It already has been noted that in 1888, as part of the plans of the Public Debt Administration for the improvement of transportation facilities in Turkey, the British-owned Smyrna-Aidin Railway Company was granted permission to construct several important branches to its main line. For a time this new concession thoroughly satisfied the owners and directors of the Company, and there was no objection on their part to the extension and development of the German-owned Anatolian system. By 1903, however, when the Bagdad concession was under discussion, the Smyrna-Aidin line demanded the protection of the British Government against the undue extension of German railways in the Near East. In particular, it objected to the agreement between the Anatolian Railway and the Smyrna-Cassaba Railway, by which the latter joined its tracks with the Anatolian system at Afiun Karahissar and accepted a schedule of tariffs satisfactory to both lines.[13] The Smyrna-Aidin Company feared that the Bagdad Railway would develop the ports of Haidar Pasha, Alexandretta, and Mersina at the expense of the prosperity of Smyrna, thereby decreasing the relative importance of the Smyrna-Aidin line and cutting down the volume of its traffic. Finally, it objected to the payment of a kilometric guarantee to the German concessionaires while there was no likelihood of its being similarly favored by the custodians of the public purse. The interests of the shareholders of the railway were well represented in the House of Commons by “that watchful dragon of imperial interests”, Mr. Gibson Bowles.

Mr. Bowles (Conservative member from King’s Lynn, 1892–1906, and Liberal from the same constituency, 1910–1916) was a frank defender of the interests of the stockholders of the Smyrna-Aidin Railway. He believed that investors were entitled to governmental protection of their investments, whether at home or abroad. He left no doubt, however, that he took his stand on high grounds of patriotism as well. He informed the House that “he did not object to the railway, because all railways were good feeders of ships. But this was not a railway; it was a financial fraud and a political conspiracy—a fraud whereby English trade would suffer and a conspiracy whereby the political interests of England would be threatened. It amounted to a military and commercial occupation by Germany of the whole of Asia Minor.”[14]

Comparable to the interests of the Smyrna-Aidin Railway were those of the Euphrates and Tigris Navigation Company, Ltd. Under this name the Lynch Brothers had been operating steamers on the Tigris and the Shatt-el-Arab since the middle of the nineteenth century. In the trade between Bagdad and Basra they enjoyed a practical monopoly. In the absence of competition they were able to render indifferent service at exorbitant rates, and there was nothing to disturb their tranquillity except an occasional complaint from a British merchant. But the old order was about to change. The Bagdad Railway concession of 1903 (articles 9 and 23) destroyed the monopoly of the Lynch Brothers by granting to the Railway Company limited rights of navigation on the Tigris. Construction of the Mesopotamian sections of the Railway, furthermore, would be almost certain to kill, by competition, profitable navigation between Bagdad and Basra. The course of the Tigris is shallow and winding, subject to heavy rises and falls, and constantly changing with the formation and disappearance of sand shoals. The river journey from Bagdad to Basra is about five hundred miles and takes from four to five days by steamer, under favorable conditions. The distance by land is about three hundred miles and could be traversed by railway in a single day’s journey, regardless of weather conditions. For passengers and most classes of freight the Bagdad Railway promised more economical transportation. The Lynch Brothers were determined, however, to resist such rude encroachment on their profitable preserves. In defence of their interests they wrapped themselves in the Union Jack and called upon their home government for protection; they were patriotic to the last degree and were determined “that the custody of a privilege highly important to British commerce would never pass to Germany except over the dead bodies of the principal partners.”[15] Overcharge their countrymen they might; surrender this prerogative to a German railway they would not!

British shipping interests, also, were vigorous in their opposition to the Bagdad Railway. A trans-Mesopotamian railway, they knew, would absorb some of the through traffic to the East, and the competition of the locomotive might compel a general readjustment of freight rates. Furthermore, it was one of the avowed purposes of the Bagdad line to acquire the profitable Indian mails concession from the British Government; this would be equivalent to the withdrawal of a subsidy from the steamship lines operating to the East. It was not for their own sake, but for the sake of British commerce, however, that these shipping interests objected to the construction of the Bagdad line! They warned the British public that the proposed railway would adversely affect the traffic passing through the Suez Canal; inasmuch as the United Kingdom was a stockholder in the Canal, this was the concern of every English citizen. They pointed out that the kilometric subsidy which had been guaranteed the Railway was to be paid from an increase in the customs duties; thus, it was charged, British commerce would be obliged to contribute indirectly to the dividends of the Deutsche Bank. The improvement of communications between Middle Europe and the Near East would be almost certain to disturb British trade with Turkey; the feared and hated “Made in Germany” trade-mark might exert its hypnotic influence in a region where British commerce heretofore had been preëminent. If, in addition, the German owners of the Bagdad Railway should choose to grant discriminatory rates to German goods, a severe body-blow would be dealt British economic interests in the Ottoman Empire. The completion of this Railway would bring with it all sorts of German interference in the Near East and undermine British commercial and maritime interests in the region.[16]

Many of the charges brought against the Bagdad Railway by the British shipping interests could not have been substantiated. As early as 1892, Lord Curzon stated emphatically that, for most commercial purposes, a trans-Mesopotamian railway would be next to valueless. “If I were a stockholder in the P. & O. [the Peninsular and Oriental, one of the Inchcape lines touching at Indian and Persian Gulf ports], I would not,” he said, “except for the possible loss of the mails, be in the least alarmed at the competition of such a railway.”[17] Informed Germans, likewise, did not consider the Bagdad Railway a serious competitor to the Suez Canal. One authority, for example, wrote: “The Bagdad Railway taken as a whole is of importance only for through passenger and postal traffic (in which respect, therefore, it is of greatest value to the British in their communications with India) and occasionally for fast freight. The great bulk of the freight traffic, on the other hand, carrying the import and export trade of the East, hardly can fall to the Bagdad Railway, which, for a long time at least, must content itself with the local traffic of certain sections of the line,” particularly in Cilicia, Syria, and northern Mesopotamia.[18]

The assertion that the cost of constructing and operating the line would be borne by British commerce was based upon specious reasoning. Higher customs duties would not be paid by the British merchant, but by the Turkish consumer. The only harmful effect of the increased duties would be a general increase of prices of imported commodities in Turkey, leading, perhaps, to a lesser demand for foreign goods. It was probable, on the other hand, that this slight disadvantage would be more than offset by the wider prosperity which the Railway was almost certain to bring the districts traversed. In any event, whatever burden might be saddled upon the import trade would have to be borne, in proportion to the volume of business transacted, by the competitors of British merchants as well as by British merchants themselves.

Many British business men were shrewd enough to foresee that the Bagdad Railway might prove to be far from disadvantageous to their interests. Where was the menace to British prosperity in a railway, German or otherwise, which promised improved communication with the British colonies in the Orient? The facilitation of mail service to India; the development of rapid passenger service to the East; the reduction of ocean freight rates as a result of healthy competition—all of these injured no one except the vested interests which had handicapped the expansion of British commerce by inadequate service and exorbitant rates. There was no indication that the Bagdad Railway Company proposed to discriminate against non-German shippers; in any event, such a course was specifically prohibited by the concession of 1903, which decreed that “all rates, whether they be general, special, proportional, or differential, are applicable to all travelers and consignors without distinction,” and which prohibited the Company “from entering into any special contract with the object of granting reductions of the charges specified in the tariffs.”[19] As the British Chamber of Commerce at Constantinople appropriately pointed out, the most certain means of avoiding discriminatory treatment was to permit and encourage the participation of British capital in the enterprise and to assure the presence of British subjects on the Board of Directors of the Company.[20]

From an economic point of view, it would appear that the British Empire had a great deal to gain from the construction of the Bagdad Railway. In proportion as improved methods of transportation shrink the earth’s surface, the contacts between mother country and dependencies will become more numerous. An economic community of interest is more likely to spring up and thrive with the aid of more numerous and more rapid means of communication. True, certain interests believed that the Bagdad Railway threatened their very existence. But would the British people have been willing to sacrifice the wider economic interests of the Empire to the vested privileges of a handful of English capitalists? They would not, of course, if the issue had been put to them in such simple terms. The problem was complicated by the obvious fact that it was not alone the economic interests of the empire which were at stake. The political import of the Bagdad enterprise overshadowed all economic considerations.

Imperial Defence Becomes the Primary Concern

British journalists and statesmen, as well as the ordinary British patriot, have been accustomed to judge international questions from but one point of view—the promotion and protection of the interests of that great and benevolent institution, “the noblest fabric yet reared by the genius of a conquering nation,” the British Empire.[21] Imperial considerations have been the determining factors in the formulation of diplomatic policies and of naval and military strategy. The possession of a far-flung empire has required further imperial conquests to insure the defence of those already acquired. Strategic necessities have constituted a “reason for making an empire large, and a large empire larger.”[22]