presided over by a British subject. The railways in Asia Minor originally undertaken by Englishmen were built in the hope and belief that early and remunerative traffic would be secured; and though, as in the case of the Smyrna-Aidin Company-the oldest line in Turkey and one which, ever since its inauguration by Lord Stratford de Redcliffe in 1858, has remained under British management-bold plans were formed for the future, the general idea was rather to push forward gradually, and only as the necessity and profit of extension became clearly apparent. Some direct financial assistance was indeed sought from the Sublime Porte, but hopes of profit depended for the most part upon the successful development of traffic in fertile districts.

As regards more ambitious schemes, during several decades prior to the inception of the German scheme for building the Bagdad Railway, proposals to construct by British capital and enterprise a railway through the Euphrates Valley, connecting the Mediterranean and the Persian Gulf, were discussed in the British press, in Parliament, and at public meetings. So early as 1856 the 'Euphrates Valley Railway Company' was formed for the purpose; and among the benefits expected from the project were the more rapid transmission of passengers, troops, and mails, and, together with much benefit to the regions traversed, great commercial advantages to Great Britain and India on the route opened up. General Chesney, who, at the instance of the British Government, had commanded the Euphrates Survey Expedition of 1835, was appointed consulting engineer and representative of the company at Constantinople, and succeeded in 1857, through the invigorating impulse of Lord Stratford's strenuous and compelling personality, in obtaining a general concession for the construction of a railway between Suedia, opposite Cyprus, and Basra, on the Shatt-el-Arab. The Ottoman Government undertook to guarantee 6 per cent. on the capital necessary for the first section as far as the Euphrates, and to grant other privileges; but these terms were not then sufficiently attractive to induce capitalists to invest in a distant undertaking, and the support of the British Government was sought in the form of a counter-guarantee for a period of twenty-five years.

This financial assistance the Government did not feel justified in giving. The scheme received a further check from the opening of the Suez Canal in 1869; but it was nevertheless kept alive by those interested, and in 187172 a Select Committee of the House of Commons was appointed to examine and report upon the whole subject of railway communication between the Mediterranean, the Black Sea, and the Persian Gulf.' The report was to the effect that no insuperable obstacle existed in the way of the construction of a railway from some suitable port on the Mediterranean to some other suitable port near the head of the Persian Gulf, but that there seemed no probability of the line being constructed by private enterprise, without a British Government guarantee, for it was plain from the evidence given that the railway could not at first pay its way as a commercial undertaking. Neither the Imperial nor the Indian Government proved willing to give a guarantee, and no action was taken upon the Committee's report. There is, nevertheless, foundation for the belief that Lord Beaconsfield clearly recognised the dominating importance of this ancient trade route; indeed the occupation of Cyprus was not wholly unassociated, in his constructive mind, with the project of a railway from the Gulf of Alexandretta to the port of Basra; and, at the time of the Congress of Berlin, he actually instructed Major (afterwards Sir John) Ardagh to trace on a map the alignment of this railway. Possibly if Lord Beaconsfield's Administration had remained in power some of the profits on the Suez Canal shares might have been applied as financial guarantees for this enterprise.

Parenthetically it may here be remarked that although in 1857 the Ottoman Government had been willing to support a line from Suedia to Basra, it is doubtful, owing to strategical and political reasons, whether at later periods they would have welcomed any railway from the Mediterranean to Bagdad until direct communication between Constantinople and Aleppo had first been established. In 1892, however, Mr. G. N. (now Lord) Curzon observed in a published work:

... I do not see how such a line, running through such a region, could possibly be expected to pay; and I should

indeed be loth to incur the responsibility of advising any Government to saddle itself with even a limited guarantee. . . . In the very fact that neither the attention which it then excited nor the voluminous literature to which it gave birth has saved it from an almost complete extinction, might be discovered an inferential argument against this scheme. Its superficial attractions, judiciously dressed up in the garb of patriotism, were such as to allure many minds; and I confess to having felt, without having ever succumbed to, the fascination.'

While the British project was thus being consigned by a prominent authority to an almost complete extinction,' other schemes, as will presently be observed, had already entered upon a fascinating development.

'German imagination,' so it has been said, 'never ceased to dream of the Morgenland since the epic of Barbarossa's crusade, and the legendary disappearance of that great figure of Teutonic battle and romance in the Cilician stream.'* Be this as it may, so early as 1841 the future Field-Marshal von Moltke, while on an official mission in Turkey, drew attention to the importance of the country from the point of view of German interests and advocated the establishment of a German principality in Palestinet; in 1848 the economist Roscher indicated Asia Minor as the eventual portion of Germany in the spoils of Turkey; while another writer of the same period, Rodbertus, looked forward to the time when German soldiers would be on the shores of the Bosphorus, and Turkey would be under German dominance. Nevertheless it was some years before these aspirations began to develop in any material form, and public interest in Germany on a practical basis was only gradually attracted. But from 1885 onward German writers dwelt with increasing attention upon the advantages offered by Turkey, especially Syria, Assyria, and Asia Minor, as a promising field of colonisation. This is the only country in the world which has not yet been seized upon by a Great Power,' wrote Dr Sprenger in 1886; if Germany does not miss her opportunity and takes it before the Cossacks

The Focus of Asiatic Policy' by X. 'National Review,' June 1901. + Helmuth von Moltke: 'Deutschland und Palästina,' Schriften, vol. ii, pp. 279-288. Berlin: Mittler, 1892.

extend their grasp, then she will have secured, in the division of the world, the best share. Here are no virgin forests to fell, no natural difficulties to surmount; simply scratch the soil, scatter the seed, and reap the harvest.'

It was in the autumn of 1888, when the completion in Europe of the Oriental Railway system had placed Germany in direct railway communication with the Bosphorus, that Turkish securities began to find a ready market at Berlin, and this was ascribed to the interest awakened in certain financial operations at Constantinople. Here a M. Kaulla, acting on behalf of the Würtembergische Vereinsbank and the Deutsche Bank, and in association with a London group of financiers, obtained at this time certain valuable railway concessions. They consisted in the right to administer the existing line of 57 miles from Haidar-Pasha (opposite Constantinople) to Ismidt; to extend that line for 300 miles to Angora; and to retain the whole undertaking, with substantial financial guarantees from the Ottoman Government, for a period of ninety-nine years. Preferential rights for eventual extensions beyond Angora were conceded to M. Kaulla at the same time. This concession, though intrinsically not a very extensive one, was to prove a turning point in the whole situation; for all practical purposes it was the initial step in the Bagdad Railway scheme, as it also was in the gradual permeation of most existing Turkish railway undertakings by German influence. Such being the case, what were the complicated conditions, the congeries of elements, which resulted in 1888 in the success of the Kaulla syndicate?

In 1888 Sir William White, one of the most energetic Ambassadors this country has ever had and certainly one who enjoyed exceptional sources of political information, represented Great Britain at Constantinople. About 1887 he had observed that more than thirty years had then elapsed since the conclusion of the Treaty of Paris, and eight British Ambassadors had been in Turkey since that event; that the importance of the railway question had been felt all along without obtaining any practical result; that British railway enterprise in Turkey had hitherto been planlos in its lines of development; and that future historians, no doubt, would wonder how so few important results were accomplished after the

conclusion of the Crimean War, when British interest in the East was still fresh, and our influence paramount and shared only with France. There were no doubt a number of causes which contributed to the failure of British enterprise to embark upon any large scheme of railway development in Turkey in the period referred to; some of them remained operative at a much later period and afforded opportunities adapted to German methods.

Firstly, there was the increasingly parlous state of Turkey's finances. From 1860 to 1874 she raised almost annually a fresh loan to meet the interest on preceding ones; in 1875 she defaulted, and it was only in 1881 that she was induced to compound with her creditors. Numerous bondholders in the United Kingdom were hit, confidence was undermined, and, with a wide field of enterprise elsewhere, as in South America and Canada where in the eighties the wheat requirements of the world gave great impetus to railway construction, British capital found ample and more inviting outlets.

Secondly, political conditions, though favourable to British enterprise in Turkey during the sixties and early seventies, for various reasons arising from events in the Near East and in Egypt, underwent a growing change for the worse in later years. It was then that the British press was full of denunciations of Ottoman misrule; thus Turkish sympathies were increasingly alienated, while the tendency of the British investor to go elsewhere was also stimulated.

Thirdly, the disinclination of the Sultan Abdul Hamid, notwithstanding his alleged propitious disposition, to grant railway concessions was a formidable obstacle during the first part of his reign. At any rate it was found expedient to overcome His Majesty's hesitation by a novel mode of procedure; and, in pressing such projects upon his attention, it became habitual if not essential to accompany them with an offer of a sum of ready money to be advanced to the Imperial Treasury as an equivalent for real or ideal advantages to be secured by the desired concession. The principal cause of the success of M. Kaulla in securing his railway concessions in 1888 was thus held to consist in the fact that, during an unusually acute and painful financial crisis, the German syndicate offered to Turkey on relatively favourable