"سكة حديد بغداد" [ظ‎‎١‎٩] (١٢٩/٣٨)

4
required in order to provide an ultimate guarantee by the hypothecation of a
definite branch of Turkish revenue over which foreign creditors might hope
to exercise some control.
8. From the Turkish point of view, the arrangement seems to leave
much to be desired. There is nothing to prevent undue expenditure upon
railway plant in the interests of the German producer. In other words,
Turkey is saddled with the responsibility for providing interest upon money,
the expenditure of which lies outside her control, and which might be saved
by the regard to economy. At the same time, there is a curious provision that,
if there is a defalcation in the special security allotted to any section of the
line (as, for example, that referred to in paragraph 6), the Company can fore
close upon the section in question. On the other hand, the Convention a)low’s
the Turkish Government to redeem its indebtedness to the bond-holders by
stipulated cash payments. As that Government rarely has cash at its disposal,
this provision can only be regarded as a practically valueless set-off to the
arrangement enabling the Company to assume possession of the line in certain
circumstances.
9. The Turkish Minister of Public "Works is to receive a monthly state
ment of the receipts of the railway. If the gross receipts exceed 4,50:) fr.
per kilom., but not 10,000 fr., the excess over 4,500 fr. is to be handed over to
the Turkish Government. If the gross receipts exceed 10,000 fr. per kilom.,
the excess over tins figure will be divided between the Turkish Government
and the Railway Company in the proportion of 60 to 40 per cent. The scru
tiny of the railway accounts will require to be exceedingly severe if the above
provisions ever become operative.
10. The Turkish Government bonds will be replaced by Company bonds
when the financial situation permits.
11. The general arrangements are such that, wdiile the railway is nomi
nally an undertaking financed by the Turkish Government, the powers wielded
by the Company will be very large, and are certainly capable of being exer
cised in various ways not immediately apparent in the letter of the Convention.
If the security of the Turkish Government w'ere equal to that of France or
Germany, the whole of the necessary capital would doubtless be immediately
available, and the construction of the line could proceed to completion without
hindrance.
12. The only present obstacles are the uncertainties of Turkish credit,
and the political considerations, arising from the susceptibilities of Russia,
w hich appear to have been partly instrumental in inducing Germany to seek
British co-operation. As pointed out in paragraph 4, these considerations may
now possibly have less weight in certain directions than at the time when His
Majesty’s Government was originally approached.
13. The life of the present Sultan is not likely to be prolonged. The
Germans are well aware that the exceptional position they have succeeded in
obtaining at Constantinople will probably not endure after the disappearance of
Abdul Hamid. They have, therefore, strong inducement to take full advantage
of the Convention before any change occurs, and they wish, on political
grounds, to secure our co-operation before any change takes place.
14. As matters stand, it would be unwise to assume that money will not
be found to finance the whole line, if the support of the German Emperor is
forthcoming on behalf of a project which is evidently regarded as important
for the furtherance of German policy. On the other hand, it is probable that
the German Government would be reluctant to press the project upon capita
lists and investors, as such action would have the effect of drawing attention
to German motives.
15. It seems clear that our position at the head of the Persian Gulf
provides no means of obstructing the progress of the railway, if the requisite
capital is available. Koweit is not essential as a terminus, as other suitable
harbours, directly under Turkish control, exist; but it offers special political
advantages as implying the countenance of the naval powers at present
paramount m these waters. There will apparently be no scope for diplomatic
action at Constantinople until the death or deposition of the present Sultan.