it increasingly difficult to borrow money. Early in 1911 the Imperial Ottoman Treasury addressed a request to the Powers for permission to increase the customs duties from eleven to fourteen per cent ad valorem. Great Britain immediately announced its determination to veto the proposed revision of the revenues, unless the increase were granted with certain important qualifications. Sir Edward Grey informed the House of Commons, March 8: "I wish to see the new régime in Turkey strengthened. I wish to see them supplied with resources which will enable them to establish strong and just government in all parts of the Turkish Empire. I am aware that money is needed for these purposes, and I would willingly ask British trade to make sacrifices for these purposes. But if the money is to be used to promote railways which may be a source of doubtful advantage to British trade, and still more if the money is going to be used to promote railways which will take the place of communications which have been in the hands of British concessionaires [i.e., the Lynch Brothers], then I say it will be impossible for us to agree to that increase of the customs duty until we are satisfied that British trade interests will be satisfactorily guarded."[35] This clear pronouncement of British policy made it plain that no increased Turkish customs revenues could be diverted to the proposed Alexandretta branch. It was even doubtful if further funds would be forthcoming for the construction of the main line beyond El Helif.
This complicated domestic and international situation led to the conventions of March 21, 1911, between the Imperial Ottoman Government and the Bagdad Railway Company. One of these conventions provided for the construction of a branch line of the Bagdad Railway from Osmanie, on the main line, to Alexandretta, but without kilometric guarantee or other subsidy from the Turkish Government. A second convention leased for a period
