- perial Minister of Finance, and foremost political opponent
of Pobêdonostsev, emphasized the strategic menace to Russia of improved railway transportation in Turkey and sturdily maintained that Russian capital and technical skill should be kept at home for the development of Russian railways and industry. By the spring of 1899 the Kapnist plan had been shelved.[2]
In the meantime French bankers had become interested in the possibilities of constructing a railway from the Mediterranean to the Persian Gulf, utilizing the existing railways in Syria as the nucleus of an elaborate system. Their spokesman was M. Cotard, an engineer on the staff of the Smyrna-Cassaba Railway. This project was possessed of such strong financial and political support at Constantinople that the Deutsche Bank considered it best to negotiate for a merger with the French interests involved.[3] Accordingly conversations were held at Berlin early in 1899 between the Deutsche Bank and the Anatolian Railway Company, on the one hand, and the Imperial Ottoman Bank and the Smyrna-Cassaba Railway, representing French interests, on the other. The result was an important agreement of May 6, 1899, the chief provisions of which were as follows:[4]
1. The Deutsche Bank admitted the Imperial Ottoman
Bank to participation in the proposed Bagdad Railway Company.
German and French bankers were to be equally represented
in ownership and control, each to be assigned 40%
of the capital stock, the remaining 20% to be offered to
Turkish investors. If British, or other capital were subsequently
interested in the Company, the share of the new
participants was to be taken from the German and French
holdings in equal proportions.
2. A modus vivendi was arrived at between the Anatolian and Smyrna-Cassaba Railways. The prevailing rate-war was to be stopped; a joint commission was to be appointed to
