'File 73/7 III (D 24) Status of Kuwait & Anglo-Turkish negotiations' [‎296r] (603/709)

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He then said that he would like to warn me about Herr Ruete : he was a
perfectly honest, though somewhat garrulous individual; he had no direct con
nection with the Deutsche Bank, but was anxious de se faire valoi^, ,, and he
was a great friend of Mr. Lynch. He was, moreover, always preaching in the
German press on the theme that the Baghdad Railway should stop at Baghdad
and not go on to Basrah,—ideas which Herr von Kuhlmann thought might be
traced to the financial interests of Mr. Lynch. As a matter of fact, the
Baghdad Railway Company and the Deutsche Bank, and the German Govern
ment, attached the greatest importance to the construction of the Baghdad-Basrah
section : he thought it well to make it plain that Herr Ruete had no sort of
mandate from either the German Government or the Deutsche Bank to
negotiate on railway questions. I replied to Herr von Kuhlmann that this
applied equally, mutatis mutandis^ to Mr. Lynch. Be had no authority to
enter into any negotiations about the railway on the part of His Majesty's
Government, and anything he might say should be treated with great circums
pection.
Herr von Kuhlmann then told me that some years ago he had noticed that
a great deal of the opposition to the Baghdad Railway in the English press
emanated from Mr. Lynch, and he had accordingly recommended the Company
to give Mr. Lynch a job ; consequently the arrangement had been made for
Mr. Lynch's steamers to convey material for constructing the railway, and
since then Mr. Lynch had become strongly in favour of Anglo-German
co-operation, and the press agitation had diminished.
A. P.
Foreign Office, 9tk May 1913,
Enclosure in No. 1.
Statement communicated to Hakki Paaha, 9th May 1913.
(Confidential.)
We have been asked by Hakki Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. to consider whether His Majesty's
Government would prefer a solution of the river navigation question on the
lines of—
(1) the draft Convention already discussed, or
(2) the abortive Lynch Convention of 1909, or
(3) the maintenance of the existing British Company as a separate
enterprise, and, subject to the maintenance of its rights, the grant of a
concession to a new Ottoman Company jointly controlled and financed, of
exclusive rights of steam navigation on the rivers.
It is obvious that so much must depend on the details of any scheme that
only a provisional indication of views can be given at the present stage.
Subject, however, to the satisfactory adjustment of the detailed arrangements,
we are at present disposed towards a solution on the lines of the third alter
native, which will have the advantage of avoiding the difficulty of the flag.
As regards the composition of the new Ottoman Company, Hakki JPasha
suggested a tripartite arrangement under which one-third of the capital would
he Turkish, one-third British, and one-third would be supplied hy the Belgian
Company for the transport of materials for the Baghdad Railway. As the
capital of the last-named Company is half British and half German, the effect
of this would be that half the capital would be British, one-third Turkish, and
one-sixth German,
As regards this proposed division of capital, we must he free to arrange
with the Germans as to the allocation between the two countries of the Anglo-
German share. In the event of the Germans foregoing their share, we should
Jje willing that this should be divided equally between Great Britain and
Turkey,