'File 73/7 III (D 24) Status of Kuwait & Anglo-Turkish negotiations' [‎299r] (609/709)

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The German Government could not absolutely prohibit any German subject
from buvinsr shnres in the new navigation company, or even liom en_ > <i_,in r ,
in navigation, but they would undertake not to " encourage or support any
German subject in taking part in the navigation. Hie German Government
hoped, however, for the sake of public opinion, that the word monopoly
might be avoided in the agreement with Turkey. I said I would report
his remarks, but that the monopoly was the essence of the whole thing, just
as in effect the Germans tiad a monopoly on the railway, and I said it seemed
to me impossible to secure our object if the word were omitted.
He said the German Government hoped w r e would agree to give an
undertaking that there should be no discrimination between the different
nations in regard to river traffic rates. (This is quite reasonable.)
Then he said that, if the company agreed to the" indefinite postponement
of the line from Basrah to the Gulf, it would require financial compensation
from|the Turkish Government for that section (100 miles or so). (I he Germans
seem to intend to squeeze the poor Turks, but this is not our business.)
Lastly, he said that the company wished not merely to secure the alloca
tion of specific revenues for the main lineup to Basrah, but also for the branches
(which include the Khanikin branch). He said this was a detail which need
not be specially brought to Sir E. Grey's attention, but it is owing to the
introduction of the Khanikin branch, a very important detail, and however
important the construction of the Khanikin branch may be as an artery or
British trade, there seems little doubt that llussia will oppose any attempt on
Germany's part to secure the immediate allocation of revenues for this branch,
as the date of completion of that branch has an important effect on Russia a
obligations under the Potsdam agreement. The Baghdad Railway Company is
of course already entitled, under the original concession of 19 to secure the
allocation of revenues for that branch eventually, but I think we should
stipulate with Herr Kiihlmann that, having regard to the exhausted financial
condition of Turkey at the moment, the company should be content if they
secure the allocation of revenues for the main line up to Basrah, leaving the
branches till a later date. Otherwise there will be a sharp divergence ot
opinion in the Financial Commission at Paris.
Meanwhile, it seems important to maintain the position that the question
of securing the allocation of revenues for the railway does not enter as a
condition expressis verbis into our bargain with Germany. All that Herr
Kuhlmann asked on the 7th May was a sort of collateral assurance that we
would help them to get security for the main line to Basrah.
It seems very desirable to tie the Germans down as soon as possible to
their undertaking about the river navigation, lest they should whittle it away,
and I venture to suggest that a Draft Agreement should be prepared ad
referendum*
21st May 1913. A - :P -
CCopv sent informally to the Army Depaitment for transmission to the Divi-
sion of the Chief of the btalX.)
(Received on the 15th June 1913 with Political Secretary's letter No. 22, dated the 30th
v May 1913.)
ASIATIC TURKEY AND ARABIA. [21st May.]
CONFIDENTIAL. . S ECTION 5.
23545 :No - 1 -
Sir Edward Grey to Sir F. Bertie.*
No 322. -Foreign Office,
21st May 1913.
^ir
I explained to the French and Russian Ambassadors to-day the position
about the Baghdad Railway. W e had made up our minds that nothing could
" ~ ^" • Also to Mr. O'beirue (No. JJ05).