“Article II.—In order to meet the wishes of the German government to connect the Bagdad Railway with the system of railways to be built in Persia at a future date, the Russian government agrees, when this system has been constructed, to proceed with the building of a line to join, on the Turco-Persian frontier, the railway from Sadje to Khanikin, when this branch of the Bagdad Railway, together with the line from Koniah to Bagdad, shall have been completed. The Russian government reserves the right to determine, at a time to suit itself, the definite route of the line, which is to join up at Khanikin. Both governments will facilitate the international traffic on the Khanikin line, and will avoid all measures that might tend to hinder it; for instance, the establishment of a transit time or the application of differential treatment.
“Article III.—The German government agrees not to construct any railway lines in any other zone than that of the Bagdad line and the Turco-Persian frontier to the north of Khanikin, and not to lend its material or diplomatic support to any undertakings of this nature in the said zone.
“Article IV.—The German government once more declares that it has no political interests in Persia, and that it is only pursuing commercial aims there. It recognizes, on the other hand, that Russia has special interests in northern Persia, from a political, strategic, and economical point of view.
“The German government also declares that it has no intention of seeking, for its own profit, or of supporting in any way, either for its own subjects or for those of other nations, any concessions for railways, roads, steamship routes, telegraphs, or other concessions of a territorial nature to the north of the line beginning at Kasrihin, crossing Ispahan, Jezd, and Khakh, and ending at the Afghan frontier at the latitude of Ghasik. If the German government seeks such concessions, it must first of all come to an agreement with the Russian government.
“On the other hand, the Russian government will consent to recognize, with regard to German trade in Persia, the principle of absolute equality of treatment.”
The publication of this agreement naturally created a decided sensation in Turkey and Persia, and the grand vizier was questioned about it on the floor of the Chamber of Deputies at Constantinople. He had very little to say and was evidently very much embarrassed. He explained that the arrangement was made without preliminary conferences with his government, but assurances had been received from both Germany and Russia that the interests of Turkey would be completely protected. As the plans for transportation lines disclosed by this arrangement interfere directly with the rights granted to the Chester syndicate, it will be necessary for the government of the United States to take part in whatever negotiations may follow, or withdraw entirely from participation in the development of the material resources of Turkey.
What is known as the Bagdad Railway is one of the greatest projects decided upon by the Turkish government. The concession has already been granted. The work of construction has already begun; two hundred kilometres of track have been laid from Konia toward Adana, and the company has received $80,000 a mile for what has cost it less than $50,000. Now that the expensive part of the line has been reached, through the Anti-Taurus Mountains, the managers are holding up and making excuses for not continuing work. They want to change the route. They have already made between $5,000,000 and $6,000,000 profit, which has been divided among the concessionaires, and have thus gotten into bad habits. They are reluctant to undertake work that will cost every dollar they will get for it, and perhaps more, although the concession was accepted as a whole and not in parts. Instead of crossing the mountains where the road is needed they have asked the government to permit them to follow the coast line, where there will be little or no grade and where the track can be laid for less than one half of the guarantee per mile. If you will take a map of the Turkish Empire you can easily see the situation.
What is known as the Anatolian Railway begins at Haidar-Pasha, on the Asiatic side of the Bosphorus, opposite Constantinople, and runs eastward, following a sort of zigzag course, to the city of Angora, in Asia Minor. A branch runs down to Murad, where it connects with a line from Smyrna, and a little farther south, at Alshehr, it connects with a line from Aidin. Both Smyrna and Aidin are on the Ægean Sea and are very important ports.
The railways I have described have been in operation for several years. They owe their existence to British enterprise and were built with British capital, but have passed into the control of the International Syndicate, which holds the concession for the Bagdad Railway, and are to be a part of that system. In other words, the present Anatolian Railway is to be extended through Asia Minor and Mesopotamia via Bagdad to the Persian Gulf, and there connect with a projected line across Persia and Afghanistan to join the railway system of India at Quetta or some other convenient place. This will connect the Mediterranean and the Black Seas with the Persian Gulf, and, in the growing railway transportation system of Asia, will correspond to the Sunset line of the Southern Pacific in the United States, in the same way as the Great Siberian road corresponds to the Northern Pacific and the Great Northern, and the Central Asia Railway to the Union and Central Pacific route. Already 640 kilometres, or about four hundred and fifty miles, have been completed and about one thousand miles remain to be built.
The greatest difficulty in carrying out the scheme has been politics. The financial aspects are clear, but the political interests at stake are widespread and complicated. Five of the great Powers of Europe are involved in the undertaking. Great Britain acquiesced only upon the condition that it should be allowed to control that portion of the route between Bagdad and the Persian Gulf. The company is incorporated in Switzerland. The incorporators represent the Anatolian Railway Company of Constantinople, which, as I have already explained, is the first link in the line; the Deutsche Bank of Berlin, the Credit-Mobilier of Paris, the Imperial Ottoman Bank of Constantinople, the Weiner Bank Verein of Vienna, the Banca Commerciale Italiana of Milan, the Swiss Creditanstadt, and several British and Belgian interests. The Deutsche Bank of Berlin, through its branch at Constantinople, has immediate management, and by manipulation has obtained practically absolute control, so that, with the exception of the unbuilt but proposed section from Bagdad to the Persian Gulf, which may not be constructed for years, it is practically a German enterprise.