it is also true that all earnings beyond what is barely necessary to work and maintain the railway belong to the Government. Should the line be finished quickly, it is quite likely that the Government will have to pay but little; but even if that hope should not be fulfilled, and the railway be opened for traffic but gradually, experience shows that wherever any section of Turkish territory has been opened up by railway communication, the increase of revenue to the Treasury has made good, if not exceeded, any outlay on railway subventions. A few exceptions there are of course; to name one, there is, for instance, the strategical railway connecting the two Oriental lines from Salonika to Servia and from Constantinople to Bulgaria. This 'Junction Railway,' built by French capital, is never likely to pay for its cost; but its existence has allowed Turkey to win the Greek campaign, and it has allowed the Young Turkish Army to quench the latest rebellion of the soldateska at Constantinople.

6

Though streams of ink be spilled to show the Turks that they are being milked' and 'looted' by us, the Turks, Old and Young, know better. They feel they have received at our hands nothing but good, and they are justly proud of the Anatolian Railway. That Railway Company has since its establishment been selling to the peasantry agricultural machinery, and without any profit. It has been subventioning schools mostly visited by the children of Ottoman subjects. It has been planting trees and making experiments and demonstrations of agriculture, and, as late as the present year, it has been advancing without interest large amounts in grain, when the peasantry, owing to last year's drought, had nothing left to sow their fields. In February last an interpellation hostile to the Baghdad Railway was engineered in the Turkish Parliament. When the Minister declared that the Government intended to go through with the undertaking, and when he spoke of the line as a sinew in the life of the State,' the nation's representatives applauded and passed a unanimous vote of approval and confidence.

I will now explain the use that has been made of the Government subvention bonds delivered to the Company for the first section of 200 kilometers from Konia. Under the concession, and according to what I have explained, the Company received bonds representing about 85001. cash value per kilometer, or for 200 kilometers say 1,700,0007. Out of this sum the Company paid for the construction about 50007. per kilometer=1,000,000l.; it further had to defray the interest on the subvention loan until the time of the opening of the line. And it is to be observed that under this heading at least 10 per cent. of the total subvention will be absorbed (21 years' average construction time at 4 per cent.), though in this case of an easy construction problem the expense was smaller. Thirdly, the Company provided a heavy sum for rolling stock over and above the actual requirements of the small spur to Bulgurlu, as we well knew that no money would be available

on the second and third sections next following to pay for rolling stock, which, however, would be necessary. Further, the Company saved and put aside an amount of over 1200l. per kilometer, or a total of 240,000l., as a reserve towards paying for the costly Taurus section. That amount, as appears from the Baghdad Railway Company's published reports, is available in cash, as well as the Company's paidup capital of 7,500,000 francs. Finally, there had to be paid a large amount for preparing so important a business during a series of years, the cost of the expedition being the principal item of the outlay, and last, not least, there was to be paid a heavy backshish. Nobody having done business in Turkey ignores that backshish on the Bosporus ruled supreme, and was hitherto an absolute condition of any contract. We had to pay in proportion to the importance of a business of some twenty million pounds. The Sultan himself saddled us sometimes under the most phantastic pretexts with fresh parties that had to be satisfied. Some of my readers will be familiar with the tale of the man who arrived at Stambul with a bag full of gold, desirous of giving it to the Public Treasury; but he had to pay backshish before reaching his purpose and being able to leave the Turkish capital relieved of his burden. To those who will blame us for having consented to pay backshish on this as on other occasions I have not at the present time any reply to make, nor do I feel called upon to apologise. But I will venture to recall having read the Diary of Samuel Pepys, Esquire, from which it appears that there was a time, not so very far distant, when backshish even in London was a common institution.

Now it is evident from the above that the creators of the Baghdad Railway scheme and the finance syndicate that carried through this operation could not possibly make a profit except by what they could save upon the price of 5000l. per kilometer in the construction, in a distant country far from the sea, of a standard gauge line, laid with heavy steel rails, and completely outfitted; and I ask whence could have come the 'loot of a million and a quarter' which we are accused of having robbed? It is known and admitted that the syndicate made a fair profit on the construction of that first section, which was easy, and which the Turkish Government knew full well was to pay for general expenses incurred in preparing and bringing to a successful conclusion such a vast scheme. The out-of-pocket expenditure of the group who undertook that work had run up to several hundreds of thousand pounds; if the business had come to naught, that would have been a dead loss. There is not one of the great railroads in the United States, nor in South America, and few in Europe, that have not been charged with expenditure and construction profits enor mously higher. Shall we call robbers and thiefs the Huntingtons and the Hills, the Hendersons and the Hersents, for having made important gains on the great work they performed for their countries and for humanity? In this connexion it has been asked why only that first and easy section was built in pursuance of the Convention

of 1903; the reply is near at hand to all having some knowledge of Ottoman finance and caring to admit the truth. Turkey had no available revenue for securing further subvention loans, and we had to look out and create new sources of income.

And this leads me to the topic of British co-operation in the Baghdad scheme.

From the outset of the Anatolian Railway construction we had English associates; but they came to grief in South American commitments, and dropped out. Doctor von Siemens had always been anxious to have British partners in this business; for political motives, not for the purpose of finding any part of the capital in London-which a Press campaign against everything Turkish, continued without interruption since the deal that gave Cyprus to Great Britain, had made fairly impossible. This line of action I followed, and when I had signed the Baghdad Convention I met some of our London friends, their names being amongst the most respected in the City, and they agreed to become our partners. The British Foreign Office was consulted and agreed, on certain conditions which we met, to help towards increasing the Turkish Customs, thus creating the necessary fresh revenue whereby to guarantee the Baghdad subvention loans. I need not go into more details here, as the gist of the agreements was published at the time. But I will say this: if those agreements had been carried out, the entire Baghdad Railway would fairly be finished and working to-day; and some London banking houses and British gentlemen of the very highest social and commercial standing would have been partners to what is now described as 'looting'; and possibly I would not be chairman of the Baghdad Railway Company now, but perhaps my place would be filled by some candidate of the entente cordiale. And the same pens now writing satires would be composing hymns on the very same subject, the case being altered.' Audacter calumniare, semper aliquid haeret.

Not one of the several British statesmen or financiers who took part in those negotiations, but has expressed or conveyed to me at some time his regret at the treatment and unjust criticism we met with.

At that time a Consular Report was spread and believed, pretending that by some clause or special trick of tarification German goods would be favoured and discrimination used against all others, and against British 'sea-borne trade' in particular, as against land-borne trade. H.B.M.'s late Ambassador at Constantinople, Sir Nicolas O'Conor, told me that he examined that statement and found no truth in it. Whoever has the slightest notion of transportation problems knows that no railway can compete where there is a possibility of transport by sea at a similar distance. Any goods that are or may have to be transported from Germany to Turkey have been shipped and will continue to be shipped by the sea route; postal packages excepted, which may be carried at the same postage from Baltimore, from Bristol, from Bremen, or from Bukarest, to the same point of

destination in Turkey. Every ton of grain, every bale of cotton, or whatever other product there may be raised in Asia Minor or Mesopotamia for export, will seek the nearest seaport. As regards discrimination against British goods, the most important individual client of the Anatolian Railway Company, making the largest use of its facilities for transport, storage, and shipping, are the Messrs. J. W. Whittall & Co., of Constantinople. Let the gentlemen who are the partners of that firm say what treatment they have had at our hands, and if they complain.

The Baghdad Railway Company has a Board of Directors of not less than twenty-seven members; of these eight are French, four Ottoman, two Swiss, one Austrian, one Italian, and eleven German, of whom three are nominated by the Anatolian Railway Company. Had our English friends been able to carry out what had been arranged, there would also have been eight Directors of British nationality. These arrangements and the tenor of the Baghdad Railway Company's concession and articles of association were likewise deliberately misrepresented at the time.

I have been silent all these years, but under such strong provocation as we are being exposed to of late, I feel now authorised to publish a letter dated the 23rd of April 1903, and addressed to me by the late Sir Clinton Dawkins, one of the gentlemen that took part in our negotiations. The letter says:—

As you originally introduced the Baghdad business to us I feel that I cannot, upon its unfortunate termination, omit to express to you personally my great regret at what has occurred. After all you have done to meet the various points raised, you will naturally feel very disappointed and legitimately aggrieved. But I am glad to think, and I feel you will be convinced, that your grievance lies not against the British group but against the British Foreign Office. The fact is that the business has become involved in politics here, and has been sacrificed to the very violent and bitter feeling against Germany exhibited by the majority of our newspapers, and shared in by a large number of people.

This is a feeling which, as the history of recent events will show you, is not shared by the Government or reflected in official circles. But of its intensity outside those circles, for the moment, there can be no doubt; at the present moment co-operation in any enterprise which could be represented, or I might more justly say misrepresented, as German will meet with a violent hostility which our Government has to consider. The history of the recent occurrences is this. When my colleagues returned from Paris-you will remember that I proceeded to Spain-and reported the result of our discussion with yourself to Lord Lansdowne, he was perfectly satisfied and pleased to think that all the difficulties in the way of his giving the desired assurances were well on the way to be removed.

Indeed had you at once sent us from Berlin the draft of the engagements on your part, which we handed you at Paris, with your signature affixed, there is no doubt at all that Lord Lansdowne would have accepted it, and would at once have given the assurances desired from our Government.

Unfortunately there was a delay which was undoubtedly and naturally due to your having to consult your friends in Berlin. In the meanwhile there suddenly appeared a violent attack upon the suggestion that the British Government

2 Neither was the oase.-A. v. G.

should pledge itself to any official countenance of the Baghdad scheme. The attack proceeded from a magazine and a newspaper which had made themselves conspicuous by their criticisms on the attitude of the British Foreign Office in the Venezuela question; who instigated these papers, from whence they derived their information, is a matter upon which I cannot speak with certainty. My own impression is that the instigation proceeded from Russian sources.

The clamour raised by these two organs was immediately taken up by practically the whole of the English Press, and a divergence of views in the Government at once became manifest, the Government not having been, as a whole, informed by the Foreign Office of the successive steps it was taking in the matter. Lord Lansdowne, who was not without support, endeavoured sincerely and earnestly to make his views prevail. But he was unsuccessful. The anti-German feeling prevailed with the majority; London having really gone into a frenzy on the matter owing to the newspapers campaign which it would have been quite impossible to counteract or influence.

It is, I think, due to you that you should know the histoire intime of what has passed, &c.

How that clamour against the Baghdad Railway to which Sir Clinton Dawkins refers came about was clear enough. Mr. Balfour's Cabinet held not a very strong position then, and instead of communicating a definite decision arrived at they preferred to put the matter before Parliament, leaving their own party in doubt as to what Government would resolve. The natural result was that the opponents alone had their say the political opposition, the Russian, and a few private interests, who had as legitimate a grudge against the Baghdad Railway's competition to their trade as Mr. Weller senior had against railways in general. It has been Russia's secular policy, for obvious reasons, to weaken and dismember the Ottoman Empire; Russia was naturally the enemy of a scheme that would strengthen Turkey strategically, financially, and politically.

All these opponents, uniting, managed to misrepresent' the whole matter in such a way that public opinion was led astray and truly believed England was right in refusing such insidious proposals,' as one of the dailies put it. Lord Lansdowne would have preferred, no doubt, to let the Suez Canal remain the only highway to India; but as he discerned the short cut which the Baghdad Railway represents would be built anyhow, though perhaps slower, he decided it was good policy for Great Britain to have a hand and a say in that momentous undertaking. No doubt he likewise saw that railway connexion is possible from the Baghdad Railway by Ispahan and the road by which Alexander the Great led his army to Kandahar (Alexandria) and India, and perhaps he even considered that one of Linde's ice machines in every car and a little liquid air might make a railway journey quite comfortable even in those hottest of regions.

Some time after our negotiations with the British group of financiers had come to naught, my regretted friend, the late Sir Edward Fitzgerald Law, suggested that we might perhaps negotiate an understanding whereby, instead of a percentage in the whole business, there might be British participation by geographical division, England obtaining control of the eastern end of the line from the