'File 73/7 II (D 22) Status of Koweit [Kuwait] - Baghdad railway, Anglo Turkish negotiations' [‎60v] (126/540)

the Board of Trade, containing observations on some of the points raised m my
despatch No. 922 of the 13th December last on the question of the results to our
interests of a change of the trace of the Baghdad Kailway between Mosul and Bagh
dad, bringing Khanikin on to the trunk line. The application of the German
company for this alteration having been rejected by the Turkish Government these
questions become of rather academic interest, but I desire nevertheless to ofier
a few observations on the Board's letter.
The Board were of opinion that the suggested change would not be detrimental
to British interests because, among other reasons, if the Baghdad-Khanikm sec ion
were built before the remainder of the line, British trade from the south would
naturally be benefited. This is, of course, perfectly true, but it does not state
the whole case. British trade would not be benefited any more than that of any
other country—than that of Germany, for instance, and German trade would have
the additional advantage of being carried by a German-managed railway, one ot
whose cardinal principles is to further German interests m every possible manner.
I am quite aware that German transit trade to Persia is at present msignihcant as
compared with our own ; but we have to look to the future, and to the probabi i y
that Germany, with its subsidised line of steamers to the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. and its
railway in Turkey and interest in the future railways system In Northern Persia,
will, at no distant date, make a great effort to capture the markets of those regions^.
The Germans, to use a homely phrase, play a very close game, and we cannot
afford to give away" any points.
I regret that the Board of Trade should have been led to think that I am
under a misapprehension as to its views with regard to the possibility of discrimina
tion against British goods on the German fines. My appreciation of their views
has been chiefly formed from their letter to your department of the 7th April last,
from which I gathered that they believed that such discrimination, at all events
in the matter of tariffs, could be fairly effectively guarded against by a written
agreement, and I merely meant in my despatch No. 922 above mentioned to convey
that my knowledge of German railway management in this country did not allow
me to place an equal amount of faith in the efficacy of such safeguards. The
Board of Trade go on to say that they fail to see how the risk of discrimination
would be increased, so far as the Baghdad-Khanikin route is concerned, if that route
were served by a main line instead of a branch line. This point is, I may observe,
answered by anticipation by the concluding sentences of the first paragraph of my
despatch No. 922, where I drew attention to the possibility of a direct line from
Baghdad to Khanikin being built by the contemplated international company
Which is to undertake the Gulf-Baghdad section, an arrangement which would give
us complete security for the transport of our merchandise from the Gulf to the
Persian frontier. It is obvious that if the Germans had succeeded in obtaining
the alteration of the trace this possibility would have disappeared.
I have, etc.,
GEKAED LOWTHER.
(Copy sent informally to the Army Department for transmission to the Divi
sion of the Chief of the Staff.)
(Received on 8th April 1912, with Political Secretary's letter No. 12, dated 22nd March
1912.)
ASIATIC TURKEY AND ARABIA. [M arch 4.]
CONFIDENTIAL . Section 5.
[9319] No. 1.
Sir G. Lowther to Sir Edward Grey.—(Received March 4.)
(No. 173) Constantinople, February 28, 1912,
Sir,
With reference to your despatch No. 23 of the 20th January 11 have the
honour to forward herewith a despatch from the Commercial Attache at Constanti-
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