Broader Business Interests Develop
Speaking to the Reichstag in March, 1908, Baron von Schoen, Foreign Secretary of the Empire, explained a few of the opportunities which the Bagdad Railway opened to German industry and commerce. “The advantages,” he said, “which accrue to Germany from this great enterprise, conceived on a grand scale, are obvious. In the first place, there arises the prospect of considerable participation of German industry in the furnishing of rails, rolling stock, and other railway materials. Furthermore, German engineers, German construction workers, and German contractors are very likely to find remunerative occupation in the construction of the railway. Finally, it is certain that with the rising civilization and the higher standard of living of the inhabitants of the country, a new market will be made available. That this territory will be opened up not merely for us, but also for other nations, we can allow without envy.... What we have in view is the development of regions that seem to be worth developing; we wish to coöperate in awakening from a sleep of a thousand years an ancient flourishing civilized region, thereby creating a new market for ourselves and others.”[22]
This same idea had been advanced by others on other occasions. The Alldeutsche Blätter of December 17, 1899, had prophesied that the construction of the railway by a German-controlled syndicate would result in the purchase of some eighty million dollars’ worth of German products and that, once completed, the railway would open to German business an enormous and wealthy market. Lord Ellenborough, speaking in the House of Lords of the United Kingdom, on May 5, 1903, expressed the opinion that “the capital disbursed in constructing the railway would be largely spent on German steel industries, and on salaries to German engineers and German surveyors, so that even if the railway, as a railway, were a failure, it would not be a total loss to Germany.”[23] The British Consul General at Constantinople pointed out, in 1903, that, in addition to all of the aforementioned advantages, there would be innumerable special opportunities for the remunerative investment of German capital in the regions traversed by the railway.[24]
Events seemed to establish the wisdom of these expressions of opinion. Rails for the Bagdad line were ordered in Germany from the Steel Syndicate (Stahlwerksverband). Transportation of materials from Europe to the Near East was arranged for through German steamship companies. German engineers were given the executive positions in the construction and operation of the railway. Important subsidiary companies were formed for the construction of port and terminal facilities, for the building of irrigation works, and for other purposes incidental to the railway proper. German banks established branches on the ground in order to take advantage of other opportunities for the profitable investment of surplus funds.[25]
There was much evidence, however, to indicate that the preëminently German character of the railway was not preserved. An English observer, after a trip over the Anatolian lines in 1908, wrote that he noted a great predominance of Turkish, Greek, and Italian employees over the Germans. “The fact is,” he maintained, “that the people who run the line, though Germans, care first for their own pockets and next for Germany. They buy or employ what is cheapest and most suitable and do not care a finger-snap for the origin of an article or a servant. Patriotism occupies a small place in the calculations of promoters. The tendency to deal with the Fatherland must always be strong, but it is founded chiefly on the fact that the German knows the goods available in his own country better than the goods of other countries and that credit and banking facilities are more easily obtained at home. The master impulse in every German engaged in business in Turkey, as in business men of every other nationality, is to make money for himself as soon as possible.” This same observer pointed out that there was an astonishing absence of German employees in even the more responsible positions of the Anatolian Railway and that the great majority of the unskilled laborers were Italians.[26]
Ultra-patriotic Germans, furthermore, denounced Dr. von Gwinner and his associates for not making the Bagdad Railway an exclusively Teutonic enterprise. A speaker at a Berlin branch of the Pan German League had this to say of the situation: “The Bagdad Railway, which in its origins was entirely German, has, thanks to the criminal negligence of the Deutsche Bank, become almost wholly French. The German schools along the line of the Railway, which were established by von Siemens, have fallen into decay. The officials of the Railway speak French. The ordinary language for transacting the business of the Railway is French, although the French share of the capital is only thirty per cent. The German engineers may as well be called home to-day as to-morrow.”[27]
Nevertheless, the rapid expansion of German financial interests in the Near East and the established policy of the German banks to encourage and assist export trade were factors in a remarkable development of German trade in the Ottoman Empire, as will be indicated by the following table:[28]
This table eloquently describes the nature of the advance of German economic interests in Turkey. It does not, however, tell the whole story. Was this advance the result of a general increase of prosperity in the Ottoman Empire in which the Germans shared in common with other traders? Or was the increase in German trade out of proportion to the progress of other nationals—perhaps at the expense of the French and British? The following tables will help answer these questions:[29]
| Exports from Turkey | ||||
| Year | To United Kingdom Marks | To France Marks | To Italy Marks | To Austria Hungary Marks |
| 1900 | 118,760,000 | 86,220,000 | 22,520,000 | 35,220,000 |
| 1901 | 122,000,000 | 26,120,000 | 31,540,000 | |
| 1902 | 130,520,000 | 83,040,000 | 28,980,000 | 35,580,000 |
| 1903 | 127,400,000 | 81,200,000 | 38,120,000 | 39,900,000 |
| 1904 | 122,760,000 | 73,120,000 | 31,300,000 | 39,120,000 |
| 1905 | 118,960,000 | 80,780,000 | 42,240,000 | 37,640,000 |
| 1906 | 129,440,000 | 91,600,000 | 45,100,000 | 39,300,000 |
| 1907 | 136,600,000 | 95,320,000 | 50,480,000 | 34,640,000 |
| 1908 | 109,220,000 | 70,760,000 | 44,580,000 | 34,360,000 |
| 1909 | 109,320,000 | 79,000,000 | 59,080,000 | 36,600,000 |
| 1910 | 100,660,000 | 77,000,000 | 48,000,000 | 43,340,000 |
Certain important conclusions may be drawn from these statistics:
1. British trade continued during the decade 1900–1910 to dominate the Near Eastern market. With total imports and exports in the latter year of over 277,000,000 marks it was in no immediate danger of being outstripped by its nearest rivals—a German trade of about 172,000,000 marks and an Austro-Hungarian trade of about 150,000,000 marks.
2. France, whose Near Eastern trade in 1900 had proudly held a position second only to that of the United Kingdom, was being obliged to accept a less prominent place in the economic life of the Ottoman Empire. During the first ten years of the new century French merchants obviously were being outmaneuvered by Germans, Austro-Hungarians, and Italians. In spite of a total increase of 17% in exports and imports between France and Turkey it was apparent that French trade was not keeping the pace; during the same period Austro-Hungarian trade showed an increased valuation of 81%, German trade of 166%.
3. Although it continued to dominate the Near Eastern market, British commerce, likewise, was losing ground. Between 1900 and 1910 it showed an increase of only 25% as compared with the Italian record of 172% during the same period. During the decade British exports, although showing an increased valuation, fell off from 35% to 22–1/2% of the total import trade of Turkey; for the same period German exports achieved not only an absolute gain of almost eighty million marks, but also a relative increase from 2–1/2% to 11–1/2% of the whole.
4. The advance of German trade was not equal to the advance of Italian trade in the Ottoman Empire during the same period. This explains, in part, the rapidly increasing political interest of Italy in the Near East and seems to set at rest the notion that the Germans acquired a stranglehold on exports and imports from and to Turkey.
5. Looking at the question from a purely political standpoint, one’s attention is struck by the fact that commercial laurels in the Ottoman Empire were going to the nationals of the Triple Alliance powers. Economically, Turkey was leaning toward the Central Powers. Few international alliances are not based upon coincidence of economic interests; it appeared that a solid foundation was being laid for the eventual affiliation of Turkey with the Triple Alliance.