18 DECEMBER 1909, Page 5


THERE are many signs that the German financiers interested in the Baghdad Railway are trying to launch their scheme afresh, and of course in a new form. It is therefore important that Englishmen should acquaint themselves with the past history of the scheme, and. should not allow themselves to be taken unawares, as they were in 1903, and. again in some degree in 1908, by the German attempt to secure British co-operation. In 1903 Mr. Balfour and. Lord Lansdowne very nearly committed the country to an outrageous proposal, and the debate in the House of Commons almost made one think that most Members became aware for the first time that Great Britain had need. of a definite policy in the Middle East. In the Times of Tuesday the Paris correspondent says : "Political opinion is beginning to be seriously concerned at the efforts of German finance under the direct patronage of the German Government to compromise French policy in the Near and Middle East by means of the Baghdad Railway." Only a fortnight ago a company was formed at Glarus, in Switzerland, for con- structing the second section of the Baghdad Railway. The chairman of the new company is Herr Gwinner, the head of the Deutsche Bank, who has done so much for the extension of German influence in the Balkans and Asiatic Turkey. In the council of the company German predominance is ensured. The council consists of four Germans, an Austrian, a Turk, three Swiss, and three Frenchmen. It will be seen that the company is Swiss only in name, and apparently the Canton of Glarus was chosen as the place of origin because legislative facilities are greater there than elsewhere. As M. Victor Berard, the well-known editor of the Revue de Paris, and one of the acutest minds in France, points out, the French Government has hitherto laid it down that the absolute condition of French co-operation in the Baghdad Railway scheme was that French and German influence should be equal in the management of the undertaking. Certain French financiers have apparently consented to waive on their own account the condition which their Government wisely held to be essential.

But this is not the only sign of renewed activity in the Baghdad Railway enterprise. M. Berard observes that for several months there have been reports of a forth- coming understanding between Germany and Great Britain, and it is said here that Sir Ernest Cassel is at this moment carrying on negotiations in Berlin, According to the reports, the Germans would abandon in favour of Great Britain their intention of building the line between Baghdad and the Persian Gulf ; Russia would be conciliated by material concessions in the case of all branch lines serving the Armenian provinces and the Persian frontier ; and France would have her wishes met in Syria. In fine, it is evident that Herr Gwinner, with the authority of the German Government at his back, is holding out tempting baits to induce Great Britain, France, and Russia to reconsider the whole question of the Baghdad Railway. Whether our Foreign Office is inclined to go back on its former decision in the light of the new conditions we cannot say. We have no means of knowing for certain what bait is being offered ; but we would urge our countrymen to take note of the fact that the scheme is being presented in a new form, and to remember that it is most desirable that they should have a clear comprehension of what conditions it would be possible, and what conditions it would be impossible, for us to accept. As long ago as 1841 Moltke began to plan a new sphere of German influence ; by means of strong financial direction, amounting to control in many cases, Germany was to be the preponderant Power from the Elbe to the Persian Gulf. To-day the hand. of Germany is to be seen at work on a large number of Balkan railways, and on nearly all the railways of Asiatic Turkey. German policy in this respect has been logical, persevering, clear, and perfectly consistent. The Baghdad Railway enterprise is a very important part of this policy, and the only reason Germany wants the co-operation of other Powers is that the scheme is very difficult to carry out without their con- sent and without their financial assistance. But although she wants the help of other Powers, she has no notion of lightly surrendering her own privileges and her own supreme authority in the management of the line. In 1903 Great Britain was very nearly persuaded to co-operate under a deed. of partnership which would have been remarkably like that which we now see reappearing in the so-called Swiss company. The British votes would have been in a minority, and the German directors could practically have done what they liked. We did not then, and we do not now, take a dog-in-the-manger view of the proposal—we could have no possible objection to Germany building the line on her own responsibility if she cares to do it—but we did and do object to British investors being advised by their Government to put their money in a com- mercial undertaking on extremely disadvantageous terms. It is not the proper function of the Foreign Office to advise investors in any case ; but when it proposed to take this exceptional course in circumstances which seemed to promise not only a loss to the investors, but a loss of British political prestige in the Middle East, the affair passed beyond the limits of sanity. So far only one section of the Baghdad Railway has been built : that lying on the easy plain between llonia, and Eregli, where construction was extremely cheap. Little more was needed than to put down ballast and to lay the line upon it ; hardly any bridges or culverts were required. The difficulties are all ahead ; the Taurus Range has to be penetrated, and after that the line will run through dangerous and difficult country, much of which is so barren that it is impossible to expect a good revenue from freights. We cannot conceive why Englishmen should put their money into an undertaking of this kind rather than in, let us say, the railways of Canada. If the line were built by Germany, well and good; in the ordinary course of commerce it would be of use to us, and we should be of use to it by supplying it with passengers and goods. We cannot see the sense of promising that our connexion with the line as a whole should be anything more definite than that.

It is true, however, that we have a particular political interest in the proposed section of the line between Baghdad and the Persian Gulf—what is generally spoken of as the Gulf Section—and we have always insisted either that we should have full and undisputed management of that section, or else that the management of it should be in a true sense independent. Germany resisted British demands in this respect, but it is said now that she is prepared to satisfy them. This, of course, would, be an important concession, and perhaps we may assume that Germany would also consent to omit the original stipula- tion that the Gulf Section of the line should not be worked till the rest of the line was ready. But it is useless, after all, to discuss mere probabilities ; it is enough to notice that circumstances have changed in several ways since the scheme of 1903 was put forward. Then we should have been placed in a very false position if the business of the railway had clashed violently with any of the numerous Russian interests with which it would inevitably have come in contact. We can no longer, fortunately, be used as a lightning-conductor to carry off the ill-humours between Russia and Gerraa.ny,—the Anglo-Russian Convention has changed all that. But for Germany the situation has changed even more than for ourselves. She recognises now that the kilometric guarantees to which the ex-Sultan com- mitted his country impose such a terribly unfair strain on the Turkish Government that there is not much chance that the payments can be made regularly, in spite of the Powers having given their consent to a rise in the Turkish Customs dues. Again, Germany is probably alarmed at the persistence with which Sir W. Willcocks advocates his scheme for bringing produce from Mesopotamia to the Mediterranean. Mesopotamia is to be revitalised by irrigation ; the line to the Mediterranean would. be only about five hundred miles long, and it would tap the very sources which otherwise would bring the best custom to the Baghdad Railway. Thus there are extremely good reasons why Germany should try harder than ever to share her responsibility with other Powers. We do not know, as we have said, whether she will offer, or has already offered, us absolute control of the Gulf Section on terms satisfactory in themselves. But we hold. that even if these terms were so gratifying to us as to appear to be a direct gift from the gods, we could even then accept them only on certain conditions, One is that Germany should spontaneously relieve Turkey of the grossly unjust kilometric guarantees, to which .A.bd-ul- Ilamid could never have consented if he had had the least care for the welfare of railicej. Another is that France and Russia should be y informed of any agreement we might come to, and that their consent should be indispensable to the conclusion of that agreement. A third—almost too obvious to be mentioned—is that our co-operation in the scheme should have the approval of the Turkish Government. We have only to add that in speaking of the Gulf Section as being wider British control we altogether exclude the possibility of a dual or international control of the railway generally. That could lead to nothing but friction and tension. It may be that Germany would not agree to our simply taking over the construction and control of the Gulf Section. But if her new offer is found to differ very substantially from this concession, we shall only say as we said in the original circumstances : "Let Germany build the line and pay the bill herself. There is no pressing reason why we should. have anything whatever to do with it." The danger against which we hope to put people on their guard is that a new offer should be jumped at without proper consideration merely because the circumstances have changed since the first unreasonable offer was made.