File 2764/1904 Pt 4 'Baghdad Railway: Anglo-Turkish negotiations; proposals of Turkish Govt; status of Kowait' [‎136v] (277/674)

received the suggestions now made by the Ottoman Government with some r
surprise. proposals for the final portions of the railway are that a
new company should be formed, and that the capital should be divided
between the Ottoman Government, who would receive 40 per cent, of the
whole and British, French, and German groups, who would each receive
20 per cent. The details of the financial arrangements are left for subsequent
settlement between the parties interested. . . ,
His Maiestv’s Government regret that they are unable to accept these
mvmosals If a new company is formed for the construction and working
of the railway south of Bagdad, and if it is to be constituted upon an
international basis, His Majesty’s Government can only accede to such an
arrangement provided that British interests are represented in a degree at
least equal to that of any other Power including Turkey, and, in order to
effect this and with a view to emphasising the international and commeicial
character of the undertaking, they would suggest that Russia should be
admitted to participation and that the percentage allotted to each country
Assuming that this distribution is adopted, His Majesty s Government
consider that a Convention should be concluded by the Powers concerned
providing for the exclusion of differential rates on any railways m Asiatic
Turkey, and for equality of treatment in regard to transport facilities and
cognate matters; for the alignment of the railway south of Bagdad and
^ the conditions under which it is to he constructed ; for the introduction of
approved financial arrangements tending to foster the development of tramc,
and for guaranteeing that the interest in the enterprise of the several
parties concerned shall he of lasting duration and not subject to termination
on the expiry of the Bagdad Railway concession.
It would furthermore he necessary for the Ottoman Government to
undertake formally not to impose river dues on British shipping or caigoes
without the assent of His Majesty’s Government. . i *
There remains the question of the terminal port: having legald to tne
fact that important commercial interests are already established at Bussorah,
His Majesty’s Government cannot but feel that substantial advantages would
accrue from the establishment of the terminus at that point, and t ej
consider that the port should be constructed and controlled by the proposed
new company in the interests of the unrestricted •commerce of all nations.
But if such an arrangement is adopted, they must stipulate that, in the eve ^
of the railway ever being prolonged to the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , it must be brought
to Koweit under conditions to be settled by agreement between Great Britain
and Turkey alone, and a clause to this effect must be embodied m a
convention dealing with these matters.