- rance of many of the most important aspects of the
situation. Although the Prime Minister denied that there had been any negotiations between the British and German Governments regarding the Bagdad enterprise, he failed to admit that there had been such negotiations between His Majesty's Government and German financiers. He made no mention of the fact, for example, that he and Lord Lansdowne, his Secretary of State for Foreign Affairs, had attended a meeting at the home of Lord Mount Stephen at which Dr. von Gwinner, on behalf of the Deutsche Bank, and Lord Revelstoke, on behalf of the interested British financiers, explained the terms of the proposed participation of British capital in the Bagdad Railway.[7] The plan was to place the Railway, including the Anatolian lines, throughout its entire length from the Bosporus to the Persian Gulf, under international control. Equal participation in construction, administration, and management was to be awarded German, French, and British interests to prevent the possibility of preferential treatment for the goods or subjects of any one country.[8] To this proposal both Mr. Balfour and Lord Lansdowne gave their approval, assuring the bankers that no diplomatic obstacles would be offered by Great Britain to the construction of the Bagdad Railway. Dr. von Gwinner thereupon returned home to obtain the consent of his associates to the reapportionment of interests and, perhaps, to consult the German Foreign Office and the Ottoman minister at Berlin. This was early in April, 1903.[9]
Persistent rumors in the London press that a Bagdad Railway agreement had been negotiated brought the subject to the attention of the Cabinet, which heretofore, apparently, had not been consulted by the Prime Minister and the Secretary of State for Foreign Affairs. It was decided that the Prime Minister should make a statement to Parliament—a statement which, perhaps, might serve
