Persian Gulf as far as Basrah or Baghdad. I had to reply at the time that even if we were to consider such a suggestion, we could never obtain the Sultan's consent. Abdul Hamid was so suspicious of any body penetrating into his empire that, in the Baghdad Convention of 1903, much against our will, he inserted article 29, prohibiting us from opening to traffic any line south of Baghdad until the connexion north of Baghdad with Constantinople was completed. I have pointed out that the Company has to pay the interest on the subvention loans until the respective section of the line be opened to traffic. That article 29 of the Baghdad Convention therefore meant that we could not, as would have been easy and reasonable, build at once from both sides. Here is another instance of a simple and easily-to-be-understood situation, which, however, has frequently been quoted to show our Machiavellian intentions.

In this same connexion I will insert a letter, which has not hitherto been published, but was made known to our British associates in April 1903 and which we had to sign when obtaining the Baghdad concession. The letter is dated Constantinople, the 5th of March 1903, addressed to the Turkish Minister of Public Works, and runs as follows:Monsieur le Ministre,-Pour faire suite à la Convention du Chemin de fer de 20 Février 1318 Konia-Bagdad-Bassorah en date du nous avons l'honneur 5 Mars 1903

de déclarer que le Concessionnaire s'egage à ne pas amener et installer des colons étrangers dans les environs de la ligne susmentionnée.

Veuillez agréer, &c.

So much to dispose of the fable of German colonisation in Mesopotamia.

The understanding with Great Britain having failed, there was no further possibility then of continuing the Baghdad Railway by an increase of the Turkish Customs, and we had to find or create fresh sources of revenue to continue our work. With this object in view I took up the scheme of Unifying the Ottoman Public Debt, which some time earlier had been moved by some French parties but apparently had been dropped. Under the so-called Decree of Mouharrem Turkey had assigned to the Council of Administration, named by the bondholders of the several countries, certain Revenues which for about twenty years had remained stationary: Turkey had no immediate interest in their increase, as any surplus over the fixed low rate of interest on the bonds went to redeem the capital of the Debt. This system was changed by the Unification of the Ottoman Debt brought about in 1904. The bondholders received a considerably higher rate of interest and Turkey obtained 75 per cent. of any surplus over and above a certain appropriation for a sinking fund sufficient to wipe out the entire old Turkish debt within about fifty years. This arrangement or décret-annexe, as it is called, was negotiated by Paris friends of ours, France representing by far the largest interest in the Ottoman Public Debt. It was sanctioned by the Turkish Government and agreed

to by the bondholders' representatives of the several countries, lastly by the English bondholders. It became the ungrateful task of Sir Henry Babington Smith, then Delegate of the British bondholders, to oppose that scheme. He did so in a long and able speech and in the manner of a gentleman by birth and education. The bondholders' meeting, however, unanimously accepted the scheme with a few unimportant modifications. The result of the Unification' of the Ottoman Debt has been a very large gain in the value of all the Ottoman loans comprised therein and, without any new taxation or increase of charge to the Turkish people, a profit to the Treasury of about 3,000,000l. in capital, besides an annual increase in Turkey's free revenue, which a year ago had risen to nearly 400,0007.

Whilst we were building up the country and its wealth the opponents to the Baghdad Railway scheme continued their campaign by all means in their power. They now accuse us of not having built sooner over the Taurus range, 'because it would have been more than human flesh and blood would be expected to disgorge a loot of a million and a quarter of profit already pocketed.' But they know that they are not speaking true. It was not allowed to appear that the amount of British interests in the Ottoman Debt had long ceased to hold the second place, yet every broker in Throgmorton Street knows there is hardly a Turkish bond left in English hands. Possibly this may change under the new régime, but formerly no occasion was missed to cripple Turkey's financial development in order to hinder the building of the Baghdad Railway; it had to be admitted, however, in a published document that an increase of the very low Turkish Customs Tariff is not borne by foreign trade, but by the Turkish consumers, Turkey not having an industrial production of her own.

Meanwhile we passed a convention in 1907 with the Ottoman Government, whereby we undertook to advance 800,000l. for bringing the waters of Lakes Beychehir and Karaviran through the gorges of the Tshartshamba river into the plain of Karaman and Konia, a distance of nearly 200 miles. When those irrigation works, the first in Turkey, now under work, are completed, they will make a garden of the arid land now traversed by the first section of the Baghdad Railway, and the burden of the railway subvention now lying upon the Government is sure to disappear. The Anatolian Railway Company is advancing that money at 5 per cent. interest repayable within thirtyfive years. The Baghdad Railway was not wealthy enough to advance that money, but it will reap the profit thereof, or rather it will go to the country and the Public Treasury which we are said to be 'milking.'

We also bought the Mersina-Adana Railway that had been pressed for sale upon us ever since 1903: it is a poor affair, without subvention and paying no dividend, but it will be necessary for the purpose of continuing the Baghdad Railway construction, and within two years we have by better administration obtained an increase of its earnings

of more than 20 per cent., as appears by the Company's published reports. Had it been possible to continue the Baghdad Railway to Adana sooner, that populous town would most likely not have become the scene of horrible massacres and would not now lie in ruins.

After having battled for nearly five years to protect the surplus earnings of the Ottoman Public Debt that were increasing, but which our opponents tried to earmark' for other purposes, in June last Mr. Edouard Huguenin, our General Manager at Constantinople, and Doctor Helfferich, now my colleague and a Director of the Deutsche Bank, at last secured the signature of a fresh convention with the Ottoman Government, granting the surplus of the Ottoman Public Debt's free income as a security for two new Baghdad Railway loans. The proceeds of these loans shall carry the Baghdad Railway over the Taurus and Amanus ranges, beyond the Euphrates and through Upper Mesopotamia, some 840 kilometers further east to a place called El Helif, not far south from the town of Mardin and on the way to Mossul. Of the total distance of 2893 kilometers from Constantinople (Haidar-Pacha) to Basrah there are now opened to traffic 946 kilometers. The above 840 kilometers, construction of which is now in hand, will leave only 1155 kilometers, the easiest, to be constructed, and we mean to work on quietly and slowly, but persistently, until security and culture shall have been carried by the railway from one end to the other of our much decried but good and useful enterprise.

To many millions space I thus should give,
Though not secure, yet free to toil and live;
Green fields and fertile ; men, with cattle blent,
Upon the newest earth would dwell content,
Settled forthwith upon the firm-based hill,
Up-lifted by a valiant people's skill;
Within a land like Paradise; outside,
E'en to the brink, roars the impetuous tide,
And as it gnaws, striving to enter there,
All haste, combined, the damage to repair.
Yea, to this thought I cling, with virtue rife,
Wisdom's last fruit, profoundly true:
Freedom alone he earns as well as life,

Who day by day must conquer them anew.

So girt by danger, childhood bravely here,

Youth, manhood, age, shall dwell from year to year;
Such busy crowds I fain would see,

Upon free soil stand with a people free.