BIBLIOGRAPHICAL AND EXPLANATORY NOTES
[1] Dr. Arthur von Gwinner (1856- ) is one of the most distinguished of modern financiers. He was born, appropriately enough, at Frankfort-on-the-Main when that city was a center of international finance. His father, a lawyer, was an intimate friend of Schopenhauer and the latter’s executor and biographer. In 1885 young Gwinner married a daughter of Philip Speyer and thus became a member of one of the famous families of bankers in Europe and America. For a time he conducted a private banking business in Berlin, but in 1894 he became an active director of the Deutsche Bank. Two years later he was sent to America to supervise the reorganization of the Northern Pacific Railway by its European creditors; and while he was in the United States, he formed lasting friendships with J. Pierpont Morgan and James J. Hill. In 1901 he succeeded Dr. von Siemens as the guiding spirit of the Deutsche Bank, which under his administration made even more remarkable progress than under his capable predecessor. As managing director of the Deutsche Bank he became president of the Anatolian and Bagdad Railway Companies. It was in 1909 that Dr. von Gwinner’s father received from the Kaiser the patent of hereditary nobility—an honor said to have been intended as much for the distinguished son as for the distinguished sire. Intellectually, Dr. von Gwinner is an international man: he quotes Dickens and Shakespeare and Molière, Goethe and Schiller and Lessing, with almost equal facility. His delightful personality stands out in all the Bagdad Railway negotiations.
[2] Infra, Chapter IX. The French bankers also shared in the ownership of the construction company. A. Géraud, “A New German Empire: the Story of the Bagdad Railway,” in The Nineteenth Century, Volume 75 (1914), p. 967; Report of the Bagdad Railway Company, 1903, pp. 4, 8.
[3] Among the German members were Dr. von Gwinner; Dr. Karl Testa, representative of the German bondholders on the Ottoman Public Debt Administration; Dr. Alfred von Kaulla, a director of the Württembergische Vereinsbank, and original concessionaire of the Anatolian Railways; Dr. Karl Schrader, a member of the Reichstag; Dr. Kurt Zander, general manager of the Anatolian Railway Company. The directors nominated by the French interests were Count A. D’Arnoux, Director General, and M. Léon Berger, French member, of the Ottoman Public Debt Administration; MM. J. Deffes, G. Auboyneau, P. Naville, Pangiri Bey, and A. Vernes, of the Imperial Ottoman Bank, the last-named being vice-president of the Bagdad Railway Company; M. L. Chenut, a member of the Ottoman Régie Générale de chemins de fer. The Turkish members of the Board were Hamdy Bey, representative of the Ottoman bondholders on the Public Debt Administration; Hoene Effendi, under-secretary in the Ministry of Posts and Telegraphs; and two Constantinople bankers. The Swiss were Herr Abegg-Arter, president of the Schweizerische Kreditanstalt, of Zurich, and M. A. Turrettini, of L’Union financière de Genève. The Austrian was Herr Bauer, of the Wiener Bankverein, and the Italian was Carlo Esterle, of the Italian Edison Electric Company, of Milan. There were few important changes in the personnel of the Board of Directors between 1903 and 1914, perhaps the most notable being the election of Dr. Karl Helfferich, in 1906. Cf. Reports of the Bagdad Railway Company, 1903, et seq.
[4] Cf. Parliamentary Debates, House of Commons, fourth series, Volume 120 (1903), p. 1371. During the Great War a conspicuous German general complained that the Swiss in charge of the operation of the Railway was more interested in the commercial than in the strategic value of the line and did not coöperate with the military authorities. Cf. Field Marshal Liman von Sanders, Fünf Jahre Türkei (Berlin, 1919), p. 40.
[5] Verhandlungen des Reichstages, Stenographische Berichte, XII Legislaturperiode, 1 Session, Volume 231 (1908), p. 4253c.
[6] Supra, p. 77.
[7] Paul Imbert, “Le chemin de fer de Bagdad,” in Revue des deux mondes, Volume 197 (1907), p. 672. The Deutsche Bank, with its capital and surplus of about $75,000,000, was the foremost of the German banks. Associated with it in the Bagdad Railway enterprise were a number of other financial institutions, including, it is said, the Dresdner Bank and the Darmstädter Bank, ranking second and fourth respectively among the great banks of the German Empire. Riesser, op. cit., pp. 642–644.
[8] Supra, Chapter IV, Note 48; Fraser, op. cit., pp. 48–49; Jastrow, op. cit., p. 94; Report of the Bagdad Railway Company, 1904, p. 3; 1905, p. 4.
[9] Von Gwinner, loc. cit., p. 1088.
[10] Corps de droit ottoman, Volume III, pp. 221–228.
[11] Turkey in Europe, pp. 128–129; The Quarterly Review, Volume 228 (1917), pp. 510–511; Parliamentary Debates, House of Commons, fourth series, Volume 159 (1906), pp. 1338, 1359; ibid., Volume 162 (1906), p. 1419; Volume 178 (1907), p. 321; ibid., fifth series, Volume 53 (1913), p. 368.
[12] Société Impériale Ottomane du Chemin de fer de Bagdad—Convention Additionelle (Constantinople, 1908); Parliamentary Papers, No. Cd. 5636, Volume CIII (1911); Report of the Bagdad Railway Company, 1908, pp. 4–5; 1909, p. 4; Bagdad Railway Loan Contract, Second and Third Series, June 2, 1908; Report of the Deutsche Bank, 1909, p. 12.
[13] Report of the Deutsche Bank, 1909, p. 12.
[14] Report of the Bagdad Railway Company, 1906, p. 4; K. Helfferich, Die Vorgeschichte des Weltkrieges, pp. 131–132; Dr. Helfferich’s reputation was based largely upon his writings on two important subjects: the gold monetary standard; government promotion of foreign trade. Cf. Germany and the Gold Standard (London, 1896); Beiträge zur Geschichte der deutschen Geldreform (Leipzig, 1901). See the enthusiastic appreciation of Dr. Helfferich’s services voiced by his associates of the Deutsche Bank upon the occasion of his appointment as Secretary of State for the Imperial Treasury, January, 1915. Report of the Deutsche Bank, 1915, pp. 11–12; Report of the Bagdad Railway Company, 1914, p. 8.
[15] The Times, October 25, 1905, commenting upon the proposed appointment of Helfferich.
[16] Report of the Anatolian Railway Company, 1907, p. 7; H. C. Woods, “The Bagdad Railway and Its Tributaries,” in The Geographical Journal, Volume 50 (1917), pp. 32 et seq.; Parliamentary Papers, No. Cmd. 964 (1920). The irrigation system thus planned was completed before the outbreak of the Great War. It justified the sanguine expectations of its promoters, for the agricultural yield of the irrigated lands increased from five to fifteen fold over the former production. In 1911 a similar irrigation project was gotten under way in Cilicia. Diplomatic and Consular Reports, No. 4835 (1911), pp. 18–19.
[17] Cf. supra, p. 37.
[18] Riesser, op. cit., p. 454; Report of the Dresdner Bank, 1905, p. 6; Diplomatic and Consular Reports, No. 3553 (1905), p. 29; Report of the Deutsche Bank, 1908, p. 10. The Bagdad office of the Deutsche Bank was not established until 1914, just before the outbreak of the War. Ibid., 1914, p. 9.
[19] The principal bank in Turkey before the War was the Imperial Ottoman Bank. This institution was owned by French and British capitalists, the French interest being predominant and in control. It was a quasi-public bank, founded in 1863, and enjoying since then a monopoly of bank-note issues. Its central office was at Constantinople, but it maintained a branch in practically every important city of Asiatic Turkey, including Smyrna, Jerusalem, Jaffa, Aleppo, Alexandretta, Beirut, Damascus, Basra, Bagdad, and Mosul. The capital stock of the Imperial Ottoman Bank was £10,000,000 sterling. A British bank of some importance was The Eastern Bank, Ltd., of which the Right Honorable Lord Balfour of Burleigh was chairman—the same Lord Balfour who was Secretary for Scotland in the ministry of his namesake, Arthur J. Balfour, in 1903, when the British Government quashed the participation of English capitalists in the Bagdad Railway. The head office of the Eastern Bank was in London, and it maintained branches in Basra and Bagdad, although its principal sphere of activity was India. Sir Ernest Cassell’s National Bank of Turkey was not established until 1909. Cf. Caillard, loc. cit., p. 439; weekly advertisements of these banks in The Near East; Parliamentary Debates, Index for 1903, p. v; Turkey in Europe, p. 36.
[20] D. S. Jordan, “The Interlocking Directorates of War,” in The World’s Work, July, 1913, p. 278; H. Hauser, Les Méthodes Allemandes d’Expansion Économique, seventh edition (Paris, 1917), passim; Riesser, op. cit., pp. 366–367.
[21] Riesser, op. cit., pp. 373–375, 432, 474, 745–746.
[22] Verhandlungen des Reichstages, Stenographische Berichte, XII Legislaturperiode, 1 Session, Volume 231 (1908), p. 4253c. The speech of the Secretary was followed by “Bravos” from the National Liberals.
[23] Parliamentary Debates, House of Lords, fourth series, Volume 121 (1903), p. 1340.
[24] Diplomatic and Consular Reports, No. 3140 (1903), p. 40.
[25] Supra, pp. 98–99, Report of the Deutsche Bank, 1909, p. 12; Stenographische Berichte, XII. Legislaturperiode, 2 Session, Volume 260 (1910), p. 2181d, statement by Baron von Schoen.
[26] Fraser, op. cit., pp. 16–17, 18–20. Cf., also, Report of the Bagdad Railway Company, 1911, p. 4.
[27] Staatsbürger Zeitung (Berlin), March 3, 1912.
[28] Compiled from the Statistisches Jahrbuch für das deutsche Reich, 1900–1914, as corrected for 1900–1905 according to the Statistisches Handbuch für das deutsche Reich, Volume 2, pp. 506–510. A remarkable increase of German exports to Turkey—an increase of 50%—is to be noted in the year 1904, during which the first section of the Bagdad Railway was constructed. Undoubtedly this increase is to be partially accounted for by the purchase in Germany of materials for right of way as well as rolling stock for the railway. This factor should not be over-estimated, however, as a glance at the following tables will show that imports into Turkey from other European countries during the same year likewise showed increases, without exception. The general falling off in trade during 1908 may be attributed, in part, at any rate, to the Young Turk Revolution of that year.
[29] Compiled from Diplomatic and Consular Reports, Nos. 2950 (1902), 3533 (1905), 4188 (1908), and 4835 (1910–1911).
[30] Supra, p. 36.
[31] Diplomatic and Consular Reports, No. 3533 (1905), p. 27; Turkey in Europe, pp. 86–87.
[32] Mesopotamia, pp. 99–101; Schaefer, op. cit., p. 22. Regarding British interests in the Persian Gulf, cf., a detailed statement by Lord Lansdowne to the House of Lords, May 5, 1903. Parliamentary Debates, House of Lords, fourth series, Volume 121 (1903), pp. 1347–1348.
[33] “Bagdad: Handelsbericht des kaiserlichen Konsulats für das Jahr 1908–1909,” in Deutsches Handels-Archiv, 1910, part 2, pp. 27–35; also, “Bericht über den Handel in Basra und Bagdad für das Jahr 1910,” ibid., 1912, part 2, pp. 263–270; Mesopotamia, p. 108.
[34] Cf. supra, pp. 59–60; Report of the Bagdad Railway Company, 1906, p. 4, 1908, pp. 7–8; Diplomatic and Consular Reports, No. 3533 (1905), p. 29. The Mersina-Adana line was formally incorporated in the Bagdad system in 1908. Cf. Deuxième convention additionelle à la convention du chemin de fer de Bagdad (Constantinople, 1910).
[35] Parliamentary Debates, House of Commons, fifth series, Volume 22 (1911), pp. 1284–1285.
[36] Quatrième convention additionelle à la convention du 5 Mars, 1903, relative au chemin de fer de Bagdad (Constantinople, 1911). H. F. B. Lynch (of the firm of Lynch Brothers), “The Bagdad Railway: the New Conventions,” in the Fortnightly Review, new series, Volume 89 (1911), pp. 773–780. Mr. Lynch explains that his summary of the Alexandretta port concessions is based upon an authentic article appearing in La Turquie, a Constantinople newspaper, of March 21, 1911. Diplomatic and Consular Reports, No. 4835 (1911), p. 16; The Times (London), March 23, 1911.
[37] Stenographische Berichte, XII. Legislaturperiode, 2 Session, Volume 266 (1911), pp. 5984c et seq.; Troisième convention additionelle à la convention du 5 Mars, 1903, relative au chemin de fer de Bagdad (Constantinople, 1911); Parliamentary Debates, House of Commons, fifth series, Volume 23 (1911), pp. 582–583, statement by Sir Edward Grey.
[38] See speeches of Herr Scheidemann and Herr Bassermann before the Reichstag, March 30, 1911. Stenographische Berichte, XII. Legislaturperiode, 2 Session, Volume 266 (1911), pp. 5980 et seq.
[39] Parliamentary Debates, House of Lords, fifth series, Volume 23 (1911), p. 589.
[40] D. Chatir, “L’État actuel du chemin de fer de Bagdad,” in Questions diplomatiques et coloniales, Volume 36 (1913), pp. 279–281; Report of the Bagdad Railway Company, 1910, p. 4, 1911, p. 4, 1913, pp. 3–5, 1914, pp. 6–8.
[41] Report of the Deutsche Bank, 1913, pp. 11–12.
[42] Report of the Bagdad Railway Company, 1914, pp. 6–8. It was not until September, 1918, that the Amanus tunnels were completed, the first train being operated through to Aleppo just before the capture of that city by Lord Allenby’s army. Von Sanders, op. cit., p. 42.