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

by Edward Mead Earle

The Germans Overcome Competition

During 1898 and 1899 the Ottoman Ministry of Public Works received many applications for permission to construct a railway to Bagdad. Whatever may have been thought later of the financial prospects of the Bagdad Railway there was no scarcity then of promoters who were willing and anxious to undertake its construction. It was not because of lack of competition that the Deutsche Bank finally was awarded the all-important concession.

In 1898, for example, an Austro-Russian syndicate proposed the building of a railway from Tripoli-in-Syria to an unspecified port on the Persian Gulf, with branches to Bagdad and Khanikin. The sponsor of the project was Count Vladimir I. Kapnist, a brother of the Russian ambassador at Vienna and an influential person at the Tsar’s court. Count Kapnist had the support of Pobêdonostsev, the famous Procurator of the Holy Synod, who was an avowed Pan-Slavist and an enthusiastic promoter of Russian colonization in Asia Minor.[1] The Sultan instructed his Minister of Public Works to study the Kapnist plan and submit a report. The Austro-Russian syndicate, however, made no further progress at Constantinople. The Sublime Porte obviously was opposed to any expansion of Russian influence in Turkey—a point of view which received the encouragement of the British and German ambassadors. Furthermore, in Russia itself there was opposition to Count Kapnist’s project. Count Witte, Imperial Minister of Finance, and foremost political opponent of Pobêdonostsev, emphasized the strategic menace to Russia of improved railway transportation in Turkey and sturdily maintained that Russian capital and technical skill should be kept at home for the development of Russian railways and industry. By the spring of 1899 the Kapnist plan had been shelved.[2]

In the meantime French bankers had become interested in the possibilities of constructing a railway from the Mediterranean to the Persian Gulf, utilizing the existing railways in Syria as the nucleus of an elaborate system. Their spokesman was M. Cotard, an engineer on the staff of the Smyrna-Cassaba Railway. This project was possessed of such strong financial and political support at Constantinople that the Deutsche Bank considered it best to negotiate for a merger with the French interests involved.[3] Accordingly conversations were held at Berlin early in 1899 between the Deutsche Bank and the Anatolian Railway Company, on the one hand, and the Imperial Ottoman Bank and the Smyrna-Cassaba Railway, representing French interests, on the other. The result was an important agreement of May 6, 1899, the chief provisions of which were as follows:[4]

1. The Deutsche Bank admitted the Imperial Ottoman Bank to participation in the proposed Bagdad Railway Company. German and French bankers were to be equally represented in ownership and control, each to be assigned 40% of the capital stock, the remaining 20% to be offered to Turkish investors. If British, or other capital were subsequently interested in the Company, the share of the new participants was to be taken from the German and French holdings in equal proportions.

2. A modus vivendi was arrived at between the Anatolian and Smyrna-Cassaba Railways. The prevailing rate-war was to be stopped; a joint commission was to be appointed to agree upon a uniform tariff for the two companies; a junction of the two lines was to be effected and maintained at Afiun Karahissar for reciprocal through traffic.

3. In order to assure the faithful execution of the agreement between the Anatolian and Cassaba railways, each of the companies was to designate two of its directors to sit on the board of the other.[5]

4. French proposals for the construction of a Euphrates Valley railway were to be withdrawn.

5. The French and German bankers were to use their best offices with their respective governments to secure united diplomatic support for the claims of the Deutsche Bank to prior consideration in the award of the Bagdad Railway concession.

This agreement temporarily removed all French opposition to the Bagdad Railway. M. Constans, the French ambassador at Constantinople, joined Baron Marschall von Bieberstein in cordial support of the new “Franco-German syndicate.”[6]

Competition had arisen, however, from a third source. During the summer of 1899 British bankers, represented in Constantinople by Mr. E. Rechnitzer, petitioned for the right to construct a railway from Alexandretta to Bagdad and the Persian Gulf. The terms offered by the British financiers were considered more liberal than any heretofore proposed,[7] and they were endorsed by the Ministry of Public Works. Mr. Rechnitzer enlisted the aid of Mahmoud Pasha, a brother-in-law of the Sultan. He secured the assistance of Sir Nicholas O’Connor, the British ambassador. He attended to the niceties of Oriental business by sending the Sultan and his aids costly presents.[8] He engineered an effective press campaign in Great Britain to arouse interest in his project. Just how much success Mr. Rechnitzer’s plan might have achieved on its own merits is an open question. It definitely collapsed, however, in October, 1899, when the outbreak of the Boer War diverted British attention and energies from the Near East to South Africa.[9] It was under these circumstances that the Sultan, on November 27, 1899, announced his decision to award to the Deutsche Bank the concession for a railway from Konia to Bagdad and the Persian Gulf.[10]

The success of the Germans was not unexpected. They had a strong claim to the concession, for, in 1888 and again in 1893, the Sultan had assured the Anatolian Railway Company that it should have priority in the construction of any railway to Bagdad. On the strength of that assurance, the Anatolian Company had conducted expensive surveys of the proposed line.[11] After a short period of sharp competition for the concession in 1899, the Deutsche Bank group was left in sole possession of the field—the Russian promoters had withdrawn because of lack of support at home; the French financiers had accepted a share in the German company in preference to sole responsibility for the enterprise; the British proposals had lost support when the Boer difficulty temporarily obscured all other issues. The diplomatic situation, furthermore, was distinctly favorable to the German claims. The Fashoda Affair and the serious Anglo-Russian rivalry in the Middle East had served to put Russia, France, and Great Britain at sixes and sevens, leaving Germans practically a free hand in the development of their interests in Asia Minor.

Aside from these purely temporary advantages, however, there were excellent reasons, from the Ottoman point of view, for awarding the Bagdad Railway concessions to the German Anatolian Railway Company. The usual explanations—that the soft, sweet-sounding flattery of William II overcame the shrewdness of Abdul Hamid; that Baron Marschall von Bieberstein dominated the entire diplomatic situation at the Porte; that the German military mission exerted a powerful influence in the final result—are more obvious than convincing. These were all contributing factors in the success of the Germans, but they were not determining factors. The reasons for the award of the concession to the Deutsche Bank were partly economic, partly strategic, partly political.

The Germans alone submitted proposals which met the demands of the Public Debt Administration and the Ottoman Government. They proposed to extend the existing Anatolian Railway from Konia, across the mountains into Cilicia and Syria, down the valley of the Tigris to Bagdad and Basra and the Persian Gulf. The railway which they had in mind would reach from one end of Asiatic Turkey to the other; in connection with the railways of southern Anatolia and of Syria, it would provide continuous railway communication between Constantinople and Smyrna in the north and west, with Aleppo, Damascus, Beirut, Mecca, and Mosul in the south and east. There were serious technical and financial difficulties in the construction of such a railway, it is true, but there were political and economic considerations which warranted the expenditure of whatever effort and funds might be necessary to carry the line to completion.

On the other hand, the groups other than the Germans proposed the construction of a trans-Mesopotamian railway which did not come up to specifications. They submitted plans calling for the building of a line from some Mediterranean port—such as Alexandretta or Tripoli-in-Syria—down the Euphrates valley to the Persian Gulf.[12] Such a line would have had obvious advantages, from the point of view of the concessionaires, over the projected German railway. The cost of construction would have been materially less, for it would have been unnecessary to build the costly sections across the Taurus and Amanus mountains. The prospects of immediate earning power were better, for the railway would have been able to take over some of the caravan trade from Arabia to the Syrian coast and from Mesopotamia to Aleppo. From the Ottoman point of view, however, the proposal was altogether unsatisfactory. The railway would have developed the southern provinces of the empire without connecting them with Anatolia, the homeland of the Turks themselves and the heart of the Sultan’s dominions. It might have promoted a separatist movement among the Arabs. Its termini on the Mediterranean and the Persian Gulf could have been controlled by the guns of a foreign fleet. From every standpoint—economic, political, strategic—the acceptance of such a proposal was out of the question.

Even had all other things been equal, it is probable that the German bankers would have been given preference in the award of the concession. The Turkish Government was determined that the Anatolian lines should be made the nucleus of the proposed railway system for the empire. That being the case, no purpose, other than the promotion of confusion, would have been served by awarding the Bagdad plum to interests other than those which controlled the Anatolian Railway Company. This reasoning was fortified by the fact that the Company had made an enviable record in its dealings with the Ottoman Ministry of Public Works. The existing lines were well constructed and were being operated in a manner entirely satisfactory to the Ottoman Government and to the peasantry and business men of Anatolia. And M. Huguenin, Assistant General Manager of the Anatolian system, announced that his Company would observe a similar policy in the construction and operation of the proposed Bagdad Railway. “We are determined,” he said, “to build a model line such as exists nowhere in Turkey, able in all respects to undertake efficiently an international service involving high speeds over the whole line.”[13]

From the political point of view, too, there were reasons for giving preference to German capitalists. Abdul Hamid was seeking moral and material assistance for the promotion of his favorite doctrine of Pan-Islamism. He sought to foster this movement, which looked toward the unification of Islamic communities for resistance to Christian European domination over the Moslem world. As Caliph of the Mohammedan world, Abdul Hamid placed himself at the head of those defenders of the faith who had been propagating the idea that Mussulmans everywhere must resist further Christian encroachment and aggression, be it political, economic, religious, cultural. That the Sultan’s primary motives were religious is doubtful. Apparently he believed that the Pan-Islamic movement could be utilized to the greater glory of his dynasty and his empire. As the tsars of Russia had utilized their position as head of the Orthodox Church for the purpose of strengthening the power of the autocracy, so Abdul Hamid proposed to exploit his position as Caliph for purposes of personal and dynastic aggrandizement.[14]

In awarding the Bagdad Railway concession, which was of such considerable economic and political importance, it was essential to choose the nationals of a power which would be sympathetic toward Pan-Islamism. Would it be Russia, whose tsars had set fires in Afghanistan, sought to destroy the independence of Persia, and threatened all of the Middle East? Would it be Great Britain, whose professional imperialists were holding in subjection more than sixty million Mohammedans in India alone? Would it be France, whose soldiers controlled the destinies of millions of Mussulmans in Algeria and Tunis? These nations could have no feeling for Pan-Islamism other than fear and hatred,[15] for it threatened their dominion over their Moslem colonies. Germany, however, had everything to gain and nothing to lose in lending support to Abdul Hamid’s Pan-Islamic program. She had practically no Mohammedan subjects and therefore had no reason to fear Moslem discontent. She had imperial interests which might be served by the revolt of Islam against Christian domination.[16]

Turkish patriots, as well as Moslem fanatics, would have preferred to see Germans favored in the award of economic concessions in the Ottoman Empire. The Germans came to Turkey with clean hands. Their Government had never despoiled the Ottoman Empire of territory and appeared to have no interests which could not be as well served by the strengthening of Turkey as by its destruction. On the other hand, Russia, traditional enemy of the Turks, sought, as the keystone of her foreign policy, to acquire Constantinople and the Straits. France, by virtue of her protectorate over Catholics in the lands of the Sultan, sought to maintain special privileges for herself in Syria and the Holy Land. Great Britain held Egypt, a nominal Turkish dependency, and was fomenting trouble for the Sultan in the region of the Persian Gulf.[17] Germany, it appeared, was the only sincere and disinterested friend of the Ottoman Empire!

The rising prestige of Germany in the Near East and the rapid expansion of German economic interests in Turkey, however, did not, during these crucial years of 1898–1900, arouse the fear or the cupidity of other European powers. Russia, it is true, objected for strategic reasons to the construction of the proposed Bagdad Railway via the so-called “northern” or trans-Armenian route from Angora. But when the Tsar was assured by the Black Sea Basin Agreement that a southern route from Konia would be substituted, M. Zinoviev, the Russian minister at Constantinople, withdrew his formal diplomatic protest.[18] The French Government adopted a policy of benevolent neutrality toward the claims of the Deutsche Bank for the concession, on the ground that the Imperial Ottoman Bank, representing powerful financial interests in Paris, was to be given a substantial participation in the proposed Bagdad Railway Company. The pact of May 6, 1899, between the German and French promoters satisfied even M. Delcassé![19]

In Great Britain, likewise, there was the friendliest feeling toward the German proposals. When the Kaiser made his second visit to the Near East in 1898 the London Times said: “In this country we can have nothing but good wishes for the success of the Emperor’s journey and for any plans of German commercial expansion which may be connected with it. Some of us may perhaps be tempted to regret lost opportunities for our own influence and our own trade in the Ottoman dominions. But we can honestly say that if we were not to have these good things for ourselves, there are no hands we would rather see them in than in German hands.”[20] The Morning Post of August 24, 1899, expressed the hope that no rivalry over the Bagdad Railway would prejudice the good relations between Great Britain and Germany. “So long as there is an efficient railway from Haidar Pasha to Bagdad, and so long as the door there is open, it should not really matter who makes the tunnels or pays the porters. If it should be necessary to insist on an open door, the Foreign Office will probably see to it; while if it should happen to be, as usual, asleep, there are always means of poking it up. As a matter of general politics it may not be at all a bad thing to give Germany a strong reason for defending the integrity of Turkey and for resisting aggression on Asia Minor from the North.”

Sympathetic consideration of German expansion in the Near East was not confined to the press. Cecil Rhodes, great apostle of British imperialism, visited Germany in the spring of 1899 and came away from Berlin favorably disposed toward the Bagdad Railway and none the less pleased with the Kaiser’s apparent enthusiasm for the Cape-to-Cairo plan. In November of the same year William II paid a royal visit to England. It was then that Joseph Chamberlain, Secretary for the Colonies, learned the details of German plans in the Ottoman Empire, but, so far from being alarmed, he publicly announced his belief in the desirability of an Anglo-German entente. The almost simultaneous announcement of the award of the preliminary Bagdad Railway concession met with a favorable reception from the British press.[21]

At the same time, however, less cordial sentiments were expressed toward Russia and France. There was general agreement among the London newspapers regarding at least one desirable feature of the Bagdad Railway enterprise: the discomfiture it would be certain to cause the Tsar in his imperial ambitions in the Near East. The Globe characterized as “impudence” the desire of Russia to regard Asiatic Turkey as “a second Manchuria.”[22] No love was being lost, either, on France. The Daily Mail of November 9, 1899, said: “The French have succeeded in wholly convincing John Bull that they are his inveterate enemies. England has long hesitated between France and Germany. But she has always respected German character, while she has gradually come to feel scorn for France. Nothing in the nature of an entente cordiale can exist between England and her nearest neighbor. France has neither courage nor political sense.”