newspapers of France and
England roundly denounced the Adana massacres and came to adopt a
hostile attitude toward the Young Turk Revolution, which only a short
time previously they had extravagantly praised. Great Britain looked
with apprehension upon Ottoman support of the nationalist movements
in Egypt and India, and France was disturbed at the prospect of a
Pan-Islamic revival in Tunis, Algeria, and Morocco. Russia demanded
“reform” in Macedonia and Armenia and encouraged anti-Turk propaganda
in the Balkans. English interference in Cretan affairs and British
support of the insolent Sheik of Koweit still further complicated the
situation.[7]

For Germany, on the other hand, Turkish nationalism held no menace.
So far from desiring a weak Turkey—as did most of the other European
Powers—her policy in the Near East was based upon the strengthening
of Turkey. If Turkey was to be strong, she must suppress dissentient
nationalist and religious minorities; therefore Germany raised no voice
of protest against the Armenian and Macedonian atrocities. If Turkey
sought to recover territories which formerly had acknowledged the
suzerainty of the Sultan, Germany had nothing to fear; the Kaiser ruled
over no such territories. If Turkey chose to arouse the Moslem world
by a Pan-Islamic revival, that was no concern of Germany; the German
Empire had a comparatively insignificant number of Mohammedan subjects.
If the Turkish program discomfited the Entente Powers, that was to
Germany’s advantage in the great game of world politics; therefore
Germany could afford to support the Young Turk Government. As in the
days of Abdul Hamid, Germany appeared to be the only friend of the
Ottomans.[8]

The improvement in the German political position at Constantinople was
reflected in a changing Turkish attitude toward the Bagdad Railway.
Among revolutionary leaders there was a growing realization of the
great economic and political importance of railways and, particularly,
of the Bagdad system. It became apparent upon examination, also,
that others than Germans had obtained monopolistic concessions in
the Ottoman Empire—in this respect the Lynch Brothers came in for a
good deal of attention. The Ottoman General Staff—which had recalled
General von der Goltz as chief military adviser—insisted that the
early construction of a trans-Mesopotamian railway at whatever cost,
was essential to the defence of the empire. In spite of serious
financial difficulties resulting from strikes, increased cost of
materials, and general economic paralysis which followed upon the
heels of the revolutions of 1908 and 1909, the Anatolian and Bagdad
Railway Companies advanced large sums to the Minister of Finance
toward the ordinary expenses of running the Government. In addition,
the concessionaires evinced a desire to meet all Turkish financial and
diplomatic objections to the provisions of the concession of 1903.[9]

It was the financial needs of the Young Turk administration which
enabled German diplomacy and the _Deutsche Bank_ to reëstablish
themselves thoroughly in the good graces of the Ottoman Government. But
here again the Germans were given their chance only after England and
France had turned the Turks away empty handed.

During the summer of 1910, Djavid Bey, as Ottoman Minister of Finance,
went to Paris to raise a loan of $30,000,000, secured by the customs
receipts of the Ottoman Empire. The negotiations with the Parisian
bankers were complicated by a bitter anti-Turk campaign on the part of
the press and by the frequent interference of the French Government.
Nevertheless, Djavid Bey succeeded in signing a satisfactory contract
with a French syndicate, and his task appeared to be accomplished. At
this juncture, however, M. Pichon, French Minister of Foreign Affairs,
informed the bankers that official sanction for the proposed loan
would be withheld unless the Ottoman Government would consent to have
its budget administered by a resident French adviser. The Young Turk
ministry, determined to tolerate no further foreign intervention in
the administrative affairs of the empire, flatly refused to consider
any such proposal, and Djavid Bey was instructed to break off all
negotiations. “As a true and loyal friend of France,” wrote Djavid, “I
regretted this incident as one likely to strain the future relations
between the two countries.”

From Paris Djavid Bey went to London. Sir Ernest Cassel appeared to be
willing to negotiate a loan to Turkey of the desired amount, but, upon
representations from M. Cambon, the French ambassador at London, Sir
Edward Grey persuaded Cassel not to put in a bid for the bonds. This
decision was reached largely, as Djavid Bey was informed by the British
Foreign Office, because the Bagdad Railway was considered to be “an
enterprise which under the existing concession has not been conceived
in the best interests of the Ottoman Empire, while it offers, as at
present controlled, an undoubted menace to the legitimate position of
British trade in Mesopotamia.” To the Turkish Government this statement
was a piece of gratuitous impertinence, for, as Djavid Bey replied, “It
was a prerogative only of the Ottoman Government to determine whether
the conditions of construction and management of the Bagdad Railway
were beneficial or detrimental to Turkey. England had no more right to
object to the Bagdad Railway than Germany had to object to the British
and French lines in operation in Turkey.”

The collapse of the financial negotiations in Paris and London offered
the _Deutsche Bank_ an opportunity which its directors were too
shrewd to overlook. Dr. Helfferich was despatched to Constantinople
and within a few weeks had secured the contract for the entire issue
of $30,000,000 of the Ottoman Four Per Cent Loan of 1910, upon terms
almost identical with those agreed upon with the French syndicate
before M. Pichon’s interference. “On this occasion,” writes Djavid
Bey, “the Germans handled the business with great intelligence and
tact. They brought up no points which were not related directly or
indirectly to the loan, and they made no conditions which would have
been inconsistent with the dignity of Turkey. This attitude of Germany
met with great approval on the part of the Turkish Government, which
was then in a very difficult position. The result was the greatest
diplomatic victory in the history of the Ottoman Empire between the
revolution of 1908 and the outbreak of the Great War.”[10]

The purchase of the loan of 1910 by the _Deutsche Bank_, however,
did not solve the financial problems of the Young Turk Government.
It was essential that measures be taken to increase the revenues of
the Ottoman Empire. Accordingly, negotiations had been conducted
during 1910, and were continued until midsummer of 1911, to secure the
consent of the Powers to an increase of 4% in the customs duties. It
was apparent from the outset that the British Government would block
any project for an increase in Turkish taxes, unless it were granted
important compensations of a political and economic character and
unless it could determine, in large measure, the purposes for which
the additional revenues would be expended. In this respect, also, it
appeared that Entente policy was standing in the way of the success of
the Revolution in Turkey!

British objections to the proposed increase in the Ottoman customs
duties were founded in large part upon British opposition to the
Bagdad Railway and, more particularly, to the sections of the Railway
between Bagdad and the Persian Gulf. In the spring of 1910, the British
Government proposed that a concession for a railway from Bagdad to
Basra _via_ Kut-el-Amara should be awarded to British financiers,
in order that British economic interests in Mesopotamia might be
adequately safeguarded. In May of that year Sir Edward Grey wrote the
British ambassador at Constantinople, “Please explain quite clearly
to the Turkish Government that the British Government will not agree
to any addition to the taxes until this claim for a concession is
taken into favorable consideration, and also that Great Britain’s
attitude towards Turkey will depend largely upon how she meets this
demand of yours.” Upon the refusal of the Ottoman Government to accede
to this demand, Sir Edward Grey wrote to Sir Henry Babington Smith,
English representative on the Ottoman Public Debt Administration,
that England must be awarded at least a 55% participation in the
Bagdad-Basra section of the Bagdad Railway, as well as concessions for
the construction and control of port works at Koweit. In addition,
Turkey should be made to understand that Great Britain could approve no
agreement without the sanction of the French and Russian Governments.

When Djavid Bey was in London in July, 1910, he submitted two
counterproposals to Sir Edward Grey: first, that the portion of the
Bagdad Railway from Bagdad to Basra should be internationalized upon
terms agreeable to Sir Ernest Cassel and Dr. Arthur von Gwinner;
or, second, that the Ottoman Government itself should undertake the
construction of the line beyond Bagdad. The British Foreign Office
indicated that it might consent to an increase in the Ottoman customs
duties until April, 1914, upon some such terms, provided the consent of
the other Powers were forthcoming, and provided Turkey would surrender
her right of veto over the borrowing powers of Egypt. Because of the
collapse of the loan negotiations, however, nothing further came of
these proposals.

On March 7, 1911, the Ottoman ministers at London and Paris presented
to the British and French Governments respectively a proposition that
the Bagdad-Basra section of the Bagdad Railway should be constructed
by an Ottoman company, to the capital of which the Turkish Government
should subscribe 40%, and German, French, and British capitalists 20%
each. The Sublime Porte expressed a willingness, furthermore, to confer
with representatives of France and Great Britain for the purpose of
satisfying the legitimate political demands of those two nations in
Syria and Mesopotamia. The following day, nevertheless, Sir Edward
Grey informed the House of Commons that His Majesty’s Government was
not prepared to consent to an increase in the Turkish customs duties,
because it was not clear that the Ottoman Government was ready to
guarantee adequate protection to British commercial interests in
Mesopotamia and the region of the Persian Gulf.[11]

This decision was received in Constantinople with undisguised
animosity. Young Turks were as little disposed to tolerate British,
as they were French, supervision of Ottoman finances and economic
policies. The press roundly denounced the British and said that once
again Turkey had been shown the wisdom of friendship for Germany.[12]

Entente actions were contrasted with the more conciliatory policy
of the Germans. As early as November, 1910, Baron Marschall von
Bieberstein had notified the Sublime Porte that Germany would place
no obstacles in the way of an increase in the Ottoman customs duties
and that, furthermore, his Government was prepared to urge that
the Anatolian and Bagdad Railway Companies forego any additional
assignment of Turkish revenues. During the first week of March, 1911,
Dr. von Gwinner and Dr. Helfferich informed the Ottoman Government
that the Bagdad Railway Company was willing to abandon its right to
construct the sections of the line from Bagdad to Basra and the Persian
Gulf, including the concessions for port and terminal facilities
at Basra. The Turkish Government was to be given a free hand as to
the disposition of the portion of the railway beyond Bagdad, with
the single reservation that the _Deutsche Bank_ should be awarded a
share in the enterprise equal to that granted any non-Ottoman group
of financiers. The German proposals were accepted and incorporated in
a formal convention of March 21, 1911, by which the Bagdad Railway
Company abandoned its claims to further commitments from the Ottoman
Treasury and agreed, at the pleasure of the Turkish Government, to
surrender its concession for the Bagdad-Basra-Persian Gulf sections to
an Ottoman company internationally owned and controlled.[13]

The outcome of the negotiations for an increase in the customs duties
was a keen disappointment to the Young Turks. Desirous as they were of
carrying the Bagdad enterprise to a successful conclusion, they could
not help resenting its political implications. “We tried,” writes
Djavid Bey, “to better our relations with the English; they talked to
us of the Bagdad Railway! We tried to introduce financial and economic
reforms in Turkey; we found before us the Bagdad Railway! Every time an
occasion arose, the French stirred up the Bagdad Railway question. Even
the Russians, notwithstanding the Potsdam Agreement,[14] constantly
waved in their hands the Bagdad weapon.” This resentment was fortified
by the knowledge that those who opposed the Bagdad Railway were those
who believed that the Sick Man would die and were interested in the
division of his inheritance. From these Powers Turkey could accept no
tutelage!


THE GERMAN RAILWAYS JUSTIFY THEIR EXISTENCE

From the Turkish point of view, the best test of the wisdom of
supporting the German railway concessions in Turkey was an examination
of the results achieved in improving political and economic conditions
in the Ottoman Empire. By 1914 the Anatolian Railways and part of the
Bagdad Railway had been in existence a sufficient length of time to
appraise their worth to Asia Minor, and the appraisal thus arrived at
would be a fair prognostication of the value of the entire system when
it should be opened to operation.

Dr. von Gwinner, in justification of the Bagdad Railway enterprise,
summarized what he believed to be the chief services of the Anatolian
Railways to Turkey. “More than twenty years ago,” he wrote in 1909,
“my predecessor, the late George von Siemens, conceived the idea
of restoring to civilization the great wastes of Asia Minor and
Mesopotamia, once and for long the center of the history of humanity.
The only means of achieving that end was by building railways; this
was undertaken, slowly but persistently, and with marvelous results.
Constantinople and the Turkish army at that time were eating bread made
from Russian flour; they are now eating grain of their own country’s
growth. Security in Asia Minor at that time was hardly greater than it
is to-day in Kurdistan. When the _Deutsche Bank’s_ engineers reached
a station a little beyond Ismid (Nikomedia) on the Sea of Marmora,
the neighborhood was infested by Tscherkess robbers; the chief of
those robbers is now a stationmaster of the Anatolian Railway Company,
drawing about £100 _per annum_, a party as respectable as the late Mr.
Micawber after his conversion to thrift. The railways brought ease to
the peasantry, who are obtaining for their harvest twice to four times
the price formerly paid, and the railways have brought revenue to the
Treasury. The Anatolian Railway’s lines are in as good condition as any
line in the United Kingdom, and their transportation charge is less
than half the rates of any railway in England.”[15]

Although this was the statement of an avowed protagonist of the
Anatolian Railway, the testimony of other observers must lead to
the conclusion that it was not an overestimate of the value of
the Anatolian system. As early as 1903, for example, the British
Consul General at Constantinople wrote: “There is no doubt that the
agricultural production of the districts traversed by the Angora
Railway has increased largely. Before the Angora Railway was opened
there was no export of grain from that district; the annual export of
wheat and barley is now from £1,500,000 to £2,000,000. The Railway
has attracted a large number of immigrants from Bulgaria and Russia,
who have settled in the most fertile parts. They form a hardworking
and intelligent population, accustomed to more civilized methods
of cultivation than the Anatolian peasantry. Population, improved
communications and security are the essentials required for the
development of Asia Minor. The Railway attracts the one and creates the
others. All agree that the country along the Railway is much safer than
elsewhere. It would be surprising, therefore, if the production of the
country did not increase.”[16]

The improvement in economic conditions in Anatolia became more marked
as time went on. The Anatolian Railway Company established a special
agricultural department for the education of the peasantry in more
improved methods of farming; nurseries and experimental stations were
maintained; demonstrations were given of the best systems of irrigation
and drainage; attention was paid to the development of markets for
surplus products of various kinds. American agricultural machinery was
introduced and promised to become widely adopted. As a result of these
improvements, the agricultural output of the country increased by leaps
and bounds, and the cultivated areas in some districts were more than
doubled. Famine, formerly a common occurrence, became a thing of the
past, because irrigation eliminated the danger of recurrent droughts
and floods. Increased production assured a plentiful food supply, and
improved transportation enabled the surplus of one district to be
transferred, in case of need, to another. All in all, the peasantry
were developing qualities of industry, thrift, and adaptability which
seemed to forecast great things for the future of Asia Minor.[17]

Furthermore, the German railways in Turkey, the failure of which had
been freely prophesied, proved to be successful business enterprises.
The directors took all possible steps to build up the earning power of
the lines, rather than depend upon the minimum return guaranteed by the
Ottoman Government. The railways were efficiently and intelligently
administered—the operating expenses of the Anatolian and Bagdad lines
never exceeded 47% of the gross receipts, although the operating
expenses of the chief European railways, under much more favorable
conditions, varied from 54% to 62% of gross receipts during the same
period. Occasional dividends of 5% or 6% were paid by the Anatolian
and Bagdad Railway Companies between 1906 and 1914, but only when the
disbursements were warranted by earnings. In 1911, a notable advance
was made by the introduction of oil-burning locomotives on the Bagdad
lines; henceforth the German railways in Turkey were operated with fuel
purchased from the Standard Oil Company of New Jersey![18]

This scrupulously careful management eventually brought its reward. In
1911, the earnings of the Angora line exceeded the kilometric guarantee
and, in accordance with the terms of the concession, the Ottoman
Government received a share of the receipts. In 1912, the returns of
the Eski Shehr-Konia line also exceeded the sum guaranteed by the
Government, the Ottoman Treasury receiving a share of the earnings of
the Anatolian system to an amount of more than $200,000. After 1913, no
further payments to the Anatolian Railway Company were required under
the kilometric guarantees.[19]

The results on the completed sections of the Bagdad Railway were
equally promising, as will be indicated by the following table:[20]

  _Year_  _Kilometres_  _Passengers_  _Freight_   _Gross_          _Total_
             _in_                      _Tons_   _Receipts per_   _Government_
          _Operation_                             _Kilometre_      _Subsidy_
                                                   (_Francs_)      (_Francs_)

  1906       200          29,629      13,693       1,368.83       624,028.21
  1907       200          37,145      23,643       1,754.44       546,129.77
  1908       200          52,759      15,941       1,839.86       529,443.12
  1909       200          57,026      15,364       1,936.72       509,565.45
  1910       200          71,665      27,756       2,571.43       381,135.58
  1911       238          95,884      38,046       3,379.34       238,166.59
  1912       609         288,833      57,670       5,315.67       278,785.25
  1913       609         407,474      78,645       3,786.53       216,295.17
  1914       887         597,675     116,194       8,177.97     2,939,983.00

 Figures in italics indicate payments _to_ the Turkish Government of
 its share of the receipts in excess of the guarantee of 4,500 francs
 per kilometre.


The improvement in the economic conditions of Anatolia, and the success
of the German railways as business enterprises, were sources of great
satisfaction and profit to the Imperial Ottoman Government. Not only
was the Treasury receiving revenue from the railway lines which had
formerly been a drain upon the financial resources of the empire, but
the receipts from taxes in the regions traversed by the railways were
constantly increasing. As early as 1893 the Ottoman Ministry of Public
Works announced that the increase in tithes and the increased value of
farm lands in Asia Minor had more than justified expenditures by the
Sultan’s Government in subsidies to the Anatolian Railway.[21] For
those portions of Anatolia which were served by the Railway, the amount
of the tithes had almost doubled in twenty years: in 1889, the year
after the award of the Anatolian concession, $639,760 was collected; in
1898, $948,070; in 1908, $1,240,450. In certain districts the amount
of the tithes collected in 1908 was five or six times as great as the
yield before the construction of the Railway.[22]

The economic prospects of Turkey never were brighter than they were
just before the outbreak of the Great War. The new régime had removed
many of the vexatious restrictions on individual initiative which had
characterized the rule of Abdul Hamid. The country’s losses in men
in the Italian and Balkan wars had been made up by an immigration of
Moslem refugees from the ceded territories. Numerous concessions had
been granted for the exploitation of mines, the construction of public
utilities, and the improvement of the means of communication. “There
was a feeling abroad in the land that an era of exceptional commercial
and industrial activity was about to dawn upon Turkey.” The Ottoman
Empire was in a fair way to become modernized according to Western
standards.[23]

Thus the Anatolian and Bagdad Railways achieved all that was claimed
for them by their sponsors. They increased political security in Asia
Minor; they brought about an economic renaissance in the homeland
of the Turks; they justified the investment of public funds which
was necessary to bring the system to completion. Beyond the Amanus
Mountains lay the plains of Syria and the great unexploited wealth
of Mesopotamia. A development of Mesopotamia, even as modest as that
achieved in Anatolia, would pay the cost of the Bagdad Railway many
times over. Were the Ottoman statesmen who supported this great project
to be condemned for so great a service to their country? Or would
they have been short-sighted had they failed to realize the great
potentialities of railway construction in Asiatic Turkey? That the
Bagdad Railway contributed to the causes of Turkish participation in
the Great War—and to the disintegration of the Ottoman Empire—was not
so much the fault of the Turks themselves as it was the blight laid
upon Turkey, a “backward nation,” by European imperialism.


THE YOUNG TURKS HAVE SOME MENTAL RESERVATIONS

Although the revolutionary party in Turkey had come to look with favor
upon German influence in the Near East, and particularly to support the
Bagdad Railway, there is little reason for accepting the too hastily
drawn conclusion that the Young Turks had sold their country to the
Kaiser or that they were under a definite obligation to subscribe to
German diplomatic policies. They were too strongly nationalistic for
that. They believed that the Ottoman Empire must eventually rid itself
of foreign administrative assistance, foreign capital invested under
far-reaching economic concessions, and foreign interference in Ottoman
political affairs. But for a period of transition—during which Turkey
could learn the secrets of Western progress and adapt them to her own
purposes—it was the obvious duty of a forward-looking government to
utilize European capital and European technical assistance for the
welfare of the empire. Patriotism and modernism went hand in hand in
the Young Turk program.[24]

The Young Turks were not unaware of the menace of the Bagdad Railway
to their own best hopes. As Djavid Bey appropriately says: “The great
drawback of this enterprise was its political character, which clung
to it and became a source of endless toil and anxiety for the country.
In a word, it poisoned the political life of Turkey. If the Bagdad
concession had not been granted, the revolutionary government could
have solved much more easily pending political and economic problems.
But one must admire the courage of Abdul Hamid in granting the
concession, no matter what the cost, because the construction of the
Bagdad line was essential for the defence and the economic progress of
the empire. Unfortunately for Turkey, she has always had to suffer from
such politico-economic concessions.

“The Bagdad Railway did not escape the malady of politics. When one
entered the meeting room of the company, one breathed the atmosphere of
the ministerial chamber in _Wilhelmstrasse_ and felt in both Gwinner
and Helfferich the presence of undersecretaries for foreign affairs.
This state of affairs, instead of simplifying the negotiations and
relations between Germany and Turkey, served only to envenom them.”


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] For accounts of the Young Turk Revolutions see René Pinon,
_L’Europe et la jeune Turquie_ (Paris, 1911); V. Bérard, _La révolution
turque_ (Paris, 1909); C. R. Buxton, _Turkey in Revolution_ (London,
1909); Ernst Jäckh, _Der aufsteigende Halbmond_ (Berlin, 1911); A.
H. Lybyer, “The Turkish Parliament,” in _Proceedings of the American
Political Science Association_, Volume VII (1910), pp. 66 _et seq._;
S. Panaretoff, _Near Eastern Affairs and Conditions_ (New York,
1922), Chapter V; A. Kutschbach, _Die türkische Revolution_ (Halle,
1909); Baron C. von der Goltz, _Der jungen Türkei Niederlage und die
Möglichkeit ihrer Wiedererhebung_ (Berlin, 1913).

[2] Paul Rohrbach, _Germany’s Isolation_, p. 50.

[3] Karl Helfferich, _Die deutsche Türkenpolitik_, p. 21.

[4] This quotation, together with many other facts in this chapter, is
from a lengthy memorandum of Djavid Bey on the Bagdad Railway, prepared
especially for the use of the author in the writing of this book. It is
dated January 3, 1923, and was forwarded from the Lausanne Conference
for Peace in the Near East. Unless otherwise specified, quotations
from Djavid Bey here given are from this memorandum. There probably is
no person who knows more of the Ottoman point of view on the Bagdad
Railway than Djavid, who as Young Turk Minister of Finance and, later,
as Turkish delegate to the Ottoman Public Debt Administration has had
perhaps an unprecedented opportunity to observe the financial and
economic ramifications of European imperialism in the Near East.

[5] _Diplomatic and Consular Reports_, No. 4835 (1911), p. 16;
_Mesopotamia_, p. 41; _The Annual Register_, 1911, pp. 364–365;
_Armenia and Kurdistan_, p. 62; _Turkey in Europe_, pp. 72–73;
_Anatolia_, pp. 51–52, 81; _infra_, pp. 244–246.

[6] Pan-Turkism, or Pan-Turanianism, started as a cultural movement
among Ottoman intellectuals. It assumed political aspects as a result
of three important circumstances: 1. Aggressions against Turkey
by foreign powers; 2. The ardent nationalism of the Balkan states
bordering on Turkey; 3. The existence within Turkey of vigorous
dissident nationalities, such as the Armenians and the Arabs.
Pan-Turanianism and Pan-Islamism, although separate movements, had much
in common. In 1911, at any rate, the Young Turks adopted Pan-Islamism
as part of their program. Pinon, _op. cit._, pp. 134 _et seq._;
_Mohammedan History_, pp. 89–96; Sir Thomas Barclay, _The Turco-Italian
War and Its Problems_ (London, 1912), pp. 100 _et seq._

[7] For an excellent statement of the reaction of Turkish nationalism
upon European politics see _The Quarterly Review_, Volume 228 (1917),
pp. 511 _et seq._

[8] Regarding the coincidence of German and Turkish interests during
the reign of Abdul Hamid _cf._ _supra_, pp. 64–65, 125–130.

[9] _Report of the Anatolian Railway Company_, 1908 and 1909, pp.
8–9; _The Annual Register_, 1909, pp. 337 _et seq._; _Stenographische
Berichte, XII Legislaturperiode, 1 Session_, Volume 260 (1910), pp.
2174d _et seq._

[10] From Djavid Bey’s memorandum. For scattered details of these
negotiations see _The Annual Register_, 1910, pp. 336–340; _Report
of the Deutsche Bank_, 1910, pp. 13 _et seq._; K. Helfferich, _Die
deutsche Türkenpolitik_, pp. 23 _et seq._; Ostrorog, _op. cit._, pp.
60–61.

[11] _Parliamentary Debates, House of Commons_, fifth series, Volume
22 (1911), pp. 1284–1285. For further details of the negotiations
of 1909–1911 _cf._ B. von Siebert, _Diplomatische Aktenstücke zur
Geschichte der Ententepolitik der Vorkriegsjahre_ (Berlin and Leipzig,
1921), Chapters VIII and IX. Hereinafter cited as _de Siebert_
documents.

[12] _Cf._ foreign correspondence of _The Times_, March 21, 1911.

[13] _Troisième convention additionelle à la convention du 5 Mars,
1903, relative au chemin de fer de Bagdad_ (Constantinople, 1911);
_supra_, pp. 111–113.

[14] _Cf._ _infra_, Chapter X.

[15] _The Nineteenth Century_, Volume 65 (1909), pp. 1083–1084.

[16] _Diplomatic and Consular Reports_, No. 3140 (1903), p. 29.

[17] _Société du chemin de fer d’Anatolie-Jahresbericht des
Agrikultur-Dienstes_ (Berlin, 1899 _et seq._), _passim_.

[18] _Archiv für Eisenbahnwesen_, Volume 31 (Berlin, 1908), pp.
207–211, 1485–1491; _Commerce Reports_, No. 18d (Washington, 1915), p.
9; _Diplomatic and Consular Reports_, No. 4835 (1911), p. 17; _Report
of the Anatolian Railway Company_, 1910–1913, _passim_.

[19] _Report of the Anatolian Railway_, 1911–1914, _passim_.

[20] Compiled from the _Report of the Bagdad Railway Company_,
1903–1914. Figures for the years 1904 and 1905 are incomplete and have
therefore been omitted. It should be kept in mind in reading this table
that the years 1912–1914 were abnormal, especially as regards passenger
traffic, because of the two Balkan Wars and the Great War.

[21] _The Levant Herald_ (Constantinople), October 25, 1893.

[22] Caillard, _loc. cit._, p. 439.

[23] _Commerce Reports_, No. 18d (1915), pp. 1–2.

[24] _Cf._ _Questions diplomatiques et coloniales_, Volume 26 (1908),
pp. 475–477.




CHAPTER X

BARGAINS ARE STRUCK


THE KAISER AND THE TSAR AGREE AT POTSDAM

During the early days of November, 1910, William II entertained at
the Potsdam palace his fellow sovereign Nicholas II, Tsar of all the
Russias. He extended his royal hospitality, also, to the recently
chosen foreign ministers of Germany and Russia respectively—Herr
von Kiderlen-Waechter, next to the ambassador at Constantinople the
Kaiser’s most competent expert on the tortuous affairs of the Near
East; and M. Sazonov, subsequently to guide Russian foreign policy
during the critical days of July, 1914. It was apparent even to the
untutored that there was some political significance to the conference
between the German Emperor and his distinguished guests, and the
press was rife with speculation as to what the outcome would be. The
answer was forthcoming on November 4, when it was announced that the
Kaiser and the Tsar, with the advice and assistance of their foreign
ministers, had reached an agreement on the Bagdad Railway question.

A short time later the terms of this Potsdam Agreement were made
public. As outlined by the German Chancellor, with some subsequent
modifications, they were as follows: 1. Germany recognized the Russian
sphere of interest in northern Persia, as defined by the Anglo-Russian
agreement of 1907, and undertook not to seek or support concessions
for railways, roads, telegraphs, or other means of communication in
the region; in other words, there was to be no change in the _status
quo_. 2. Russia recognized the rights of the _Deutsche Bank_ in the
Bagdad Railway and agreed to withdraw all diplomatic opposition to the
construction of the line and to the participation of foreign capital
therein. 3. Russia agreed to obtain from Persia, as soon as possible, a
concession for the construction of a railway from Teheran, the capital
city, to Khanikin, an important commercial city on the Turco-Persian
frontier. This new railway was to be linked with a branch of the Bagdad
system to be constructed in accordance with the terms of the concession
of 1903 from Sadijeh, on the Tigris, to Khanikin. Both lines were to
be planned for through international traffic. If, for any reason, the
Russian Government should fail to build the proposed railway from
Teheran to Khanikin, it was understood that German promoters might
then apply for the concession. 4. The policy of the economic open door
was to be observed by both nations. Russia agreed not to discriminate
against German trade in Persia, and the two nations pledged reciprocal
equality of treatment on the new railway lines from Sadijeh to
Teheran.[1]

Russia had a great deal to gain and little to lose by the Potsdam
Agreement. Whether Russia liked it or not, the Bagdad Railway had
become a going concern, and there was every indication that another
decade would see its completion. When finished, the Bagdad system,
together with projected Persian lines, would provide Russian trade
with direct communications with the Indies (_via_ Bagdad and the
Persian Gulf) and with the Mediterranean (_via_ Mosul, Aleppo, and the
Syrian coast). By the entente of 1907 with Great Britain the Tsar had
renounced his imperial interests in southern Persia; therefore he had
little to gain by a dog-in-the-manger attitude toward the development
of Mesopotamia by the Germans. Under these circumstances continued
resistance to the Bagdad Railway appeared to be short-sighted and
futile. Cheerful acquiescence, on the other hand, might bring tangible
diplomatic compensations. In addition, it has been suggested, Russian
reactionaries were delighted at the prospect of a _rapprochement_
with Prussia, in which they saw the last strong support of a dying
autocracy.[2]

From the German point of view the agreement with Russia was a
diplomatic triumph. All that Germany conceded was recognition of
Russia’s special position in Persia, which affected no important German
interests and exerted no appreciable influence on the balance of
power in the Near East. In return, German trade was to be admitted to
the markets of Persia, heretofore an exclusively British and Russian
preserve; the sphere of the Bagdad Railway was to be considerably
enlarged; Russian political obstruction of the Bagdad enterprise was
to cease. Russian objections had been the first stumbling block in the
way of the Railway; Russian protests had been the instigation of French
opposition; now Russian recognition held out high promise for the
final success of the Great Plan. The first breach had been made in the
heretofore solid front presented by the Entente.[3]

Outside of Germany and Russia, however, the Potsdam Agreement met
with a heated reception. The Ottoman press complained that Turkey
was being politely ignored by two foreign powers in the disposition
of her rights. One Constantinople daily said it was a sad commentary
on Turkish “sovereignty” that in an important treaty on the Bagdad
Railway “there is no mention of us, as if we had no connection with
that line, and we were not masters of Bagdad and Basra and the ports
of the Persian Gulf.”[4] M. Hanotaux, a former French minister of
foreign affairs, expressed his belief that “the negotiations at Potsdam
have created a situation which, from every point of view, obliges
us to ask, now, if Russia has dissolved the Triple Entente.”[5] Mr.
Lloyd George delivered a particularly venomous attack upon Russia for
having disregarded her diplomatic engagements, and he announced in
clarion tones that this desertion from the ranks of the Entente—even
if condoned by France—would not cause Great Britain to alter one iota
her former policy.[6] The “Slav peril” appeared to be more keenly
appreciated, for the moment, in France and England than in Germany!

M. Jaurès, the brilliant French Socialist parliamentarian, believed
that the Potsdam Agreement was an admirable instance of the menace
of the Russian Alliance to the security of France and the peace of
Europe. During the course of a bitter debate in the Chamber of Deputies
he confronted the Minister of Foreign Affairs, M. Pichon, with this
dilemma: “What is the situation in which you find yourself? You are
going to be faced, you already are faced, with a _fait accompli_, a
Russo-German convention on the Bagdad question. What do you propose
to do? Well, you may pursue an independent course and continue to
oppose the Bagdad Railway. In that event you will be in the unenviable
position of opposing Germany in an enterprise to which Russia—whose
interests are more directly involved—has given her support. Or, on
the other hand, you may subscribe with good grace to this enterprise
which Russia commends to you. What then will be your situation? For
some years France has successfully resisted the Bagdad Railway. If
during this time we have sulked at the enterprise, it was not of our
own choice, but out of regard for Russia, because Russia believed her
interests to be menaced. In short, we arrive at this paradox. You have
created an extremely delicate situation between France and Germany
by opposing the Bagdad Railway, in which you had no interests other
than those of Russia. And now it is this same Russia which, without
previously consulting you, places at the disposal of Germany the
moral advantage of compelling you—you who resisted only on behalf of
Russia—to accede to the Bagdad Railway.” Was this the sort of ally to
whom France should entrust her national safety?[7]

In the midst of the storm over the Potsdam Agreement, M. Stephen Pichon
and Sir Edward Grey alone appeared to be unruffled. Both of these
gentlemen, interpolated in the Chamber of Deputies and the House of
Commons respectively, averred that they saw no reason for becoming
disturbed or alarmed at the new Russo-German understanding. This point
of view was incomprehensible to the average citizen, unskilled in
the niceties of professional diplomacy, until on January 31, 1911,
M. Jaurès forced M. Pichon to admit that the French Foreign Office
had been informed of the character of the Potsdam negotiations before
they took place. Less than a month later Mr. Lloyd George severely
criticized his fellow-minister Sir Edward Grey for having taken no
action against the policy of Russia at Potsdam, although, as Foreign
Secretary, Sir Edward had been fully posted on the nature of the
negotiations. Apparently, then, Russia had come to the agreement with
Germany only after having consulted France and Great Britain and,
perhaps, after having received their consent.[8]

There were a few persons who hoped that the Potsdam Agreement might
be the first step in a general settlement of the Bagdad Railway
entanglement. One humble member of the House of Commons, Mr.
Pickersgill, said, for example, “I cannot understand the policy of
continued antagonism to Germany. Ex-President Roosevelt recently gave
much good advice to our Foreign Minister, and amongst other things he
said that the presence of Germany on the Euphrates would strengthen the
position of Great Britain on the Nile.... The action of Russia in the
recent meeting at Potsdam has brought matters to a head, and I hope
the Foreign Office will approach Turkey with a view to an arrangement
for the completion of the Bagdad Railway which might be agreeable to
Turkey, Germany and ourselves.”[9]

The hope of Mr. Pickersgill was fulfilled, for the agreement of
November 4, 1910, proved to be the first of a series of conventions
regarding the Near East negotiated between 1911 and 1914 by Germany,
Turkey, Great Britain and France. On the eve of the Great War the
Bagdad Railway controversy had been all but settled!


FRENCH CAPITALISTS SHARE IN THE SPOILS

France, relieved of the necessity of supporting Russia’s strategic
objections to the Bagdad Railway, was glad to compromise with Turkey—in
return for compensatory concessions to French investors. The sharp
rebuff given M. Pichon by the Young Turks in the loan negotiations of
the spring and summer of 1910 had convinced French diplomatists and
business men alike that a policy of bullying the new administration
at Constantinople would be futile.[10] Continued obstruction of
Ottoman economic rehabilitation could have but two effects: to injure
French prestige and prejudice the interests of French business; to
drive the Young Turks into still closer association with the German
Government and still greater dependence upon German capitalists. On
the other hand, a conciliatory policy might be rewarded by profitable
participation of French bankers in the economic development of
Turkey-in-Asia and by a revival of French political influence at the
Sublime Porte.

Even before the negotiation of the Potsdam Agreement the Young Turks
had smiled upon French financial interests in the hope that the French
Government might adopt a more friendly attitude toward the new régime
in Turkey. In June, 1910, for example, the Smyrna-Cassaba Railway was
authorized to extend its existing line from Soma, in western Anatolia,
to Panderma, on the Sea of Marmora. The concession carried with it the
highest kilometric guarantee (18,800 francs) ever granted a railway in
the Ottoman Empire, although the construction of the line offered fewer
engineering and financial difficulties than other railways which had
been constructed under less favorable terms. From the standpoint of the
Turkish Government, however, the Soma-Panderma railway offered economic
and strategic returns commensurate with the investment, for it was part
of a comprehensive plan for the improvement of commercial and military
communications in Asia Minor.[11]

The acceptance of this concession by French capitalists—presumably
with the approval, certainly without the opposition, of their
Government—was an interesting commentary on the official attitude of
the French Republic toward the Bagdad Railway. If it was unprincipled
for Germans to accept a guarantee for the construction and operation
of their railways in Turkey, it is difficult to ascertain what
dispensation exempted Frenchmen from the same stigma. If the Anatolian
and Bagdad systems were anathema because of their possible utilization
for military purposes, little justification can be offered for the
Soma-Panderma line, which, completed in 1912, was one of the principal
factors in the stubborn defence of the Dardanelles three years later.

Shortly after the promulgation of the Soma-Panderma convention
additional steps were taken by the Ottoman Government toward the
further extension of French railway interests in Anatolia and Syria.
Negotiations were initiated with the Imperial Ottoman Bank for the
award to a French-owned company, _La Société pour la Construction
et l’Exploitation du Réseau de la Mer Noire_, of a concession for a
comprehensive system of railways in northern Anatolia. It was proposed
to construct elaborate port works at the Black Sea towns of Heraclea,
Samsun, and Trebizond, and to connect the new ports by railway with
the inland towns of Erzerum, Sivas, Kharput, and Van. Connections were
to be established at Boli and Sivas with extensions to the Anatolian
Railways, and at Arghana with a branch of the Bagdad line to Nisibin
and Diarbekr. Thus adequate rail communications would be provided from
the Ægean to the Persian Gulf, from the Black Sea to the Syrian shore
of the Mediterranean.[12]

Simultaneously, negotiations were being carried on between the Ottoman
Ministry of Public Works and the Imperial Ottoman Bank for extensive
concessions to the French Syrian Railways, owned and operated by _La
Société du Chemin de Fer de Damas-Hama et Prolongements_. Provision was
made for the construction of port and terminal facilities at Jaffa,
Haifa, and Tripoli-in-Syria; a traffic agreement was negotiated with
the Ottoman-owned Hedjaz Railway, pledging both parties to abstain
from discriminatory rates and other unfair competition; tentative
arrangements were made for the construction of a line from Homs to
the Euphrates. Provisional agreements embodying the Black Sea and
Syrian railway and port concessions were signed in 1911, but technical
difficulties of surveying the lines, together with the political
instability occasioned by the Tripolitan and Balkan Wars, postponed the
definitive contract.[13]

After the Treaty of Bucharest, August 10, 1913, the Ottoman Government
was more determined than ever to do everything in its power to
eliminate French opposition to railway construction in Asia Minor and
to secure French aid in the further economic development of Turkey.
Crushing defeats at the hands of the Italians and the Balkan states had
emphasized the deficiencies of Ottoman communications, Ottoman economic
and military organization, Ottoman financial resources. The national
treasury, emptied by the drain of three wars, needed replenishment by
an increase in the customs duties, to which French sanction would have
to be obtained, and by a foreign loan, for which it was hoped French
bankers would submit a favorable bid. All of these questions were so
closely associated with the question of political influence in the Near
East, however, that it was obviously desirable to arrive at some _modus
vivendi_ between French and German interests in Ottoman railways and
in Ottoman financial affairs. Accordingly, the Young Turk Government
prevailed upon the Imperial Ottoman Bank and the _Deutsche Bank_ to
discuss a basis for a Franco-German agreement, and Djavid Bey was
despatched to Paris to conduct whatever negotiations might be necessary
with the French Government.

On August 19 and 20 and September 24, 25, 26, 1913, a series of
important meetings was held in Berlin to ascertain upon what terms
French and German investments in Turkey might be apportioned with the
least possibility of conflict. German interests were represented by Dr.
von Gwinner and Dr. Helfferich; the chief of the French negotiators
were Baron de Neuflize, a Regent of the Bank of France, and M. de
Klapka, Secretary-General of the Imperial Ottoman Bank. Supposedly the
conferences were conducted only between the interested financiers,
but the discussions were participated in by representatives of the
French, German, and Ottoman foreign offices. Obstacles which, at the
start, seemed insurmountable were overcome at the Berlin meetings and
a series of minor conferences which followed. The result was one of
the most important international agreements of the years immediately
preceding the Great War—the secret Franco-German convention of February
15, 1914. The terms of this agreement, heretofore unpublished, may be
summarized as follows:[14]

 1. Northern Anatolia was recognized as a sphere of French influence
 for purposes of railway development. Arrangements were concluded for
 linking the Anatolian and Bagdad systems with the proposed Black Sea
 Railways, and traffic agreements satisfactory to all of the companies
 were ratified and appended to the convention. It was agreed that the
 port and terminal facilities at Heraclea should be constructed by a
 Franco-German company.

 2. Syria, likewise, was recognized as a French sphere of influence. In
 particular, the right of the Syrian Railways to construct a line from
 Tripoli-in-Syria to Deir es Zor, on the Euphrates, was confirmed. A
 traffic agreement between the Bagdad and Syrian companies was ratified
 and appended to the convention.

 3. The regions traversed by the Anatolian and Bagdad Railways
 were defined as a German sphere of influence. A neutral zone was
 established in Northern Syria to avoid infringement upon German or
 French rights in that region.

 4. The _Deutsche Bank_ and the Imperial Ottoman Bank each pledged
 itself to respect the concessions of the other, to seek no railway
 concessions within the sphere of influence of the other, and to
 do nothing, directly or indirectly, to hinder the construction or
 exploitation of the railway lines of the other in Asiatic Turkey.

 5. It was agreed that appropriate diplomatic and financial measures
 should be taken to bring about an increase in the revenues of the
 Ottoman Empire, sufficient, at least, to finance all of the projected
 railways, both French and German. Construction of the lines already
 authorized, or to be authorized, should be pursued, as far as
 possible, _pari passu_, each group to receive subsidies from the
 Ottoman Treasury in about the same proportion.

 6. The _Deutsche Bank_ agreed to repurchase from the Imperial Ottoman
 Bank all of the latter’s shares and debentures of the Bagdad Railway
 and its subsidiary enterprises, amounting to Fr. 69,400,000. Payment
 was to be made in like value of Imperial Ottoman bonds of the Customs
 Loan of 1911, Second Series, which had been underwritten by a German
 syndicate.

Certain observations should be made regarding the character of this
convention, if its full significance is to be appreciated. It was an
agreement between two great financial groups in France and Germany; as
such it was signed by M. Sergent, Sub-Governor of the Bank of France;
M. de Klapka, Secretary-General of the Imperial Ottoman Bank; and Dr.
Karl Helfferich, Managing Director of the _Deutsche Bank_. In addition,
it was an understanding between the Governments of France and Germany;
as such it was signed by M. Ponsot, of the French Embassy in Berlin,
and by Herr von Rosenberg, of the German Foreign Office. A speech of
Chancellor von Bethmann-Hollweg to the Reichstag, December 9, 1913,
acknowledged the official character of the negotiations being conducted
by the French and German bankers. That the French Government considered
the convention a binding international agreement is made perfectly
clear by a despatch of Baron Beyens, Belgian Minister in Berlin, to
M. Davignon, Belgian Minister of Foreign Affairs, February 20, 1914,
in which the attention of the Belgian Government is officially called
to the existence of the convention.[15] The agreement, furthermore,
was acceptable to the Ottoman Government, for the Sultan promptly
confirmed the concessions for the new Black Sea and Syrian lines and
for the necessary extensions to the Anatolian Railways. Much has been
written about governmental support of investors in foreign countries,
but, so far as the author has been able to ascertain, this is the first
instance in which a financial pact and an international agreement have
been combined in one document. No longer are treaties negotiated by
diplomatists alone, but by diplomatists and bankers!

From the standpoint of the French interests involved, the February
convention of 1914 was an eminently satisfactory settlement of the
Bagdad Railway controversy. French capitalists secured concessions for
more than 2,000 miles of railways in Asiatic Turkey, thus eliminating
the danger of eventual German control of all communications in the
Ottoman Empire. The Imperial Ottoman Bank was relieved of the risk
of carrying an investment of almost seventy million francs in the
Bagdad enterprise—an investment which had been a “frozen asset”
because of the persistent refusal of the French Government to admit
the Bagdad securities to the Bourse. In return, the Bank received a
large block of Imperial Ottoman bonds, which were readily negotiable
and which materially increased French influence in the Ottoman Public
Debt Administration. Furthermore, as a result of a tacit agreement
with the _Deutsche Bank_, the Imperial Ottoman Bank was awarded the
Imperial Ottoman Five Per Cent Loan of 1914, amounting to $100,000,000,
upon terms affording a handsome profit to the underwriters.[16] As
for the French Government, it was enabled to emerge gracefully from
the difficult situation in which it found itself after the Potsdam
Agreement. France no longer was obliged to pursue a purely Russian
policy in the Near East, for the Tsar’s Government—in addition to
withdrawing its objections to German railways in Asiatic Turkey—gave
its consent to the construction of the French Black Sea Railways
with the sole proviso that the system should not be completed in its
entirety until Russia had constructed certain strategic railways
necessary to assure the safety of the Caucasus frontier.[17]

German diplomacy, on the other hand, had strengthened its position in
the Near East by securing definite recognition of central and southern
Anatolia, northern Syria and Mesopotamia as German spheres of interest.
German financiers acquired exclusive control of the Bagdad enterprise
and were assured that there would be no further obstruction of their
plans by the French Government. The French promise to coöperate in
improving the financial situation in Turkey meant that funds would
be forthcoming for continued construction of uncompleted sections of
the Bagdad Railway. The Young Turks were delighted at the prospect
that the Powers might finally consent to the much-needed increase in
the customs duties. They were no less delighted to know that railway
construction in Asia Minor—which held out so much promise for the
economic development and the political stability of the country—was to
go on unimpeded by Franco-German rivalry and antagonism.[18]

There was some harsh criticism in Great Britain, however, of the
advantages which France had obtained for herself in the Ottoman Empire.
Sir Mark Sykes, an eminent student of Near Eastern affairs, believed
that the new state of affairs was worse than the old. Speaking in the
House of Commons, March 18, 1914, he warned the Foreign Office that
“the policy of French financiers will produce eventually the collapse
of the Ottoman Empire.... Take the proposed loan arranged with the
French Government, for something over £20,000,000. In order to get this
there are concessions which I cannot help feeling are more brazen and
more fatal than any I have seen. The existing railways in Syria meander
for miles to avoid legitimate profits in order to extort a guarantee.
Alongside these railways you can see the merchants’ merchandise and the
peasants’ produce rotting because the railway people do not trouble to
warehouse the stuff or to shift it. They have got their guarantee, and
they do not care. These concessions, which have been extracted from
Turkey, mean a monopoly of all Syrian transit; and, further, a native
press is to be subventioned practically in the interest of these
particular monopolies.... In practice, loans, kilometric guarantees,
monopolies, and a financed native press must, whether the financiers
desire it or not, pave the way to annexation. I submit that this is not
the spirit of the _entente_. The British people did not stand by the
French people at Agadir to fill the pockets of financiers whose names
are unknown outside Constantinople or the Paris Bourse.... The Ottoman
Empire is shaken, and the cosmopolitan financier is now staking out the
land into spheres of interest. An empire may survive disaster, but it
cannot survive exploitation. A country like Turkey, without legislative
capacity, without understanding what the economics of Europe mean and
at the same time rich, is a lamb for the slaughter.”[19]

This trenchant criticism of French policy might have been taken more
seriously had Great Britain herself been actuated by magnanimous
impulses. Instead, British financiers were joining the common scramble
for concessions, and British statesmen were pursuing with ruthless
avidity every means of protecting British imperial interests.


THE YOUNG TURKS CONCILIATE GREAT BRITAIN

The Bagdad negotiations of 1910–1911 between Sir Ernest Cassel and Dr.
von Gwinner, on the one hand, and the British and Ottoman Governments,
on the other, came to naught, it will be recalled, because of the
refusal of Sir Edward Grey to consent to an increase in the Turkish
customs duties. The Sublime Porte was unwilling to grant the economic
concessions demanded by Great Britain as the price of her assistance in
Ottoman financial stabilization. But the Young Turks were shrewd enough
to keep the door open for further negotiations by removing the chief
political objection of England to the Bagdad enterprise—namely, that it
menaced British imperial interests in the region of the Persian Gulf.
In the convention of March 21, 1911, with the Bagdad Railway Company,
the Ottoman Government reserved to itself considerable latitude in the
disposition of the sections of the line beyond Bagdad.[20]

Conversations were resumed in July, 1911, when the Turkish minister
in London solicited of the Foreign Office a further statement of the
conditions upon which British objections to the Bagdad Railway might be
waived. He was informed that English acquiescence might be forthcoming
if the Bagdad-Basra section of the railway were constructed by a
company in which British, French, German, Russian, and Turkish capital
should share equally; if adequate guarantees were obtained regarding
the protection of British imperial interests in southern Mesopotamia
and Persia; if English capital were granted important navigation rights
on the Shatt-el-Arab, including complete exemption of British ships and
British goods from Ottoman tolls; if safeguards were provided against
discriminatory and differential tariffs on the Bagdad system.

These proposals met with only partial acceptance by the Ottoman
Government. Turkey was willing to internationalize the southernmost
sections of the Bagdad Railway, but under no circumstances would she
permit Russian participation in an enterprise which was so vital to the
defence of the Sultan’s Empire. Turkey was prepared to discuss with
England measures for the protection of legitimate British interests
in the Middle East, provided there be no further infringement on the
sovereign rights of the Sultan in southern Mesopotamia. Turkey agreed
that the principle of the economic open door should be scrupulously
observed throughout the Ottoman Empire; therefore she could not agree
to discriminatory treatment in favor of British commerce on the
Shatt-el-Arab, the Tigris, and the Euphrates. Upon these conditions
the Ottoman minister at London was authorized to continue negotiations
in the most friendly spirit.[21]

The Agadir crisis, which threatened war between England and Germany,
and the Tripolitan War, which diverted Turkish attention from domestic
reform to defence of the Empire, unfortunately led to a suspension of
the Anglo-Turkish conversations. They were not resumed until 1913, when
Turkey found a breathing spell between the first and second phases of
the First Balkan War.

During the interim, however, steps were taken to remove the obstacles
which stood in the way of an Anglo-German understanding. In February,
1912, Lord Haldane visited Berlin as the guest of the Kaiser to
discuss curtailment of the naval programs of the two Powers and to
agree upon other measures which would effect a _rapprochement_ between
_Wilhelmstrasse_ and Downing Street. As regards the Bagdad Railway,
Lord Haldane informed the German Government that he stood upon the
position he had taken in 1907—that Great Britain was prepared to
grant its consent to the enterprise if British political interests
in Mesopotamia were adequately safeguarded.[22] A few months later,
Baron Marschall von Bieberstein—who for fifteen years had guided
Germany’s destiny in the Near East—was transferred from Constantinople
to the embassy at London, as the first step in an attempt to reconcile
British imperial interests with German diplomatic hegemony in Turkey.
Almost simultaneously, Sir Harry Johnston, whose enthusiasm for
German ventures in Asia Minor has already been mentioned,[23] began a
quasi-official lecture tour in Germany to urge a sane settlement of the
Near Eastern tangle. Another important development was the appointment
as German Minister of Foreign Affairs, in January, 1913, of Herr von
Jagow, who believed that a great European war was inevitable unless
England and Germany could come to terms on the Turkish question.[24]

In this manner the stage was set for a resumption of Anglo-Turkish
conversations on the Bagdad Railway. In February, 1913, Hakki Pasha,
minister plenipotentiary and extraordinary of the Ottoman Government,
arrived in London with instructions to leave no stone unturned to
settle outstanding differences with Great Britain. For almost four
months Hakki Pasha and Sir Edward Grey discussed the problems of the
Near East and conferred with Herr von Kühlmann and Prince Lichnowsky,
of the German embassy at London, regarding the general terms of a
tripartite settlement of the economic and political questions at issue.
In May, 1913, a full agreement was reached upon the following wide
range of subjects: regularization of the legal position in Turkey of
British religious, educational, and medical institutions; pecuniary
claims of Great Britain against the Ottoman Empire; the Turkish veto
on the borrowing powers of Egypt; Turco-Persian boundary disputes,
particularly in so far as they affected oil lands; navigation of the
Tigris, Euphrates, and Shatt-el-Arab; irrigation of the Mesopotamian
valley; the status of Koweit. The settlements agreed upon were ratified
by a series of treaties between Great Britain and Turkey, notably those
of July 29, and October 21, 1913, and of June, 1914. Reconciliation of
British and German interests was reserved for discussion between London
and Berlin.[25]

In so far as concerned the Bagdad Railway, the substance of the
Anglo-Turkish agreements of 1913 is as follows:

 1. Turkey recognized the special position of Great Britain in the
 region of the Persian Gulf. Therefore, although Great Britain
 acknowledged the suzerainty of the Sultan over Koweit, the Ottoman
 Government pledged a policy of non-interference in the affairs of
 the principality. The existing treaties between the Sheik and Great
 Britain were confirmed.

 2. The terminus of the Bagdad Railway was to be Basra, unless and
 until Great Britain should give consent to an extension of the line to
 the Persian Gulf.

 3. In order to assure equality of treatment for all, regardless of
 nationality or other considerations, the Ottoman Government agreed
 that two British citizens should be elected to the Board of Directors
 of the Bagdad Railway Company.

 4. Exclusive rights of navigation by steamers and barges on the
 Tigris, Euphrates, and Shatt-el-Arab were granted to the Ottoman
 River Navigation Company, to be formed by Baron Inchcape, chairman of
 the Peninsular and Oriental and the British India Steam Navigation
 Companies. The Navigation Company, in which Turkish capital was to
 be offered a fifty per cent participation, was to have wide powers
 for the improvement and regulation of all navigable streams in
 Mesopotamia, in cooperation with a commission to be appointed by the
 Ottoman Government. Lord Inchcape’s concession was for a period of
 sixty years, with optional renewals for ten-year periods.

 5. It was agreed, however, that the Bagdad Railway and Inchcape
 concessions were without prejudice to the rights of the Lynch
 Brothers, which were specifically reaffirmed. The Lynch Brothers, in
 fact, were granted the privilege of adding another steamer to their
 equipment, with the single restriction that it fly the Turkish flag.

 6. The British Government agreed that no navigation rights of its
 nationals would be construed as permitting interference with the
 development of Mesopotamia by irrigation, and the Ottoman Government
 guaranteed that no irrigation works would be permitted to divert
 navigable streams from their course.

 7. In return for these, and other, assurances and concessions, Great
 Britain consented to support an increase of 4% in the customs duties
 of the Ottoman Empire.

The terms of this settlement were hailed by the English press as an
admirable solution of the Mesopotamian imbroglio. _The Times_ of May
17, 1913, for example, said: “Great Britain will have no further
reason for looking askance at a project which should do much for the
development of Asiatic Turkey. Our interests will be safeguarded;
we have always said that a terminus at Basra offered no menace to
specific British interests in the Persian Gulf; and the German
promoters will be free to complete their great project with the
benevolent acquiescence of Great Britain. There will be no official
participation in the construction of the line, but there will also
be nothing to deter British capital from being associated with the
scheme. We believe that if some such solution is adopted, a fertile
source of international misunderstanding will disappear. It is a
solution which should receive the approval of France and Russia and
should give gratification to Germany. It appears to leave no room for
subsequent differences of opinion, while it wipes out a whole series
of obscure disputes. It will be a further demonstration of that spirit
of coöperation among the Great Powers which has done so much of late
to preserve the peace of Europe. It should convince Germany that Great
Britain does not oppose the essential elements of the Bagdad Railway
scheme provided her own special interests are protected. Above all,
it will relieve the financial disabilities of Turkey and will enable
her to press forward the great task of binding with bonds of steel the
great Asiatic territories in which her future chiefly lies.” Other
press opinion was in accord with Sir Edward Grey that the agreement
“justifies us in saying that it is no longer in British interests to
oppose the line.”[26]

In Germany, likewise, the Anglo-Turkish agreement was favorably
received. The _Berliner Tageblatt_ of December 29, 1913, hailed it as
a triumph of German diplomacy. “For years,” it said, “this undertaking
has threatened to become a bone of contention between Russia, England,
and Germany. The German Government has now, through its cleverness
and tenacity, succeeded in removing all differences and in bringing
the line altogether into German possession.” In the Reichstag, as
well, the general tenor of the comments was favorable, although Herr
Bassermann and other National Liberals were somewhat vociferous about
the great “sacrifices” which Germany had made to propitiate Great
Britain. Among the Social Democrats and the Centrists, however, the
sentiment was obviously in accord with one member who said, “We share
the general satisfaction at this _rapprochement_, which is an aid to
world peace, but we also are of the opinion that there is no occasion
for over-exuberance or patriotic bombast.”[27]

As usual, the rôle of the Turks themselves was slighted. A casual
observer might have remarked that whatever “benevolent acquiescence”
was included in the settlement originated in Constantinople rather than
in London, and that the “sacrifices” involved were much more painful to
Turkey than to Germany!


BRITISH IMPERIAL INTERESTS ARE FURTHER SAFEGUARDED

In the Speech from the Throne, February 10, 1914, King George V
informed Parliament that the Near Eastern question was approaching a
solution. “My relations with foreign Powers continue to be friendly,”
he said. “I am happy to say that my negotiations, both with the German
Government and the Ottoman Government as regards matters of importance
to the commercial and industrial interests of this country in
Mesopotamia are rapidly approaching a satisfactory issue.” Nothing was
said to indicate the character of the negotiations or to identify the
“commercial and industrial interests” which were the objects of royal
solicitude.

Before the British Government would give its consent to a final
agreement with Turkey and Germany regarding the Bagdad Railway, the
King might have added, it was determined to acquire for certain worthy
Britons a share in some of the choicest economic plums in the Ottoman
Empire. Heading the interests which were thus to be favored was the
Right Honorable James Lyle Mackay, Baron Inchcape of Strathnaver, who
had been the beneficiary of the aforementioned Mesopotamian navigation
concession of July, 1913. Lord Inchcape is perhaps the foremost
shipping magnate in the British Empire. He is chairman and managing
director of the Peninsular and Oriental and the British India Steam
Navigation Companies; chairman and director of the Australasian United
Steam Navigation Company and the Eastern and Australian Steamship
Company; a director of the Steamship Owners’ Coal Association,
the Australasia and China Telegraph Company, the Marine Insurance
Company, the Central Queensland Meat Export Company, and various other
commercial enterprises. He is a vice-president of the Suez Canal
Company. He has extensive interests in the petroleum industry as a
director of the Anglo-Persian Oil Company, Scottish Oils, Ltd., and the
D’Arcy Exploration Company.

Lord Inchcape’s interests were given ample consideration in the
Anglo-German negotiations of 1914. On February 23, a contract was
signed at London between the Bagdad Railway Company and Lord Inchcape,
the signatures to which were witnessed by Herr von Kühlmann, of
the German embassy, and Sir Eyre Crowe, of the British Foreign
Office. Under the terms of this contract the Bagdad Railway Company
acknowledged the monopolistic privileges in Mesopotamian river
navigation conferred upon Lord Inchcape’s interests by the Ottoman
Government; agreed to cancel its outstanding engagements with the Lynch
Brothers for the transportation of railway materials between Basra and
points along the Tigris; and guaranteed Lord Inchcape a minimum amount
of 100,000 tons of freight, at a figure of 22–1/2 shillings per ton, in
the transportation on the Tigris of supplies for the construction of
the Bagdad Railway and its subsidiary enterprises.[28]

This contract was so obviously in contravention of earlier rights of
the Lynch Brothers, which had been specifically reaffirmed by the
negotiations with Turkey, that it was amended by an agreement of March
27, 1914, between Lord Inchcape, Mr. John F. Lynch, and the Bagdad
Railway Company. The latter arrangement provided: 1. That Lord Inchcape
should immediately organize the Ottoman Navigation Company to take
over the concession of July, 1913, and the rights conferred upon Lord
Inchcape by his agreement of February 23, 1914, with the Bagdad Railway
Company; 2. That the Lynch Brothers should be admitted to participation
in the new Navigation Company and that Mr. John F. Lynch should be
elected a director thereof; 3. That the Bagdad Railway should assign to
a new Ottoman Ports Company—in which Mr. Lynch and Lord Inchcape should
be granted a 40% participation—all of the rights of the Railway to the
construction of port and terminal facilities at Bagdad and Basra; 4.
That the Bagdad Railway Company should be granted a 20% participation
in the new Ottoman Navigation Company. Thus were Lord Inchcape’s
powerful interests further propitiated! Thus did the Lynch Brothers
cease to be big fish in a small pond, to become small fish in a big
lake!

Measures were now taken to protect another vested interest, the
British-owned Smyrna-Aidin Railway Company. On March 26, a draft
agreement, subsequently confirmed as part of the Anglo-German
convention of June 15, was executed by Dr. Carl Bergmann, of the Bagdad
Railway Company, and Lord Rathmore, of the Smyrna-Aidin Company. It
provided for important extensions of over 200 miles to the existing
Smyrna-Aidin line (including a junction with the Anatolian-Bagdad
system at Afiun Karahissar), granted to British interests valuable
navigation rights on the lakes of Asia Minor, and protected each
railway from discriminatory treatment at the hands of the other. This
settlement was approved by Herr von Kühlmann, on behalf of the German
Government; Mr. Alwyn Parker, of the British Foreign Office; and Hakki
Pasha, minister plenipotentiary of the Sultan to the Court of St.
James.[29]

Oil—the magic word which has become the open sesame of so many
diplomatic mysteries—was of no inconsiderable importance in 1914. Early
in that eventful year the British Government—in order to insure an
uninterrupted supply of fuel to the fleet—had purchased a controlling
interest in the Anglo-Persian Oil Company. As a necessary step in
the negotiations regarding Turkish oilfields the German Government
was obliged, in March, 1914, to recognize southern Mesopotamia,
as well as central and southern Persia, as the exclusive field of
operations of the Anglo-Persian Company, and, in addition, to agree
to the construction of a railway from Kut-el-Amara to Mendeli for the
purpose of facilitating petroleum shipments. Thereupon an Anglo-German
syndicate organized the Turkish Petroleum Company for the acquisition
and exploitation of the oil resources of the vilayets of Mosul and
Bagdad. Half of the stock of the new company was assigned to the
National Bank of Turkey (controlled by Sir Ernest Cassel) and the
D’Arcy group (in which Lord Inchcape was interested); one quarter was
assigned to the Royal Dutch Company, and the remainder was reserved
for the _Deutsche Bank_. Upon joint representations by the British
and German ambassadors at the Sublime Porte, the Sultan, in June,
1914, conferred upon the Turkish Petroleum Company exclusive rights of
exploitation of the oil resources of the Mesopotamian valley from Mosul
to Bagdad.[30]

The vested interests of certain of its citizens having thus been
amply protected, the British Government proceeded to complete its
negotiations with the German ambassador in London. On June 15, 1914,
Sir Edward Grey and Prince Lichnowsky initialed an important convention
regarding the delimitation of English and German interests in Asiatic
Turkey. The following day _The Times_ announced that the terms of
an Anglo-German agreement had been incorporated in a draft treaty,
and on June 29, Sir Edward Grey informed the House of Commons that
formal ratification of the convention was being postponed only “until
Turkey and Germany have completed their own separate negotiations.”
By mid-July all was in readiness for the definitive signing of the
treaty, but the widening importance of the Austro-Serbian dispute
and the outbreak of the Great War put an end to the Bagdad Railway
conversations.[31]

The terms of the convention of June 15, 1914—which might have meant so
much to the future of Anglo-German relations—constituted a complete
settlement of the controversy which had waged for more than ten years
over German railway construction in the Mesopotamian valley. The
reconciliation of the divergent interests of the two Powers was based
upon the following considerations:[32]

 1. “In recognition of the general importance of the Bagdad Railway
 in international trade” the British Government bound itself not “to
 adopt or to support any measures which might render more difficult
 the construction or management of the Bagdad Railway by the Bagdad
 Railway Company or to prevent the participation of capital in the
 enterprise.” Great Britain further agreed that under no circumstances
 would it “undertake railway construction on Ottoman territory in
 direct competition with lines of the Bagdad Railway Company or in
 contravention of existing rights of the Company or support the efforts
 of any persons or companies directed to this end,” unless in accord
 with the expressed wishes of the German Government.

 2. His Britannic Majesty’s Government pledged itself to support an
 increase in the customs duties of the Ottoman Empire from 11% to
 15% _ad valorem_ and, furthermore, to “raise no objection to the
 assignment to the Bagdad Railway Company of already existing Turkish
 State revenues, or of revenues from the intended increase in tariff
 duties, or of the proposed monopolies or taxes on the consumption of
 alcohol, petroleum, matches, tinder, cigarette-paper, playing cards,
 and sugar to the extent necessary for the completion of the Railway.“

 3. The terminus of the Bagdad Railway was to be Basra. Both of the
 signatory Powers declared that under no circumstances would they
 “support the construction of a branch from Basra or any other point
 on the main line of the Bagdad Railway to the Persian Gulf, unless
 a complete understanding be previously arrived at between the
 Imperial Ottoman, the Imperial German, and His Britannic Majesty’s
 Governments.” The German Government furthermore pledged itself under
 no circumstances to “undertake the construction of a harbor or a
 railway station on the Persian Gulf or support efforts of any persons
 or companies directed toward that end, unless a complete agreement be
 previously arrived at with His Britannic Majesty’s Government.”

 4. The German Government undertook to see that “on the lines of
 the Bagdad Railway Company, as hitherto, no direct or indirect
 discrimination in transit facilities or freight rates shall be made in
 the transportation of goods of the same kind between the same places,
 either on account of ownership or on account of origin or destination
 of the goods or because of any other consideration.” In other words,
 the German Government agreed to enforce Articles 24 and 25 of the
 Specifications of March 5, 1903, which provided that “all rates,
 whether they be general, special, proportional, or differential, shall
 be applicable to all shippers and passengers without distinction,”
 and which prohibited the Company to enter into any agreement for the
 purpose of granting reductions in the rates announced in its published
 tariffs.

 5. In order further to protect British interests the German Government
 assumed responsibility for the election to the Board of Directors of
 the Bagdad Railway Company of “two English members acceptable to His
 Britannic Majesty’s Government.”

 6. Both Powers pledged themselves unreservedly to observe the
 principle of the economic open door in the operation of railway,
 ports, irrigation, and navigation enterprises in Turkey-in-Asia.

 7. Great Britain recognized German interests in the irrigation of
 the Cilician plain, and Germany recognized British interests in the
 irrigation of the lower Mesopotamian valley.

 8. Both signatory Powers took cognizance of and agreed to observe the
 Anglo-Turkish agreement of July, 1913, conferring important navigation
 rights in Mesopotamia upon British subjects; the agreements between
 Lord Inchcape and the Bagdad Railway Company, regarding navigation
 and port and terminal facilities on the Tigris and Euphrates; the
 agreement between the Smyrna-Aidin Railway and the Bagdad Railway
 regarding important extensions to the former line.

 9. Great Britain and Germany agreed to “use their good offices with
 the Imperial Ottoman Government to the end that the Shatt-el-Arab
 shall be brought into a satisfactory navigable condition and
 permanently maintained in such condition, so that ocean-going ships
 may always be assured of free and easy access to the port of Basra,
 and, further, that the shipping on the Shatt-el-Arab shall always be
 open to ocean-going ships under the same conditions to ships of all
 nations, regardless of the nationality of the ships or their cargo.”

 10. It was agreed, finally, that any differences of opinion resulting
 from the convention or its appended documents should be subject to
 arbitration. If the signatory Powers were unable to agree upon an
 arbitrator or a special court of arbitration, the case was to be
 submitted to the Permanent Court of Arbitration at the Hague.

From both the German and the British points of view the foregoing
convention was an admirable solution of the Turkish problem. Had
the agreement been reached ten years earlier, it might have avoided
estrangement between the two nations. Had it come at almost any other
time than on the eve of the Great War, it would have been a powerful
stimulus to an Anglo-German _rapprochement_.

Germany, it is true, was obliged to abandon any hope of establishing
a port on the Persian Gulf. But there were grave uncertainties that
Koweit could ever be developed as a commercially profitable terminus
for the Bagdad Railway, whereas its very possession by a German company
would have been a constant source of irritation to Great Britain.
Basra, on the other hand, had obvious advantages. Like many of the
great harbors of the world—Hamburg, Bremen, Antwerp, London, New
York—it was on a river, rather than the open sea; and inasmuch as Great
Britain had agreed that the freedom of the open sea should be applied
to the Shatt-el-Arab, German ships were assured unrestricted access to
the southern terminus of the Bagdad Railway. In return for surrendering
the Basra-Persian Gulf section of the Bagdad system and for admitting
British capitalists to participation in the Bagdad and Basra ports
company, Germany received full recognition of her economic rights in
Anatolia, Syria, and northern Mesopotamia, together with a minor share
in Lord Inchcape’s navigation enterprises and in the newly formed
Turkish Petroleum Company. Above all, British opposition to the Bagdad
Railway, which had been so stubbornly maintained since 1903, was to be
a thing of the past. For these considerations Germany could well afford
to accept a subordinate place in southern Mesopotamia and to recognize
British interests in the Persian Gulf.

Great Britain gained even more than Germany. She abandoned her policy
of obstruction of the Bagdad Railway and consented to an increase
in the customs duties of the Ottoman Empire. These considerations
had never been ends in themselves, but rather pawns in the great
game of diplomacy, to be surrendered in return for other valuable
considerations. For them England secured guarantees of equality of
treatment for British citizens and British goods on the German railway
lines in Turkey. In addition, English capitalists received a monopoly
of navigation on the Tigris and Euphrates, a 40% interest in port and
terminal facilities at Bagdad and Basra, control of the oil resources
of the Mesopotamian valley, extensions to British-owned railways in
southern Anatolia, and other valuable economic concessions. British
political control was recognized as dominant in southern Mesopotamia;
therefore the Bagdad Railway no longer could be said to be a menace to
the safety of India. As for Britain’s new position in the Persian Gulf,
one of her own publicists said, “England has virtually annexed another
sea, one of the world’s highways.”[33]


DIPLOMATIC BARGAINING FAILS TO PRESERVE PEACE

It is one of the tragedies of pre-War diplomacy that the negotiations
of 1910–1914 failed to preserve peace in the Near East or, at least, to
prevent the entry of Turkey into the Great War. But the failure of the
treaties between Germany and the Entente Powers regarding the Ottoman
Empire can be traced, in general, to the same reasons that contributed
to the collapse of all diplomacy in the crisis of 1914. Imperialism,
nationalism, militarism—these were the causes of the Great War; these
were the causes of Ottoman participation in the Great War.

One obvious defect of the Potsdam Agreement, the Franco-German
agreement regarding Anatolian railways, the Anglo-Turkish settlement
of 1913, and the Anglo-German convention regarding Mesopotamia,
was the fact that they were founded upon the principle of imperial
compensations. Each of the Great Powers involved made “sacrifices”—but
in return for important considerations. And throughout all of the
bargaining the rights of Turkey, a “backward nation,” were completely
ignored. As the German ambassador in London wrote: “The real purpose
of these treaties was to divide Asia Minor into spheres of interest,
although this expression was anxiously avoided, out of regard for the
rights of the Sultan.... By virtue of the treaties all Mesopotamia as
far as Basra became our sphere of interest, without prejudice to older
British rights in the navigation of the Tigris and in the Willcocks
irrigation works. Our sphere further included the whole region of the
Bagdad and Anatolian Railways. The British economic domain was to
include the coasts of the Persian Gulf and the Smyrna-Aidin line; the
French, Syria; the Russian, Armenia.”[34]

In the scramble for concessions in Asia Minor, Italy had been
overlooked. The proposed extension of the Smyrna-Aidin Railway met with
vehement denunciation on the part of patriotic Italians who looked
forward to the further development of Italian economic influence in the
hinterland of the port of Adalia. The Italian press loudly demanded
that energetic action be taken by the Government to secure from Turkey
compensatory concessions or, in default of that, to announce to the
Sublime Porte that Italy would not return to Turkey the Dodecanese
Islands, of which Italy was in temporary occupation under the terms of
the Treaty of Lausanne (1912). A formal demand of this character was
made by King Victor Emmanuel’s ambassador at Constantinople, but was
met with a curt refusal on the part of the Turks to bargain for the
return of their own property.[35]

The Young Turks were not unaware of the true character of the
agreements they had entered into with the respective European Powers,
but they considered themselves impotent to act otherwise at the time.
They knew full well that there was grave danger in an extension of
British influence in Mesopotamia, French interests in Syria, and
Franco-Russian enterprise in northern Anatolia. They had not forgotten
the spoliation of their empire by Austria-Hungary and Italy. They
were not altogether unsuspicious about the intentions of Germany. But
they believed they could never emancipate their country from foreign
domination until they had modernized it. They needed foreign capital
and foreign technical assistance, and they had to pay the price. In
order to throw off the yoke of European imperialism they had to consent
temporarily to be victimized by it.[36]

Nationalistic fervor added to the difficulties created by imperialist
rivalry. M. André Tardieu, political editor at the time of _Le Temps_,
did not let a single opportunity pass during February and March, 1914,
to denounce the French Government for its pro-German policy in the
Bagdad Railway question. When M. Cambon, French ambassador at Berlin,
was asked whether the Franco-German agreement on Turkish railways would
improve the relations between his country and the German Empire, he
said: “Official relations, yes, perhaps to some extent, but I do not
think that the agreement will affect the great body of public opinion
on both sides of the Vosges. It will not, unfortunately, change the
tone of the French press towards the Germans.... There is no doubt
whatever that the majority, both of Germans and Frenchmen, desire to
live at peace; but there is a powerful minority in each country that
dreams of nothing but battles and wars, either of conquest or revenge.
That is the peril that is always with us; it is like living alongside
a barrel of gunpowder which may explode on the slightest provocation.”
Herr von Jagow, German Minister of Foreign Affairs, expressed a
similar opinion when he said that he was watching for a favorable
moment for the publication of the Anglo-German convention of June 15,
1914—“an appropriate moment when the danger of adverse criticism was
no longer so acute.”[37] Hatred, suspicion, fear, and other unbridled
passions were the stock-in-trade of the Continental press during the
months preceding the outbreak of the Great War. Patriotic bombast,
not international conciliation, was demanded by the imperialist and
nationalist minorities, who exerted only too much influence upon the
Governments and made politicians fear lest their efforts at peace be
misconstrued as treason!

A situation which was made bad by imperial rivalries and national
antagonisms was made intolerable by militarism. During the year
1913–1914, when the diplomatists were working for peace, preparations
were being made for war. In the month of August, 1913, while
conversations were being held in Berlin to reconcile French and German
interests in the Near East, General Joffre was on his way to Russia
to confer with the Tsar’s general staff regarding the reorganization
of the Russian army. In October of the same year, while tripartite
negotiations were being conducted by England, Turkey, and Germany
regarding Mesopotamia, General Liman von Sanders was despatched to
Constantinople by the Kaiser as head of a German military mission to
rebuild the Ottoman army and improve the Ottoman system of defence.
Considerations of military strategy were vitiating the efforts of
conciliatory diplomacy.

The mission of Liman von Sanders created a crisis at Constantinople.
The Russian, French, and British ambassadors protested against
such an obvious menace to the interests of the Entente. Russia, in
particular, objected to the announced intention of the German general
to strengthen the defences of the Straits. All three of the Powers
expressed opposition to the further proposal that Field Marshal von
Sanders be placed in command of the First Army Corps, with headquarters
at Constantinople. The Ottoman Government replied that it meant no
offence to England or France, but that it could not allow its military
policy to be determined by Russia. It called attention to the fact
that the improvement of the navy was in the hands of a British mission
and that the reorganization of the gendarmerie was going on under the
direction of a French general. German officers were being asked to
perform similar services for the army because the great majority of
Turkish officers had completed their training in Germany, and the rest,
since the days of General von der Goltz Pasha, had been educated and
experienced in German methods. To change from German to French or
British technique appeared to the Ottoman Minister of War an extremely
inadvisable procedure.[38]

Although the storm over Liman von Sanders cleared by February, 1914,
it left behind it certain permanent effects. It strengthened German
influence at Constantinople, indirectly because of the increased
Turkish hostility to Russia and suspicion of France and England,
directly because of the presence of hundreds of German staff and
regimental officers who used every opportunity to increase German
prestige in the army and the civil services. The German ambassador
at the Sublime Porte, Baron von Wangenheim, readily capitalized this
prestige in the interest of German diplomacy. A formal Turco-German
alliance was rapidly passing from the realm of the possible to the
realm of the probable.

In the meantime feverish efforts were being made to complete
Turkey’s military preparations. In March, 1914, at the request of
the Minister of War, a conference was held of representatives of all
railways in Asiatic Turkey to discuss the utilization of Ottoman rail
communications for mobilization in the event of war. Under the guidance
of German and Turkish staff officers a plan was adopted by which the
respective railways agreed to merge their services into a unified
national system for the transportation of troops. Throughout the spring
of 1914 the defences of the Dardanelles were being strengthened,
schools were being conducted for junior officers and non-commissioned
officers, the General Staff was reorganized, new plans for mobilization
were in process of completion. On July 23, 1914, the handiwork of Field
Marshal Liman von Sanders Pasha was exhibited in a great national
military review. On that occasion Baron von Wangenheim said to the
Ottoman Minister of Marine: “Djemal Pasha, just look at the amazing
results achieved by German officers in a short time. You have now
a Turkish army which can be compared with the best organized armies
in the world! All German officers are at one in praising the moral
strength of the Turkish soldier, and indeed it has proved itself beyond
all expectation. We could claim we have won a great victory if we could
call ourselves the ally of a Government which has such an army at its
disposal!”[39]

A few days later the Ottoman Empire was admitted to the Triple
Alliance—with the consent of Austria, but without even the knowledge of
Italy. The die was cast for Turkey’s participation in the War of the
Nations![40]


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Statement of Chancellor von Bethmann Hollweg to the Reichstag,
December 10, 1910, in _Stenographische Berichte, XII Legislaturperiode,
2 Session_, Volume 262, pp. 3561b _et seq._ _Cf._, also, _The Annual
Register_, 1910, pp. 314–315, 335–336; Shuster, _op. cit._, pp. 225
_et seq._ The informal agreement reached at Potsdam was confirmed by a
treaty of August 19, 1911. _The Annual Register_, 1911, pp. 357–358.
For the diplomatic correspondence arising out of the Potsdam Agreement
_cf._ de Siebert, _op. cit._, Chapter IX.

[2] Korff, _op. cit._, pp. 163–164. Baron Korff believes, also, that
the Potsdam Agreement was forced upon the weak and vacillating Nicholas
II by the unscrupulous and bullying William II.

[3] _Supra_, pp. 65–66, 147–153. For German estimates of the importance
of the Potsdam Agreement see a reasoned and temperate speech by Dr.
Spahn, of the Catholic Centre, and an impassioned and boisterous
speech by Herr Bassermann, of the National Liberals. _Stenographische
Berichte, XII Legislaturperiode, 2 Session_, Volume 266 (1911), PP.
5973 _et seq._, 5984 _et seq._

[4] _The Times_, January 18, 1911.

[5] Quoted by W. M. Fullerton, _Problems of Power_ (new and revised
edition, New York, 1915), p. 171.

[6] _Parliamentary Debates, House of Commons_, fifth series, Volume 21
(1911), pp. 241–244.

[7] _Journal Officiel, Débats parlementaires, Chambre des Députés_,
January 13, 1911, pp. 33–34. M. Jaurès was one of the Frenchmen who
felt that their Government never should have opposed the Bagdad Railway
in the first instance.

[8] _Ibid._, January 16, pp. 64 _et seq._; _Parliamentary Debates,
House of Commons_, Volume 21 (1911), pp. 82 _et seq._, 243–244; _The
Times_, January 17 and 19, 1911.

[9] _Parliamentary Debates, House of Commons_, Volume 21 (1911), p. 82.

[10] _Cf._ _supra_, pp. 224–225.

[11] _Cf._ G. Saint-Yves, “Les chemins de fer français dans la Turquie
d’Asie,” in _Questions diplomatiques et coloniales_, Volume 37 (1914),
pp. 526–531; _Anatolia_, pp. 51–52.

[12] It was proposed that the Anatolian Railways should construct three
branches: one from a point east of Bulgurlu north and north-east to
Kaisarieh and Sivas; a second from Angora east to the aforementioned
branch, joining it near Kaisarieh; a third from Adabazar to Boli. The
branch of the Bagdad Railway from Nisibin to Diarbekr and Arghana was
authorized by the concession of 1903.

[13] Much of the present account of the negotiations of the years
1910–1914 is based upon documentary material furnished by Dr. von
Gwinner and upon additional information supplied by Sir Henry Babington
Smith and Djavid Bey. Almost everything heretofore published has been
very general in character, but one may find some illuminating details
in the following: R. de Caix, “La France et les chemins de fer de
l’Asie turque,” in _Questions diplomatiques et coloniales_, Volume
36 (1913), pp. 386–387; _Armenia and Kurdistan_, p. 36; _Commerce
Reports_, No. 18a (1915), pp. 2–3; _Stenographische Berichte, XIII
Legislaturperiode, 1 Session_, Volume 291 (1913), pp. 6274c _et seq._;
_American Journal of International Law_, April, 1918; Commandant
de Thomasson, “Les négotiations franco-allemandes,” in _Questions
diplomatiques et coloniales_, Volume 37 (1914), pp. 257 _et seq._

[14] For certified copies of the minutes of the meetings of August
19–20 and September 24–26, 1913, and for the text of the convention of
February 15, 1914, the author is indebted to Dr. von Gwinner.

[15] _Stenographische Berichte, XIII Legislaturperiode, 1 Session_,
Volume 291 (1913), p. 6274c. No. 111 of a series of despatches
published by the German Foreign Office (Berlin, 1915), an English
translation of which is to be found in E.D. Morel’s _Diplomacy
Revealed_ (London, 1921), pp. 282–283.

[16] _Parliamentary Papers_, No. Cmd. 964 (1920).

[17] _Cf._ de Caix, _op. cit._, pp. 386–387.

[18] It should be made clear that not all the terms of the
Franco-German agreement were carried out before the beginning of the
Great War. Because of the delay in the negotiations with Great Britain
(_cf._ _infra_) the exchange of Bagdad Railway securities for Imperial
Ottoman Bonds was not completed, with the result that, when the War
came, French bankers still held an interest in the Bagdad Railway
Company.

[19] _Parliamentary Debates, House of Commons_, fifth series, Volume
59 (1914), pp. 2179–2189. Sir Mark Sykes (1879–1919) had traveled
extensively in the Near and Far East and was the author of many books
on the political and economic problems of those regions. During the
Great War he was commissioned by the British Government to negotiate
with France regarding the delimitation of the Allies’ interests in
Mesopotamia and Syria. He was one of the authors of the Sykes-Picot
Treaty of 1916.

[20] _Supra_, pp. 111–112, 228–229.

[21] Memorandum of Djavid Bey, cited in Chapter IX, _supra_.

[22] Haldane, _op. cit._, _passim_; W. von Hohenzollern, _My Memoirs,
1878–1918_, pp. 142–156; _supra_, pp. 198–199; _The Annual Register_,
1912, pp. 16, 332; Count de Lalaing, Belgian Minister in London, to M.
Davignon, Belgian Minister of Foreign Affairs, February 9 and 16, 1912,
despatches Nos. 88 and 90, translated in Morel, _op. cit._, pp. 228–230.

[23] _Supra_, pp. 205–207.

[24] Baron Marschall died in September, 1912, after only a few weeks
of service at his new post. He was succeeded by Prince Lichnowsky, who
took up his duties in London in November. Regarding the lecture tour
of Sir Harry Johnston see the authentic account by Bernadotte Schmitt,
_England and Germany, 1740–1914_, pp. 355–356. Herr von Jagow’s opinion
of the importance of an Anglo-German understanding on the Near East is
to be found in his reply to Prince Lichnowsky, in the _Norddeutsche
Allgemeine Zeitung_ of March 23, 1918, translated by Munroe Smith, _The
Disclosures from Germany_, pp. 130–131.

[25] Regarding the Anglo-Turkish negotiations _cf._ _Parliamentary
Debates, House of Commons_, Volume 53 (1913), pp. 392–395;
_Stenographische Berichte, XIII Legislaturperiode, 1 Session_, Volume
291 (1913), pp. 6274c-6294d; Karl Helfferich, _Die Vorgeschichte des
Weltkrieges_, pp. 143 _et seq._; _Mesopotamia_, pp. 97–98; _The Times_
(London), May 17 and May 31, 1913; _The Quarterly Review_, Volume 228
(1917), pp. 517–521; de Siebert, _op. cit._, Chapter XX.

[26] _Parliamentary Debates, House of Commons_, Volume 53 (1913), p.
393.

[27] _Stenographische Berichte, XIII Legislaturperiode, 1 Session_,
Volume 289 (1913), p. 4744d. _Cf._, also, _ibid._, pp. 4744c-4746c;
Volume 290 (1913), p. 5326a-c.

[28] For copies of this and other agreements the author is indebted to
Dr. von Gwinner, of the _Deutsche Bank_.

[29] For the text of the agreement _cf._ E.M. Earle, “The Secret
Anglo-German Convention of 1914 regarding Asiatic Turkey,” in the
_Political Science Quarterly_ (New York), Volume XXXVIII (1923), pp.
41–44.

[30] “Correspondence between His Majesty’s Government and the United
States Ambassador respecting Economic Rights in Mandated Territories,”
_Parliamentary Papers_, No. Cmd. 675 (1921); _The Daily News_ (London),
June 26, 1920; G. Slocombe, “The Oil Behind the War Scare,” in _The
Daily Herald_ (London), October 12 and 13, 1922; _The Disclosures from
Germany_, p. 238.

[31] _Parliamentary Debates, House of Commons_, Volume 64 (1914), pp.
116–117.

[32] For the complete text of the convention, _cf._ E. M. Earle, “The
Secret Anglo-German Convention of 1914 regarding Asiatic Turkey,” _loc.
cit._, pp. 24–44.

[33] Fullerton, _op. cit._, p. 307.

[34] Prince Lichnowsky, quoted from _The Disclosures from Germany_, pp.
71–72.

[35] Saint-Yves, _loc. cit._, pp. 526–531; _Anatolia_, pp. 49 _et seq._
Regarding the earlier development of Italian economic interests in
Turkey _cf._ _supra_, pp. 105–107.

[36] For an interesting discussion of this point see Ahmed Djemal
Pasha, _Erinnerungen eines türkischen Staatsmannes_ (Munich, 1922),
translated into English under the title, _Memories of a Turkish
Statesman, 1913–1919_ (New York, 1923), pp. 107–115 of the translation,
pp. 113–122 of the German text. (Hereafter page references are given
for the translation only).

[37] Baron Beyens, Belgian minister in Berlin, to M. Davignon, Belgian
Minister of Foreign Affairs, No. 111 of the Belgian documents,
translated in Morel’s _Diplomacy Revealed_, p. 283. The quotation from
von Jagow is from _The Disclosures from Germany_, p. 251.

[38] Regarding the German military mission to Turkey _cf._ Djemal
Pasha, _op. cit._, pp. 65–70, 101–102; Liman von Sanders, _Fünf Jahre
Türkei_ (Berlin, 1919); Field Marshal von der Goltz, _Die Militärische
Lage der Türkei nach dem Balkankriege_ (Berlin, 1913); _The Disclosures
from Germany_, pp. 57 _et seq._

[39] Djemal Pasha, _op. cit._, p. 108.

[40] _Ibid._, pp. 107–115. Regarding other aspects of German military
and diplomatic successes in Turkey during 1914, _cf._ _Anatolia_, pp.
44–45; Henry Morgenthau, _Ambassador Morgenthau’s Story_ (New York,
1918); Karl Helfferich, _Die deutsche Türkenpolitik_, pp. 28 _et seq._,
and _Die Vorgeschichte des Weltkrieges_, _passim_; André Chéradame,
_The Pan German Plot Unmasked_ (New York, 1917)—all representing widely
divergent points of view.




CHAPTER XI

TURKEY, CRUSHED TO EARTH, RISES AGAIN


NATIONALISM AND MILITARISM TRIUMPH AT CONSTANTINOPLE

The outbreak of the Great War precipitated a serious political crisis
at Constantinople. Decisions of the utmost moment to the future of
the Ottoman Empire had to be taken. Chief among these was the choice
between neutrality and entry into the war in coöperation with the
Central Powers. Pacifists and Entente sympathizers, of whom Djavid
Bey was perhaps the foremost, counseled non-intervention in the
struggle. Militarists and Germanophiles, headed by Enver Pasha, the
distinguished Minister of War, advocated early and complete observance
of the alliance with Germany, which called for active military measures
against the Entente. In support of the pacifists were the great mass of
the people, overburdened with taxes, worn out with military service,
and weary of the sacrifices occasioned by the Tripolitan and Balkan
Wars. In support of the militarists were German economic power, German
military prestige, and the powerful emotion of Turkish nationalism.

The case of the pacifists, like that of their opponents, was based
frankly upon national self-interest. A great European war seemed to
them to offer an unprecedented opportunity for setting Ottoman affairs
in order without the perennial menace of foreign interference. Ottoman
neutrality would be solicited by some of the belligerents, Ottoman
intervention by others; during the war, however, no nation could
afford to bully Turkey. By clever diplomatic bargaining economic and
political privileges of the greatest importance might be obtained—the
Capitulations, for example, might be abolished. Neutral Turkey might
grow prosperous by a thriving commerce with the belligerents. After the
peace both victor and vanquished would be too exhausted to think of
aggression against a revivified Ottoman Empire. To remain neutral was
to assure peace, security, and prosperity. To intervene was to invite
defeat and dismemberment.

Militarists, however, appraised the situation differently. National
honor demanded that Turkey go to the assistance of her allies. But,
more than that, national security demanded the decisive defeat of the
Entente Powers. As contrasted with the firm friendship of Germany
for Turkey, it was pointed out, there was the traditional policy of
Russia to dismember the Ottoman Empire and of France and Great Britain
to infringe upon Ottoman sovereignty whenever opportunity presented
itself. A victorious Russia would certainly appropriate Constantinople,
and as “compensations” France would take Syria and England Mesopotamia.
By closing the Dardanelles and declaring war, Turkey could deal Russian
economic and military power a blow from which the empire of the
Tsars might never recover. By associating herself with the seemingly
irresistible military forces of Germany, Turkey might once and for
all eliminate Russia—the feared and hated enemy of both Turks and
Germans—from Near Eastern affairs. In addition, British security in
Egypt might be shaken, and the French colonial empire in North Africa
might be menaced by a Pan-Islamic revival. In these circumstances
the war might be for Turkey a war of liberation, from which only the
craven-hearted would shrink.

For a time, however, practical considerations led to the maintenance
of Ottoman neutrality. “To Germany the ‘sphere of influence’ in
Turkey was of far greater economic and political importance than all
her ‘colonies’ in Africa and in the South Seas put together. The
latter, under the German flag, were an obvious and quick prey to Great
Britain’s naval superiority, but so long as Turkey remained out of
the war the German sphere of influence in Anatolia and Mesopotamia
was protected by the neutral Crescent flag. As soon as Turkey entered
the war, however, Great Britain’s naval superiority could be brought
to bear upon Germany’s interests in the Near East as well as upon her
interests in Africa and Oceanica. If German imperialists were devoted
to a Berlin-to-Bagdad _Mittel-Europa_ project, there were British
imperialists whose hearts and minds were set upon a Suez-to-Singapore
South-Asia project. The Ottoman Empire occupied a strategic position
in both schemes. A neutral Turkey, on the whole, was favorable to
German imperialism. A Turkey in armed alliance with Germany presented a
splendid opportunity for British imperialism.”[1]

Turkish mobilization, furthermore, was a tediously slow process. The
construction of the Bagdad Railway, as we have seen, had not been
completed before the outbreak of the Great War.[2] There were wide
gaps in northern Mesopotamia and in the Amanus mountains which made
difficult the transportation of troops for the defence of Irak, an
attack on the Suez, an offensive in the Caucasus, or the fortification
of the Dardanelles. The entry of Turkey into the war before the
completion of mobilization would have been of no material advantage
to Germany and would almost certainly have brought disaster to the
Ottoman Empire. Therefore, while the war went well for Germany on the
French and Russian fronts, German influence at Constantinople was
more concerned with creating sentiment for war and with speeding up
mobilization than with encouraging premature intervention. After the
Teutonic defeats at the Marne and in Galicia, however, active Turkish
support was needed for the purpose of menacing Russian security in
the Caucasus and British security in Egypt, as well as for bolstering
up German morale. During the latter part of September and the month
of October, Marshal Liman von Sanders, Baron von Wangenheim, the
commanders of the _Goeben_ and the _Breslau_, and other German
influences at Constantinople exerted the strongest possible pressure on
the Ottoman Government to bring Turkey into the war on the side of her
Teutonic allies.

On October 31, 1914, the Turkish Government took the fatal step
of precipitating war with the Entente Powers, after Enver Pasha,
Minister of War, and Djemal Pasha, Minister of Marine, were satisfied
that Ottoman preparations were sufficiently advanced to warrant the
beginning of hostilities. The outcome of the Bagdad Railway concession
of 1903 was the entry of Turkey into the War of 1914![3]

Discouraged by their failure to maintain the peace, and fearful of
impending disaster to their country, Djavid Bey and three other
members of the Ottoman ministry resigned their posts. There were other
indications, also, that intelligent public opinion at Constantinople
was not whole-hearted in support of war. But the nationalists—playing
upon the “traditional enmity” toward Russia—had their way, and with
an outburst of patriotic fervor Turkey began hostilities. In a
proclamation to the army and navy the Sultan affirmed that the war was
being waged for the defence of the Caliphate and the “emancipation”
of the Fatherland: “During the last three hundred years,” he said,
“the Russian Empire has caused our country to suffer many losses in
territory. And when we finally arose to a sentiment of awakening and
regeneration which was to increase our national welfare and our power,
the Russian Empire made every effort to destroy our attempts, either
with war or with numerous machinations and intrigues. Russia, England,
and France never for a moment ceased harboring ill-will against our
Caliphate, to which millions of Mussulmans, suffering under the tyranny
of foreign domination, are religiously and wholeheartedly devoted. And
it was always these powers that started every misfortune that came
upon us. Therefore, in this mighty struggle which we are undertaking,
we once and for all will put an end to the attacks made from one side
against the Caliphate and from the other against the existence of our
country.”[4]

Turcophiles in Germany were enthusiastic over Ottoman participation
in the Great War. The Turkish military contribution to a Teutonic
victory might not be decisive, but neither would it be insignificant.
And German coöperation in Ottoman military ventures would certainly
strengthen German economic penetration in the Near East, even though
Turkish arms might not drive Britain out of Egypt or Russia out of the
Caucasus. “Over there in Turkey,” wrote Dr. Ernest Jäckh, “stretch
Anatolia and Mesopotamia—Anatolia, the ‘land of sunrise,’ Mesopotamia,
an ancient paradise. Let these names be to us a symbol. May this world
war bring to Germany and Turkey the sunrise and the paradise of a new
era. May it confer upon a strengthened Turkey and a greater Germany
the blessings of fruitful Turco-Teutonic cooperation in peace after
victorious Turco-Teutonic collaboration in war.”[5]


ASIATIC TURKEY BECOMES ONE OF THE STAKES OF THE WAR

Whatever may have been the European origins of the Great War, there was
no disposition on the part of the belligerents to overlook its imperial
possibilities. A war which was fought for the protection of France
against German aggression, for the defence of Belgian neutrality,
for the recovery of Alsace-Lorraine, for the democratizing of a
bureaucratic German Empire—this war was fought not only in Flanders and
Picardy and the Vosges, but in Africa and Asia and the South Seas; not
only in Poland and Galicia and East Prussia, but in Mesopotamia and
Syria and the Dardanelles. Anatolia, Palestine, and the region of the
Persian Gulf were as much the stakes of the war as _Italia irredenta_,
the lost provinces of France, or the Serbian “outlet” to the Adriatic.

Of all the spoils of the war, Turkey was among the richest. Her
undeveloped wealth in minerals and fuel; her potentialities as a
producer of foodstuffs, cotton, and other agricultural products; her
possibilities as a market—these were alluring as war-time necessities
and peace-time assets. Her strategic position was of inestimable
importance to any nation which hoped to establish colonial power in the
eastern Mediterranean. Her future as a sphere of influence promised
unusual opportunities for the investment of capital and the acquisition
of exclusive economic rights. It was no accident, therefore, that
brought men from Berlin and Bombay, Stuttgart and Sydney, Munich
and Marseilles, to fight bitterly for possession of the cliffs of
Gallipoli, the deserts of Mesopotamia, and the coast of Syria.
Turkey-in-Asia was a rich prize upon which imperialists in Berlin and
Vienna, London and Paris and Petrograd, had set their hearts.

No sooner had Turkey entered the war than the imperial aspects of
the struggle became apparent. Germany was deluged with literature
designed to show that Ottoman participation in the war would assure
Germany and Austria their legitimate “place in the sun.” Business men
and diplomatists, missionaries and Oriental scholars[6] combined in
prophesying that the Turco-German brotherhood-in-arms would fortify
the Teutonic economic position in the Near East, disturb Russian
equanimity in the Caucasus, menace Britain’s communications with
India, and end once and for all French pretensions in Syria. Moslem
sympathizers predicted that the Holy War would shake the Entente
empires to their foundations. Pan-Germans frankly avowed that the war
offered an opportunity to make Berlin-to-Bagdad a reality rather than
a dream—some went so far as to believe that German domination could be
extended from the North Cape to the Persian Gulf! Mercantilists foresaw
the possibility of creating a politically unified and an economically
self-sufficient Middle Europe.[7]

As a means of promoting closer relationships with Turkey numerous
societies were established in Germany for the purpose of disseminating
information on the Near East and its importance in the war. For
example, Dr. Hugo Grothe conducted at Leipzig the work of the
_Deutsches Vorderasienkomitee_—_Vereinigung zur Förderung deutscher
Kulturarbeit im islamischen Orient_. This organization published
and distributed hundreds of thousands of books, pamphlets, and
maps regarding Asiatic Turkey; conducted a Near East Institute, at
which lectures and courses of instruction were given; maintained an
information bureau for business men interested in commercial and
industrial opportunities in the Ottoman Empire; and established German
libraries in Constantinople, Aleppo, Bagdad, Konia, and elsewhere
along the line of the Bagdad Railway. A similar organization, the
_Deutsch-türkische Vereinigung_, was maintained at Berlin under the
honorary presidency of Dr. von Gwinner of the _Deutsche Bank_ and the
active supervision of Dr. Ernest Jäckh. The two societies numbered
among their members and patrons Herr Ballin, of the Hamburg-American
Line, General von der Goltz, Baron von Wangenheim, and the Ottoman
ambassador at Berlin.[8]

The watchdogs of British imperial welfare, however, were not asleep.
Lord Crewe, the Secretary of State for India, was busily engaged in
plans for safeguarding British economic and strategic interests in
Mesopotamia. Early in September, 1914, General Sir Edmund Barrow,
Military Secretary of the India Office, prepared a memorandum,
“The Rôle of India in a Turkish War,” which proposed the immediate
occupation of Basra on the grounds that it was “the psychological
moment to take action” and that “so unexpected a stroke at this moment
would have a startling effect” in checkmating Turkish intrigues,
encouraging the Arabs to revolt and thus forestalling an Ottoman attack
on the Suez, and in protecting the oil installations at the head of the
Persian Gulf.[9] Supporters of a pro-Balkan policy, in the meantime,
were urging an attack on Turkey from the Mediterranean. Winston
Churchill, Chief Lord of the Admiralty, for example, in a memorandum of
August 19, 1914, to Sir Edward Grey, advocated an alliance with Greece
against Turkey; by September 4 he had completed plans for a military
and naval attack on the Dardanelles; on September 21 he telegraphed
Admiral Carden, at Malta, to “sink the _Goeben_ and _Breslau_, no
matter what flag they fly, if they come out of the Straits.” Mr.
Churchill, with whose name will ever be associated the disastrous
expedition to the Dardanelles, believed that, whatever the outcome
of the war on the Western Front, the success or failure of Germany
would be measured in terms of her power in the Near East after the
termination of hostilities. To destroy German economic and political
domination of Turkey it was necessary to have an expedition at the head
of the Persian Gulf and, possibly, another in Syria, but the commanding
strategic position was the Straits. The capture of Constantinople would
win the war.[10]

There were others who considered that a purely defensive policy should
be followed in the Near East. Lord Kitchener, for example, believed in
concentrating the maximum possible man power in France and advocated
restricting Eastern operations to the protection of the Suez Canal and
other essential communications. Influential military critics, like
Colonel Repington, were firmly opposed to “side shows” in Mesopotamia,
at the Dardanelles, or elsewhere, which would divert men, matériel,
and popular attention from the Western Front. Sir Edward Grey appeared
to be more interested in Continental than in colonial questions. Lord
Curzon was swayed between fear of a Moslem uprising in India and the
hope that British prestige in the East might be materially enhanced by
outstanding military successes at the expense of the Turks.[11]

The Near Eastern imperialists, however, had their way. During
September, 1914, the Government of India was ordered to prepare an
expeditionary force for service in the region of the Persian Gulf.
Early in October, almost four weeks before Turkey entered the war,
Indian Expeditionary Force “D,” under General Delamain, sailed from
Bombay under sealed orders. It next appeared on October 23, at
Bahrein Island, in the Persian Gulf, where General Delamain learned
the purposes of the expedition which he commanded. His army was to
occupy Adaban Island, at the mouth of the Shatt-el-Arab, “with the
object of protecting the oil refineries, tanks and pipe lines [of the
Anglo-Persian Company], covering the landing of reënforcements should
these be required, and assuring the local Arabs of support against
Turkey.” For the last-named purpose Sir Percy Cox, subsequently British
High Commissioner in Irak, was attached to the army as “political
officer.” In addition, General Delamain was to “take such military
and political action as he should consider feasible to strengthen his
position and, if necessary, occupy Basra.” Nevertheless, he was warned
that the rôle of his force was “that of demonstrating at the head of
the Persian Gulf” and that on no account was he “to take any hostile
action against the Turks without orders from the Government of India,
_except in the case of absolute military necessity_”![12]

Meanwhile, Sir Arthur Henry McMahon, subsequently first High
Commissioner in Egypt under the Protectorate, entered into an
agreement, dated October 23, 1914, with the Sherif of Mecca, assuring
the latter that Great Britain was prepared “to recognize and support
the independence of the Arabs within territories in which Great Britain
is free to act without detriment to the interests of her ally, France,”
it being understood that “the districts of Mersina and Alexandretta and
portions of Syria lying to the west of the districts of Damascus, Homs,
Hama and Aleppo cannot be said to be purely Arab.” In other words, an
independent Arab state was considered to be feasible insofar as it did
not conflict with the sphere of interest in Syria developed by French
railway-builders and recognized by the Franco-German agreement of
February 15, 1914.[13]

Even before Turkey formally entered the war, therefore, a British army
was “demonstrating” in the Shatt-el-Arab; Sir Percy Cox was coöperating
with the Sheik of Koweit for the purpose of precipitating a rebellion
among the Arabs of Mesopotamia, and a British representative had sown
the seeds of a separatist movement in the Hedjaz. It was a short step
from this, after the declaration of hostilities, to the occupation of
Basra, on November 22, and of Kurna, on December 9. The close of the
year 1914 saw Turkey in the unenviable position of having to choose
between increasing German economic and political domination, on the one
hand, and dismemberment by the Entente Allies, on the other.

The political and military situation of Turkey did not improve during
the year 1915. By mid-January, the rigors of a Caucasian winter and
the absence of adequate means of communication and supply brought to a
standstill Enver Pasha’s drive against the Russians. Early in February,
Djemal Pasha’s army, which had crossed the Sinai Peninsula in the face
of seemingly insuperable obstacles, attacked the Suez Canal only to
be decisively defeated by its British and French defenders. During
March a secret agreement was reached between Great Britain, France,
and Russia for the partition of the Ottoman Empire, including the
assignment of Constantinople to the Tsar. On April 26, by the Treaty
of London which brought Italy into the war, the Entente Powers bound
themselves to “preserve the political balance in the Mediterranean” by
recognizing the right of Italy “to receive on the division of Turkey an
equal share with Great Britain, France and Russia in the basin of the
Mediterranean, and more specifically in that part of it contiguous to
the province of Adalia, where Italy already had obtained special rights
and developed certain interests”; likewise the Allies agreed to protect
the interests of Italy “in the event that the territorial inviolability
of Asiatic Turkey should be sustained by the Powers” or that “only a
redistribution of spheres of interest should take place.”[14] To give
greater effect to these secret imperialistic agreements British troops
were landed at the Dardanelles on April 28. The bargains were sealed
with the blood of those heroic Britons and immortal Anzacs who went
through the tortures of hell—and worse—at Gallipoli![15]

In the meantime, British activities were resumed in Mesopotamia. In
March, 1915, General J. E. Nixon was ordered to Basra with renewed
instructions “to secure the safety of the oilfields, pipe line and
refineries of the Anglo-Persian Oil Company,” as well as with orders
to consolidate his position for the purpose of “retaining complete
control of lower Mesopotamia” and of making possible a subsequent
advance on Bagdad. On May 29, in accordance with these instructions,
the Sixth Division, under General Sir Charles Townshend, occupied
Amara, a town of 12,000 lying about fifty miles north of Basra on
the Tigris, seat of the Turkish provincial administration and one
of the principal entrepôts of Mesopotamian trade. Beyond this point
General Nixon refused to extend his operations unless assured adequate
reënforcements, which were not forthcoming. Nevertheless, because of
the insistence of Sir Percy Cox that some outstanding success was
necessary to retain support of the Arabs, another advance was ordered
in the early autumn. On September 29, General Townshend occupied
Kut-el-Amara, 180 miles north of his former position.

Then followed the decision to advance on Bagdad—a move which will go
down in history as one of the chief blunders of the war, as well as a
conspicuous instance of the manner in which political desiderata were
allowed to outweigh military considerations. The soldiers on the ground
were opposed to the move. General Nixon believed it would be disastrous
to advance farther than Kut without substantial reënforcements. General
Townshend was convinced that “Mesopotamia was a secondary theatre of
war, and on principle should be held on the defensive with a minimum
force,” and he warned his superiors that his troops “were tired, and
their tails were not up, but slightly down,” that they were fearful
of the distance from the sea and “were going down, in consequence,
with every imaginable disease.” But the statesmen at London were
thinking not only of winning the war but of eliminating Germany from
all future political and economic competition in the backward areas of
the world. “Because of the great political and military advantages to
be derived from the capture of Bagdad,” and because the “uncertainty”
of the situation at the Dardanelles made apparent “the great need of
a striking success in the East,” Austen Chamberlain, Secretary of
State for India, telegraphed the Viceroy on October 23, 1915, that
an immediate advance should be begun. Fearful of the consequences,
but faithful to his trust, General Townshend began the hundred-mile
march to Bagdad. Worn out, but heroic beyond words, his troops drove
the Turkish forces back and, on November 22, occupied Ctesiphon, only
eighteen miles from their goal. This, however, marked the high tide of
Allied success in the Near East during 1915, for General Townshend was
destined to reach Bagdad only as a prisoner of war.[16]


GERMANY WINS TEMPORARY DOMINATION OF THE NEAR EAST

Allied military successes in Turkey were not looked upon with
equanimity in Germany. There was a realization in Berlin, as well as
London and Paris and Petrograd, that the stakes of the war were as
much imperial as Continental. Nothing had as yet occurred which had
lessened the importance of establishing an economically self-sufficient
Middle European _bloc_ of nations. In the event that the German
oversea colonies could not be recovered, Asiatic Turkey—because of
its favorable geographical position, its natural resources, and its
potentialities as a market—would be almost indispensable in the German
imperial scheme of things. As Paul Rohrbach wrote in _Das grössere
Deutschland_ in August, 1915, “After a year of war almost everybody in
Germany is of the opinion that victory or defeat—at least political
victory or defeat—depends upon the preservation of Turkey and the
maintenance of our communications with her.”

The dogged defence of the Dardanelles had convinced Germany that,
granted proper support, Turkey could be depended upon to give a good
account of herself. The problem was one of supplementing Ottoman man
power with Teutonic military genius, technical skill, and organizing
ability. The enlistment of Bulgaria and the obliteration of Serbia made
possible more active German assistance to Turkey, and during the latter
months of 1915 and the early months of 1916 strenuous efforts were made
to bring the Turkish military machine to a high point of efficiency.
Large numbers of German staff officers were despatched to Mesopotamia,
Syria, and Anatolia, and Turkish officers were brought to the French
and Russian fronts to learn the methods of modern warfare. The
Prussian system of military service was adopted throughout the Ottoman
Empire, and exemptions were reduced to a minimum. Liberal credits were
established with German banks for the purchase of supplies for the new
levies of troops. Field Marshal von der Goltz was sent to Mesopotamia
as commander-in-chief of the Turkish troops in that region.[17]

Perhaps the chief handicap of the Turks in all their campaigns was
inadequate means of transportation. The Ottoman armies operating
in the vicinity of Gaza and of Bagdad were dependent upon lines of
communication more than twelve hundred miles long; and had the Bagdad
Railway been non-existent, it is doubtful if any military operations at
all could have been conducted in those regions. But the Bagdad Railway
was uncompleted. Troops and supplies being despatched from or to
Anatolia had to be transported across the Taurus and Amanus mountains
by mule-back, wagon, or automobile, and then reloaded on cars south
or north of the unfinished tunnels. To remedy these deficiencies,
herculean efforts were made by Germans and Turks during 1915 to improve
the service on existing lines and to hurry the completion of the Bagdad
Railway. Locomotives and other rolling stock were shipped to Turkey,
and German railway experts coöperated with the military authorities
in utilizing transportation facilities to the best advantage. In
September, 1915, the Bagtché tunnel was pierced; and although through
service to Aleppo was not inaugurated until October, 1918, a temporary
narrow-gauge line was used, during the interim, to transport troops
and matériel through the tunnel. Commenting on the importance of the
Bagtché tunnel, the American Consul General at Constantinople wrote:
“With its completion the most serious difficulties connected with the
construction of the Bagdad Railway have been overcome, and the work of
connecting up many of the isolated stretches of track may be expected
to be completed with reasonable rapidity. In spite of delays occasioned
by the war, this most important undertaking in railway construction in
Turkey has passed the problematical stage and is now certain to become
an accomplished fact in the near future.”[18]

The effects of German assistance to Turkey soon made themselves
apparent. Field Marshal von der Goltz, commanding a reënforced and
reinvigorated Ottoman army, supported by German artillery, compelled
General Townshend to abandon hope of occupying Bagdad and to fall back
toward Basra. By December 5, 1915, Townshend’s army was besieged in
Kut-el-Amara; and although the Turks failed to take the town by storm,
they did not fail to beat off every Russian and British force sent to
the relief of the beleaguered troops. About the same time, December 10,
evacuation of the Dardanelles was begun, and the last of the British
troops were withdrawn during the first week of January, 1916. On April
29, Townshend’s famished garrison surrendered. Shortly thereafter the
offensive of the Grand Duke Nicholas in Turkish Armenia was brought
to a standstill. During July and August a second Ottoman attack was
launched against the Suez Canal; and although it was unsuccessful, the
expedition reminded the British that Egypt was by no means immune from
danger. By the end of the year 1916 Turkey, with German assistance, had
completely cleared her soil of enemy troops, except for a retreating
Russian army in northern Anatolia and a defeated British expedition at
the head of the Persian Gulf.[19]

As for Germany, she “was unopposed in her mastery of that whole
vast region of southeastern Europe and southwestern Asia which goes
by the name of the Near East.... She now enjoyed uninterrupted and
unmenaced communication and commerce with Constantinople not only, but
far away, over the great arteries of Asiatic Turkey [the Bagdad and
Hedjaz railways], with Damascus, Jerusalem, and Mecca, and with Bagdad
likewise.... If military exploits had been as conclusive as they had
been spectacular, Germany would have won the Great War in 1916 and
imposed a _Pax Germanica_ upon the world.... With the adherence of
Turkey and Bulgaria to the Teutonic Alliance, and the triumphs of those
states, a Germanized _Mittel-Europa_ could be said to stretch from the
North Sea to the Persian Gulf, from the Baltic to the Red Sea, from
Lithuania and Ukrainia to Picardy and Champagne. It was the greatest
achievement in empire-building on the continent of Europe since the
days of Napoleon Bonaparte.”[20]

If Germany had been alarmed during the summer of 1915 at the prospect
that she might lose her preponderant position in Turkey, the world was
now alarmed at the prospect that she might maintain that position.
Nor was that alarm easily dispelled, for the Bagdad Railway and the
power and prestige it gave Germany in the Near East were pointed to by
statesmen as additional evidence of the manner in which the Kaiser and
his cohorts had plotted in secret against the peace of an unsuspecting
and unprepared world. In fact, the Bagdad Railway came to be considered
one of the fundamental causes of the war, as well as one of the chief
prizes for which the war was being fought. President Wilson, for
example, in his Flag Day speech, June 14, 1917, stated the case in the
following terms:[21]

 “The rulers of Germany ... were glad to go forward unmolested,
 filling the thrones of Balkan states with German princes, putting
 German officers at the service of Turkey to drill her armies and
 make interest with her government, developing plans of sedition and
 rebellion in India and Egypt, setting their fires in Persia. The
 demands made by Austria upon Serbia were a mere single step in a plan
 which compassed Europe and Asia, from Berlin to Bagdad....

 “The plan was to throw a broad belt of German military power and
 political control across the very centre of Europe and beyond the
 Mediterranean into the heart of Asia; and Austria-Hungary was to be
 as much their tool and pawn as Serbia or Bulgaria or Turkey or the
 ponderous states of the East.... The dream had its heart at Berlin. It
 could have had a heart nowhere else!...

 “And they have actually carried the greater part of that amazing
 plan into execution.... The so-called Central Powers are in fact but
 a single Power. Serbia is at its mercy, should its hands be but for
 a moment freed. Bulgaria has consented to its will, and Roumania
 is overrun. The Turkish armies, which Germans trained, are serving
 Germany, certainly not themselves, and the guns of German warships
 lying in the harbor at Constantinople remind Turkish statesmen every
 day that they have no choice but to take their orders from Berlin.
 From Hamburg to the Persian Gulf the net is spread!”

As late as November 12, 1917, after some spectacular victories by the
Allies in Mesopotamia and Syria, President Wilson made it plain that no
peace was possible which did not destroy German military power in the
Near East. Addressing the American Federation of Labor, at Buffalo, N.
Y., he said:[22]

 “Look at the map of Europe now. Germany, in thrusting upon us
 again and again the discussion of peace, talks about what? Talks
 about Belgium—talks about Alsace-Lorraine. Well, these are deeply
 interesting subjects to us and to them, but they are not talking about
 the heart of the matter. Take the map and look at it. Germany has
 absolute control of Austria-Hungary, practical control of the Balkan
 States, control of Turkey, control of Asia Minor. I saw a map the
 other day in which the whole thing was printed in appropriate black,
 and the black stretched all the way from Hamburg to Bagdad—the bulk
 of the German power inserted into the heart of the world. If she can
 keep that, she has kept all that her dreams contemplated when the
 war began. If she can keep that, her power can disturb the world as
 long as she keeps it, always provided ... the present influences that
 control the German Government continue to control it.”

In the light of all the facts, this diagnosis of the situation is
incomplete, to say the least. Had President Wilson been cognizant
of the contemporaneous counter-activities of the Allied Powers, he
might not have been prepared to offer so simple an explanation of a
many-sided problem. For it was not German imperialism alone which
menaced the peace of the Near East and of the world, but _all_
imperialism.


“BERLIN TO BAGDAD” BECOMES BUT A MEMORY

Germany may have been determined to dominate the Ottoman Empire by
military force. But from the Turkish point of view domination by
Germany was hardly more objectionable than the dismemberment which was
certain to be the result of an Allied victory.

Indeed, confident that they would eventually win the war, the Entente
Powers had proceeded far in their plans for the division of the Ottoman
Empire. During the spring of 1915, as has been indicated,[23] Russia
had been promised Constantinople, and Italy had been assigned a share
of the spoils equal to that of Great Britain, France, or Russia. To
give full effect to these understandings, further negotiations were
conducted during the autumn of 1915 and the spring of 1916, looking
toward a more specific delimitation of interests.

Accordingly, on April 26, 1916—the first anniversary of the
Treaty of London with Italy—France and Russia signed the secret
Sazonov-Paléologue Treaty concerning their respective territorial
rights in Asiatic Turkey. Russia was awarded full sovereignty over the
vilayets of Trebizond, Erzerum, Bitlis, and Van—a vast area of 60,000
square miles (about one and one-fifth times the size of the State of
New York), containing valuable mineral and petroleum resources. This
handsome prize put Russia well on the road to Constantinople and in a
fair way to turn the Black Sea into a Russian lake. And at the moment
the treaty was signed the armies of the Grand Duke Nicholas were
actually overrunning the territory which Russia had staked out for
herself! For her part, France was to receive adequate compensations in
the region to the south and southwest of the Russian acquisitions, the
actual delimitation of boundaries and other details to be the result of
direct negotiation with Great Britain.[24]

Thus came into existence the famous Sykes-Picot Treaty of May 9, 1916,
defining British and French political and economic interests in the
hoped-for dismemberment of the Ottoman Empire. The Syrian coast from
Tyre to Alexandretta, the province of Cilicia, and southern Armenia
(from Sivas on the north and west to Diarbekr on the south and east)
were allocated to France in full sovereignty. In addition, a French
“zone of influence” was established over a vast area including the
provinces of Aleppo, Damascus, Deir, and Mosul. Administration of this
stretch of coast and its hinterland would give French imperialists
what they most wanted in the Near East—actual possession of a country
in which France had many religious and cultural interests, control
of the silk production of Syria and the potential cotton production
of Cilicia, ownership of the Arghana copper mines, and acquisition
of that portion of the Bagdad Railway lying between Mosul and the
Cilician Gates of the Taurus.[25] Aside from its satisfaction of French
imperial ambitions, however, “the French area defied every known law of
geographic, ethnographic, and linguistic unity which one might cite who
would attempt to justify it.”[26]

Great Britain, by way of “compensation,” was to receive complete
control over lower Mesopotamia from Tekrit to the Persian Gulf and
from the Arabian boundary to the Persian frontier. In addition,
she was recognized as having special political and economic
interests—particularly the right “to furnish such advisers as the
Arabs might desire”—in a vast territory lying south of the French
“zone of influence” and extending from the Sinai Peninsula to the
Persian border. Palestine was to be internationalized, but was
subsequently established as a homeland for the Jews. In this manner
Britain, also, had adequately protected her imperial interests—she
had secured possession of the Bagdad Railway in southern Mesopotamia;
she had gained complete control of the head of the Persian Gulf, thus
fortifying her strategic position in the Indian Ocean; she was assured
the Mesopotamian cotton supply for the mills of Manchester and the
Mesopotamian oil supply for the dreadnoughts of the Grand Fleet; she
had erected in Palestine a buffer state which would block any future
Ottoman attacks on the Suez Canal. All in all, Sir Mark Sykes had
driven a satisfactory bargain.[27]

Italian ambitions now had to be propitiated. For a whole year before
the United States entered the war—while the Allied governments were
professing unselfish war aims—secret negotiations were being conducted
by representatives of France, Great Britain and Italy to determine what
advantages and territories, equivalent to those gained by the other
Allies, might be awarded Italy. In April, 1917, by the so-called St.
Jean de Maurienne Agreement, Italy was granted complete possession of
almost the entire southern half of Anatolia—including the important
cities of Adalia, Konia, and Smyrna—together with an extensive “zone of
influence” nort-heast of Smyrna. With such a hold on the coast of Asia
Minor, Italian imperialists might realize their dream of dominating the
trade of the Ægean and of reëstablishing the ancient power of Venice in
the commerce of the Near East.[28]

These inter-Allied agreements for the disposal of Asiatic Turkey were
instructive instances of the “old diplomacy” in coöperation with
the “new imperialism.” The treaties were secret covenants, secretly
arrived at; they bartered territories and peoples in the most approved
manner of Metternich and Richelieu. But they were less concerned with
narrowly political claims than with the exclusive economic privileges
which sovereignty carried with it; they determined boundaries with
recognition of their strategic importance, but with greater regard for
the location of oilfields, mineral deposits, railways and ports of
commercial importance. They left no doubt as to what were the real
stakes of the war in the Near East.

It is difficult, if not impossible, to reconcile the secret treaties
with the pronouncements of Allied statesmen regarding the origins
and purposes of the Great War. Certainly they were no part of the
American program for peace, which promised to “the Turkish portions
of the Ottoman Empire a secure sovereignty”; which demanded “a free,
open-minded, and absolutely impartial adjustment of all colonial
claims, based upon a strict observance of the principle that in
determining all such questions of sovereignty the interests of the
populations concerned must have equal weight with the equitable claims
of the government whose title is to be determined”; and which announced
in no uncertain terms that “the day of conquest and aggrandizement is
gone by” as is also “the day of secret covenants entered into in the
interest of particular governments and likely at some unlooked-for
moment to upset the peace of the world.”[29]

Allied diplomacy was to have its way in the Near East, however, for the
goddess of victory finally smiled upon the Allied armies and frowned
upon both Turks and Germans. As 1916 had been a year of Turco-German
triumphs at the Dardanelles and in Mesopotamia, 1917 brought
conspicuous Allied victories along the Tigris and in Syria, and 1918
saw the complete collapse of the Ottoman Empire. On February 24, 1917,
General Sir Stanley Maude, in command of reënforced and rejuvenated
British forces in Mesopotamia, captured Kut-el-Amara, retrieving the
disaster which had befallen Townshend’s army a year before. Deprived
of the services of Field Marshal von der Goltz, who died during the
Caucasus campaign, the Turks retired in disorder, and on March 11
British troops entered Bagdad—the ancient city which had bulked so
large in the German scheme of things in the Near East. Although the
capture of Bagdad was not in itself of great strategic importance,
its effect on morale in the belligerent countries was considerable.
British imperialists were in possession of the ancient capital of the
Arabian Caliphs, as well as the chief entrepôt of caravan trade in the
Middle East; therefore their prestige with both Arabs and Turks was
certain to rise. At home, pictures of British troops in the Bagdad of
the Arabian Nights appealed to the imagination of the war-weary, as
well as the optimistic, patriot. In the Central Powers, on the other
hand, the loss of Bagdad created scepticism as to whether the German
dream of “Hamburg to the Persian Gulf” was not now beyond realization.
This scepticism became more confirmed when, on April 24, General Maude
captured Samarra, northern railhead of the uncompleted Bagdad line in
Mesopotamia.[30]

Scepticism would have turned to alarm, however, had Germans been
fully aware of the significance of the British advance in the Land
of the Two Rivers. For behind the armies of General Maude came civil
officials by the hundreds to consolidate the victory and to lay the
foundations of permanent occupation. An Irrigation Department was
established to deal with the menace of floods, to drain marshes, and
to economize in the use of water. An Agricultural Department undertook
the cultivation of irrigated lands and conducted elaborate experiments
in the growing of cotton—the commodity which means so much in the
British imperial system. A railway was constructed from Basra to Bagdad
which, when opened to commerce in 1919, became an integral part of
the Constantinople-Basra system. There was every indication that the
British were in Mesopotamia to stay.[31]

Germans and Turks were sufficiently aroused, however, to take strenuous
measures to counteract General Maude’s successes. In April, 1917,
Field Marshal von Mackensen, hero of the Balkan and Rumanian campaigns
and strong man of the Near East, was sent to Constantinople to confer
with Enver Pasha regarding the military situation. It was decided,
apparently, that Bagdad must be retaken at all costs, for throughout
the summer quantities of rolling stock for the Bagdad Railway were
shipped to Turkey, enormous supplies of munitions were accumulated
at Haidar Pasha, and a division of picked German troops (including
machine-gun and artillery units) made its appearance in Anatolia.
Command of all the Turkish armies in Mesopotamia was conferred upon
General von Falkenhayn, former German Chief of Staff. Germany was not
yet prepared to surrender her sphere of interest in Turkey.

The great expedition against Bagdad, however, had to be abandoned.
In the first place, Turkish officers were loath to serve under von
Falkenhayn. Turkish nationalism was beginning to assert itself, and
German supervision of Ottoman military affairs was resented—Mustapha
Kemal Pasha, for example, refused to accept orders from German generals
and resigned his commission. Von Falkenhayn himself was disliked
because of his dictatorial methods and was held in light esteem
because of his responsibility for the disastrous Verdun offensive.
Furthermore, many Turks deemed it inadvisable to dissipate energy in
a Mesopotamian campaign, the avowed purpose of which was a recovery
of German prestige, when all available man power was required for the
defence of Syria. Djemal Pasha was so insistent on this point that he
received from the Kaiser an “invitation” to visit the Western Front! In
the second place, Providence or, perhaps, an Allied spy intervened to
thwart the German plans, for a great fire and a series of explosions
(September 23–26, 1917) destroyed the entire port and terminal of
Haidar Pasha, together with all the munitions and supplies which had
been accumulated there by months of patient effort. And finally, the
spectacular campaign of Field Marshal Allenby in Palestine, which
opened with the capture of Beersheba, on October 31, convinced even
von Falkenhayn that an expedition in Mesopotamia, while Aleppo was in
danger, would be the height of folly. German energies were thereupon
diverted to the defence of the Holy Land.[32]

During the autumn of 1917, Great Britain and France, to assure their
possession of the territories assigned them by the Sykes-Picot Treaty,
began a Syrian campaign which was not to terminate until Turkey had
been put out of the war. Under Field Marshal Sir E. H. H. Allenby,
British troops, reënforced by French units and assisted by the
rebellious Arabs of the Hedjaz, captured Gaza (November 7), Jaffa
(November 16), and Jerusalem (December 9). The triumphal entry of
General Allenby into Jerusalem was hailed throughout Christendom as
marking the success of a modern crusade to rid Palestine of Ottoman
domination forever. Jericho was occupied, February 21, 1918, but
Turkish resistance, under Marshal Liman von Sanders, stiffened for a
time, and it was not until the autumn that large-scale operations were
resumed. On October 1, Damascus was occupied by a combined Arab and
British army; a week later Beirut was taken; and on October 25, Aleppo,
the most important junction point on the Bagdad Railway, capitulated.
Five days afterward, Turkey gave up the hopeless fight by signing the
Mudros armistice, terminating hostilities.[33]

Thus ended a Great Adventure for both Turkey and Germany. Germany
lost all hope of retaining any economic or political influence in the
Ottoman Empire; the dream of Berlin-to-Bagdad became a nightmare.
Turkey faced dismemberment. “The Bagdad Railway had proved to be the
backbone of Turkish utility and power in the War. Were it not for
its existence, the Ottoman resistance in Mesopotamia and in Syria
could have been discounted as a practical consideration in the War,
and the sending of Turkish reënforcements to the Caucasus would have
been even more materially delayed than was in fact the case.”[34]
For Turkey, then, the war had come at a most inappropriate time. Had
hostilities begun ten years later, after the completion of the Bagdad
system, military operations in the Near East might have had an entirely
different result. As it was, the Bagdad Railway—and the international
complications arising from it—proved to be the ruination of the Ottoman
Empire.


TO THE VICTORS BELONG THE SPOILS

During 1919, the Allied Governments set about possessing themselves of
the spoils which were theirs by virtue of the secret treaties and by
right of conquest. In April, Italian troops occupied Adalia and rapidly
extended their lines into the interior as far as Konia. In November,
French armies replaced the British forces in Syria and Cilicia. Great
Britain began the “pacification” of the tribesmen of Mesopotamia and
Kurdistan. And in the meantime there was plentiful evidence that German
rights in the Near East would be speedily liquidated in the interest
of the victorious Powers. For example, on March 26, the Interallied
Commission on Ports, Waterways, and Railways announced at Paris the
adoption of “a new transportation agreement designed to secure a route
to the Orient by railway without passing through the territories of
the Central Empires.” Accordingly, a fast train, the “Simplon-Orient
Express,” was to be run regularly from Calais to Constantinople _via_
Paris, Lausanne, Milan, Venice, Trieste, Agram, and Vinkovce. Later
this service was to be extended into Asiatic Turkey, over the lines of
the Anatolian, Bagdad, and Syrian railways. To meet a changed situation
one must provide new paths of imperial expansion, and the French press
spoke glowingly of the prospect that the slogans “Hamburg to the
Persian Gulf” and “Berlin to Bagdad” would be speedily replaced by
“Calais to Cairo” and “Bordeaux to Bagdad”![35]

All German rights in the Bagdad Railway and other economic enterprises
in the Near East were abrogated by the Treaty of Versailles, signed
June 28, 1919. The German Government was obligated to obtain and to
turn over to the Reparation Commission “any rights and interests of
German nationals in any public utility undertaking or in any concession
operating in ... Turkey, Austria, Hungary, and Bulgaria” and agreed, as
well, “to recognize and accept all arrangements which the Allied and
Associated Powers may make with Turkey and Bulgaria with reference to
any rights, interests and privileges whatever which might be claimed by
Germany or her nationals in Turkey and Bulgaria.”[36]

The Treaty of Sèvres, August 10, 1920—together with the accompanying
secret Tripartite Agreement of the same date between Great Britain,
France, and Italy—carried still further the liquidation of German
interests in the Near East. The Turkish Government was required to
dispose of all property rights in Turkey of Germany, Austria, Hungary,
Bulgaria, or their respective nationals and to turn over the proceeds
of all purchases and sales to the Reparation Commission established
under the treaties of peace with those Powers. The Anatolian and
Bagdad Railways were to be expropriated by Turkey and all of their
rights, privileges, and properties to be assigned—at a valuation to be
determined by an arbitrator appointed by the Council of the League of
Nations—to a Franco-British-Italian corporation to be designated by the
representatives of the Allied Powers. German stockholders were to be
compensated for their holdings, but the amount of their compensation
was to be turned over to the Reparation Commission; compensation due
the Turkish Government was to be assigned to the Allied Governments
toward the costs of maintaining their armies of occupation on Turkish
soil. German and Turkish property in ceded territories of the Ottoman
Empire was to be similarly liquidated. The Treaty of Versailles and the
Treaty of Sèvres left hardly a vestige of German influence in the Near
East.[37]

The Sèvres settlement, furthermore, destroyed the Ottoman Empire
and sought to give the Allies a stranglehold upon the economic life
of Turkey. Great Britain and France received essentially the same
territorial privileges as they had laid out for themselves in the
Sykes-Picot Treaty, with the vague restrictions that they should
exercise in Mesopotamia and Palestine and in Syria and Cilicia
respectively only the rights of mandatory powers. Great Britain was
confirmed in her oil and navigation concessions in Mesopotamia, France
in her railway rights in Syria; in addition, the Hedjaz Railway was
turned over outright to their joint ownership and administration. Italy
received only a “sphere of influence” in southern Anatolia, including
the port of Adalia, but, as a consequence of one of the most sordid of
the transactions of the Paris Conference, she was deprived of the bulk
of the privileges guaranteed her under the Treaty of London and the St.
Jean de Maurienne Agreement.[38] Greece was installed in Smyrna—the
most important harbor in Asia Minor, a harbor the control of which was
vital to the peasantry of Anatolia for the free export of their produce
and for the unimpeded importation of farm machinery and other wares of
western industry. Constantinople was put under the jurisdiction of an
international commission for control of the Straits, and the balance
of the former Russian sphere of interest was assigned to the ill-fated
Armenian Republic. The Hedjaz was declared to be an independent Arab
state. The Ottoman Empire was no more.

Even the Turkey that remained—a portion of Anatolia—enjoyed sovereignty
in name only. The Capitulations, which the Sultan had terminated in
the autumn of 1914, were reëstablished and extended. Concessions to
Allied nationals were confirmed in all the rights which they enjoyed
before Ottoman entry into the Great War. Because of the reparations,
and because of the high cost of the Allied armies of occupation, the
country was being loaded down with a still further burden of debt from
which there appeared to be no escape—and debts not only mortgaged
Turkish revenues but impaired Turkish administrative integrity. To
assure prompt payment of both old and new financial obligations of
the Turkish Government, an Interallied Financial Commission was
superimposed upon the Ottoman Public Debt Administration. The Financial
Commission had full supervision over taxation, customs, loans, and
currency; exercised final control over the Turkish budget; and had
the right to veto any proposed concession. In control of its domestic
affairs the new Turkey was tied hand and foot. Here, indeed, was a
Carthaginian peace! And all of this was done in order “to help Turkey,
to develop her resources, and to avoid the international rivalries
which have obstructed these objects in the past!”[39]


“THE OTTOMAN EMPIRE IS DEAD. LONG LIVE TURKEY!”

In the meantime, however, while the Sèvres Treaty was still in
the making, there was a small handful of Turkish patriots who were
determined at all costs to win that complete independence for which
Turkey had entered the war. These Nationalists were outraged by the
Greek occupation of Smyrna, in May, 1919, which they considered a
forecast of the kind of peace to be dictated to Turkey. During the
summer of 1919 they held two conferences at Erzerum and Sivas and
agreed to reject any treaty which handed over Turkish populations to
foreign domination, which would reduce Turkey to economic servitude
to the victorious Powers, or which would impair the sovereignty of
their country. Upon this program they won a sweeping victory in the
parliamentary elections of 1919–1920. For leadership they depended
largely upon that brilliant soldier and staunch Turk, Mustapha Kemal
Pasha, who had distinguished himself by his quarrel with Liman von
Sanders at the Dardanelles and his defiance of von Falkenhayn in Syria.
Mustapha Kemal Pasha, who had bitterly contested the growth of German
influence in Turkey during the war, was not likely to accept without a
struggle the extension of Allied control over Turkish affairs.[40]

In Constantinople, January 28, 1920, the Nationalist members of the
Turkish Parliament signed the celebrated “National Pact”—frequently
referred to as a Declaration of Independence of the New Turkey. “The
Pact was something more than a statement of war-aims or a party
programme. It was the first adequate expression of a sentiment which
had been growing up in the minds of Western-educated Turks for three
or four generations, which in a half-conscious way had inspired the
reforms of the Revolution of 1908, and which may dominate Turkey and
influence the rest of the Middle East for many generations to come.
It was an emphatic adoption of the Western national idea.”[41] It
was based upon principles which had received wide acceptance among
peoples of the Allied nations during the war: self-determination of
peoples, to be expressed by plebiscite; protection of the rights of
minorities, but no further limitations of national sovereignty. As
regards the Capitulations and the Ottoman Public Debt Administration,
the Pact is explicit: “With a view to assuring our national and
economic development,” it reads, “and with the end of securing to the
country a more regular and more modern administration, the signatories
of the present pact consider the possession of complete independence
and liberty as the _sine qua non_ of our national existence. In
consequence, we oppose all juridical or financial restrictions of any
nature which would arrest our national development.” Rather that Turkey
should die free than live in slavery! Foreswearing any intention of
recovering the Sultan’s former Arab possessions, the Pact proceeded to
serve notice, however, that Cilicia, Mosul, and the Turkish portions
of Thrace must be reunited with the fatherland. “The Ottoman Empire is
dead! Long live Turkey!”[42]

With this amazing program Mustapha Kemal Pasha undertook to liberate
Turkey. In April, 1920, the government of the Grand National Assembly
was instituted in Angora and proceeded to administer those portions of
Anatolia which were not under Allied or Greek occupation. The proposed
Treaty of Sèvres—which was handed to the Turkish delegates at Paris
on May 11—was condemned as inconsistent with the legitimate national
aspirations of the Turkish people. The Allies and the Constantinople
Government were denounced—the former as invaders of the sacred soil of
Turkey, the latter as tools of European imperialists. Then followed
a series of successful military campaigns: by October, 1920, the
French position in Cilicia had been rendered untenable, the Armenian
Republic had been obliterated, the British forces of occupation had
been forced back into the Ismid peninsula, and the Italians had
withdrawn their troops to Adalia. In the spring of 1921 separate
treaties were negotiated with Russia, Italy, and France, providing for
a cessation of military operations and for the evacuation of certain
Turkish territories.[43] Then came the long, bitter struggle against
the Greeks, terminating with the Mudania armistice of October 10,
1922, which assured to the Turks the return of Smyrna and portions
of Thrace. On November 1, the Sultanate was abolished, and Turkey
became a republic. Four days later the Turkish Nationalists entered
Constantinople in triumph. The struggle for the territorial and
administrative integrity of a New Turkey seemed to be won.

The victory of the Nationalists scrapped the Treaty of Sèvres and
called for a complete readjustment of the Near Eastern situation. When
the first Lausanne Conference for Peace in the Near East assembled
on November 20, 1922, there were high hopes that a just and lasting
settlement might be arrived at. The conference was only a few days old,
however, when the time-honored obstacles to peace in the Levant made
their appearance: the rival diplomatic policies of the Great Powers;
the desire of the West, by means of the Capitulations, to maintain a
firm hold upon its vested interests in the East; the imperialistic
struggle of rival concessionaires, supported by their respective
governments, for possession of the raw materials, the markets, and the
communications of Asiatic Turkey. Once more the Bagdad Railway, with
its tributary lines in Anatolia and Syria, became one of the stakes of
diplomacy!


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] C. J. H. Hayes, _A Brief History of the Great War_ (New York,
1920), pp. 71–72; “A Rival to the Bagdad Line,” in _The Near East_, May
25, 1917.

[2] _Supra_, Chapter V.

[3] Regarding the diplomatic situation at Constantinople during the
critical months of July to November, 1914, _cf._ “Correspondence
respecting events leading to the rupture of relations with Turkey,”
_Parliamentary Papers_, No. Cd. 7628 (1914); C. Mehrmann, _Der
diplomatische Krieg in Vorderasien_ (Dresden, 1916); J. Aulneau,
_La Turquie et la Guerre_ (Paris, 1916); C. Strupp, _Diplomatische
Aktenstücke zur orientalischen Frage_ (Berlin, 1916); Historicus,
“Origines de l’alliance turco-germanique,” in _Revue_, 7 series, Volume
III (Paris, 1915), pp. 267 _et seq._; Ostrorog, _op. cit._, Chapters
XII-XVI; footnote 40, Chapter X, _supra_.

[4] Quoted from _Current History_, Volume I (New York, 1915), p. 1032.

[5] _Die deutsch-türkische Waffenbrüderschaft_, p. 30.

[6] Notably Dr. Ernst Jäckh and Dr. Hugo Grothe.

[7] The following list of books is given without any pretence that it
is a complete bibliography of German publications on the Near Eastern
question during the year 1914–1915: A. Ritter, _Berlin-Bagdad, neue
Ziele mitteleuropäischer Politik_ (Munich, 1915) and _Nordkap-Bagdad,
das politische Programm des Krieges_ (Frankfort a. M., 1914); Hugo
Grothe, _Die Türken und ihre gegnerkriegsgeographische Betrachtungen_
(Frankfurt a. M., 1915), _Deutsch-türkische wirtschaftliche
Interessengemeinschaft_ (Munich, 1915), and _Deutschland, die Türkei
und der Islam_ (Leipzig, 1915); C. A. Schäfer, _Deutsch-türkische
Freundschaft_ (Stuttgart, 1915); Carl H. Becker, _Deutschland und
der Islam_ (Leipzig, 1914); J. Ritter von Riba, _Der türkische
Bundesgenosse_ (Berlin, 1915); J. Hall, _Der Islam und die
abendländische Kultur_ (Weimar, 1915); Ernst Marré, _Die Türken und
wir nach dem Kriege_ (Leipzig, 1916); Tekin Alp, _Türkismus und
Pantürkismus_ (Weimar, 1915); R. Schäfer, _Der deutsche Krieg, die
Türkei, Islam und Christentum_ (Leipzig, 1915); W. T. Vela, _Die
Zukunft der Türkei in Bundnis mit Deutschland_ (Berlin, 1915); W.
Blanckenburg, _Die Zukunftsarbeit der deutschen Schule in der Türkei_
(Berlin, 1915); H. Schmidt, _Das Eisenbahnwesen in der asiatischen
Türkei_ (Berlin, 1914); H. Margulies, _Der Kampf zwischen Bagdad
und Suez in Altertums_ (Weimar, 1915); M. Horten, _Die islamische
Geisteskultur_ (Leipzig, 1915); Fritz Regel, _Die deutsche Forschung
in türkische Vordasien_ (Leipzig, 1915); M. Roloff, _Arabien und seine
Bedeutung für die Erstärkung des Osmanenreiches_ (Leipzig, 1915);
A. Paquet, _Die jüdische Kolonien in Palästina_ (Weimar, 1915); C.
Nawratzki, _Die jüdische Kolonisation Palästinas_ (Munich, 1914); D.
Trietsch, _Die Juden der Türkei_ (Leipzig, 1915). Two notable magazine
articles are: R. Hennig, “Der verkehrsgeographische Wert des Suez- und
des Bagdad-Weges,” in _Geographische Zeitschrift_, 1916, pp. 649–656;
A. Tschawisch, “Der Islam und Deutschland—Wie soll man sich die Zukunft
des Islams denken?”, in _Deutsche Revue_, 1915, Volume III, pp. 249 _et
seq._

[8] See advertisements regarding the society and its work in a series
of pamphlets _Länder und Völker der Turkei_, edited by Dr. Hugo Grothe
(Leipzig, 1915, _et seq._), and descriptions of similar organizations
in a series _Orientbücherei_, edited by Dr. Ernst Jäckh (Stuttgart and
Berlin, 1914, _et seq._).

[9] “Report of the Commission Appointed by Act of Parliament to Enquire
into the Operations of War in Mesopotamia,” _Parliamentary Papers_,
1917, No. Cd. 8610.

[10] W. S. Churchill, _The World Crisis, 1910–1915_ (New York, 1923),
pp. 529–535; A. MacCallum Scott, _Winston Churchill in Peace and War_
(London, 1916), Chapter X.

[11] C. C. Repington, _The First World War, 1914–1918_ (2 volumes,
London, 1920), Volume I, pp. 42, 51, etc. _ad lib._; Churchill, _op.
cit._, pp. 537–538.

[12] The italics are mine. The proposed debarkation of troops,
however, was certain to involve a breach of Persian neutrality. _Cf._
_Parliamentary Papers_, 1917, No. Cd. 8610.

[13] _Ibid._ Regarding the Franco-German agreement of February 15,
1914, _cf._ _supra_, pp. 246–250.

[14] The text of the agreement between England, France and Russia
regarding the disposition of Constantinople and other portions of
Turkey is to be found in _Full Texts of the Secret Treaties as Revealed
at Petrograd_ (New York, _The Evening Post_, 1918); _cf._, also, R. S.
Baker, _Woodrow Wilson and World Settlement_ (3 volumes, Garden City,
1922), Volume I, Chapter III. The text of the Treaty of London between
Italy and the Allies is to be found in _Parliamentary Papers_, 1920,
No. Cmd. 671, Miscellaneous No. 7.

[15] The best single work on military operations in Turkey during the
Great War is Edmund Dane’s _British Campaigns in the Nearer East,
1914–1918_ (2 volumes, London, 1919). Regarding the Caucasus campaigns
of 1914–1915 _cf._ M. P. Price, _War and Revolution in Asiatic Russia_
(London, 1918), Chapter I; R. Machray, “The Campaign in the Caucasus,”
in the _Fortnightly Review_, Volume 97 (1915), pp. 458–471. Excellent
accounts of the first Turkish offensive against the Suez Canal are to
be found in G. Douin, _Un épisode de la guerre mondiale: l’attaque
du canal de Suez, 3 Fevrier, 1915_ (Paris, 1922); C. Stiénon, “Sur
le chemin de fer de Bagdad,” in _Revue des deux mondes_, 6 series,
Volume 5 (1916), pp. 148–174; T. Wiegand, _Sinai_ (Berlin, 1920); N.
Moutran, _La Syrie de demain: France et Syrie_ (Paris, 1916); R.
Hennig, _Der Kampf um den Suezkanal_ (Stuttgart, 1915); E. Serman,
_Mit den Türken an der Front_ (Berlin, 1915); J. Walther, _Zum Kampf
in der Wüste am Sinai und Nil_ (Leipzig, 1916); P. Schweder, _Im
türkischen Hauptquartier_ (Leipzig, 1916); _Eine Geschichte der Türkei
im Weltkriege_ (Munich, 1919). For the Mesopotamian expedition of
1914–1915 consult _Despatches Regarding Operations in the Persian
Gulf and Mesopotamia_ (London, the War Office, 1915); G. M. Chesney,
“The Mesopotamian Breakdown,” in the _Fortnightly Review_, Volume
102 (1917), pp. 247–256; H. B. Reynardson, _Mesopotamia, 1914–1915_
(London, 1919); C. H. Barber, _Besieged in Kut and After_ (Edinburgh,
1917). Of the great quantity of material available on the Dardanelles
campaign, _cf._, in particular, the following: _Gallipoli: der Kampf um
den Orient, von einem Offizier aus dem Stab des Marschalls Liman von
Sanders_ (Berlin, 1916); General Sir Ian Hamilton, _Gallipoli Diary_
(London, 1920); H. W. Nevinson, _The Dardanelles Campaign_ (London,
1918); S. A. Moseley, _The Truth About the Dardanelles_ (London, 1916);
John Masefield, _Gallipoli_ (London, 1916).

[16] _Parliamentary Papers_, 1917, No. Cd. 8610; C. V. F. Townshend,
_My Campaign in Mesopotamia_ (London, 1920).

[17] Regarding renewed German activity and interest in the Near East
after the elimination of Serbia from the war seemed to bring the
_Drang nach Osten_ within the realm of practical politics, _cf._:
R. Zabel, _Im Kampfe um Konstantinopel und die wirtschaftliche Lage
der Türkei während des Weltkrieges_ (Leipzig, 1916); C. H. Müller,
_Die wirtschaftliche Bedeutung der Bagdadbahn_ (Hamburg, 1917); R.
Junge, _Die deutsch-türkischen Wirtschaftsbeziehungen_ (Weimar,
1916); E. Marré, _Die Türken und wir nach dem Kriege: ein praktisches
Wirtschaftsprogramm_ (Berlin, 1916); H. Rohde, _Deutschland in
Vorderasien_ (Berlin, 1916); H. W. Schmidt, _Auskunftsbuch für den
Handel mit der Türkei_ (Leipzig, 1917); E. Mygind, _Anatolien und seine
wirtschaftliche Bedeutung_ (Berlin, 1916); C. V. Bichtligen, “_Die
Bagdadbahn, eine Hochstrasse des Weltverkehrs in ihrer wirtschaftliche
Bedeutung_,” in _Soziale Revue_, 16 year (1916), pp. 1–11, 123–139; F.
C. Endres, _Die Türkei_ (Munich, 1916); A. Philippsohn, _Das türkische
Reich_ (Weimar, 1916); H. Kettner, _Vom Goldenen Tor zum Goldenen
Horn und nach Bagdad_ (Berlin, 1917). For the point of view of Allied
sympathizers, _cf._: E. F. Benson, _Deutschland über Allah_ (London,
1917), and _Crescent and Iron Cross_ (New York, 1918); E. A. Martel,
_L’emprise austro-allemande sur la Turquie et l’Asie Mineure_ (Paris,
1918); H. C. Woods, _The Cradle of the War_ (New York, 1919), and an
article, “The Bagdad Railway in the War,” in the _Fortnightly Review_,
Volume 102 (1917), pp. 235–247; J. Thureau, “La pénétration allemande
en Asie Mineure,” in _Revue politique et parlementaire_, Volume 86
(1916), pp. 19–44; R. Lane, “Turkey under Germany’s Tutelage,” in
_Unpopular Review_, Volume 9 (1918), pp. 328 _et seq._; N. Markovitch,
_Le pangermanisme en Orient_ (Nice, 1916); A. J. Toynbee, _Turkey, a
Past and a Future_ (New York, 1917).

[18] Quoted in _The Near East_, November 12, 1915. For other material
regarding construction of the Bagdad Railway during the war and its
utilization for military purposes, _cf._: _Report of the Bagdad Railway
Company_, 1914, pp. 6–7; 1915, pp. 3–6; _The Engineer_, February 4,
1915; “Transportation in the War—The Railways of Mesopotamia,” in
_Modern Transport_ (London), November, 1919; D. G. Heslop, “The Bagdad
Railway,” in _The Engineer_ (London), November 12 and 26 and December
3 and 17, 1920; “Railways of Mesopotamia,” in the _Railway Gazette_
(London), War Transportation Number, September 21, 1920, pp. 129–140;
“Die Bagdadbahn und der Durchschlag des letzten grossen Tunnels,” in
_Asien_, 14 year (1917), pp. 97–101.

[19] Dane, _op. cit._, Volume I, Chapters VIII-XII, inclusive; “The
German-Turkish Expedition Against the Suez Canal in 1916,” in _Journal
of the United Service Institution_, Volume 65 (London, 1920), pp.
353–357.

[20] Hayes, _op. cit._, pp. 142–143.

[21] Quoted from the official text as given in E. E. Robinson and V.
J. West, _The Foreign Policy of Woodrow Wilson, 1913–1917_ (New York,
1917), pp. 403–405.

[22] _The New York Times_, November 13, 1917.

[23] _Supra_, p. 285.

[24] Baker, _op. cit._, Volume I, Chapter IV, contains an excellent
account of the inter-Allied negotiations of 1916–1917 regarding Asiatic
Turkey, based upon the private papers of Woodrow Wilson. _Cf._, also,
_Full Texts of the Secret Treaties as Revealed at Petrograd_.

[25] The Treaty provided that the Bagdad Railway should not be extended
southward from Mosul or northward from Samarra without the express
consent of both France and Great Britain and in no case before the
construction of a railway from Bagdad to Aleppo _via_ the Euphrates
Valley—the purpose being, as far as possible, to develop southern
Mesopotamia and the Syrian coast rather than Kurdistan. By a subsequent
agreement of December, 1918, between Messrs. Lloyd George and
Clémenceau, Mosul was transferred to Great Britain.

[26] W. L. Westermann, “The Armenian Problem and the Disruption of
Turkey,” in _What Really Happened at Paris—The Story of the Peace
Conference, 1918–1919, by American Delegates_, edited by E. M. House
and C. Seymour (New York, 1921), pp. 176–203. _Cf._ p. 183.

[27] The text of the Sykes-Picot Treaty was first published by _The
Manchester Guardian_, January 8, 1920, and was reprinted in _Current
History_, Volume XI (1920), pp. 339–341. _Cf._, also, Bowman, _The New
World_, pp. 100–104; Baker, _op. cit._, pp. 67–69.

[28] Baker, _op. cit._, pp. 68–70. The negotiations concerning the St.
Jean de Maurienne Agreement extended from the autumn of 1916 to August,
1917. The agreement appears to have been negotiated with the Italians
by Mr. Lloyd George, in April, 1917, while Mr. Balfour was in America
with the British Mission. It was amended in August, as a result of the
insistence of the Italians that they had not received an adequate share
of the spoils.

[29] President Wilson’s address to a joint session of the Congress of
the United States, January 8, 1918, setting forth the famous Fourteen
Points of a durable peace. Quoted from James Brown Scott, _President
Wilson’s Foreign Policy_ (New York, 1918), pp. 354–363.

[30] Regarding General Maude’s brilliant campaign in Mesopotamia,
_cf._: Dane, _op. cit._, Volume II, Chapters II, III, XII; E. F. Eagan,
_The War in the Cradle of the World_ (London, 1918); Kermit Roosevelt,
_War in the Garden of Eden_ (New York, 1919); Sir Charles Collwell,
_Life of Sir Stanley Maude_ (London, 1920); E. Betts, _The Bagging of
Bagdad_ (London, 1920); E. Candler, _The Long Road to Bagdad_ (London,
1920); C. Cato (pseudonym), _The Navy in Mesopotamia_ (London, 1917);
F. Maurice, “The Mesopotamian Campaign,” in _Asia_, Volume 18 (New
York, 1918), pp. 933–936.

[31] British intrenchment in Mesopotamia, 1917–1920, is described in
the following: “Review of the Civil Administration of Mesopotamia,”
_Parliamentary Papers_, No. Cmd. 1061 (1920); R. Thomas, _Report on
Cotton Experimental Work in Mesopotamia_ (Bagdad, 1919); “Cotton
Growing in Mesopotamia,” _Bulletin of the Imperial Institute_, Volume
18 (London, 1920), pp. 73–82; _Mesopotamia as a Country for Future
Development_ (Cairo, Ministry of Public Works, 1919); “Transportation
and Irrigation in Mesopotamia,” _Commerce Reports_, No. 50 (Washington,
1919), pp. 948–954; Sir H. P. Hewett, _Some Impressions of Mesopotamia_
(London, 1919); C. R. Wimshurst, _The Wheats and Barleys of
Mesopotamia_ (Basra, 1920); _Review of the Civil Administration of
the Occupied Territories of Irak_ (Bagdad, 1918); L. J. Hall, _Inland
Water Transport in Mesopotamia_ (London, 1921); Sir Mark Sykes, _The
Commercial Future of Bagdad_ (London, 1917); “Turkish Rule and British
Administration in Mesopotamia,” in The Quarterly _Review_, Volume 232
(1919), pp. 401 _et seq._; W. Ormsby Gore, “The Organization of British
Responsibilities in the Middle East,” in _Journal of the Central Asian
Society_, Volume 7 (1920), pp. 83–105; I. A. Shah, “The Colonization
of Mesopotamia,” in _United Service Magazine_, Volume 179 (1919), pp.
350 _et seq._

[32] Townshend, _op. cit._, pp. 375 _et seq._; Djemal Pasha, _op.
cit._, Chapter VII; _Current History_, Volume XII (1920), pp. 117–118;
A. D. C. Russell, _loc. cit._, pp. 325 _et seq._; F. C. Endres, _Der
Weltkrieg der Türkei_ (Berlin, 1919).

[33] Regarding General Allenby’s campaigns in Palestine and Syria,
see: H. Pirie-Gordon, _A Brief Record of the Advance of the Egyptian
Expeditionary Force_ (London, 1919); W. T. Massey, _Allenby’s Final
Triumph_ (London, 1920); C. C. R. Murphy, _Soldiers of the Prophet_
(London, 1921); H. O. Lock, _The Conquerors of Palestine Through Forty
Centuries_ (New York, 1921); R. E. C. Adams, _The Modern Crusaders_
(London, 1920); H. Dinning, _Nile to Aleppo: With the Light Horse in
the Near East_ (London, 1920); P. E. White, _The Disintegration of the
Turkish Empire_ (London, 1920); C. T. Atkinson, “General Liman von
Sanders and His Experiences in Palestine,” _Army Quarterly_, Volume 3
(London, 1922), pp. 257–275; A. Aaronsohn, _Mit der türkischen Armee in
Palästina_ (Berne, 1918); J. Bourelly, _Campagne d’Égypte et de Syrie
contre les Turcs_ (Paris, 1919); G. Gautherot, _La France en Syrie
et en Cilicie_ (Paris, 1920); C. Stiénon, _Les campagnes d’Orient et
les intérêts de l’entente_ (Paris, 1918), and _La défense de l’Orient
et le rôle de l’Angleterre_ (Paris, 1918); A. Mandelstamm, _Le sort
de l’Empire Ottoman_ (Paris, 1917); G. A. Schreiner, _From Berlin to
Bagdad: Behind the Scenes in the Near East_ (New York, 1918).

[34] H. Charles Woods, _The Cradle of the War_, p. 271.

[35] See a suggestive article by Hilaire Belloc, “Europe’s New Paths
of Empire,” in _Our World_ (New York), October, 1922, pp. 41–46; _The
Evening Post_ (New York), January 3 and March 27, 1919.

[36] _The Treaty of Peace with Germany_, Articles 155, 258, 260, 261,
297.

[37] “Treaty of Peace with Turkey, Signed at Sèvres August 10, 1920,”
_Parliamentary Papers_, No. Cmd. 964, Treaty Series No. 11, 1920;
“Tripartite Agreement Between the British Empire, France, and Italy,
Respecting Anatolia, Signed at Sèvres, August 10, 1920,” _Parliamentary
Papers_, No. Cmd. 963, Treaty Series No. 12, 1920. An official summary
of the Sèvres treaty was published in _The Nation_ (New York),
International Relations Section, Volume 111 (1920), pp. 21–28, and
in _Current History_, Volume XIII (1921), pp. 164–184. An excellent
discussion of the main provisions of the treaty and its probable
effects is to be found in Bowman’s _The New World_, Chapters XXIV and
XXVI.

[38] Regarding the negotiations at the Paris Conference by which the
claims of Italy were disregarded in favor of those of Greece, _cf._
Baker, _op. cit._, Volume II, Chapter XXXII, and Volume III, Documents
Nos. 1, 31–41.

[39] Preamble to the Tripartite Agreement of August 10, 1920.

[40] Regarding the Turkish Nationalist movement, see: Major General
James G. Harbord, “Mustapha Kemal Pasha and His Party,” in the
_World’s Work_, Volume 36 (London, 1920), pp. 470–482; M. Paillarès
_La kémalisme devant les Alliés_ (Paris, 1922); “The Recovery of the
Sick Man of Europe,” an excellent review, with a colored map, in the
_Literary Digest_, November 11, 1922, pp. 17 _et seq._; M. K. Zia Bey,
“How the Turks Feel,” in _Asia_, Volume XXII (1922), pp. 857 _et seq._,
and “The New Turkish Democracy,” in _The Nation_, Volume 115 (New
York, 1922), pp. 546–548; Major General Sir Charles Townshend, “Great
Britain and the Turks,” in _Asia_, Volume XXII (1922), pp. 949–953;
Clair Price, “Mustapha Kemal and the Angora Government,” in _Current
History_, Volume XVI (1922), pp. 790–800; Ludwell Denny, “The Turk
Comes Back,” in _The Nation_, Volume 115 (1922), pp. 575–577; “The New
Epoch in Turkey,” in the _Muslim Standard_ (London), November 9, 1922.

[41] A. J. Toynbee, _The Western Question in Greece and Turkey: A Study
in the Contact of Civilizations_ (New York, 1922), p. 190. Professor
Toynbee’s book is the most noteworthy of recent contributions to the
history of Turkey since the Great War.

[42] The text of the National Pact, as translated from the French,
is to be found in _The Nation_, Volume 115 (1922), pp. 447–448, in
_Current History_, Volume XVII (1922), pp. 280–281, and in Toynbee,
_op. cit._, pp. 207–211 (in both French and English).

[43] _Infra._, pp. 316–317, 323–324.




CHAPTER XII

THE STRUGGLE FOR THE BAGDAD RAILWAY IS RESUMED


GERMANY IS ELIMINATED AND RUSSIA WITHDRAWS

The Great War has completely destroyed German influence in the Near
East. In the way of any resumption of German enterprise in Turkey
are formidable obstacles which are not likely to be removed for some
time. To begin with, the Turks themselves will not encourage German
attempts to recover the Bagdad Railway or other property rights which
were liquidated by the Treaty of Versailles. Among Turkish Nationalists
there is satisfaction that Turkey has “shaken off the yoke of the
ambitious leaders who dragged the country into the general war on the
side of Germany” and has got rid of the “arrogance” of the Germans who
infested the Near East during the last years of the war. Resentment at
German military domination of Turkey during 1917 and 1918 will not soon
disappear.[1]

Furthermore, Germany possesses neither the disposition nor the power
to regain her former preëminence in the Near East. The confiscation by
the Treaty of Versailles of private property in foreign investments
has set a precedent which will make German investors—as well as
prudent investors everywhere—extremely chary of utilizing their funds
for the promotion of such enterprises as the Bagdad Railway. The
surplus production and surplus capital of Germany may be absorbed
by reparations payments or attracted to such enterprises as the
reconstruction of the German merchant marine. But the _Drang nach
Osten_ has become a thing of the past. The dismemberment of the
Austrian Empire and the erection of the Jugoslav Kingdom have shut
off German access, through friendly states, to the Balkan Peninsula
and Asiatic Turkey. Formidable customs barriers will stand in the way
of overland trade with the Near East and render railway traffic from
“Berlin to Bagdad” unprofitable. Defeat and disarmament have destroyed
German prestige in the Moslem world. Democratization of both Germany
and Turkey, it is hoped, will render increasingly difficult the kind of
secret intrigue that characterized Turco-German relations during the
régime of William II and of Abdul Hamid. If Germany returns to the Near
East in the next generation or two, it is not likely to be in the rôle
of an Imperial Germany promoting railway enterprises of great economic
and strategic importance.

Russian diplomatic policy toward Turkey has likewise undergone
important changes. Imperial Russia had been a bitter opponent of
Imperial Germany in the Bagdad Railway project. Imperial Russia had
conspired with Great Britain and France to bring about the collapse
and dismemberment of the Ottoman Empire. Imperial Russia was the
“traditional enemy” of the Turk. But Imperial Russia was destroyed
in 1917 by military defeat and social revolution. Regardless of the
pronunciamentos of bourgeois imperialists like Professor Milyukov,
revolutionary Russia was certain to look upon the Near Eastern question
in a new light. Political and economic disorganization incidental
to the war and the revolution would have made it imperative for any
government in Russia to curtail its imperialistic pretensions. And with
the advent of Bolshevism the outcome was certain. A government which
was anti-capitalist and anti-imperialist could not sanction Russian
“spheres of interest” or Russian territorial aggrandizement at the
expense of Turkey. A government which preached “self-determination of
peoples” and “no annexations” could not confirm the secret treaties of
1915–1916. A government which was engaged in repelling foreign invasion
and in resisting counter-revolutionary insurrections had to keep within
strict limits its military liabilities. Therefore, Soviet Russia
speedily foreswore any intention of occupying Constantinople, declared
unreservedly for a free Armenia, and proceeded forthwith to withdraw
its troops from Persia. These measures were considered “a complete
break with the barbarous policy of bourgeois civilization which built
the prosperity of the exploiters among the few chosen nations upon
the enslavement of the laboring population in Asia,” as well as an
expression of Bolshevist Russia’s “inflexible determination to wrest
humanity from the talons of financial capital and imperialism, which
have drenched the earth with blood in this most criminal of wars.”[2]

Turkish Nationalist resistance to the Treaty of Sèvres met with a
sympathetic response on the part of Bolshevist Russia, and on March
16, 1921, the Government of the Grand National Assembly and the
Government of the Russian Socialist Federated Soviet Republic signed
at Moscow a treaty to confirm “the solidarity which unites them in
the struggle against imperialism.” By the terms of this treaty Russia
refused to recognize the validity of the Treaty of Sèvres or of any
other “international acts which are imposed by force.” Russia ceded
to Turkey the territories of Kars and Ardahan, in the Caucasus
region, as a manifestation of full accord with the principles of the
National Pact. The Soviet Republic, “recognizing that the régime of
the capitulations is incompatible with the national development of
Turkey, as well as with the full exercise of its sovereign rights,
considers null and void the exercise in Turkey of all functions and
all rights under the capitulatory régime.” In particular, Russia freed
Turkey “from any financial or other obligations based on international
treaties concluded between Turkey and the Government of the Tsar.”
As regards the construction of railways in Anatolia, the Soviet
Government completely reversed the former policy of Imperial Russia,
which was to oppose all such railways as a strategic menace.[3] It
was now provided that, “with the object of facilitating intercourse
between their respective countries, both Governments agree to take in
concert with each other all measures to develop and maintain within
the shortest possible time, railway, telegraphic, and other means of
communication,” as well as measures “to secure the free and unhampered
traffic of passengers and commodities between the two countries.”
Finally, both countries agreed to stand together in resisting all
foreign interference in their domestic affairs: “Recognizing that the
nationalist movements in the East,” reads the treaty, “are similar
to and in harmony with the struggle of the Russian proletariat to
establish a new social order, the two contracting parties assert
solemnly the rights of these peoples to freedom, independence, and free
choice of the forms of government under which they shall live.”[4]

No more complete disavowal of Russian imperialism could be desired by
the New Turkey. It is by no means certain, however, that Russia will
continue indefinitely to pursue so magnanimous a policy in the Near
East. With the development of her natural resources and the extension
of industrialism, it is not improbable that Russia—in common with
the other Great Powers—will once again feel the urge to imperialism.
Raw materials, markets, the maintenance of unimpeded routes of
commercial communication, and opportunities for profitable investment
of capital are likely to be considered—in the present anarchic state
of international relations—as essential to an industrial state under
working-class government as to an industrial state under bourgeois
administration. If such be the case, Russian economic penetration in
Turkey and Persia may be resumed, and Russian eyes may once more be
cast covetously at Constantinople. “In Mongolia and Tibet, in Persia
and Afghanistan, in Caucasia and at Constantinople, the Russian has
been pressing forward for three hundred years,” writes an eminent
American geographer, “and no system of government can stand that denies
him proper commercial outlets.”[5]

Nevertheless, whatever be the future policy of Russia in the Near East,
for the present the Russian Republic has no economic or strategic
interests which are inconsistent with the national development of the
Turkish people. Certainly Russia has neither the economic nor the
political resources to demand a share in the Bagdad Railway or to seek
for herself other railway concessions in Anatolia. And the Western
Powers are little likely to heed the wishes of the Soviet Government
until such time as those wishes are rendered articulate in a language
the Western Powers understand—the language of power.


FRANCE STEALS A MARCH AND IS ACCOMPANIED BY ITALY

Those who believed that the defeat of Germany and the withdrawal of
Russia would solve all problems of competitive imperialism in the
Near East were destined to be disillusioned. For no sooner was the war
over than France and Great Britain took to pursuing divergent policies
regarding Turkey. The rivalry between these two powers—which had been
terminated for a time by the Entente of 1904—was resumed in all its
former intensity. The Entente, in fact, had been formed because of
common fear of Germany, rather than because of coincidence of colonial
interests; and with that fear removed, the foundation of effective
coöperation had been undermined.[6] The Great War may be said to have
terminated the first episode of the great Bagdad Railway drama—the rise
and fall of German power in the Near East; it opened a second episode,
which promises to be equally portentous—an Anglo-French struggle for
the right of accession to the exalted position which Germany formerly
occupied in the realm of the Turks.

Anglo-French rivalry in the Near East will not be an unprecedented
phenomenon. “Since the Congress of Vienna in 1814, France and Great
Britain have never fought in the Levant with naval and military weapons
(though they have several times been on the verge of open war), but
their struggle has been real and bitter for all that, and though it has
not here gone the length of empire-building, it has not been confined
to trade. Its characteristic fields have been diplomacy and culture,
its entrenchments embassies, consulates, religious missions, and
schools. It has flared up on the Upper Nile, in Egypt, on the Isthmus
of Suez, in Palestine, in the Lebanon, at Mosul, at the Dardanelles,
at Salonica, in Constantinople. The crises of 1839–41 and 1882 over
Egypt and of 1898 over the Egyptian Sudan are landmarks on a road that
has never been smooth, for conflicts [of one sort or another] have
perpetually kept alive the combative instinct in French and English
missionaries, schoolmasters, consuls, diplomatists, civil servants,
ministers of state, and journalists. One cannot understand—or make
allowances for—the post-war relations of the French and British
Governments over the ‘Eastern Question’ unless one realizes this
tradition of rivalry and its accumulated inheritance of suspicion and
resentment. It is a bad mental background for the individuals who have
to represent the two countries. The French are perhaps more affected by
it than the English, because on the whole they have had the worst of
the struggle in the Levant as well as in India, and failure cuts deeper
memories than success.”[7]

French statesmen were dissatisfied with the division of the spoils
of war in the Near East. They had a feeling that here, as elsewhere,
Britain had obtained the lion’s share. They believed that Mr. Lloyd
George had been guilty of sharp practice in his agreement of December,
1918, with M. Clémenceau, by the terms of which Mosul and Palestine
were to be turned over to Great Britain.[8] Frenchmen were suspicious
of British solicitude for the Arabs, which they believed was not based
upon disinterested benevolence; in fact, self-determination for the
Arabs came to be considered a political move to render precarious the
French mandate for Syria. French patriots chafed at British emphasis
upon the fact that “the British had done the fighting in Turkey almost
without French help” and that “there would have been no question of
Syria but for England and the million soldiers the British Empire had
put in the field against the Turks.” French pride was hurt by the
rapid rise of British prestige in a region where France had so many
interests. And prestige—diplomatic, military, religious, cultural,
and economic—has always been an important desideratum in Near Eastern
diplomacy.[9]

French dissatisfaction with the Turkish settlement was one of the
issues of the San Remo Conference of April, 1920, at which were
assigned the mandates for the territories of the former Ottoman Empire.
Exclusive control by Great Britain of the oilfields of the Mosul
district was so vigorously contested that M. Philippe Berthelot, of
the French Foreign Office, and Professor Sir John Cadman, Director
of His Majesty’s Petroleum Department, were instructed to work out
a compromise. Thus came into existence the San Remo Oil Agreement
of April 24, 1920, by which Great Britain, in effect, assigned to
France the former German interest in the Turkish Petroleum Company’s
concession for exploitation of the oilfields in the vilayets of
Mosul and Bagdad.[10] But the British drove a shrewd bargain, for it
was provided, in consideration, that the French Government should
agree, “as soon as application is made, to the construction of two
separate pipe-lines and railways necessary for their construction
and maintenance and for the transport of oil from Mesopotamia and
Persia through French spheres of influence to a port or ports on the
Mediterranean.” The oil thus transported was to be free of all French
taxes.[11]

French imperialists likewise were dissatisfied with the disposition of
the Bagdad Railway as provided for by the unratified Sèvres Treaty.
French bankers had held a thirty per cent interest in the Bagdad
line while it was under German control,[12] and they believed, for
this reason, that they were entitled to a controlling voice in the
enterprise when it should be reorganized by the Allies. Although the
settlement at Sèvres—the Treaty of Peace with Turkey and the Tripartite
Agreement between Great Britain, France, and Italy—recognized the
special interests of France in the Bagdad Railway, and particularly
in the Mersina-Adana branch, it provided, as has been seen, for
international ownership, control, and operation.[13] Now, Frenchmen
were suspicious of internationalization, particularly where British
participation was involved. Had not the condominium in Egypt proved to
be a step in the direction of an eventual British protectorate? Might
not the history of the Suez Canal be repeated in the history of the
Bagdad Railway? Would Great Britain look with any greater equanimity
upon French, than upon German, interests in one of the great highways
to India? To answer these questions was but to increase the French
feeling of insecurity.

French dissatisfaction with the distribution of the spoils in the Near
East and French fear of British imperial power and prestige—these
were factors in a new alignment of the diplomatic forces in Turkey
during 1920–1922. British imperialists were desirous of keeping Turkey
weak. A weak Turkey could never again menace Britain’s communications
in the Persian Gulf and at Suez; a weak Turkey could be of no moral
or material assistance to restless Moslems in Egypt and India. To
keep Turkey weak the Treaty of Sèvres had loaded down the Ottoman
Treasury with an enormous burden of reparations and occupation costs
(to which France could not object without repudiating the principle
of reparations); had taken away Turkish administration of Smyrna
and Constantinople, the two ports essential to the commercial life
of Anatolia; and had made possible a Greek war of devastation and
extermination in the homeland of the Turks. France, on the other
hand, would have preferred to see Turkey reasonably strong. A strong,
prosperous Turkey would the more readily pay off its pre-War debt,
of which French investors held approximately sixty per cent; payment
of this debt was more important to France than payment of Turkish
reparations. A strong Turkey, furthermore, might fortify the French
position in the Near East. As Germany had utilized Ottoman strength
against Russia and Great Britain, so France might utilize Nationalist
Turkey against a Bolshevist Russia which would not pay its debts or an
imperial Britain which might prove unfaithful to the Entente.[14]

Anglo-French differences in the Near East were brought to a head by
the rapid rise of the military power of the Angora Government, for
it was against France that Mustapha Kemal’s troops launched their
principal early attacks. General Gouraud—his hands tied by an Arab
rebellion which had necessitated a considerable extension of his
lines in Syria—was unable to repulse the Turkish invasion of Cilicia,
which reached really serious proportions in the autumn of 1920. Time
and again French units were defeated and French garrisons massacred
by the victorious Nationalists. In these circumstances, France “had
to choose between the two following alternatives: either to maintain
her effectives and to continue the war in Cilicia, or to negotiate
with the _de facto_ authority which was in command of the Turkish
troops in that region.” The French armies in Syria and Cilicia already
numbered more than 100,000 men; to reënforce them would have been to
flout the opinion of the nation and the Chamber, “which had vigorously
expressed their determination to put an end to cruel bloodshed and
to expenditure which it was particularly difficult to bear.” To
negotiate with Mustapha Kemal was, to all intents and purposes, to
scrap the unratified Treaty of Sèvres. The French Government chose
the latter alternative. It is said that during the London Conference
of February-March, 1921, “M. Briand declared to Mr. Lloyd George on
several occasions, without the British Prime Minister making the
slightest observation, that he would not leave England without having
concluded an agreement with the Angora delegation. M. Briand pointed
out that neither the Chamber nor French public opinion would agree to
the prolongation of hostilities, involving as they did losses which
were both heavy and useless.”[15]

Accordingly, on March 9, 1921, there was signed at London a
Franco-Turkish agreement terminating hostilities in Cilicia. The
Turkish Nationalists recognized the special religious and cultural
interests of France in Turkey and granted priority to French
capitalists in the awarding of concessions in Cilicia and southern
Armenia. French interests in the Bagdad Railway were confirmed. In
return, France was to evacuate Cilicia, to readjust the boundary
between Turkey and Syria, and to adopt a more friendly attitude toward
the Government of the Grand National Assembly.[16]

The Italian Government was only too glad to have so excellent an excuse
for throwing over the Treaty of Sèvres, which had thoroughly frustrated
Italian hopes in Asia Minor to the advantage of Greece. Italian troops,
furthermore, had been driven out of Konia and were finding their hold
in Adalia increasingly precarious; the Italian Government had neither
the disposition nor the resources to wage war. Therefore, on March
13, 1921, the Italian and Turkish ministers of foreign affairs signed
at London a separate treaty, providing for “economic collaboration”
between Turkey and Italy in the hinterland of Adalia, including part
of the sanjaks of Konia, Aidin, and Afiun Karahissar, as well as for
the award to an Italian group of the concession for the Heraclea coal
mines.[17] The Royal Italian Government pledged itself to “support
effectively all the demands of the Turkish delegation relative to the
peace treaty,” more especially the demands of Turkey for complete
sovereignty and for the restitution of Thrace and Smyrna. Italian
troops were to be withdrawn from Ottoman soil.[18]

During the summer of 1921 further negotiations were conducted between
France and Turkey for the purpose of elaborating and confirming their
March agreement. The outcome was the so-called Angora Treaty, signed
October 20, 1921, by M. Henri Franklin-Bouillon, a special agent of the
French Government, and Yussuf Kemal Bey, Minister of Foreign Affairs
in the Government of the Grand National Assembly. This treaty formally
brought to an end the state of war between the two countries, provided
for the repatriation of all prisoners, defined new boundaries between
Turkey and Syria, and awarded valuable economic privileges to French
capitalists. It obligated the French Government “to make every effort
to settle in a spirit of cordial agreement all questions relating to
the independence and sovereignty of Turkey.”[19]

The Bagdad Railway was given a great deal of consideration in the
Angora Treaty. The Turks wanted possession of the line because of its
great political and strategic value; French capitalists sought full
recognition of their previous investments in the railway, together with
a controlling interest in its operation. A solution was reached which
fully satisfied both Turkish Nationalists and French imperialists.
The Turco-Syrian boundary was so “rectified” that the Bagdad Railway
from Haidar Pasha to Nisibin was to lie within Turkish territory,
whereas formerly the sections from the Cilician Gates to Nisibin lay
within the French mandate for Cilicia and Syria.[20] In return for
these territorial readjustments the Turkish Government assigned to a
French group (to be nominated by the French Government) the _Deutsche
Bank’s_ concession for those sections of the railway, including
branches, between Bozanti and Nisibin, “together with all the rights,
privileges, and advantages attached to that concession.” The Government
of the Grand National Assembly, furthermore, declared itself “ready
to examine in the most favorable spirit all other desires that may
be expressed by French groups relative to mine, railway, harbor and
river concessions, on condition that such desires shall conform to
the reciprocal interest of Turkey and France.” In particular, the
Turkish Government agreed to take under advisement the award to French
capitalists of concessions for the exploitation of the Arghana copper
mines and for the development of cotton-growing in Cilicia.[21]

Thus France sought to make herself heir to the former German estate in
Asiatic Turkey. Her capitalists became the recipients of the kilometric
guarantee for which German concessionaires had been so freely
criticized. And in some respects the conditions of French tenancy were
questionable. The old Bagdad Railway concession had prohibited the
Germans, under any and all circumstances to grant discriminatory rates
or service to any passenger or shipper.[22] The conditions of French
control of the line, however, recognized only a limited application of
the principle of the “open door”: “Over this section and its branches,”
reads Article 10 of the Angora Treaty, “no preferential tariff shall
be established _in principle_. Each Government, however, _reserves the
right to study in concert with the other any exception to this rule
which may become necessary. In case agreement proves impossible, each
party will be free to act as he thinks best._”[23]

During the spring of 1922 the concession for the operation of the
French sections of the Bagdad Railway, as defined by the Angora Treaty,
was assigned to the Cilician-Syrian Railway Company (_La société
d’exploitation des chemins de fers de Cilicie-Nord Syrie_.) The
Mesopotamian sections of the line, from Basra to Bagdad and Samarra,
were under the jurisdiction of the British Civil Administration
for Irak. From Haidar Pasha to the Cilician Gates the Railway was
being operated by the Turkish Nationalist Government, although its
utilization for commercial purposes was seriously curtailed by the
Greco-Turkish War.[24]


BRITISH INTERESTS ACQUIRE A CLAIM TO THE BAGDAD RAILWAY

The Angora Treaty met with a distinctly heated reception from the
British Government. During November and December, 1921, Lord Curzon
carried on a lengthy correspondence with the French Embassy at London,
in which he made it perfectly plain that the British Government
considered the Franklin-Bouillon treaty a breach of good faith on
the part of France, in the light of which Great Britain must possess
greater freedom of action than would otherwise be the case.[25]

Lord Curzon called into question the moral right of the French
Government to enter into separate understandings with Turkey or to
recognize the Angora Assembly as the _de jure_ government of the
country. He insisted that a revision of the frontier of northern Syria
“could not be regarded as the concern of France alone”:

 “It hands back to Turkey a large and fertile extent of territory which
 had been conquered from her by British forces and which constituted
 a common gage of allied victory, although by an arrangement between
 the Allies the mandate has been awarded to France. The mandate is
 now under consideration by the League of Nations, and this important
 and far-reaching modification of the territory to which it applies
 altogether ignores the League of Nations, while the return to Turkey
 of territory handed over to the Allies in common without previous
 notification to Great Britain and Italy is inconsistent with both the
 spirit and the letter of the treaties which all three have signed.

 “Further, the revision provides for handing back to Turkey the
 localities of Nisibin and Jezirit-ibn-Omar, both of which are of great
 strategic importance in relation to Mosul and Mesopotamia; the same
 consideration applies to the handing back to Turkey of the track of
 the Bagdad Railway between Tchoban Bey and Nisibin.... His Majesty’s
 Government cannot remain indifferent to the manifest strategic
 importance to their position in Irak of the return to Turkey of the
 Bagdad Railway or of the transfer to that power of the localities of
 Jezirit-ibn-Omar and Nisibin.”

In addition to disputing the territorial readjustments contemplated
by the Angora Treaty, the British Government challenged the transfer
to French capitalists of the former German concession for the
Bozanti-Nisibin sections of the Bagdad Railway. Lord Curzon pointed
out that Great Britain would not recognize the Franco-Turkish treaty
as overriding the Treaty of Sèvres, “whereby Turkey was herself to
liquidate the whole Bagdad Railway on the demand of the principal
Allies”; neither would the British Government assent to the award to
France of “a large portion of the railway without regard to the claims
of her other allies upon a concern which both under the Treaty of
Versailles and the Treaty of Sèvres is the Allies’ common asset.”[26]

 “Apart from the immediate and premature advantage gained by France
 by this transfer of a large portion of the Bagdad line to a French
 company in advance—and therefore possibly to the prejudice—of the
 reciprocal allied arrangements contemplated by Article 294 of the
 Treaty of Sèvres and Article 4 of the Tripartite Agreement, it is
 necessary to point out that these stretches of the railway which were
 previously in Syria, but are now surrendered to Turkey, although
 placed in the French zone of economic interest, ought naturally to
 be divided among the Allies in accordance with the above mentioned
 treaties.... The transfer to a French company of that part of the
 railway which still remains in Syria does not in itself fulfil the
 provisions of the Treaty of Sèvres, which stipulates for liquidation
 by the mandatory and the assignment of the proceeds to the Financial
 Commission as an allied asset.”

The correspondence was concluded by Lord Curzon with emphatic
statements that “when peace is finally concluded the different
agreements which have been negotiated up to date, including the
Angora Agreement, will require to be adjusted with a view to taking
their place in a general settlement”; that he was obliged “explicitly
to reserve the attitude of His Majesty’s Government with regard to
the Angora Agreement”; and that there must especially be reserved for
further discussion “all articles of the Agreement which appear to
infringe the provisions of the Treaty of Sèvres and the Tripartite
Agreement.

Subsequent events did nothing to restore Anglo-French unity in the
Near East. At the Washington Conference in December, 1921, Lord Lee
and M. Briand engaged in a verbal war over submarines which created no
little hard feeling and suspicion in both Great Britain and France.
Differences of opinion regarding Russia and other questions discussed
at the Genoa Conference, together with a clash over reparations in
midsummer, 1922, strained relations still further. Charges by Greeks
and Englishmen that France and Italy were supplying munitions to the
Turkish Nationalists were received with counter-charges that British
officers were aboard Greek warships and that British “observers” were
directing Greek military operations in Asia Minor.[27] Feeling ran high
in September, 1922, when—seeking to avoid a Near Eastern war—the French
and Italian Governments withdrew their troops from the Neutral Zone of
the Straits, leaving the British forces to face, alone, the victorious
Nationalist army of Mustapha Kemal Pasha. British patriots were further
irritated by the mysterious activities of M. Henri Franklin-Bouillon
in the negotiations preceding the Mudania armistice and by the claims
of the Paris press to a great victory thereby for French prestige at
Angora and Constantinople. Fundamental differences of opinion regarding
reparations—culminating in the French invasion of the Ruhr in January,
1923—made still more difficult coöperation by the former Allies in
the Near East. In fact, it might be questioned whether the Entente
Cordiale any longer existed.

This situation was brought into sharp relief at the first Lausanne
Conference for Peace in the East.[28] Great Britain’s interests were
chiefly territorial. She had abandoned all hope of destroying Turkish
power by creating a Greek empire in Asia Minor; Greece was gone from
Smyrna for good. But England was determined to maintain her hold in
Mesopotamia—particularly in the oilfields of Mosul—and to hold out for
neutralization of the Straits. These territorial questions occupied
the major part of the first six weeks of the Conference. France had no
interest in the decisions regarding the Straits and Mosul; therefore
she supported the Turks and placed Lord Curzon in the position of
appearing to be the real opponent of Turkish Nationalist ambitions and
the principal obstacle in the way of an equitable settlement. Lord
Curzon himself strengthened this impression, for many of his utterances
were provocative and bombastic in the extreme—apparently he would not
give up the idea that the Turks could be bluffed and bullied into
submission.

While the conference as a whole was debating territorial questions
and problems concerning the rights of minorities, a member of the
French delegation was presiding over the sessions of the all-important
Committee on Financial and Economic Issues. It was in this committee
that questions of the Ottoman Public Debt and of concessions were
to be threshed out; therefore it was in this committee that French
imperialists hoped to achieve real successes. And while France was
framing the economic sections of the treaty, her co-worker Italy was
supervising the work of the Committee on the Status of Foreigners in
Turkey, to determine the conditions upon which French and Italian
schools and missions should continue their activities in Asia Minor.
In this manner France hoped to protect adequately her economic and
cultural interests in the Near East.

As the work of these committees progressed, the Turks became more and
more suspicious of French aims. The Nationalist delegates—including
Djavid Bey—were mindful of the price which their country had had to
pay because of its economic exploitation by Germany, and they were
determined not to permit another European Power to succeed to the
position which Germany had left vacant. Friction developed, therefore,
as soon as concessions came up for consideration. The French delegation
asked for the incorporation in the treaty of provisions confirming all
concessions to Allied nationals whether granted by the old Ottoman
Government before the War, or by the Constantinople Government after
the armistice, or by mandatory powers in territory subsequently
evacuated (as in Cilicia, Smyrna, and Adalia). The Turks objected
that they were not aware of the nature, the number and extent, or the
beneficiaries of the concessions coming within the last two categories;
confirmation of such would have to be the subject of independent
investigation and negotiation, for the Turks would not sign any
blank checks at Lausanne. They doubted whether they could accept the
financial burden which would be involved in validating concessions
granted by the Sultan’s Government before the War, especially if the
National Assembly was to be obliged to honor Ottoman pre-War debts
in full. In any case, the Turkish delegates insisted, no concessions
would be confirmed if they in any way limited the sovereignty of
Turkey or infringed upon its financial and administrative integrity.
Between the French and Turkish views was a chasm which it would be
difficult, indeed, to bridge. The French stood upon the rock of the old
imperialism; the Turks were fortified in their new nationalism. The
French were seeking to intrench certain important vested interests;
the Turks were striving to preserve a precious independence, recently
won at great price.

In these circumstances, it was to be expected that the British and
the Turks should seek to effect an understanding. The claims of Great
Britain, it appeared, were more easily reconcilable with the Turkish
program than were the claims of France. Concessions obtained by British
nationals between 1910 and 1914 were largely in areas detached from
Turkey during the War—chiefly in Mesopotamia—whereas many of the most
important French concessions were in Anatolia, the stronghold of the
Turkish Nationalists.[29] To Great Britain, therefore, it was a matter
of comparative indifference whether all concessions within Turkey
were specifically confirmed; to France it was a matter of the utmost
importance. According to the proposed Lausanne treaty the Turkish
Government was to expropriate the former German railways in Turkey,
with a view to incorporating them into a state-owned system, and was to
pay therefor to the Financial Commission, on reparations account, a sum
to be fixed by an arbitrator appointed by the League of Nations.[30] It
suited British interests thus to prevent a rival Power from obtaining
control of the former Bagdad line; it suited French interests not
at all to be deprived of a considerable share in a highly important
enterprise. In the settlement of questions regarding the Ottoman Public
Debt, likewise, the French were more obdurate than the British.

In the closing days of the conference, the question of Mosul and its
oilfields—the last question which stood in the way of an Anglo-Turkish
agreement—was temporarily settled by a decision to make it the subject
of “direct and friendly negotiations between the two interested
Powers.” But no agreement was possible between Turkey and France on
concessions and capitulations. When the first Lausanne Conference broke
up, therefore, it was because of the determination of the Turks not to
accept economic, financial, and judicial clauses which they believed
menaced their independence. “The treaty,” said Ismet Pasha, head of
the Turkish delegation, “would strangle Turkey economically. I refuse
to accept economic slavery for my country, and the demands of the
Allies remove all possibility of economic rehabilitation and kill all
our hopes.” On the other hand, the refusal of the Turks to sign was
characterized by the chief of the French delegates as “a crime.”[31]

During the interim between the first and second Lausanne conferences
French prestige in the Near East was dealt some severe blows. The
Turkish press attacked the French Government for having insisted upon
concessions and capitulations which were designed to keep Turkey under
foreign domination in the interest of bondholders and promoters. Such
conduct, it was pointed out, was altogether inconsistent with the terms
of the Angora Treaty by which France agreed “to make every effort to
settle in a spirit of cordial agreement all questions relating to the
independence and sovereignty of Turkey.”[32] In the National Assembly
hostility to French claims was so pronounced that no further action
was taken toward the ratification of the Angora Treaty—and without
such ratification the French title to certain sections of the Bagdad
Railway would be invalid. The Turkish army on the Syrian frontier was
reënforced for the purpose of bringing home to France the determination
of the Angora Government to tolerate no foreign interference in its
domestic affairs. The situation in Syria became so serious that M.
Poincaré saw fit to despatch to Beirut one of Marshal Foch’s right-hand
men, General Weygand, as commander-in-chief in Syria.

The breach between France and Turkey was widened when, on April 10,
1923, the Angora Government awarded to an American syndicate headed
by Admiral Colby M. Chester, a retired officer of the United States
Navy, concessions for almost three thousand miles of railway, together
with valuable rights to the exploitation of the mineral resources
of Anatolia.[33] The Chester concessions conflicted with certain
French claims which had been under discussion at the first Lausanne
Conference: the concession for a Black Sea railway system, which had
been conferred upon French capitalists in 1913; and rights to the
Arghana copper mines, to which a French group had been given a kind
of priority under the Angora Treaty of 1921.[34] In part, at least,
the award of the Chester concessions at this particular time was a
shrewd political move on the part of the Nationalist Government.
It was designed to serve notice on France that no treaty would be
acceptable to Turkey which would require complete confirmation of
pre-War concessions; from this decision there could be no departure
without infringing upon American rights and without recognizing the
acts of a former Sultan as superior to acts of the new government
of Turkey. It was intended, also, to win for the Turks a measure of
American diplomatic support. That the French Government understood the
implications of the Chester concessions is evidenced by the fact that
the Foreign Office despatched to Angora a note which characterized
the award as “a deliberately unfriendly act, of a nature to influence
adversely the coming negotiations at Lausanne.”[35]

When the second Lausanne Conference convened on April 22, 1923,
therefore, it was France, not Great Britain, which was on the
defensive. And the French position became steadily worse, rather than
better. On May 15, it was announced that a syndicate of British banks
had purchased a controlling interest in the _Bank für orientalischen
Eisenbahnen_, of Zurich, the _Deutsche Bank’s_ holding company for the
Anatolian and Bagdad Railway Companies. Ismet Pasha, it was said, was
kept fully informed of the British plans and expressed his pleasure
at the consummation of the transaction. Thus, after twenty years of
diplomatic bargaining, British imperialists had won possession of the
“short cut to India”![36] Should Great Britain succeed in establishing
her point that the _Bank für orientalischen Eisenbahnen_ is a neutral
Swiss, rather than enemy German, corporation and therefore exempt from
seizure under the reparations provisions of the Treaty of Versailles;
and should the Chester concessions be recognized as superseding the
rights of the Black Sea Railways, French interests in the Levant will
face a powerful Anglo-American competition which it will be very
difficult for them to combat with any degree of success.[37] And the
power of the French Government is so heavily invested in the Ruhr
occupation that it is doubtful if it can do anything at all to coerce
the Turks into full recognition of French claims.

Kaleidoscopic indeed have been the changes in the Near East since the
outbreak of the Great War in 1914. The economic and political power
of Germany in Anatolia, Syria, and Mesopotamia has been completely
destroyed. The Ottoman Empire has disappeared, and in its place has
risen a republican Nationalist Turkey. Tsarist Russia, with its
consuming desire for aggrandizement in the Caucasus, in Asia Minor, and
at the Straits, has given way to a proletarian Russia which foreswears
imperialist ambition. Italy, which sought to transform the Adriatic and
the Ægean into Italian lakes, has finally been compelled to recognize
that she assumed imperial liabilities out of all proportion to her
economic resources. France, after achieving a temporary victory in
the New Turkey, has had to surrender her position to more powerful
competitors. But Great Britain has emerged from the conflict in all
her glory. She has obtained possession of another highway to the East.
Alongside the Suez Canal, in the collection of British imperial jewels,
will be placed the Bagdad Railway; alongside of Malta and Gibraltar and
Cyprus must be placed Jerusalem and Basra and Bagdad.

No less remarkable than all these changes, however, is the entry of
American interests into the tangled problem of the Near East.


AMERICA EMBARKS UPON AN UNCHARTED SEA

The Great War was accompanied by a definite growth of American prestige
in the Near East. After the entry of Turkey into the war against the
Allied Powers, American schools and missions were left practically a
free hand in the Ottoman Empire; and inasmuch as the United States
did not declare war against Turkey, American institutions were not
disturbed even after 1917. Carrying on their work under the most
trying circumstances, these educational and philanthropic enterprises
established a still greater reputation than they formerly possessed
for efficient and disinterested service. In consequence, an American
official mission to the Near East in 1919 was able to report that the
moral influence of the United States in that region of the world was
greater than that of any other Power. President Wilson was looked upon
as the champion of small nations and oppressed peoples. Americans were
considered to be charitable and generous to a fault. The United States
was hailed as the only nation which had entered the war for unselfish
purposes.[38]

Since the armistice of 1918 events have not materially decreased the
prestige which the War built up. “From Adrianople to Amritsar, and
from Tiflis to Aden, America is considered a friend. It has become a
tradition in the Near East to interpret every action of the European
Powers as an attempt at political domination. America is the only power
considered strong enough to provide the Orient with the capital and
expert knowledge for its industrial development, without aiming at more
than a legitimate profit. The Oriental feels that he needs coöperation
with the West; but he is anxious to restrict that coöperation to the
economic field. And he considers the United States the only power which
would replace Europe’s political ambitions by a sound, matter-of-fact,
and sincere economic policy.”[39]

During the Great War the economic situation of the United States
underwent certain fundamental changes which seem to forecast increasing
American interest in imperialism. Before the War, America was
practically self-sufficient in raw materials; its export trade was
composed very largely of foodstuffs and raw materials which found a
ready market in the great industrial nations of Europe; financially,
it was a debtor, not a creditor, nation. The enormous industrial
expansion of the United States during the Great War, however, has
changed these conditions. Raw materials have become an increasingly
greater proportion of the nation’s import trade, and American business
men are becoming concerned about foreign control of certain essential
commodities such as rubber, nitrates, chrome, and petroleum. American
export trade has experienced an unparalleled period of expansion, and
American manufactured articles are competing in world markets which
formerly were the exclusive preserves of European nations. Furthermore,
the export of American capital has almost kept pace with the export
of American goods, so that by 1920 the United States had taken its
place alongside Great Britain and France as one of the great creditor
nations of the world. As time goes on American business will be
reaching out over the world for a fair share of the earth’s resources
in raw materials, for new markets capable of development, and for
opportunities for the profitable investment of capital.[40]

These new tendencies were quickly reflected in American relations
with the Near East. As early as the spring of 1920 the Government
of the United States was engaged in a lengthy correspondence with
His Britannic Majesty’s Government regarding the right of American
capital to participate in the exploitation of the oil resources of
Mesopotamia.[41] About the same time the Guaranty Trust Company of
New York—the second largest bank in the United States—established a
branch in Constantinople and proceeded to inform American business men
regarding the opportunities for commercial expansion in the Near East.
In a booklet entitled _Trading with the Near East—Present Conditions
and Future Prospects_, the bank had this to say:

 “The establishing of a Constantinople branch of the Guaranty Trust
 Company of New York brings forcibly to mind the growing importance
 of the Near East to American foreign trade. Up to the present time
 American business in Constantinople has been seriously handicapped by
 the absence of American banking facilities. Our traders were forced to
 rely on British, French, or other foreign banks for their financial
 transactions. This was not only inconvenient, but it was devoid of
 that business secrecy which is so necessary in exploiting new fields.

 “Before the war merchandise from the United States was a negligible
 factor in the business life of Constantinople, and a vessel flying
 the Stars and Stripes was a rare sight. Today one will find four or
 five American liners in the Golden Horn at all times.... Today a dozen
 important American corporations have permanent offices there, and many
 other American concerns are represented by local agents.

 “The future possibilities of imports from and exports to the Eastern
 Mediterranean, the Sea of Marmora, and the Black Sea ports from the
 United States are of almost unbelievable proportions. These entire
 sections must be fed, clothed, and largely rehabilitated. Roads,
 ports, railways, and public works of all kinds are needed everywhere.
 The merchants of the Near East have valuable raw products to send us
 in exchange for the manufactured goods which they so urgently need.“

This estimate of the situation was confirmed by the American Chamber
of Commerce for the Levant when, in urging upon the Department of
State the vigorous defence of the “open door” in Turkey, it said: “The
opportunities for the expansion of American interests in the Near East
are practically unlimited, provided there is a fair field open for
individual enterprise.... In fact, with the conclusion of peace, there
is the economic structure of an empire to be developed.”[42]

The rapid development of American economic interests in Turkey can
be most effectively presented by reference to the trade statistics.
American exports to Turkey at the opening of the twentieth century
amounted to only $50,000. In 1913 they had risen to $3,500,000. But
between 1913 and 1920 they showed a phenomenal increase of over twelve
hundred per cent, reaching the sum of $42,200,000. Nor was this trade
one sided, for during the period 1913–1920, American imports from
Turkey increased from $22,100,000 to $39,600,000.[43]

The Chester concessions are another important step in the development
of a new American policy in the Near East. They provide for the
construction by the Ottoman-American Development Company—a Turkish
corporation owned and administered by Americans—of approximately 2800
miles of railways, of which the following are the most important:

 1. An extension of the old Anatolian Railway from Angora to Sivas,
 with a branch to the port of Samsun, on the Black Sea.

 2. A line from Sivas to Erzerum and on to the Persian and Russian
 frontiers, with branches to the Black Sea ports of Tireboli and
 Trebizond.

[Illustration]


 3. A line from Oulu Kishla, on the Bagdad Railway, to Sivas _via_
 Kaisarieh.

 4. A trans-Armenian railway from Sivas to Kharput, Arghana, Diarbekr,
 Mosul, and Suleimanieh, including branches to Bitlis and Van.

 5. A railway from Kharput to Youmourtalik, a port on the Gulf of
 Alexandretta.

No more elaborate project for railway construction in Asiatic Turkey
has ever been incorporated in a definitive concession. That it should
be entrusted to American promoters and American engineers is one of the
most significant developments in the long and involved history of the
Eastern Question.

But the Chester concessions do not stop at railway construction
alone. As in the case of the Bagdad Railway, the Turkish Government
is obliged to offer the financiers powerful inducements to the
investment of capital in railway enterprises which, in themselves,
may be unremunerative for a time. The German promoters of the Bagdad
Railway obtained a kilometric guarantee, or subsidy; the American
promoters of the Chester lines are granted exclusive rights to the
exploitation of all mineral resources, including oil, lying within
a zone of twenty kilometres on each side of the railway lines. The
Bagdad Railway mortgaged the revenues of Imperial Turkey; the Chester
concessions mortgage the natural resources of Nationalist Turkey. The
Ottoman-American Development Company, furthermore, is authorized to
carry out important enterprises subsidiary to the construction of the
railway lines and the exploitation of the mines aforementioned. It
may, for example, lay such pipe lines as are necessary to the proper
development of the petroleum wells lying within its zone of operations.
It is permitted to utilize water-power along the line of its railways
and to install hydro-electric stations for the service of its mines,
ports, or railways. It is required to construct elaborate port and
terminal facilities at Samsun, on the Black Sea, and at Youmourtalik,
on the Gulf of Alexandretta.

There are other respects in which the terms of the Chester grant
are strikingly similar to those of the Bagdad Railway concession of
March 5, 1903.[44] Lands owned by the Turkish Government and needed
for right-of-way, terminal facilities, or exploitation of mineral
resources are transferred to the Ottoman-American Development Company,
free of charge, for the period of the concession (ninety-nine years).
Public lands required for construction purposes—including sand-pits,
gravel-pits, and quarries—may be utilized without rental, and wood
and timber may be cut from State-owned forests without compensation.
As public utilities, the Chester enterprises are granted full rights
of expropriation of such privately owned land as may be necessary for
purposes of construction or operation. Like the _Deutsche Bank_, the
Ottoman-American Development Company is granted sweeping exemption
from taxation, as follows: “The materials, machines, coal, and other
commodities required for the construction operations of the Company,
whether purchased in Turkey or imported from abroad, shall be exempt
from all customs duties or other tax. The coal imported for the
operation of the [railway] lines shall be exempt from customs duties
for a period of twenty years, dating from the ratification of the
present agreement. For the entire duration of the concession the lines
and ports constructed by the Company, as well as its capital and
revenues, shall be exempt from all imposts.”[45]

From the Turkish point of view, the Chester concessions may be
justified on the grounds that the new railways will bring political
stability to Anatolia[46] and will initiate an era of unprecedented
economic progress. From the point of view of those American interests
which believe in the stimulation of foreign trade, likewise, the
Chester project has much to commend it. Exploitation of the oilfields
of the vilayets of Erzerum, Bitlis, Van, and Mosul, and the development
of the mineral resources of Armenia—including the valuable Arghana
copper mines—will provide rich sources of supply of raw materials. In
the construction of railways, ports, and pipe lines there will be a
considerable demand for American steel products. Economic development
of the vast region through which the new railways will pass promises
to furnish a market for American products, such as agricultural
machinery, and to offer ample opportunity for the profitable investment
of American capital. The Chester project may well become an imperial
enterprise of the first rank.

With the exception of the temporary advantage which they hoped to gain
at the second Lausanne Conference, the Turkish Government wished no
political importance to be attached to the Chester concessions. As
Abdul Hamid had awarded the Anatolian and Bagdad Railway concessions
to a German company because he believed Germans would be less likely
to associate political aims with their economic privileges, so the
Government of the National Assembly has awarded the Chester concessions
to an American syndicate because Turkish Nationalists are convinced
that Americans have no political interests in Turkey. This was made
clear by Dr. I. Fouad Bey, a member of the National Assembly, in a
semi-official visit to the United States during April, 1923. “We Turks
wish to develop our country,” he said. “We need foreign coöperation to
develop it. We cannot do without this coöperation. Now, there are two
kinds of foreign coöperation. There is the foreign coöperation that
is coupled with foreign political domination—coöperation that brings
profit only to the foreign investor. We have had enough of that kind.
There is another kind of coöperation—the kind we conceive the Chester
project and other American enterprises to be. This kind of coöperation
is a business enterprise and has no imperialistic aim. It is a form
of coöperation designed to profit both America and Turkey, and not
to invade Turkish sovereignty and Turkish political interests in any
way. That is why we prefer American coöperation. That is why the Grand
National Assembly at Angora is prepared to welcome American capital
with open arms and secure it in all its rights.”[47]

These sentiments found a ready echo among American merchants. At a
dinner given in honor of Dr. Fouad Bey by the American Federated
Chambers of Commerce for the Near East, one of the speakers said:
“Turkey, in our opinion, is destined to have a magnificent future.
It is on the threshold of a new and great era. Its extraordinary
resources, amazingly rich, are practically untouched. Although in
remote ages of antiquity these vast regions played a great rôle in
history, they have for many centuries lain practically fallow. The
tools, appliances, machinery and methods which have been so highly
perfected in the United States are appropriate to and will be needed
for the development of this marvelous latent wealth. Our capital
likewise can be very helpful. The members of our Chamber of Commerce
have a keen interest in the furtherance of trade relations between
Turkey and the United States. We want both to increase the imports of
its raw materials into our country and to stimulate the export of our
manufactured articles to Turkey. We are inspired by no political aims.
We seek no annexation of territory. We desire no exclusive privileges.
Our motto, if we had one, would be ‘A fair field and no favors.’ In
the development of commercial relations with Turkey, in seeking the
investment of our capital there, we ask for nothing more than an open
door.”[48]

The American press, likewise, is in accord with a policy of
governmental non-intervention in the ramifications of the Chester
project. The following editorial from the new York _World_ of April 23,
1923, is perhaps representative:

 “There is no reason why the State Department should make itself the
 attorney for or the promoter of the Chester business enterprises. If
 the Angora Government has granted privileges to the Admiral’s company,
 then the Admiral’s business is with Angora and not with Washington.

 “Certainly the American people have no more interest in taking up
 the Chester concessions diplomatically than they would have if
 the Admiral were proposing to open a candy store in Piccadilly, a
 dressmaking establishment in the Rue de la Paix, or a beauty parlor
 on the Riviera. If the Admiral and his friends wish to invest money
 in Turkey, they no doubt know what they are doing. They will expect
 profits commensurate with the risks, and they should not expect the
 United States Government, which will enjoy none of the profits, to
 insure them against the risks.”

It is difficult, nevertheless, to see how the Chester concessions,
and their affiliated enterprises can be kept scrupulously free from
political complications. The French Government, in defence of the
interests of its nationals, has announced semi-officially that American
support of the concessions might lead to “a diplomatic incident of the
first importance.”[49] Furthermore, the United States Navy is said
to be vitally interested in the Chester project. The oilfields to
which Admiral Chester’s Ottoman-American Development Company obtain
rights of exploitation may prove to be important sources of fuel
supply to American destroyers operating in the Mediterranean—Mr.
Denby, Secretary of the Navy, said apropos of the concessions that the
Navy “is always concerned with the possibility of oil supplies.”[50]
Furthermore, an American-built port at Youmourtalik, on the Gulf of
Alexandretta, might conceivably be utilized as an American naval base.
Such a station, less than 150 miles from Cyprus and less than 400 miles
from the Suez Canal, could hardly be expected to increase the British
sense of security in the Eastern Mediterranean.

The American Navy has already been very active in the Near East. “Soon
after the armistice, Rear Admiral Bristol was sent to Constantinople
to command the small American naval forces there. A large part of
his efforts was immediately devoted to the promotion of American
business in that unsettled region, including the countries bordering
on the Black Sea. He soon established for himself such an influential
position by sheer force of character and by his intelligent grasp of
both the political and economic situations that he was appointed high
commissioner by the State Department.

“Early in 1919 several American destroyers were ordered to
Constantinople for duty in the Near East. Although these destroyers
are good fighting ships, it costs some $4,000,000 a year to maintain
them on this particular duty, which does not train the crews for use
in battle.... The possible development of the economic resources of
this part of the world was carefully investigated by representatives
of American commercial interests. These representatives were given
every assistance by the Navy, transportation furnished them to various
places, and all information of commercial activities obtained by naval
officers in their frequent trips around the Black Sea given them. The
competition for trade in this part of the world is very keen, the
various European countries using every means at their disposal to
obtain preferential rates. The Navy not only assists our commercial
firms to obtain business, but when business opportunities present
themselves, American firms are notified and given full information on
the subject. One destroyer is kept continuously at Samsun, Turkey, to
look after the American tobacco interests at that port. ... The present
opportunities for development of American commerce in the Near East
are very great, and its permanent success will depend largely upon
the continued influence of the Navy in that region.”[51] This is the
situation as diagnosed by the Navy Department itself.

“With the assistance of a small force of destroyers based on
Constantinople,” according to an instructor in the United States Naval
Academy, “our commercial representatives are establishing themselves
firmly in a trade which means millions of dollars to the farmers of
the American Middle West. By utilizing the wireless of destroyers in
Turkish ports, at Durazzo, and elsewhere, commercial messages have
been put through without delay.... Destroyers are entering Turkish
ports with ‘drummers’ as regular passengers, and their fantails piled
high with American samples. An American destroyer has made a special
trip at thirty knots to get American oil prospectors into a newly
opened field.” Here is “dollar diplomacy” with a vengeance! “If this
continues, we shall cease to take a purely academic interest in the
naval problems of the Near East. These problems are concerned with
the protection of commerce, the control of narrow places in the
Mediterranean waterways, and the naval forces which the interested
nations can bring to bear. They cannot be discussed without constant
reference to political and commercial aims.”[52]

Americans would do well to take stock of this Near Eastern situation.
Mustapha Kemal Pasha invites the participation of American capital in
railway construction in Anatolia for substantially the same reasons
which prompted Abdul Hamid to award the Bagdad Railway concession to
German bankers. In 1888, Abdul Hamid considered Germany economically
powerful but politically disinterested. Today, Mustapha Kemal Pasha
believes that American promoters, engineers, and industrialists possess
the resources and the technical skill which are required to develop
and modernize Asia Minor. And, from the Turkish point of view, the
political record of the United States in the Near East is a good
record. America never has annexed Ottoman territory or staked out
spheres of interest on Turkish soil; America has not participated in
the Ottoman Public Debt Administration; America has few Mohammedan
subjects and therefore is not fearful of the political strength of
Pan-Islamism; America did not declare war on Turkey during the European
struggle; America was not a party to the hated treaty of Sèvres.
America alone among the Western Powers seems capable of becoming a
sincere and disinterested friend of Turkey.[53] The avowed foreign
policies of the United States appear to confirm the opinion of the
Turks that Americans can be depended upon not to infringe upon Turkish
sovereignty. America must be kept scrupulously free from all “foreign
entanglements”; therefore an American mandate for Armenia has been
firmly declined. Splendid isolation is declared to be the fundamental
American principle in international affairs.

The political theory of isolation, however, is not altogether in
harmony with the economic fact of American world power. The enormous
expansion of American commercial and financial interests during and
since the Great War brings the United States face to face with new,
difficult, and complicated international problems. American business
men will be increasingly interested in the backward countries of the
world, in which they can purchase raw materials, to which they can sell
their finished products, and in which they can invest their capital.
American financiers, manufacturers, and merchants will look to their
government for assistance in the extension of foreign markets and
for protection in their foreign investments. Already there is grave
danger that the United States may “plunge into national competitive
imperialism, with all its profits and dangers, following its financiers
wherever they may lead.”[54]

The situation is not unlike that which faced the German Empire in
1888. When the _Deutsche Bank_ initiated its Anatolian railway
enterprises, it inquired of the German Government whether it might
expect protection for its investments in Turkey. Bismarck—who desired
to avoid imperialistic entanglements and to limit German political
interests, as far as possible, to the continent of Europe—replied with
a warning that the risk involved “must be assumed exclusively by the
entrepreneurs” and that the Bank must not count upon the support of the
German Government in “precarious enterprises in foreign countries.”
But Bismarck’s policy did not take full cognizance of the phenomenal
industrial and commercial expansion of the German Empire, whose
nationals were acquiring economic interests in Asia and in Africa and
on the Seven Seas. William II was more sensitive than Bismarck to the
demands of German industrial, commercial, and financial interests that
they be granted active governmental support and protection abroad.
Bismarck tolerated German enterprises in Turkey; William II sponsored
them. It was under William II, not under Bismarck, that Germany
definitely entered the arena of imperial competition.[55]

The development of American interests in Turkey puts the Government
of the United States to a test of statesmanship. The temptations will
be numerous to lend governmental assistance to American business men
against their European competitors; to utilize the new American
economic position in Turkey for the acquisition of political influence;
to use diplomatic pressure in securing additional commercial and
financial opportunities; to emphasize the economic, at the expense
of the moral, factors in Near Eastern affairs. To yield to these
temptations will be to destroy the great prestige which America
now possesses in the Levant by reason of disinterested social and
educational service. To yield will be to forfeit the trust which
Turkish nationalists have put in American hands. To yield will be to
intrench the system of economic imperialism which has been the curse
of the Near East for half a century. To yield will be to involve the
United States in foreign entanglements more portentous than those
connected with the League of Nations, or the International Court of
Justice, or any other plan which has yet been suggested for American
participation in the reconstruction of a devastated Europe and a
turbulent Asia.

The Chester concessions may be either promise or menace. They will give
promise of a new era in the Near East insofar as they contribute to
the development and the prosperity of Asia Minor, without infringing
upon the integrity and sovereignty of democratic Turkey, and without
involving the Government of the United States in serious diplomatic
controversies with other Great Powers. They will be a menace—to Turkey,
to the United States, and to the peace of the world—if, unhappily, they
should lead republican America in the footsteps of imperial Germany.


BIBLIOGRAPHICAL AND EXPLANATORY NOTES

[1] Mufty-Zade Zia Bey, “How the Turks Feel,” in _Asia_, Volume XXII
(1922), p. 857.

[2] “Declaration of the Rights of the Toiling and Exploited People,”
Article III. Available in English translation in _International
Conciliation_, No. 136 (New York, 1919).

[3] _Supra_, Chapter VII.

[4] The text of the Russo-Turkish Treaty of March 16, 1921, is given
as an appendix to an article by A. Nazaroff, “Russia’s Treaty with
Turkey,” in _Current History_, Volume XVII (1922), pp. 276–279.

[5] Bowman, _op. cit._, p. 398.

[6] _Cf._ _supra_, pp. 202–203. Professor Toynbee now speaks of this
feature of the Entente in terms of contempt: “Its direct motive was
covetousness, and it rested locally on nothing more substantial than
the precarious honor among thieves who find their business threatened
by a vigorous and talented competitor. Some of the thieves, at any
rate, never got out of the habit of picking their temporary partners’
pockets.“ _Op. cit._, p. 46.

[7] _Ibid._, pp. 45–46.

[8] It seems to be established that Mr. Lloyd George compelled a
readjustment of the terms of the Sykes-Picot Treaty by threatening
M. Clémenceau with a complete exposure and repudiation of all of the
secret treaties. _Cf._ Baker, _op. cit._, Volume I, pp. 70–72.

[9] See Minutes of the Council of Four, March 20, 1919, reported in
full by Baker, _op. cit._, Volume III, Document No. 1.

[10] Regarding the claims of the Turkish Petroleum Company, _cf._
_supra_, p. 261.

[11] _Parliamentary Papers_, No. Cmd. 675 (1920). _Cf._, also, the
“Franco-British Convention of December 23, 1920, on Certain Points
Connected with the Mandates for Syria, the Lebanon, Palestine, and
Mesopotamia,” _Parliamentary Papers_, No. Cmd. 1195 (1921). For
a general discussion of the oil situation, see: H. Bérenger, _La
politique du pétrole_ (Paris, 1920); F. Delaisi, _Le pétrole—La
politique de la production_ (Paris, 1921); A. Apostol and A. Michelson,
_La lutte pour le pétrole_ (Paris, 1922).

[12] _Cf._ _supra_, Chapter X, Note 18.

[13] _Supra_, pp. 301–302.

[14] Interesting sidelights on these points will be found in the
correspondence between the French and British Governments regarding the
Angora Treaty of October 20, 1921, _Parliamentary Papers_, No. Cmd.
1571, Turkey No. 1 (1922). _Cf._, also, Toynbee, _op. cit._, Chapter
III, “Greece and Turkey in the Vicious Circle”; Jean Lescure, “Faut-il
détruire la Turquie?” in _Revue politique et parlementaire_, Volume
103 (1920), pp. 42–48; “Where Diplomacy Failed,” _The Daily Telegraph_
(London), September 19, 1922.

[15] M. de Montille to the Marquess Curzon of Kedleston, November 17,
1921, in the official correspondence cited in Note 14.

[16] _Cf._ a statement by M. Briand regarding the purposes and the
scope of the agreement, _Journal officiel, Débats parlementaires,
Chambre des députés_, March 16, 1921, pp. 1272–1273. The text of the
agreement is available in _Current History_, Volume XIV (1921), pp.
203–204, and in the _Contemporary Review_, Volume 119 (1921), pp.
677–679.

[17] Regarding the Heraclea coal mines _cf._ _supra_, p. 14. During
the War the mines were operated by Hugo Stinnes.

[18] For the text of the Turco-Italian treaty see _L’Europe Nouvelle_
(Paris), May 28, 1921, or _The Nation_, Volume 113 (New York, 1921), p.
214. _The New York Times_, April 13, 1921, contains a good summary of
the treaty and the circumstances of its negotiation.

[19] The text of the Angora Treaty is given in _Parliamentary Papers_,
No. Cmd. 1556, Turkey No. 2 (1921). It has been reprinted in Current
History, January, 1922. For a statement by M. Briand regarding the
purposes and scope of the treaty, _cf._ _Journal officiel, Débats
parlementaires, Sénat_, October 28, 1921, pp. 818–819.

[20] Aleppo remained within the French mandate for Syria, so that for
a time—until the Turks construct a substitute line—through trains will
have to pass through French territory for a short distance. Guarantees
against interruption of either military or commercial traffic were
exacted by the Turks, however. In addition, Turkey was guaranteed full
use of the port of Alexandretta on a basis of absolute equality with
Syria.

[21] Most of the supplementary economic concessions are provided for in
a covering letter of Yussuf Kemal Bey and in an exchange of notes which
coincided with the signature of the treaty. These were kept absolutely
secret until December, when their contents were made known to the
British Government.

[22] _Supra_, p. 83.

[23] The italics are mine. Discrimination against British trade from
Mosul to Alexandretta, for example, might be used to force Great
Britain to abandon many of her claims in northern Mesopotamia.

[24] _The Times_ (London), August 2, 1922; _Manchester Guardian
Commercial_, August 31, 1922; _Chicago Tribune_, Paris edition, August
21, 1922.

[25] For the text of the correspondence, _cf._ _Parliamentary Papers_,
No. Cmd. 1571, Turkey No. 1 (1922).

[26] _Cf._ _supra_, pp. 301–302.

[27] A not unrepresentative Greek view is the following: “Nationalist
Turkey became, in a military sense, French territory. Political
missions, military missions, propaganda missions, financial missions,
found their way from Paris to Angora. The entire credit of the French
Republic was placed behind Kemal. The warships of France and the liners
of the _Messageries Maritimes_ became Turkish transports, and the
French arsenals were placed at the disposal of the Turks. Once the ally
of Kemal, France supported him to the fullest extent of its ability and
its resources.” A. T. Polyzoides, “The Greek Collapse in Asia Minor,”
in _Current History_, Volume XVII (1923), p. 35.

[28] Material regarding the Lausanne Conference is scattered and
fragmentary. The text of the proposed treaty is to be found in
_L’Europe Nouvelle_ (Paris), February 24 and March 10, 1923; a summary
is given in _The Times_ (London), February 1, 1923. The newspaper
accounts which I have used are those of _The New York Times_, _The
Times_ (London), _The Manchester Guardian_, _The World_ (New York),
and the _Christian Science Monitor_ (Boston). For reports and
editorial comment in weekly periodicals I have consulted _The Near
East_, _L’Europe Nouvelle_, _Journal des Débats_, _The New Statesman_
(London), _The Nation_ (New York). The following magazine articles have
proved useful: “The Lausanne Conference,” in _Current History_, Volume
XVII (1923), pp. 531–537, 743–748, 929–930; Saint-Brice, “De la Ruhr à
Lausanne,” in _Correspondance d’Orient_ (Paris), February, 1923; “The
Oriental Labyrinth at Lausanne,” in the _Literary Digest_, April 21,
1923, pp. 19–20; H. Froidevaux, “Les négociations de Lausanne et leur
suspension,” in _L’Asie Française_, 33 year, No. 208 (Paris, 1923), pp.
8–10; J. C. Powell, “Italy at Lausanne,” in _The New Statesman_, Volume
XX (1922), pp. 291–292; A. J. Toynbee, “The New Status of Turkey,” in
the _Contemporary Review_, Volume 123 (1923), pp. 281–289; P. Bruneau,
“La question de Mossoul,” in _L’Europe Nouvelle_, February 3, 1923, pp.
138–140. For some of my information regarding the Lausanne Conference I
am indebted to Djavid Bey.

[29] _Cf._ _supra_, Chapters IX and X, _ad lib._

[30] Compare with the provisions of the Treaty of Sèvres, _supra_, pp.
301–302.

[31] _The New York Times_, February 5, 1923.

[32] _Cf._ _supra_, pp. 324–325.

[33] The Chester concessions will be treated more fully in the
succeeding pages.

[34] _Supra_, pp. 245–249, 325–326. It was the Turkish contention that
the Black Sea concessions were invalid for the following reasons: they
were negotiated by a government for the acts of which the National
Assembly assumed no responsibility; they never had been ratified by
the Turkish Parliament; the French bankers had not fulfilled all the
conditions upon which the concessions were predicated.

[35] _The New York Times_, April 12, 1923.

[36] Regarding the _Bank für orientalischen Eisenbahnen_, _cf._
_supra_, p. 32. Accounts of the purchase by British interests are to be
found in _The New York Times_, April 28, May 15 and 16, 1923, and _The
Times_ (London), May 18, 1923.

[37] The Chester concessions conflict, to a degree, with the rights of
the British-owned Turkish Petroleum Company (_cf._ _supra_, Chapter X)
in the vilayet of Mosul. The area in conflict is so small, compared
to the total of the two concessions, however, that it is extremely
doubtful if there will be any serious difficulty in reaching a
satisfactory adjustment.

[38] “Report of the King-Crane Mission to the Near East,” published as
a supplement to the _Editor and Publisher_, Volume 55 (New York, 1922),
pp. I-XXVIII. _Cf._, also, “Report of the American Military Mission to
Armenia,” Senate Document No. 266, Sixty-sixth Congress, First Session
(Washington, 1920).

[39] E. J. Bing, “Chester and Turkey, Inc.,” in _The New Republic_,
Volume XXXIV (New York, 1923), pp. 290–292.

[40] _Cf._ E. M. Earle, “The Outlook for American Imperialism,” in
the _Annals of the American Academy of Political and Social Science_,
Volume CVIII (Philadelphia, 1923).

[41] For the text of this correspondence, _cf._ _Parliamentary Papers_,
No. Cmd. 675 (1921).

[42] _The New York Times_, October 29, 1922.

[43] _Statistical Abstract of the United States_, 1921, _passim_; “The
Trade of Turkey During 1920,” _Commerce Reports_, Special Supplement
(Washington, 1921).

[44] Compare with the terms of the Bagdad Railway concession, _supra_,
pp. 70–71, 77–84.

[45] The text of the Chester concessions—in an English translation
which leaves much to be desired—is to be found in _Current History_,
Volume XVIII (1923), pp. 485–489. For an official copy of the
concessions, with a map, I am indebted to Mr. M. Zekeria, Secretary of
the Turkish Information Service in New York.

[46] The Chester concessions contain the usual provisions for the
utilization of the railways by the gendarmerie and the military, both
in time of peace and in time of war.

[47] _The World_ (New York), April 10, 1923.

[48] The remarks are those of Mr. Ernest Filsinger, of the firm of
Lawrence & Company, exporters. Mr. Filsinger has been good enough to
supply me with a copy of his speech.

[49] _The New York Times_, April 12, 1923.

[50] _Ibid._, April 23, 1923.

[51] _The United States Navy as an Industrial Asset_ (Washington,
Office of Naval Intelligence, 1923). _Cf._, also, C. Merz, “Bristol,
Quarterdeck Diplomat,” in _Our World_, December, 1922.

[52] Allen Westcott, “The Struggle for the Mediterranean,” in _Our
World_, February, 1923, pp. 11–17.

[53] _Cf._, _supra_, pp. 63–65.

[54] _Cf._ W. E. Weyl, _American World Policies_ (New York, 1917),
Chapter V; A. Demangeon, _America and the Race for World Dominion_
(Garden City, 1921), a translation of _Le Déclin de l’Europe_ (Paris,
1920).

[55] _Supra_, pp. 40–42.




INDEX


  Abdul Hamid, Sultan, 5, 23, 198;
    problems of, 9;
    interest in railway construction, 20, 30;
    deposition of, 97.

  Adaban Island, 283.

  Adalia, 267, 285, 302, 324.

  Adana, 22, 72. (_See also_ Mersina-Adana Railway.)

  Adrianople, 29.

  Afiun Karahissar, 34, 53, 324.

  Agadir crisis, 170, 253.

  Agriculture in Turkey. (_See_ Turkey, agricultural conditions.)

  Aidin, 324. (_See also_ Smyrna-Aidin Railway.)

  Alashehr, 34.

  Aleppo, 2, 22, 62, 71, 73, 281, 299.

  Alexandretta, 19, 62, 73, 110, 112, 151.

  Allenby, Field Marshal Sir E. H. H., 298–299.

  _Alliance Israélite Universelle_, 133.

  Amanus Mountains, 22, 72, 94, 234, 277, 289;
    Bagdad Railway tunnels through, 113, 119, 289.

  Amara, 286.

  America. (_See_ United States of America.)

  American Federated Chambers of Commerce for the Near East, 344.

  Anatolia, 280, 302, 305;
    geography of, 10;
    natural resources of, 13–14;
    railways of, 29–30.
    (_See also_ Anatolian Railway, Smyrna-Cassaba Railway, Smyrna-Aidin
        Railway, Black Sea Railways, etc.)

  Anatolian Railway, 34, 53, 61, 63, 224, 248, 339;
    concession of 1888, 32;
    concession of 1893, 33;
    agreement with Smyrna-Cassaba Railway, 59–60;
    board of directors, 85;
    irrigation enterprises, 98, 117;
    economic achievements of, 230–232;
    concessions of 1914, 248–249, 272.

  Andrew, Sir William, 176–177.

  Anglo-French Entente. (_See_ Entente Cordiale.)

  Anglo-French rivalry in the Near East, 318–329.

  Anglo-German Agreement of June 15, 1914, 261–265.

  Anglo-German rivalry, 138, 179–180, 203.

  Anglo-Japanese Alliance, 204.

  Anglo-Persian Oil Company, 259, 261, 283, 286.

  Anglo-Russian Agreement (1907), 204.

  Anglo-Turkish Agreements (1913), 254–258, 263–264.

  Angora, 31, 32, 33, 34, 305, 339.

  Angora Government. (_See_ Grand National Assembly.)

  Angora Treaty (October 20, 1921), 324–325, 333, 352.

  Arabs, 9–10, 15, 87, 196, 207, 282–284, 294, 297, 299, 302, 305, 320.

  Ardahan, 316.

  Arghana, 246, 340;
    copper mines of, 326, 334, 343.

  Armenia, 2, 9, 44;
    republic of, 302, 305;
    proposed American mandate, 348.

  Asia Minor. (_See_ Anatolia.)

  Atlas Line, 107.

  Auguste Victoria, Kaiserin, 132.

  Austria-Hungary, policies in Near East, 11;
    railways in Turkey, 58;
    trade with Turkey, 105–106;
    annexation of Bosnia-Herzegovina, 218;
    relations with Germany in Near East, 129–130.
    (_See also Drang nach Osten._)


  _Backshish_, 94.

  Bagdad, 2, 31, 32, 62, 71, 73–74, 261, 281, 286, 296, 336.

  Bagdad Railway, 3, 7, 21, 34;
    factor in Great War, 4, 172, 278, 288–289, 291, 299–300;
    strategic importance to Turkey, 22, 152–153;
    mileage, 90;
    construction, 94–95, 113–114, 289;
    political importance to Germany, 126–131;
    opponents and friends of enterprise in Germany, 137–142;
    economic success, 233–234;
    disposition of by Allies, 301;
    Angora Treaty, 325–326;
    status in 1922, 326;
    purchase by British bankers, 334.
    (_See also_ Germany, Great Britain, France, Russia.)

  Bagdad Railway Company, incorporation of, 70, 92;
    concession of 1903, 22, 70–75, 77–84, 219;
    attempt to internationalize (1903), 92–93;
    board of directors, 93, 115, 256, 263;
    preliminary concession of 1899, 61–65, 68;
    financing concession of 1903, 77, 91, 93–94, 116;
    concession of 1908, 96–97;
    convention of March, 1911, 111–112, 228–229, 252;
    Franco-German agreement of 1914, 170, 247–252;
    contracts with Lord Inchcape, 259–260, 264;
    agreement with Smyrna-Aidin Railway Company, 260, 264;
    proposed liquidation, 301.

  Bagtché tunnel, 289.

  Bahrein Island, 283.

  Balfour, A. J. (Earl Balfour), 93, 180–185, 202.

  Balfour of Burleigh, Lord, 117.

  Balkan States, 11, 152;
    nationalism of, 7.

  Balkan Wars, 246–275.

  Ballin, Albert, 141, 281.

  Banditry, 9, 12.

  _Bank für Handel und Industrie_, 101, 116.

  _Bank für orientalische Eisenbahnen_, 32, 334.

  _Banque d’Orient_, 99.

  Barrow, General Sir Edmond, 282.

  Basra, 2, 19, 62, 74, 255, 263, 282, 284, 336.

  Bassermann, Herr, 120, 129, 170, 256.

  Beersheba, 298.

  Beirut, 30, 62, 72, 299.

  Belgium. Railway concessions of Belgians in Turkey, 30.

  Berger, Léon, 91, 115.

  Bergmann, Dr. Carl, 260.

  Berthelot, Philippe, 320.

  Bethmann-Hollweg, von, 249.

  Beyens, Baron, 249.

  Bieberstein, Baron Marschall von, 43, 55, 170, 218, 254.

  Bismarck, 40–42, 54–55, 349.

  Bitlis, 340.

  Black Sea Basin Agreement, 65, 149.

  Black Sea Railways, 245–246, 248–249.

  Boer War, 61, 179, 203.

  Boli, 246.

  Bowles, Gibson, 190, 210.

  Bozanti, 325.

  _Breslau_ (Cruiser), 278, 282.

  Briand, Aristide, 329.

  Brusa, 14.

  Bulgaria, 288, 290.

  Bulgurlu, 94, 96.

  Bülow, Prince von, 48, 135.


  Cadman, Sir John, 321.

  Caillard, Sir Vincent, 31, 32.

  Caliphate, 27, 64, 278–279, 296.

  Cambon, Jules, 268.

  Cambon, Paul, 225.

  Capitulations, 10–11, 82, 153–154, 276, 303–306, 316, 332.

  Carden, Admiral, 282.

  Cassel, Sir Ernest, 209, 220–221, 225.

  Chamberlain, Austen, 287.

  Chamberlain, Joseph, 67, 178–179, 185.

  Chéradame, André, 155, 215.

  Chesney, Francis R., 176.

  Chester, Rear Admiral Colby M., 15, 333.

  Chester concessions, 334, 339, 353;
    compared with Bagdad Railway concessions, 340–343;
    political significance of, 350.

  Chrome, 13, 337.

  Churchill, Winston, 282.

  Cilicia, 305, 325–326, 331;
    French mandate for, 302, 325.
    (_See also_ Mersina-Adana Railway.)

  Cilician Gates of the Taurus, 72, 113, 149, 325.

  Cilician-Syrian Railway Company, 326.

  Clémenceau, Georges, 310, 320, 351.

  Coal, Heraclea mines, 14, 324.

  Colonization, 84, 123–125.

  Combes, Émile, 167.

  Commercial Revolution, 1, 3–4, 73. (_See also_ Trade routes.)

  Committee of Union and Progress, 217, 219.

  Constans, M., 60, 155.

  Constantinople, 2, 10, 23, 281, 302.

  Cotton, 16, 50–51, 294, 297, 326.

  Cox, Sir Percy, 283–284, 286.

  Cranborne, Lord, 69.

  Crawford, Sir Richard, 221.

  _Crédit Lyonnais_, 158.

  Crewe, Lord, 282.

  Crowe, Sir Eyre, 259.

  Ctesiphon, 287.

  Curzon, Lord, 23, 113, 192, 197–198, 199, 212–213, 283, 327.

  Customs duties of Ottoman Empire, 95, 111, 180, 226–228, 256, 262.


  Damascus, 12, 21, 30, 62, 72, 299.

  Damascus-Homs-Aleppo Railway, 34, 246.

  D’Arcy Exploration Company, 259, 261.

  Dardanelles, 245, 280, 282, 285, 288–289.

  Dawkins, Sir Clinton, 186.

  Deir, province of, 294.

  Deir es Zor, 248.

  Delamain, General, 283–284.

  Delcassé, Théophile, 66, 68, 155–157, 168–169.

  De Lesseps, Ferdinand, 177.

  Denby, Charles, 345.

  Deschanel, Paul, 159, 172.

  _Dette Publique._ (_See_ Ottoman Public Debt Administration.)

  _Deutsche Bank_, 32–33, 36, 99, 140, 141, 184–185, 261;
    negotiations of 1899 with Imperial Ottoman Bank, 59–60, 155;
    influential position in German industry, 100–101;
    loans to Young Turks, 225;
    negotiations of 1913–1914 with Imperial Ottoman Bank, 170, 247–252.
    (_See also_ Anatolian Railway, Bagdad Railway Company, etc.)

  _Deutsche Levante Linie_, 36, 107.

  _Deutsche Mittelmeer Levante Linie_, 108.

  _Deutsche Orientbank_, 99.

  _Deutsche Orient Mission_, 132.

  _Deutsche Palästina Bank_, 37, 99, 158.

  _Deutsch-türkische Vereinigung_, 281.

  _Deutsches Vorderasienkomitee_, 281.

  _Deutschtum, das_, 135.

  Diarbekr, 12, 14, 31, 73, 246, 340.

  Disraeli, Benjamin (Earl of Beaconsfield), 3, 178, 215.

  Djavid Bey, 95, 219–220, 224–229, 235–236, 247, 275, 278, 331.

  Djemal Pasha, 278, 285, 298.

  Dodecanese Islands, 267.

  Downing Street, 185, 201, 210, 254.

  _Drang nach Osten_, 51, 123, 129–130, 139, 141–142, 315.

  _Dresdner Bank_, 101, 116.


  Eastern Bank, The, 117.

  Egypt, 3, 7, 21, 195, 201, 278, 319.

  El Helif, 96.

  Ellenborough, Lord, 102, 197.

  Entente Cordiale, 188, 203–204, 319.

  Enver Pasha, 275, 278, 285, 297.

  Eregli, 72.

  Erzerum, 12, 246, 303, 339.

  Eski Shehr, 14, 33.

  Euphrates River, 2, 74, 81.
    (_See also_ Lynch Brothers.)

  Euphrates Valley Railway Company, 176.

  Euphrates & Tigris Steam Navigation Company, Ltd. (_See_ Lynch
    Brothers.)


  Falkenhayn, General von, 298–299.

  Fashoda incident, 61, 203.

  Fouad Bey, Dr. I., 343.

  France, 7, 23, 276, 293;
    French railways in Turkey, 30, 34, 53, 59, 165–166, 245–246,
      248–249. (_See also_ Smyrna-Cassaba Railway, Damascus-Homs-Aleppo
      Railway, etc.);
    trade with Turkey, 104–106;
    imperialism, 122, 294, 300, 330;
    attitude toward Bagdad Railway, 66, 94, 153–169;
    investments in Turkey, 154–155;
    spheres of interest in Near East, 293–294, 302;
    mandate for Syria and Cilicia, 302, 320, 325;
    rivalry with Great Britain in Near East, 318–329;
    treaty of March 9, 1921, with Turkish Nationalists, 323–324;
    Angora Treaty, 324–326;
    policy at Lausanne Conferences, 329–335;
    attitude toward Chester concessions, 333–334, 345.

  Francis I, 154.

  Franco-German convention of 1914, 247–252, 272.

  Franco-Russian Alliance, 153, 158–159, 168.

  Franco-Turkish Treaty of March, 1921, 323–324.

  Franco-Turkish Treaty of October, 1921. (_See_ Angora Treaty.)

  Franklin-Bouillon, Henri, 324, 329.


  Gallipoli, 8, 280, 285.

  Gaza, 288, 299.

  Genoa Conference, 329.

  George V, of Great Britain, 258.

  Germany, railways in Turkey. (_See_ Anatolian Railway, Bagdad Railway,
     _Deutsche Bank_);
    trade with Turkey, 101–106, 109, 118;
    banks in the Near East, 98–101;
    steamship lines in the Near East, 36, 107–110;
    military missions to Turkey, 38, 269, 288, 297–298;
    Near Eastern policies, 38–45, 64–65, 120–131, 261–265, 276–279,
      287–292, 297–300;
    schools and missions, 131–136, 145;
    imperialism, 39–40, 44–52, 56, 114, 125–135, 277, 280–281, 292;
    anti-imperialism, 137–138;
    rivalries with Great Britain, 138, 179–180, 203;
    alliance with Turkey, 271;
    propaganda, 281–282;
    military campaigns in Turkey, 285–290, 296–299;
    destruction of interests in Near East, 301–302, 314–315.

  _Goeben_ (cruiser), 278, 282.

  Golden Horn, 29, 338.

  Goltz, Field Marshal von der, 21, 38–39, 153, 223, 282, 288, 289, 296.

  Gouraud, General, 323.

  Grand National Assembly, 305, 316, 323, 325, 331, 333–334, 343.

  Great Britain, Near Eastern policies, 11, 23, 66–67, 68–69, 111,
      195–208, 225–228, 252–265, 282–287, 297, 322;
    attitude toward Bagdad Railway, 66–67, 69, 182–201, 205–209, 261–265;
    imperialism, 122, 195–197, 200, 277, 282, 294, 300;
    trade with Turkey, 105–106;
    economic enterprises in Near East, 30, 53, 60, 117, 189–192, 220,
      261 (_see also_ Lynch Brothers, Anglo-Persian Oil Company,
      Inchcape, etc.);
    spheres of interest in Ottoman Empire, 294, 302;
    acquisition by Bagdad Railway, 334–335;
    military campaigns in Near East, 283–285, 286–287, 296–297, 298–299.
   (_See also_ headings under “Anglo,” Persian Gulf, Mesopotamia,
    Suez Canal, etc.)

  Great War, 234, 275–276;
    rôle of Bagdad Railway in, 285–290, 296–299.

  Greece, 11, 302, 303, 306.

  Greco-Turkish War (1920–1922), 306, 329.

  Grey, Sir Edward (Viscount Grey), 111, 198, 225–227, 228, 243, 255,
    261–262, 282–283.

  Grothe, Dr. Hugo, 281, 307.

  Guaranty Trust Company of New York, 338.

  Gwinner, Dr. Arthur von, 114–115, 121, 125, 129, 141, 184, 186, 221,
    236, 247, 281.


  Haidar Pasha, 298, 325.

  Haidar Pasha-Ismid Railway, 30, 31, 80.

  Haidar Pasha Port Company, 86, 112.

  Haifa, 246.

  Hakki Bey, Ismail, 219.

  Hakki Pasha, 254–255, 261.

  Haldane, Lord, 198, 254.

  Hama, 72.

  Hamburg-American Line, 108–109, 141.

  Hanotaux, Gabriel, 241–242.

  Hatzfeld, Count, 38.

  Hedjaz, 284, 299, 302.

  Hedjaz Railway, 21, 27, 246, 302.

  Helfferich, Dr. Karl, 52, 97, 141, 225, 236, 247, 249.

  Heraclea, 246;
    coal mines of, 14, 324.

  _Hilfsverein der deutschen Juden_, 136.

  Hirsch, Baron, 32.

  Hittites, 12.

  Holy Land, 6, 299.
    (_See also_ Palestine.)

  Holy War, 278–279, 281.

  Homs, 72, 246.

  Huguenin, M., 63.


  Immigration, 234.

  Imperial Ottoman Bank, 59, 93, 117, 245, 246–248.

  Imperialism, 3, 5–8, 11–12, 45–52, 114, 235–236, 267, 279–280,
    292–296, 306, 316–318, 331, 337–338, 350.
    (_See also_ Imperialism as sub-topic under France, Germany,
    Great Britain, Italy, Russia, United States.)

  Inchcape, Lord, 109, 192, 256, 258–260.

  India, 7, 126, 178, 195, 196, 282, 283.

  Industrial Revolution, 13, 45–46.

  Industry in Turkey. (_See_ Turkey, industrial backwardness.)

  Interallied Commission on Ports, Waterways, and Railways, 300.

  Interallied Financial Commission, 303.

  International Court of Justice, 350.

  Irak, 16, 108, 277, 326.
    (_See also_ Mesopotamia.)

  Irrigation, 16–17, 98, 117, 205, 221, 256, 263, 297.

  Ismet Pasha, 333–334.

  Ismid, 14, 305.

  Italy, trade with Turkey, 105–107;
    imperialism, 11, 173–174, 218, 295, 300, 330;
    Tripolitan War, 246;
    economic interests in Turkey, 266–267;
    spheres of interest in Near East as defined by secret treaties,
      285, 295, 302, 305;
    treaty of 1921 with Turkish Nationalists, 324.


  Jäckh, Ernst, 204–205, 279, 281, 307.

  Jaffa, 30, 72, 246, 299.

  Jagow, Gottlieb von, 254, 268.

  Jastrow, Morris, 142.

  Jaurès, Jean, 242.

  Jericho, 299.

  Jerusalem, 30, 72, 299.

  _Jerusalems-Verein_, 132, 135.

  Jezirit-ibn-Omar, 327.

  Joffre, Marshal, 268–269.

  Johnston, Sir Harry H., 205–206, 215, 254.


  Kaisarieh, 272, 340.

  Kapnist, Count Vladimir I., 58.

  Kapp, Wolfgang, 141.

  Karaman, 72.

  Kars, 316.

  Kaulla, Dr. Alfred von, 31.

  Kemal Bey, Yussuf, 325.

  Kemal Pasha, Mustapha, 298, 303, 323, 347.

  Khanikin, 58, 75, 240.

  Kharput, 73, 246, 340.

  Kiderlen-Waechter, von, 239.

  Kilometric guarantees, 31, 33, 77–78, 85, 90, 245.

  Kipling, Rudyard, 137.

  Kitchener, Lord, 283.

  Klapka, M. de, 247, 249.

  Konia, 14, 33, 62, 72, 281.

  Koweit, 4, 180, 197–198, 255;
    Sheik of, 181, 223, 255, 284.

  Kühlmann, Herr von, 255, 259, 261.

  Kurds, 9.

  Kurna, 284.

  Kut-el-Amara, 226, 261, 286, 289–291.


  Land of the Two Rivers. (_See_ Mesopotamia.)

  Langénieux, Cardinal, 162–163.

  Lansdowne, Lord, 69, 93, 122, 184, 197.

  Lausanne Conferences (1922–1923), 306, 329–333, 334–343.

  League of Nations, 327, 350.

  Ledochowski, Cardinal M. H., 144.

  Lee, Lord, 329.

  Lichnowsky, Prince, 139–140, 146, 255, 262.

  Lloyd George, David, 199, 242–243, 310, 320, 351.

  Ludwig Loewe & Company, 37, 101.

  Lynch Brothers, 74, 81, 82, 111, 190–191, 210–211, 256, 260.


  McMahon, Sir Arthur H., 284.

  Macedonian Railways Company, 113.

  Mackensen, Dr., 34.

  Mackensen, Field Marshal von, 297.

  Mahmoud Pasha, 60.

  Mandates, 302, 320, 325, 327, 348.

  Manissa, 30.

  Maude, General Sir Stanley, 296, 297.

  Meade, Colonel, 198.

  Mecca, 21, 62.

  Medina, 21.

  Mendeli, 261.

  Mersina, 19, 72, 110.

  Mersina-Adana Railway, 30, 109, 321.

  Mesopotamia, 32, 35, 51, 124, 140, 147, 152, 176, 180–181, 226, 234,
      256, 262–266, 277, 280, 282, 284, 288, 327;
    trade routes, 1–2;
    natural resources, 14–17;
    Bagdad Railway in, 73–75;
    German steamship service, 108–109;
    military campaigns, 286–287, 289–290, 296–299;
    British sphere of interest, 294–295;
    British mandate for, 302, 320;
    British Civil Administration, 297, 326.
    (_See also_ Persian Gulf, Shatt-el-Arab, Koweit, Irak.)

  Metternich, 295.

  Middle East, 3, 178, 196.

  Militarism, 268–271, 275–276.

  Milyoukov, Professor, 315.

  Minerals in Turkey, 13–15, 50–51, 280, 340.
    (_See also_ Chrome, Oil, Turkey, mineral resources.)

  Missions and missionaries, effect on Turkey, 6;
    in support of the Bagdad Railway, 131–133, 141;
    German, 132–133;
    French, 133, 135, 160–165;
    Italian, 133, 173–174;
    American, 336.

  _Mittel-Europa_, 277, 290, 292.

  Mocha, 10.

  Moltke, General H. K. B., 145, 176.

  Morgen, Major, 34.

  Morley, Viscount, 207–208.

  Mosul, 2, 12, 62, 73, 261, 305, 321, 327, 332.

  Mount Stephen, Lord, 184, 209.

  Mudania armistice, 306.

  Mudros armistice, 299.

  Mutius, Herr von, 109.


  National Bank of Turkey, 220, 261.

  National Pact, 304–305, 316.

  Nationalism, 267–268;
    Balkan, 7;
    German, 136–137, 163;
    French, 136, 163;
    Italian, 173–174;
    English, 211;
    Turkish, 222, 275, 278, 303–304, 314.
      (_See also_ Young Turks, Pan-Turanianism, Kemal Pasha, etc.)

  Naumann, Friederich, 127.

  Near East. (_See_ Ottoman Empire, Turkey, Middle East.)

  Neuflize, Baron de, 247.

  Neutral Zone of the Straits, 329.

  Nicholas, Grand Duke, 290, 293.

  Nicholas II, Tsar of Russia, 239.

  Nineveh, 73, 137.

  Nisibin, 73, 246, 325, 327.

  Nixon, General J. E., 286.

  Northcote, Sir Stafford, 178.

  North German Lloyd Steamship Company, 107.


  O’Connor, Sir Nicholas, 60.

  Oil, 14–15, 50–51, 147, 261, 282–283, 286, 294, 321, 332, 338, 340.

  Open Door, 83, 125, 263, 326, 339.

  Oriental Railways, 18, 29, 32, 113.

  Osmanie, 111.

  Ottoman-American Development Company. (_See_ Chester concessions.)

  Ottoman Civil List, 15.

  Ottoman Empire, economic, strategic, and religious importance, 4–17;
    military system, 26;
    partition of, 285, 293–295, 302–303;
    abolition of Sultanate, 306.
    (_See also_ Turkey, Abdul Hamid, Ottoman Public Debt Administration,
       etc.)

  Ottoman General Staff, 22.

  Ottoman Ministry of Public Works, 31, 32, 81, 246.

  Ottoman Ports Company, 260.
    (_See also_ Inchcape.)

  Ottoman Public Debt Administration, 11, 31, 32, 81, 303, 305;
    railway policies, 17–20, 29.

  Ottoman River Navigation Company, 258.
    (_See also_ Inchcape.)

  Oulu Kishla, 340.


  _Palästinaverein_, 133.

  Palestine, 280, 294, 298, 319–320;
    British mandate, 302.

  Palmerston, Viscount, 176–177.

  Panderma, 221, 245.

  Pan-Germanism, 35, 103, 281;
    support of Bagdad Railway, 136–137.

  Pan-Islamism, 64, 87, 222, 276.

  Pan-Slavism, 164.

  Pan-Turanianism, 222, 237.

  Parker, Alwyn, 261.

  Peninsular & Oriental Steam Navigation Company, 192, 256.

  Persia, 73, 122, 196, 239–240, 255.

  Persian Gulf, 2, 74, 255, 263, 280, 282, 322;
    British strategic interests, 196–199, 211–212.
    (_See also_ Koweit, Shatt-el-Arab, Anglo-Persian Oil Company.)

  Petroleum. (_See_ Oil.)

  Pichon, Stephen, 224, 243.

  Pobêdonostsev, 58.

  Poincaré, Raymond, 333.

  Ponsot, M., 249.

  Potsdam Agreement, 199, 239–244.

  Pressel, Wilhelm von, 18, 26, 30.

  Propaganda, 281–282.


  _Quai d’Orsay_, 169, 245, 247.


  Radek, Karl, 130.

  Railways, military value of, 22, 176.
    (_See_ Abdul Hamid, Anatolia, Cilicia, Syria, Mesopotamia,
    Anatolian Railway, Bagdad Railway, etc.)

  Ras el Ain, 114.

  Rathmore, Lord, 260.

  Rechnitzer, Ernest, 60, 85–86, 87.

  Reparation Commission, 301–302.

  Repington, Colonel, 283.

  Revelstoke, Lord, 184, 209.

  Reventlow, Count zu, 140–141.

  Rhodes, Cecil, 67, 178.

  Richelieu, 295.

  Rohrbach, Dr. Paul, 15, 16, 27, 120, 125, 127, 128, 136, 213, 218,
    287.

  Roosevelt, Theodore, 243.

  Rosenberg, Baron von, 249.

  Rouvier, M., 157, 167, 169.

  Royal Dutch Petroleum Company, 261.

  Russia, Near Eastern policies, 7, 11, 23, 42, 147–153, 239–244,
      315–318;
    attitude toward Bagdad Railway, 65–66, 147–153;
    Potsdam Agreement with Germany, 199, 239–244;
    entente with Great Britain and France, 153, 158–159, 168, 204;
    imperialism, 7, 9, 15, 23, 61, 65, 127, 151–153, 166–168, 177,
      183, 212, 240–241, 269, 276, 278–279;
    spheres of interest defined by secret treaties, 285, 293;
    Soviet Republic and the Near East, 315–318.

  Russo-Japanese War, 3, 153.

  Russo-Turkish War of 1877, 150, 152.


  Sadijeh, 73, 75, 114, 240.

  Samarra, 73, 297.

  Samsun, 31, 246, 339.

  Sanders, Field Marshal Liman von, 269, 278, 299.

  San Remo Conference, 320.

  San Remo Oil Agreement, 321.

  Sarolea, Charles, 131.

  Sazonov, 239.

  Sazonov-Paléologue Treaty, 293.

  Scheidemann, Philip, 130, 137, 214.

  Schoen, Baron von, 93, 101–102, 120, 125, 130–131.

  Seljuk Turks, 72.

  Sericulture. (_See_ Silk.)

  Shatt-el-Arab, 2, 74, 81, 264.

  Sherif of Mecca, 87, 284.

  Siemens, Carl von, 141.

  Siemens, George von, 31, 41, 68, 121.

  Silk, 20, 158, 294.

  Simplon-Orient Express, 300.

  Sinai Peninsula, 4, 21, 27, 285.

  Sivas, 31, 246, 303, 339, 340.

  Slav Peril, 242.

  Smith, Sir Henry Babington, 188, 209, 227.

  Smyrna, 4, 19, 110, 302, 303, 306, 324.

  Smyrna-Aidin Railway, 30, 84, 189, 260, 264.

  Smyrna-Cassaba Railway, 30, 34, 53, 59–60, 245.

  _Société d’exploitation des chemins de fer de Cilicie-Nord Syrie_,
     326.

  _Société du chemin de fer de Damas-Hama et prolongements_, 34, 246.

  _Société du chemin de fer ottomane d’Anatolie._ (_See_ Anatolian
     Railway.)

  _Société française de Heraclée_, 14.

  _Société impériale ottomane du chemin de fer de Bagdad._ (_See_
     Bagdad Railway Company.)

  _Société pour la construction et l’exploitation du réseau de la Mer
     Noire._ (_See_ Black Sea Railways.)

  _Société pour enterprises électriques en Orient_, 99.

  Soma, 30, 245.

  Soma-Panderma Railway, 221, 245.

  Speyer, Edward B. von, 141.

  Spheres of influence, 277, 294, 295, 302.

  St. Jean de Maurienne Agreement, 295, 302, 311.

  _Stahlwerksverband_, 103.

  Standard Oil Company, 15, 232.

  Stemrich, Herr, 34.

  Sublime Porte, 43, 55, 149, 247, 252, 261.

  Subsidies, railroad, 75–80.

  Suez Canal, 2, 3, 4, 21, 27–28, 177, 178, 192, 195, 204, 259, 277,
    282, 283, 285, 290.

  Suleiman the Magnificent, 7.

  Suleimanieh, 340.

  Sykes, Sir Mark, 251, 272–273, 295.

  Sykes-Picot Treaty, 293–294, 310.

  Syria, 2, 11, 280, 288, 302, 320, 323, 328;
    railways of, 30, 34, 245–246, 248–249, 326;
    military campaigns, 299;
    French sphere of interest, 293–294;
    French mandate, 302, 320, 325.


  Tardieu, André, 169–170, 203, 214, 267–268.

  Taurus Mountains, 72, 94, 113, 149, 288.

  Tchoban Bey, 327.

  Teheran, 75, 240.

  Tekrit, 73, 294.

  Thrace, 305, 306, 324.

  Tigris River, 2, 74, 81.
    (_See also_ Lynch Brothers.)

  Tireboli, 239.

  Townshend, General Sir Charles, 286, 287, 289, 290.

  Trade routes, 2, 71.

  Trans-Caspian Railway, 2, 150.

  Trans-Caucasian Railways, 2, 150.

  Trans-Persian Railway, 2, 147.

  Trans-Siberian Railway, 2, 3, 4, 147, 150.

  Treaty of Berlin (1878), 149, 162–163.

  Treaty of Bucharest (1913), 246.

  Treaty of Lausanne (1912), 267.

  Treaty of London (1915), 285, 302.

  Treaty of Sèvres (1920), 301, 305, 306.

  Treaty of Versailles (1919), 301.

  Trebizond, 246, 339.

  Tripartite Agreement (Great Britain, France, Italy, 1920), 301.

  Triple Alliance, 107, 271.

  Triple Entente, 275.

  Tripoli-in-Syria, 72, 246.

  Tripolitan War, 246.

  Turco-Italian Treaty (March, 1921), 324.

  Turkey, agricultural conditions, 5, 12, 13, 15–16, 18, 20, 230–232;
    industrial backwardness, 12–13;
    general economic conditions, 12–17, 233–234;
    finances (_see_ Ottoman Public Debt Administration);
    mineral resources, 13–15, 50–51, 280, 340;
    foreign trade, 36, 104–107, 339;
    alliance with Germany and Austria, 271;
    entry into Great War, 275–278;
    as spoils of war, 280–281, 285, 292–295, 301–302;
    military campaigns of 1920–1922, 305–306;
    a republic, 306.
    (_See also_ Ottoman Empire, Anatolia, Cilicia, Syria, Mesopotamia,
       Grand National Assembly, Angora Treaty, Lausanne Conferences,
       etc.)

  Turkish Petroleum Company, 261, 321, 353.


  Union and Progress, Committee of, 217, 219.

  United States of America, railroad subsidies, 79;
    economic changes since the Great War, 337–338;
    American interests in the Near East, 336, 337–338
      (_see also_ Chester concessions);
    naval activity in Near East, 346–347;
    outlook for American imperialism, 337–338, 347–350.


  Van, 246, 340.


  Wangenheim, Baron von, 43, 270, 278, 282.

  Washington Conference (1921), 329.

  Weygand, General, 333.

  _Wilhelmstrasse_, 121, 133, 142, 201, 236, 247, 254.

  Willcocks, Sir William, 16, 205, 214–215, 220–221.

  William II, German Emperor, 142, 198, 298, 349;
    imperialistic policies of, 39–40, 44–52, 349;
    visits to Turkey, 41, 43–44, 55, 134–135;
    and Bagdad Railway concession of 1899, 68.

  Wilson, Woodrow, 291, 336.

  Witte, Count, 58, 68, 149–150.

  _Württembergische Vereinsbank_, 31.


  _Young Turks_, 5, 13, 17, 110–111, 217–218;
    hostility to Germans, 220–224;
    financial difficulties, 224–229;
    efforts to conciliate France and Great Britain, 244, 252–261;
    hostility to imperialism, 267.

  Young Turk Revolution, 27, 96.

  Youmourtalik, 340–341.


  Zander, Dr. Kurt, 68.

  Zihni Pasha, 68.

  Zinoviev, M., 65, 149.

  Zubeir, 75.