'File 73/7 II (D 22) Status of Koweit [Kuwait] - Baghdad railway, Anglo Turkish negotiations' [‎62v] (130/540)

of advantage to such trade as can be done by other countries, and especially to
German trade, is of course true, but unless the Baghdad Company, in working
such a railway, adopted discrimination of a very pronounced character, the Board
are disposed to think that the advantages resulting from the construction of the
line would accrue chiefly to British trade, in view of its greater extent and wider
local connections. Discrimination of a serious character would most probably
be avoided by the company, as being likely to provoke diplomatic interven
tion.
an
2. As regards the possibility of guarding against discrimination by means of
agreement between the railway companies operating to the north and south
of Baghdad respectively, Sir Gerard Lowther refers in his despatch to an opine
expressed by the Board of Trade in their letter of the 7th April 1911, to tk
effect that equality of treatment *' could probably be attained without seriou?
difficulty by an agreement." I am to point out that their opinion related to the
event of Great Britain having control to the extent of at least 50 per cent, of the
southern railway, and that it was indicated in that letter that the case in which
Great Britain would have only a smaller share of representation on the Southern
Railway Company was totally different, and presented much greater difficulty.
3. Sir G. Lowther expresses the opinion that, so far as the Khanikin line is
concerned, the contingency contemplated in the preceding paragraph might be
avoided by the transference of the concession for that line to the proposed inter
national company for the construction and operation,of the line between Baghdad
and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . On this I am to observe that the Board have no information
which leads them to suppose that the Baghdad Kail way Company would consent
to such a transference, since the Khanikin branch seems likely to be commer
cially one of the most valuable parts of their undertaking ; and as, so far as they
are aware. His Majesty's Government have never hitherto put forward any claim
to the construction of such a line, or, indeed, with respect to any railway construc
tion northward of Baghdad, the Board, on the information before them, doubt
the practicability of their doing so at the present stage with any useful result.
If, however. Sir Gerard Lowther is in possession of any information which
leads him to think that it is reasonably possible to secure the transference suggest
ed, the Board admit that a new situation is created, which appears to them to
require that the whole question of British participation in the new international
company should be examined afresh in the light of this new fact.
4. Subject to the last observation, the Board of Trade, as at present advised,
see no reason to modify the views expressed in their previous letter, and they are
relieved that the course of events has obviated any possibility of His Majesty's
Government taking up a position with regard to the suggested modification
which they consider would not have been to the best interests of British trade.
I am, etc.,
H. LLEWELLYN SMITH.
(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 leltter No. 12, dated ike
22nd March 2912).
Foreign Office,
10357-12.
March 12th, 1912.
(Immediate.)
Sir,
With reference to previous correspondence I am directed by Secretary Sir
Edward Grey to transmit to you, herewith, copies of telegrams exchanged with His
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