Chapter I: Preface

The Chester concessions and the Anglo-American controversy regarding the Mesopotamian oilfields are but two conspicuous instances of the rapid development of American activity in the Near East. Turkey, already an important market for American goods, gives promise of becoming a valuable source of raw materials for American factories and a fertile field for the investment of American capital. Thus American religious interests in the Holy Land, American educational interests in Anatolia and Syria, and American humanitarian interests in Armenia, are now supplemented by substantial American economic interests in the natural resources of Asia Minor. Political stability and economic progress in Turkey no longer are matters of indifference to business men and politicians in the United States; therefore the Eastern Question—so often a cause of war—assumes a new importance to Americans. This book will have served a useful purpose if—in discussing the conflicting political, cultural, and economic policies of the Great Powers in the Near East during the past three decades—it contributes to a sympathetic understanding of a very complicated problem and suggests to the reader some dangers which American statesmanship would do well to avoid. Students of history and international relations will find in the story of the Bagdad Railway a laboratory full of rich materials for an analysis of modern economic imperialism and its far-reaching consequences.

The assistance of many persons who have been intimately associated with the Bagdad Railway has enabled the author to examine records and documents not heretofore available to the historian. To these persons the author is glad to assign a large measure of any credit which may accrue to this book as an authoritative and definitive account of German railway enterprises in the Near East. He wishes especially to mention: Dr. Arthur von Gwinner, of the _Deutsche Bank_, president of the Anatolian and Bagdad Railway Companies; Dr. Karl Helfferich, formerly Imperial German Minister of Finance, erstwhile managing director of the _Deutsche Bank_, and at present a member of the Reichstag; Sir Henry Babington Smith, an associate of the late Sir Ernest Cassel, a director of the Bank of England, president of the National Bank of Turkey, and at one time representative of the British bondholders on the Ottoman Public Debt Administration; Djavid Bey, Ottoman Minister of Finance during the régime of the Young Turks, an economic expert at the first Lausanne Conference, and at present Turkish representative on the Ottoman Public Debt Administration; Mr. Ernest Rechnitzer, a banker of Paris and London, a competitor for the Bagdad Railway concession in 1898–1899; Rear Admiral Colby M. Chester, of the United States Navy (retired), beneficiary of the “Chester concessions.”

Valuable assistance in the collection and preparation of material has been rendered, also, by the following persons, to whom the author expresses his grateful appreciation: Sir Charles P. Lucas, director, and Mr. Evans Lewin, librarian, of the Royal Colonial Institute; Sir John Cadman, director of His Majesty’s Petroleum Department; Professor George Young, of the University of London, formerly attaché of the British embassy at Constantinople; Mr. Charles V. Sheehan, sub-manager in London of the National City Bank of New York; Mr. M. Zekeria, chief of the Turkish Information Service in the United States; Mr. René A. Wormser, an American attorney who assisted the author in research work in Germany during the summer of 1922. Dr. Gottlieb Betz, of Columbia University, and Dr. John Mez, American correspondent of the _Frankfurter Zeitung_, have aided in the translation of important documents.

Professors Carlton J. H. Hayes and William R. Shepherd, of Columbia University, have been patient advisers and judicious critics of the author during the preparation of his manuscript. To them he owes much, as teachers who stimulated his interest in international relations, and as colleagues who cheerfully coöperate in any useful enterprise. Professor Parker Thomas Moon, of Columbia University, also has read the manuscript and offered many valuable suggestions.

EDWARD MEAD EARLE

Columbia University
June, 1923

CONTENTS

CHAPTER PAGE

I AN ANCIENT TRADE ROUTE IS REVIVED 1

II BACKWARD TURKEY INVITES ECONOMIC EXPLOITATION 9

Turkish Sovereignty is a Polite Formality 9

The Natural Wealth of Asiatic Turkey Offers Alluring
Opportunities 13

Forces Are at Work for Regeneration 17

III GERMANS BECOME INTERESTED IN THE NEAR EAST 29

The First Rails Are Laid 29

The Traders Follow the Investors 35

The German Government Becomes Interested 38

German Economic Interests Make for Near Eastern
Imperialism 45

IV THE SULTAN MORTGAGES HIS EMPIRE 58

The Germans Overcome Competition 58

The Bagdad Railway Concession is Granted 67

The Locomotive is to Supplant the Camel 71

The Sultan Loosens the Purse-Strings 75

Some Turkish Rights Are Safeguarded 81

V PEACEFUL PENETRATION PROGRESSES 92

The Financiers Get Their First Profits 92

The Bankers’ Interests Become More Extensive 97

Broader Business Interests Develop 101

Sea Communications Are Established 107

VI THE BAGDAD RAILWAY BECOMES AN IMPERIAL ENTERPRISE 120

Political Interests Come to the Fore 120

Religious and Cultural Interests Reënforce Political
and Economic Motives 131

Some Few Voices Are Raised in Protest 137

VII RUSSIA RESISTS AND FRANCE IS UNCERTAIN 147

Russia Voices Her Displeasure 147

The French Government Hesitates 153

French Interests Are Believed to be Menaced 157

The Bagdad Railway Claims French Supporters 165

VIII GREAT BRITAIN BLOCKS THE WAY 176

Early British Opinions Are Favorable 176

The British Government Yields to Pressure 180

Vested Interests Come to the Fore 189

Imperial Defence Becomes the Primary Concern 195

British Resistance is Stiffened by the Entente 202

IX THE YOUNG TURKS ARE WON OVER 217

A Golden Opportunity Presents Itself to the Entente
Powers 217

The Germans Achieve a Diplomatic Triumph 222

The German Railways Justify Their Existence 229

The Young Turks Have Some Mental Reservations 235

X BARGAINS ARE STRUCK 239

The Kaiser and the Tsar Agree at Potsdam 239

French Capitalists Share in the Spoils 244

The Young Turks Conciliate Great Britain 252

British Imperial Interests Are Further Safeguarded 258

Diplomatic Bargaining Fails to Preserve Peace 266

XI TURKEY, CRUSHED TO EARTH, RISES AGAIN 275

Nationalism and Militarism Triumph at Constantinople 275

Asiatic Turkey Becomes One of the Stakes of the War 279

Germany Wins Temporary Domination of the Near East 287

“Berlin to Bagdad” Becomes but a Memory 292

To the Victors Belong the Spoils 300

“The Ottoman Empire is Dead. Long Live Turkey!” 303

XII THE STRUGGLE FOR THE BAGDAD RAILWAY IS RESUMED 314

Germany is Eliminated and Russia Withdraws 314

France Steals a March and is Accompanied by Italy 318

British Interests Acquire a Claim to the Bagdad
Railway 327

America Embarks on an Uncharted Sea 336

INDEX 355

MAPS

The Railways of Asiatic Turkey _Frontispiece_

The Chester Concessions 340

TURKEY, THE GREAT POWERS,
AND THE BAGDAD RAILWAY

TURKEY, THE GREAT POWERS AND THE BAGDAD RAILWAY

A Study in Imperialism