Turkey, the Great Powers, and the Bagdad Railway: A study in imperialism

by Edward Mead Earle

The French Government Hesitates

The position of France in the Bagdad Railway controversy was anomalous. In addition to political, economic, and religious reasons for opposing the construction of the trans-Mesopotamian railway, the French had many historical and sentimental interests which influenced the Government of the Republic to resist German penetration in the Near East. French patriots recalled with pride the rôle of France in the Crusades; they remembered that Palestine itself was once a Latin kingdom; they believed that Christians in the Levant looked to France as their protector and that this protection had received formal recognition under the Capitulations, negotiated by Francis I and renewed and extended by his successors from Henry IV to Louis XV. They knew that the French language was the language not only of the educated classes in Turkey, but, also, in Syria, of the traders, so that it could be said that a traveler in Syria might almost consider himself in a French dependency. They were proud of the fact that the term “Frank” was the symbol of Western civilization in the Near East. They were aware of the far-reaching educational work of French missionaries. France, to their mind, had done a great work of Christian enlightenment in the Moslem stronghold, Turkey. Was the Government of the Republic to be backward in asserting the interests of France, when Bourbons and Bonapartes had so ably paved the way for the extension of French civilization in the Holy Land? Reasoning of this kind was popular in France during 1898 and 1899, when the Kaiser’s visit to Abdul Hamid was still under discussion and when the first indications were given that a German company was to be awarded a concession for the construction of a railway from Constantinople to the Persian Gulf.

On the other hand, however, there was a considerable and a powerful group in France which urged the French Government, if not to support the project of the Bagdad Railway, at least to put no obstacles in its way. The members of this group were French financiers with investments in Turkey. They believed that the construction of the Railway would usher in a new era of prosperity in the Ottoman Empire which would materially increase the value of the Turkish securities which they owned. If the interests of these financiers were not supported by historical traditions and nationalist sentiment, they were tangible and supported by imposing facts. It was estimated, in 1903, that French investors controlled three-fifths, amounting to a billion and a half of francs, of the public obligations of the Imperial Ottoman Treasury. French promoters owned about 366 million francs in the securities of Turkish railroads and over 162 millions in various industrial and commercial enterprises in Asia Minor. French banks had approximately 176 million francs invested in their branches in the Near East. The total of all French investments in Turkey was more than two and a half billion francs.[11] The French-controlled Imperial Ottoman Bank, the French-owned Smyrna-Cassaba Railway, and the French-administered Ottoman Public Debt Council all favored the promotion of the Bagdad Railway idea.

For a time, the French Government decided to follow the lead of the financial interests. French bankers, in 1899, had entered into an agreement with the Deutsche Bank to operate the Anatolian and Smyrna-Cassaba systems under a joint rate agreement, to coöperate in the construction of the Bagdad Railway, and to attempt to secure diplomatic support for their respective enterprises.[12] At the request of the Imperial Ottoman Bank, M. Constans, the French Ambassador at Constantinople, adopted a policy of “benevolent neutrality” toward the negotiations of the Deutsche Bank with the Ottoman Ministry of Public Works. This course was approved by M. Delcassé, Minister of Foreign Affairs, who considered the Bagdad Railway harmless because French capitalists were to participate in its construction and operation. Just how much this diplomatic non-interference assisted the Deutsche Bank in obtaining the concessions of 1899 and 1903 is an open question. It is extremely doubtful if French objections could have blocked the award of the concessions, although M. Chéradame subsequently maintained that the consummation of the plans of the Deutsche Bank would have been impossible without the tacit coöperation of the French embassy at Constantinople.[13]

Between 1899 and 1902 the proposed Bagdad Railway was discussed occasionally by French publicists, but it could not have been considered a matter of widespread popular interest. In the spring of the latter year, however, immediately after the award of the first Bagdad concession by the Sultan, a bitter protest was voiced in the Chamber of Deputies against the policy of the French Government. M. Firmin Fauré, a deputy from Paris, introduced a resolution that “the issue of debentures, stocks, or bonds designed to permit the construction of the Bagdad Railway shall not be authorized in French territory except by vote of the Chamber of Deputies.” In a few words M. Fauré denounced the Bagdad Railway plan as a menace to French prestige in the Near East and as a threat against Russian security in the Caucasus. He believed, furthermore, that Bagdad Railway bonds would be an unsafe investment: “It is a Panama that is being prepared down there. Do you choose, perchance, my dear colleagues, to allow French capital to be risked in this scheme without pronouncing it foolhardy? Do you choose to allow the great banks and the great investment syndicates to realize considerable profits at the expense of the small subscribers? If that is how you attend to the defence of French capital, well and good, but you will permit me to disagree with you.” He warned the members of the Chamber that they would not dare to stand for reëlection if they thus allowed the interests of their constituents to be prejudiced.[14]

M. Delcassé, Minister of Foreign Affairs, objected to the resolution. He denied that French diplomacy had assisted the German bankers in securing the Bagdad Railway concession.[15] But the concession was a fait accompli, and it also was a fact that French financiers felt they could not afford to refuse the offer of participation with the German concessionaires. “I venture to ask how it can be prevented, and I inquire of the Chamber whether, when such an enterprise has been arranged and decided upon, it is not preferable that French interests, so considerable in the East, should be represented therein.” He promised that every possible precaution would be taken to assure French capitalists a share in the enterprise equal to that of any other power. The Minister was upheld, the motion being defeated by a vote of 398 to 72.[16]

Less than two years later, in October, 1903, the Paris Bourse, at the instigation of the French Government, excluded all Bagdad Railway securities from the privileges of the Exchange. This change in policy was not so much the result of a volte face on the part of M. Rouvier and M. Delcassé as it was a consequence of a persistent clamor on the part of the French press that the construction of the Bagdad Railway, which was popularly considered a serious menace to French interests, should be obstructed by every effective method at the disposal of the Government.[17]