'File 73/7 I (D 19) Status of Kuwait & Baghdad Railway, and Anglo-Turkish negotiations 1911' [‎114r] (241/631)

[This Document is the Property of His Britannic Majesty's Government.]
EASTERN DEPARTMENT. [Eebruary 13.]
SECRET SERIES. S ection 5.
[5542] No - 1 -
Sir E. Speyer to Sir Edward Grey.—{Eeceived February 13.)
Dear Sir Edward, * 7, Lothhury, London, February 13, 1911.
ABOUT two years ago, at an interview you granted me, I ventured to urge the
importance of coming to an agreement with Germany regarding the Bagdad Railway,
and explained that, having regard to the fact of M. von Gwinner, the president of the
Bagdad Railway Company, being my cousin, I was in a favourable position to negotiate
a commercial agreement, of which the basis would have been the control by English
capital of the southern part of the line from Bagdad to the Persian Gull
I expressed myself sanguine with regard to the result of such negotiations.
Your reply was to the effect that, while the proposal in itself might be acceptable,
nothing could be done without <c une conversation a cjuatre, as you could not act
without the knowledge and consent of France and Russia.
The Germans declined to discuss the matter on that basis, and the matter
dropPt resiimec [ ]jy Si r Ernest Cassel, with your knowledge, and, as I understand,
with your consent, but without result.
In the meantime the Persian question entered upon a more acute phase. Ine
British Government's note to the Persian Government alarmed the lurks. 1 he claims
nut forward by Great Britain as to her rights and privileges m the Persian Guit
section increased Turkish suspicion, so that the chances of Turkey agreeing to Germany
ceding that portion of the concession to build the southern section of the Bagdad
Railway to British capitalists are now very much reduced, if indeed they have not
'"^foS'tderstaading has removed Russia from the group of Powers
supposed by the Turks to be antagonistic to the Bagdad Railway enterprise.
The position was further complicated by the lurkish loan negotiations, wh lc
terminated in the signing of a contract with Germany for 11,000,0001. Turkish bonds
aftpr France and England had declined to assist Turkey. . , t , -n *
When I saw Sir Arthur Nicolson shortly afterwards he said that the Foreign
Office did Dot then encourage British capital being put at the disposal of the lurkish
Government, and at my interview with you in January you confirmed that, although
von were not altogether averse to British investments m lurkey.
I ventured to tell you that as Turkey was a country with great resources, but m
equally great need of capital to develop them, it seemed a paty if Great Bntam were
t0 meTo"'^^" Great Britain at a political
lo contl ? l f ^ ^ t F Reports from Constantinople which I have received
from < a > person of autKUo went out on my firm's behalf fully confirm
Iron, a pa ; h W wp and lav stress on the great importance of a change m the
British attitude towards Turkey, and of demonstrating that Great Britain's friendship
for negotiation with Germany consists of 7,000,0001. firm stock with
an option on 4,000,boOC more. My proposal is to try to obtain that option stoc ■ an
issue it here - . , is no cllance 0 f participating in the firm stock, as the
I am satisfied the • , . ^ beins certain of placing the stock m
German syndicate, having 0 t cons ider any such proposal; but it would in my
Germany, would not for a mo . , rvnt j or . s tock for this country, and 1 venture
opinion be worth while trying to^ ^ a frien dly attitude on the part of the British
to urge this, as 1 have reason ] „ welcomed in Turkey, and, further, would pave
Government m this matter would be ilwa V l. ls3ia could not now
the way for an agreement regarding the t0 the l oail
object, and as regards France, it is common other amongst competing banking
of 2,500,0001. for making roads.
[1889 n—5]