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Research Foundation of SUNY The Economic Partition of the Arab Provinces of the Ottoman Empire before the First World War Author(s): Rashid I. Khalidi Source: Review (Fernand Braudel Center), Vol. 11, No. 2, Ottoman Empire: Nineteenth- Century Transformations (Spring, 1988), pp. 251-264 Published by: Research Foundation of SUNY for and on behalf of the Fernand Braudel Center Stable URL: http://www.jstor.org/stable/40241095 . Accessed: 25/06/2014 07:51 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. . Research Foundation of SUNY and Fernand Braudel Center are collaborating with JSTOR to digitize, preserve and extend access to Review (Fernand Braudel Center). http://www.jstor.org This content downloaded from 195.78.108.163 on Wed, 25 Jun 2014 07:51:04 AM All use subject to JSTOR Terms and Conditions

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Research Foundation of SUNY

The Economic Partition of the Arab Provinces of the Ottoman Empire before the First WorldWarAuthor(s): Rashid I. KhalidiSource: Review (Fernand Braudel Center), Vol. 11, No. 2, Ottoman Empire: Nineteenth-Century Transformations (Spring, 1988), pp. 251-264Published by: Research Foundation of SUNY for and on behalf of the Fernand Braudel CenterStable URL: http://www.jstor.org/stable/40241095 .

Accessed: 25/06/2014 07:51

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Research Foundation of SUNY and Fernand Braudel Center are collaborating with JSTOR to digitize, preserveand extend access to Review (Fernand Braudel Center).

http://www.jstor.org

This content downloaded from 195.78.108.163 on Wed, 25 Jun 2014 07:51:04 AMAll use subject to JSTOR Terms and Conditions

The Economic Partition of the Arab Provinces of the Ottoman Empire Before the First World War

Rashid I. Khalidi

one who has lived for any length of time in the Arab East, al- mashriq al 'arabi, or indeed in most other parts of the Arab world,

has been able to avoid hearing about the Sykes-Picot agreement. Known to every schoolboy and college student from Basra to Beirut, and from Aleppo to 'Aqaba, this important accord formalized the partition of most of the Arab provinces of the Ottoman Empire between the two leading imperial successor powers, Great Britain and France. It has thus become as infamous in Arab nationalist literature - where it came to symbolize the arbitrary entities - as it is famous in diplomatic history.

On the other hand, there is no doubt that due to both their his- torical and current relevance, the Sykes-Picot accords deserve the at- tention they have received from scholars. To take only the most obvious evidence of their importance, well over a thousand miles of the fron- tiers between several Arab states, including Syria, Iraq, Jordan, and Saudi Arabia (generally the straightest stretches of their boundaries) follow very closely the lines originally laid down by Sir Mark Sykes and Georges Picot in 1916.

Much less well known, to Arab student demonstrators and dili- gent scholars alike, is the extent to which the war-time territorial par- tition of the Empire by the imperialist powers formalized in the Sykes-Picot accords was prefigured by an informal pre-war economic partition.1 Such a division of the spoils was necessitated by the greatly heightened competition between these powers for economic and strate- gic advantage in the Ottoman Empire in the years immediately pre- ceding the First World War.

REVIEW, XI, 2, SPRING I988, 25I-64 251

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252 Rashid I. Khalidi

The resulting arrangement would have given predominant influ- ence in Mesopotamia, the Gulf, and the regions bordering Palestine to Great Britain; Syria and most of the eastern littoral of the Medit- erranean to France; the Black Sea coastal region adjoining its own fron- tiers to Russia; and the rest to Germany. This de facto partition grew out of what were ostensibly agreements on the building of new railway lines in the Asiatic provinces of the Empire, but in fact amounted to the establishment of clearly defined, virtually exclusive economic spheres of influence.

Although the broad outlines were clear, the complex political neg- otiations on this subject between the European powers and the Otto- man state were still under way on the eve of the First World War, and some of the agreements reached could not be finally formalized in treaty form due to the outbreak of the war. The main diplomatic undertak- ings are analyzed in the works of several historians (e.g. Shorrock, 1976; Nevakivi, 1979; Howard, 1931). However, only a few scholars, not- ably Jacques Thobie (1977), have been able to unravel some of more fundamental, albeit much more shadowy, financial and economic as- pects of this web of understandings. Linked to the intensive diplo- matic bargaining over railways, these go back many years, to the early stages of the negotiations over the Baghdad railway.

Unfortunately, most of what we know on this subject is based on what can be found in the archives of the various foreign ministries in- volved. This has the disadvantage, among others, of reflecting pri- marily the thinking of the chancelleries involved. And yet, since it was quite frequently the bankers and not the diplomats who did the ne- gotiating and made the key decisions, their perspective is essential. We get it all too infrequently, for unlike diplomats and politicians, who bask in publicity - at least the favorable kind - bankers and financiers generally regard it with horror.

Even well after the event, the records of most banks and the pri- vate papers of most bankers are sealed to the serious researcher. One of the great virtues of Thobie's book is his brilliant exploitation of the archives of French banks and other commercial and financial institu- tions which he was the first to use extensively, notably those of the Credit Lyonnais. The perspective thus obtained is unique and, for this sub- ject, absolutely indispensable.

In his introduction Thobie explains that the use of such sources

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ECONOMIC PARTITION OF ARAB PROVINCES 253

is dictated by the salience of economic and financial questions in inter- national relations in the late nineteenth and early twentieth centuries. He adds that during the decades before 1914: "financial and industrial investment in the Ottoman Empire was the pre-condition for solid in- fluence in the other domains and represented the indisputable basis of political efficacy" (1977:3).

While this is clear to us today, and was then to many in the world of finance, it was less clear to the strategically-minded diplomats and politicians of the time, many of whom were aristocrats with a pro- nounced disdain for business and businessmen. An example of this at- titude, particularly widespread in Great Britain, can be found in a private letter about the Baghdad Railway negotiations form Sir Ar- thur Nicolson, Permanent Under- Secretary at the Foreign Office, to a colleague: "I wish we could free this Office as far as possible from too intimate relations with any banking or financial concerns. . . . We cannot rely with certainty on any of these financiers being animated by disinterested or patriotic motives."2

To men such as Nicolson, financiers were a nuisance to be toler- ated, who existed to do the bidding of statesmen like himself, not to impose their own point of view or their sordid pecuniary interests. But quite frequently, the statesmen found that they could not advance the political or strategic interests of their country without financiers. When that happened, the result was often a conflict between two fundament- ally different points of view.

A case in point is the lengthy negotiations over the Baghdad Rail- way and other railway lines in the Asiatic provinces of the Empire. The foreign ministries of course did much of the negotiating over rail- ways, and indeed had to be intimately involved, as what was being discussed in the last analysis had political and strategic, as well as ec- onomic, import. But quite often, the bulk of the negotiations took place between financiers. Thus, the Franco-German draft agreement of Feb- ruary 1914, which if ratified would have settled all outstanding issues concerning Ottoman railways between the two countries, is in the form of an accord between the French-controlled Imperial Ottoman Bank and the Deutsche Bank.

While the importance of the role played by financial interests in such matters is not fully reflected in the public record, much relevant material can be found in the published German, French, and British

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254 Rashid L Khalidi

documentary collections on the pre-war period. This has been skill- fully utilized in Thobie's systematic treatment, which combines pub- lished and unpublished state papers with those of the banks and financial establishments to examine the important French share of these nego- tiations.

British diplomatic historians have in some ways shared the prej- udices of their subjects, the diplomats, regarding business. We find relatively little on economic issues in the published British documen- tary compilation on the pre-war period edited by G. P. Gooch and Ha- rold Temperley, British Documents on the Origins of the War, 1898-1914, which devotes much attention and extensive space to the great power rivalry in the Near East.3

The British Foreign Office archives themselves are full of material on railways and other aspects of great power economic competition in the Ottoman Empire: there are ten massive volumes of documents in F. O. 371 on the Baghdad railway alone. (This compares with 15 vo- lumes on the same subject in the French Nouvelle Série, out of a total of 42 on Ottoman railways between 1898 and 1914.) But even in the numerous British Foreign Office papers dealing with the subject, po- litical and strategic considerations prevail.

A rare window on some of the economic considerations, and on British financial involvement in this affair, is provided by the exten- sive private papers of the first President of the British-owned National Bank of Turkey, Sir Henry Babington Smith.4 Of particular relevance for the study of Ottoman railways (and illuminating with regard to other subjects) is Babington Smith's weekly confidential correspondence with the owner of the Bank, the influential financier Sir Ernest Cassel. These letters, together with Babington Smith's other papers, provide the re- searcher with previously unavailable material analogous to the much larger body of documents examined by Thobie for French economic interests in the Empire.

Babington Smith was a former senior civil servant with three years' experience as a member of the Ottoman Public Debt Commission who took the banking post in Constantinople "at the request of His Maj- esty's Government."5 He was in a unique position to follow economic developments in the Ottoman Empire, as both the chosen represen- tative of the important Baring-Cassel financial interests, and Great Bri- tain's main negotiator with the French, the Germans, and the Ottomans

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ECONOMIC PARTITION OF ARAB PROVINCES 255

on questions affecting railways and other economic matters. In this capacity, Babington Smith played a key role in the delib-

erations over the Baghdad Railway from 1909 until 1912, at times serv- ing as the primary negotiator, while at others Cassel himself took on this role, as can be followed in the correspondence between the two men. Babington Smith was also instrumental in the prolonged neg- otiations in 1909 and 1910 between competing financial groups and the governments of Great Britain, France, and the Ottoman Empire over a major railway project in Syria. These negotiations provided the occasion for the first overt moves towards partition of this region.

What was nominally at issue was a concession for a railway line to run from Horns to Baghdad to compete with the original Baghdad project. In the end, the Horns-Baghdad alternative to the Baghdad line was never built, as Great Britain and France in 1913 and 1914 finally settled for a deal with the Germans and the Ottoman government whereby they allowed Baghdad railway construction to go ahead in ex- change for concessions elsewhere. However, the deliberations over the abortive Horns-Baghdad project between the two Entente partners laid down a clear basis for the delimitation of their respective spheres of influence in the Syrian provinces of the Empire,6 as did the Franco- German and Anglo-German accords between these powers in other regions.

The difference, of course, and the reason the Anglo-French under- standings retain more than academic interest, was that unlike Ger- many, Great Britain and France remained Near Eastern imperial powers after the First World War, and their pre-war agreement thus had post-war significance. How was the Anglo-French understanding reached?

It is noteworthy in view of the prominent role played by private interests throughout this affair that the initiative for the Horns-Baghdad scheme - which was the basis for an essentially political understanding - came not from French or British officials, but from businessmen. A group of British investors in 1908 approached the For- eign Office with a scheme for a rail line from Tripoli to Horns and on to Baghdad, and after some delay received official support.

The somewhat diffident backing of Downing Street proved insuf- ficient to overcome the efforts exerted by the French government in support of the existing French-owned Syrian railway company, the

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256 Rashid I. Khalidi

Société de Damas-Hamah et Prolongements (DHP), which applied immediately for the concession for the Tripoli-Horns section of the line as an extension of its existing network. After the customary diplo- matic pressure had been applied in the Ottoman capital by France, the DHP received the concession for a Tripoli-Horns extension of its network in October 1909.

Unlike the British Foreign Office, whose official on occasion seemed strangely naive regarding economic matters, the Quai d'Orsay was as a rule fully alive to the political and strategic importance of railway lines. To the French, a British-owned and -built railway in central Syria would have constituted a serious incursion into the heart of a region they wanted to preserve exclusively for themselves. In the words of a 1909 despatch by a French diplomat on the subject, "The Department knows how important it is to our interests that this line is built by Frenchmen."7 Although British diplomats remained temporarily un- aware of it, the importance the French attached to this matter became apparent when the Horns-Baghdad issue was raised at the highest lev- els soon afterwards, in a manner that involved the basic interests of both powers.

As a result of a lengthy bureaucratic process, the Foreign Office by mid- 1909 had decided that its strategy of choice to obstruct the build- ing of the Baghdad line to the Gulf as a predominantly German- controlled enterprise was to ask for the alternate Baghdad-Horns line. This was to be an adjunct to a British-controlled line down the Tigris from Baghdad to the Gulf in place of the route planned by the Ger- mans along the Euphrates. The British diplomats involved were ig- noring a number of factors in thus making up their plans, however. One was the great strength of the German position given a German consortium's possession of the concession for the Baghdad line. A re- lated factor was the strong desire of the Ottoman government for the building of such a railway linking the far-flung periphery of the Em- pire with its center.

The Porte was equally determined in its opposition to alternative routes, particularly those such as the Baghdad-Horns or Tigris River lines, which established the primary communications of distant pro- vinces with the sea rather than the interior. Yet another obstacle was the likely reaction of the French to a major British railway enterprise running right through the middle of Syria, and linking it with a zone

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ECONOMIC PARTITION OF ARAB PROVINCES 257

of primary British influence in Mesopotamia. Not surprisingly, British financiers involved in the project were more

aware than was the Foreign Office of these vital elements of the pic- ture. This was partly because the Cassel group was well disposed to, and indeed deeply involved in, what today would be called "multina- tional enterprise." In this Cassel and his partners were similar to the French financial groups that controlled the Imperial Ottoman Bank, which had long been willing to cooperate in a pragmatic fashion with German financial interests over the Baghdad line, and were only par- tially restrained in doing so by the nationalistic objections of their gov- ernment. Thus by 1914 almost 25% of the capital invested in the Baghdad line was French (Thobie, 1977: 354).

At the same time, partly because of this more cosmopolitan world view, the British bankers realized far better than did the Foreign Of- fice what passions would be aroused in Paris by a purely British line in such a region. Thus in October 1909 (well before the matter had been mentioned in the Foreign Office correspondence), Babington Smith wrote Cassel that "Apart from their original objections to ad- mitting others to what have hitherto been their preserves, [the French] would specifically resent a railway starting from the Syrian littoral if they have no share in it."8

No such awareness was reflected in the internal Foreign Office de- bates at this stage. In a flurry of minutes and counter-minutes which went on for several months, the primary consideration seemed to be whether Great Britain should focus on railway concessions solely in its main area of interest, lower Mesopotamia, or try as well for some- thing in Syria. Futhermore, there is hardly any mention of the French in an equally lengthy series of inter-departmental exchanges which pit- ted the India Office, and those in the Foreign Office who favored con- centrating exclusively on Mesopotamia, against others, including the Board of Trade, who felt that a British-controlled railway from the Me- diterranean to the Gulf would be good both strategically and for com- merce.9

The French soon imposed themselves on these deliberations. Much more aware than the British of what such a railway meant for France's position in Syria, and more sensitive to financial questions, the French Foreign Ministry operated on several fronts at once. In addition to con- sultations with the Ottoman government on the matter, Stephen Pi-

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258 Rashid I. Khalidi

chon, the Foreign Minister, and his Ambassador in London, Paul Cambon, devoted great attention to determining which financial group France would back.

During his distinguished diplomatic career, Cambon had been ap- pointed to the boards of directors of a number of banks, railway com- panies and French overseas enterprises, and as Ambassador to the Ottoman Empire in 1893 had himself won for France the original con- cession for the Syrian railway network of the DHP. He was thus nat- urally sensitive to financial and economic matters, as is shown by a dispatch he sent Pichon regarding the Horns-Baghdad affair in 1910: "There are only two ways to treat financiers: either not to mix in their affairs, and let them search for their profits as they wish, or to impose on them a control in conformity with our political interests, and keep them highly dependent. . . ."10 There was never any doubt which of the two approaches would be followed by French policy-makers in this affair.

In addition to their close attention to the financial aspect, the main effort of Pichon and Cambon in the matter of Syrian railways was from the beginning single-mindedly devoted to obtaining from Sir Edward Grey and the British Foreign Office some explicit confirmation of French railway primacy in Syria, with all that implied politically and strategically.

This was eventually achieved over a period of a few months in early 1910 by a complex series of diplomatic undertakings which seem to have been engineered primarily by Cambon. They were so neatly ex- ecuted that the reader of the British records (and even more of the French archives and the Cassel-Babington Smith correspondence) is left with the strong impression that the British officials involved for a long time failed to realize fully what was at stake.

Thus, Grey himself at one point in the minutes admitted that he "had overlooked" that Great Britain would "have to come to terms with the French about any railway from Baghdad to the Mediterranean."11 By April 1910, however, the light had finally dawned on Downing Street, and Sir Charles Hardinge, the Permanent Undersecretary, wrote privately of the Horns-Baghdad line to Lowther, the Ambassador in Constantinople that "We recognize that it is a concession in the French sphere of interests rather than in our own."12 Although no formal agree- ment was ever concluded, the French welcomed the informal under-

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ECONOMIC PARTITION OF ARAB PROVINCES 259

standing that had been reached, and were equally cognizant of its full political implications.13

In the end both powers benefited. At the same time as the French sphere in Syria was being informally and privately recognized by the British, the paramount position of Great Britain in Mesopotamia was being consecrated, and both imperialist powers were turning a much stronger common front to the hapless Ottoman Empire. Although many financiers and some policy-makers were disturbed by this process, whereby common spheres of activity between the powers and between financial interests of different nationalities were giving way to exclu- sive zones of influence, there was little they could do about it.

Much as Cassel might have liked to come to terms with Gwinner of the Deutsche Bank over the Baghdad Railway (as he very nearly did on at least one occasion), or with French financiers over an Anglo- French railroad from Horns to Baghdad, this was impossible. In the last analysis the period prior to the First World War was an age of "everyone in his own preserve, after the delimitation of the domain of each," in the words of a pre-war French despatch on the subject of railways.14

This does not mean that the process of delimitation was always smooth. In following the British internal decision-making process over the Syrian railway question in 1909-1910, it becomes clear that some officials, such as Louis Mallet, Assistant Under- Secretary, would have liked a swath of British-dominated territory across the Arab provinces from the Mediterranean to the Gulf. However, they ultimately real- ized that it was impossible to secure this in Syria via the Horns-Baghdad proposal, which excited too much French jealousy, and would have disrupted the Entente powers' common front against the Ottomans and the Germans.

A chance for Great Britain to obtain something along these lines eventually arose. The privileged French position in Syria established via the 1909-10 railway accords was later confirmed overtly when a formal assurance to the French by Sir Edward Grey that Great Britain had no "political aspirations" in Syria was quoted by the French Prime Minister, Raymond Poincaré, before the Assemblée Nationale in De- cember 1912, 15 but there were many details of delimitation still to be worked out.

The occasion to obtain a British sphere very similar to that earlier

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260 Rashid I. Khalidi

envisioned by Mallet and others in London arose when the final pre- war negotiations on railways in the Asiatic provinces of the Empire brought up the question of railway concessions in Palestine. This oc- curred in two phases, the first in mid-1913, and the second in the fol- lowing year.16

In May 1913, as part of the ongoing Baghdad Railway negotia- tions between the European powers and the Ottomans, France re- quested permission for a southwards extension of the Syrian network of the DHP from its existing terminus at Riyaq in the Beqa' valley to Al-'Arish on the Egyptian frontier. This was part of a package of de- mands relating to Syrian railways being made on the Ottoman Em-

pire, which the author of one French memo said would be "a marker posed for an eventual partition of Turkey in Asia."17

For strategic reasons related to the defense of Egypt and the ex-

pectation that Ottoman Turkey would be aligned with Germany in a conflict, British military planners had always sought to prevent a link- up between the Ottoman and Egyptian railway systems. British dip- lomatic intervention was successful in preventing the extension re-

quested by France, obtaining pledges from both the French and the Ottomans that only the Ottoman Hijaz railway was to be allowed to build in the area of Palestine south of its branch line from the Syrian interior across Galilee to the coast at Haifa. Furthermore, any rail- road construction south of Jerusalem was to require British consent.18

This understanding was consecrated further in the first months of 1914 as a minor part of the multilateral Baghdad railway accords then

being negotiated between the Ottoman Empire, Germany, France, and Great Britain.19 From the former, the British obtained a formal com- mitment that railways could be built in Palestine connecting the ex- isting French system in Syria and the British system in Egypt only by a British group, and only under conditions acceptable to Great Bri- tain.20 Through the exclusion of Great Britain's only European rival in the Levant from central and southern Palestine via these railway accords of 1913 and 1914 with France and the Ottoman Empire, all the elements of a belt of British-dominated territory stretching from the Mediterranean to the Gulf were now in place.

By July 1914, the competition between the European powers over the Ottoman Empire, mirroring their larger rivalry in the world arena, had gone as far as it logically could in peace-time. Many of the con-

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ECONOMIC PARTITION OF ARAB PROVINCES 261

cerned financiers, railway builders, bankers, and some leading Otto- man politicians had hoped to give a multi-national nature to projects like the Baghdad Railway, but events had proven too powerful for them (Khalidi, 1980b). The tide of nationalism and inter-imperialist rivalry was too strong, and in the end each power was consciously employing its economic resources in the Empire exclusively in support of its own interests.

The possibility that this process was leading in the direction of a confrontation was present in the minds of many of the statesmen in- volved. Thus, in February 1914, Sir Arthur Nicolson, successor to Har- dinge at the Foreign Office and a leading participant in the great power negotiations over the fate of the Empire, wrote: "If Europe once be- gins to scramble over the debris of the Ottoman Empire in Asia I should be much surprised if the scramble did not develop into an open con- flict.21

It remained for war to break out, making it possible for Sir Mark Sykes, Georges Picot, and others to turn the shadowy economic spheres of interest that had evolved by 1914 into exclusive zones of paramount influence, which a few years afterwards were incorporated into the Brit- ish and French empires under the guise of the mandate system. Al- though many modifications were introduced into these rough outlines in the course of the war and during the post-war bargaining between Great Britain and France over "the debris of the Ottoman Empire in Asia," the main outlines of their respective zones had been settled be- tween the two powers by 1914.

The diplomats and strategists had used the financiers as their stalk- ing horses in much of this. Thus the French government almost forces the DHP railway consortium to apply for and build a Tripoli-Horns line the company did not want or need, simply to pre-empt a British bid for the same line, out of fear that this would threaten exclusive French influence in central Syria. Similarly, the British Foreign Of- fice initially encouraged the Cassel group over the Horns-Baghdad line, and then bowed to the French when they asserted their political pre- rogative in Syria, in exchange for concessions elsewhere.

As can be imagined, these proceedings were not well received by the bankers themselves. Cassel's letters to Babington Smith are full of bitter complaints not only about this, but also about the low level of competence of some of the British officials concerned. Thus Cassel de-

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262 Rashid L Khalidi

scribes one key minister involved in the discussions over the Horns- Baghdad line, Winston Churchill, then President of the Board of Trade, as "quite uninformed as to the real situation."22

In another letter to Babington Smith, this one describing the 1911 break-down of his efforts to secure an agreement over the Baghdad Railway with the Germans, Cassel writes:

Our Government has to pay the penalty for not seizing the op- portunities when they were offered, and it is somewhat heart- rending for us to find that, in a matter in which we have been working very hard, the result of what we had done has been wiped out by the indecision and dilatoriness of those in authority.23

In this case, Cassel's distress that the public interest had been ill-served can only have been compounded by the fact that a tidy profit had si- multaneously escaped him, as he stood to benefit greatly had the ac- cord he was negotiating been accepted by the British government.

However, there was more to the actions of the Foreign Office than indecision and dilatoriness. In their own seemingly inept way, the Brit- ish in fact were only following the advice Cambon had given Pichon for dealing with financiers at the height of the complicated Horns- Baghdad negotiations, and as cited earlier: "impose a direction in keep- ing with our political interests, and keep them highly dependent."24 This the more worldly French had done with consummate skill, and this the officials at Downing Street had also done, albeit at times clum- sily, driving the straightforward Lowther to ask Hardinge at one point: "is it quite fair to Babington Smith and Cassel to conceal our real in- tentions re the Baghdad line? . . . We seem to be playing hot and cold with Cassel. . . ,"25

As the First World War approached, the Ottoman Empire came under growing internal and external pressures, those from without pro- ducing the alarming beginnings of partition as a result of the increas- ingly intense rivalries between the European powers, and those from within manifesting themselves in social, ethnic, and national differen- tiation, which in turn was exploited by these powers and tended to- wards partition.

Although the policy-makers of the powers were deeply involved in both processes, the often unwilling pioneers and trailblazers were the financiers, bankers, and engineers who created the economic infrastruc-

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ECONOMIC PARTITION OF ARAB PROVINCES 263

ture that made political claims possible. Most of them would have pref- erred the heretofore usual cozy and confidential arrangements between banks and entrepreneurs of different nationalities, but after the turn of the century forces were increasingly at work that made this increas- ingly impossible. The obsession of each power with staking out its claims made partition inevitable; before overt political partition could take place, a tacit economic partition, a division of the Empire into spheres of influence, had to occur. This process can be followed especially clearly, and with continuing relevance to the present day, in the case of the Empire's Arab provinces.

NOTES

1 . A brief account of the economic partition of the Asian provinces of the Empire, based on secondary sources, can be found in Frischwasser-Ra'anan (1955: 45-57). For a fuller ac- count of the Anglo-French aspects of this partition, based on archival sources, see Khalidi (1980a: especially chapter III, which covers in detail the crucial railway negotiations of 1909-10 discussed below).

2. Public Record Office, Foreign Office (hereafter F.O.) 800/193B, Nicolson to Sir Ge- rard Lowther, January 23, 1911.

3. This twelve- volume compilation (vols. IX and X have two parts each) was published by the Foreign Office from 1928 to 1938. Half of them are devoted in whole or part to the Near East. It will be cited hereafter as B.D.

4. These papers are located in Oxford at the St. Antony's College Middle East Centre. They are well organized and easy to use. For more on the subject of the National Bank, see Marian Kent (1975).

5. F.O. 800/193A/190: Grey memo, August 9, 1909. 6. This abortive project is treated in detail in Khalidi (1980a: 113-99). 7. Ministère des Affaires Etrangères, Turquie, Nouvelle Série (hereafter MAE, N.S.)

309, Boppe to Pichon, June 23, 1909. 8. B.S. papers, Box 2, II: Babington Smith to Cassel, October 30, 1909. 9. The Foreign Office and interdepartmental exchanges can be followed in R. Khalidi

(1980a: 135-46). 10. MAE, N.S. 344, Cambon to Pichon, March 17, 1910. For more on Cambon's role,

see Binion (1960: 383). 11. Grey minute on Bertie to Grey, December 1, 1909, cited in B.D., VI pp. 403-405. 12. F.O. 800/193B/64: Hardinee to Lowther, April 19, 1910. 13. The full implications of these bilateral negotiations are assessed in Khalidi (1980a:

83-86). 14. France, Ministère des Affaires Etrangères, Documents Diplomatiques français,

1871-1914, (D.D.F.), 3e série, VI, no. 518, Bompard to Pichon, "Note de l'Ambassade de France," May 8, 1913.

15. The original pledge by Grey is cited in F.O. 371/1519/42842/50279: Grey to Bertie, December 5, 1912. For the text of the speech in which it was cited, see Poincaré (1926: II, 411-12).

16. These two episodes are covered in Khalidi (1980a: 308-09, 339-40). 17. D.D.F. 3e série, VIII, no. 192, n. 2: "Note rédigée au Ministère des Affaires étran-

gères le 11 mai 1913."

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264 Rashid I. Khalidi

18. The Anglo-French aspect can be followed in B.D., X, 2, 134-135, Cambon to Grey, June 2, 1913, and the Frenco-Ottoman side in D.D.F., 3e série, VII no. 323: Boppe to Pi- chon, July 9, 1913, and VIII, no. 172: "Note pour le Conseil des Ministres."

19. Details of the negotiations can be followed in various volumes of D.D.F. and B.D. For texts of the draft agreements between France and Germany (as already noted, the actual agreement was between the Imperial Ottoman Bank and the Deutsche Bank, not the respec- tive governments), and Great Britain and Germany, of February and June 1914 respectively, see Hurewitz, (1972: I, nos. 110, 113).

20. For the minute by Alwyn Parker on which the British request was based, the de- spatch which embodied it, and the Ottoman assent to it, see B.D., X, 2, pp. 372-73; 385; 418.

21. F.O. 800/193A: Nicolson to Lowther, February 4, 1913. 22. BS papers, Box 2, III: Cassel to Babintrton Smith, November 26, 1909. 23. Cassel was referring to a later stage of the Baghdad Railway negotiations: BS papers,

Box 3, VI: Cassel to Babington Smith, March 23, 1911. 24. MAE, N.S. 344, Cambon to Pichon, March 17, 1910. 25. F.O. 800/193A/64: Lowther to Hardinge, April 19, 1910.

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