Britain and Her Rivals in the Middle East 95
and was soon followed by a nationalist reaction of which the
Armenian massacres of 1909 were a feature. While the British and
French press denounced these atrocities, the Germans were silent.
In the next year, after the Turks had applied to France and Britain
for a loan without success, they eventually obtained it from Ger-
many on conditions which, unlike those proposed by France, were
'consistent with the dignity of Turkey'.
Meanwhile, in 1907 the new Liberal government in Britain had
announced that its objection to a railway to the Persian Gulf would
be removed if the construction and operation of the section south
of Baghdad were left to British capitalists. Negotiations were
protracted over a period of six years, and eventually resulted in an
agreement between Britain, Germany, and Turkey in 1913-14.
Britain finally consented to the construction of the Baghdad Rail-
way on terms which may be summarized as follows:
(1) Basra was to be the terminus. The existing status of Kuwait
was confirmed. No harbour or railway-station was to be built on
the Persian Gulf, and Germany was not to support the effort of any
other Power to this end.
(2) Britain was to have two directors on the board of the Bagh-
dad Railway Co.
(3) An Ottoman River Navigation Co. with exclusive rights
on the rivers of Iraq, and an Ottoman Ports Co. to build and ad-
minister ports and termini at Baghdad and Basra, were to be form-
ed on British initiative, generous shares being allotted to the
Turkish government and the Baghdad Railway Co.
(4) The Germans recognized the exclusive right of the Anglo-
Iranian Oil Co. to prospect for and extract oil in South Persia and
the vilayet of Basra. The oil-exploitation of the vilayets of Bagh-
dad and Mosul was to be entrusted exclusively to a Turkish
Petroleum Co., in which British interests were to hold three-
quarters, and German interests one-quarter, of the shares.
It seemed, therefore, as if a compromise over this tangled question
had at last been reached, and Britain's jealously-guarded control
over the Persian Gulf preserved in its essentials. But it has been
rightly said that Germany's interest in the Railway, like Britain's
interest in the Persian Gulf, was now as much imperial as economic.
The 'Drang nach Osten' had become a principal aspiration of
German imperialists, while on the other hand their Social-Demo-
crats warned against the Railway as the 'first great triumph of