The Hejaz Railway and the Ottoman Empire

Modernity, Industrialisation and Ottoman Decline

Murat Özyüksel

• Publisher: I.B. Tauris
• Year: 2014
• Print ISBN: 9781780763644
• eBook ISBN: 9780857737434
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: 20th Century History
• Index: Politics & International Relations

Railway expansion was symbolic of modernization in the late 19th century, and Britain, Germany and France built railways at enormous speed and reaped great commercial benefits. In the Middle East, railways were no less important and the Ottoman Empire's Hejaz Railway was the first great industrial project of the 20th century. A route running from Damascus to Mecca, it was longer than the line from Berlin to Baghdad and was designed to function as the artery of the Arab world - linking Constantinople to Arabia. Built by German engineers, and instituted by Sultan Abdul Hamid II, the railway was financially crippling for the Ottoman state and the its eventual stoppage 250 miles short of Mecca (the railway ended in Medina) was symbolic of the Ottoman Empire's crumbling economic and diplomatic fortunes. This is the first book in English on the subject, and is essential reading for those interested in Industrial History, Ottoman Studies and the geopolitics of the Middle East before World War I.

CHAPTER 1

THE HISTORICAL DEVELOPMENT OF RAILWAY CONSTRUCTION IN THE OTTOMAN EMPIRE

A) RAILWAY CONSTRUCTION IN ANATOLIA AND ROUMELIA

1- Internal and External Dynamics of Ottoman Railways and the British Lines

The economic structure of the Ottoman Empire was not mature enough to call for railway construction. Nevertheless, as early as the 1830s, a British officer named Chesney had formulated the very first railway project to be carried out in the Ottoman territory.Chesney’s project was one of those initiatives put by the British to reach out to India through the Persian Gulf.¹ As a matter of fact, in 1856, the British inaugurated the Alexandria – Cairo railway with this purpose.² The concession of this railway was granted to the British by the governor of Egypt, Abbas Pasha. Later, the Sublime Porte had to bow to the diplomatic pressure exerted by Britain and acquiesce in the construction of this line.³

The very first railways inaugurated in the Anatolia and Roumelia regions of the empire were constructed, again by the British, to benefit from the agricultural potential of these fertile lands. German and French lines to be constructed afterwards would serve both strategic and commercial purposes. For the competing imperialist countries, the most effective way of gaining spheres of influence in the Ottoman territory was constructing railways.

The above explanations should not be taken to imply that the Ottoman railways were constructed merely because of the pressures and suggestions of European countries. The Ottomans also hailed this rapidly developing new transportation system as a panacea for their road problems. Starting from Mustafa Res it Pasha, all bureaucrats of the Ottoman Reform Period, referred to as the Tanzimat, who believed in the necessity of political integration with Europe, had underlined the significance of railways for the Ottoman Empire in the proposals that they submitted to the Sultan.⁴ The Ottoman rulers were interested in railways primarily due to administrative/strategic concerns. They presumed that escalating internal and external unrest could be averted by rapid deployment of soldiers, which would become possible thanks to railways. Secondly, they hoped that railways could help ease the financial bottleneck emerging as a consequence of the lack of industrialization and that tithe⁵ could be increased in tandem with increasing production once the transportation problem was resolved. In fact, in the years 1889 – 91, while agricultural production throughout the empire increased by 63 per cent, this increase reached up to 114 per cent in regions that were connected to a railway line.⁶ That is to say, Ottoman railways can be said to take root from a blend of internal and external dynamics.

The Ottoman Empire not only lacked the capital accumulation to finance railway investments; it was also short of experienced technical personnel. A natural outcome of this fact was that—with the exception of the Haydarpaşa – İzmit line and the Hejaz line— all of the Ottoman railways were constructed by foreign companies. Moreover, the Ottomans even had to offer guarantees to foreign investors, since the trade potential of the lines to be built was not enough in the short run to attract foreign capital.

The first concession was granted to the British in the year 1856 for the İzmit – Aydın Railway. The raw material resources of the region and its potential as an assured market for finished goods provided the incentives for British capital to construct this line. İzmir (Smyrna) was one of the Ottoman Empire’s most important ports. It was the only exit point of an extremely fertile hinterland and was avery favorable location for foreign trade.

Even before the commencement of railway constructions, there were already 1,601 British merchants who were engaged in import and export activities in İzmir.⁷ This can be explained by the fact that the city had increasingly become an attractive commercial hub for British merchants. Britain had dismantled the Ottoman Empire’s last barriers to foreign trade with the Commercial Convention of Balta Limanı in 1838. Bans on export, monopolistic practices and internal tariffs were removed,⁸ thus eliminating all legal obstacles to entering the Ottoman markets and importing raw material. However, the British merchants faced one major roadblock: transportation. Camel transportation not only increased costs but also brought about a series of other difficulties.⁹ Under the circumstances, this problem could only be solved by constructing railways. Robert Wilkin and four of his friends, all British merchants based in İzmir, applied to the Sublime Port to request the concession on a railway to be constructed between İzmir and Aydın. Receiving the backing of the British Embassy, their application was accepted. Since they would not be able to undertake an investment of such scale, they sold their concession to a corporation in Britain. Subsequently, in 1857, the İzmit – Aydın Railway Company was incorporated.¹⁰

In accordance with the İzmit – Aydın railway agreement, the Ottoman government had to offer a 6 per cent profit guarantee annually against 30.6 million francs of capital invested in the company.¹¹ Furthermore, the company also enjoyed the right to exploit the land, the mines and the forests that belonged to the government free of charge. In return for these, the first 70 km of the railway line would have to be completed in four years and the Ottoman Empire would not authorize any other company to construct a railway on the specified route.¹²

However, the company could not complete the first 70 km of the railway in the allotted time. In such cases, the agreement entitled the government to seize the 39,600 pounds kept as security deposit and take over the management of the company.Yet, the government decided to extend the period by three years. The reason behind the Ottoman government’s granting additional privileges to the company, let alone extending it the a forementioned rights, was the increasing importance attached by the Ottoman rulers to railway construction. The two general reasons why the Ottoman rulers supported railway construction throughout the country were also true for the İzmit – Aydın region. The Western Anatolian region had also been affected by the existing chaos: in addition to conflicts among the Greek, Jewish and Armenian communities, Zeibek, Yuruk and Circassian mobs necessitated rapid soldier deployment. This unrest had an adverse impact on the economic life of the region.

The Ottoman rulers hoped that they could boost production by overcoming the transportation problem and thus increase the yield from tithe. Moreover, railways would improve trade, which would then lead to a rise both in agricultural taxes and customs duties. The construction of the İzmit – Aydın railway took ten years and the line was inaugurated in 1866. As had been predicted, agricultural taxes collected from the regions transected by the İzmit – Aydın railway increased 13- fold between 1856 and 1909. Likewise, the customs revenues collected from İzmir amounted to around 230,000 pounds a year between 1873 and 1877.¹³ The İzmit – Aydın line, which was initially 130 km, was extended to Dinar with a supplementary agreement, dated 1879.The length of the line reached 515 km, taken together with its various branch lines.¹⁴

Meanwhile, the British embarked on the construction of a second railway line that would connect İzmir to Kasaba. When in 1863 a British entrepreneur named Price gained the concession of that line with a 6 per cent profit guarantee from the Ottoman Empire, the İzmit – Kasaba Railway Company was established. The company started its operations in 1864 and in three years completed the 92-km İzmit – Kasaba line.¹⁵ In 1888, the İzmit – Kasaba Company was granted the concession to construct and operate a 92-km line between Manisa and Soma, but without guarantees. The Manisa – Soma line was inaugurated in 1890.¹⁶

Thanks to the İzmir – Aydın and the İzmir – Kasaba railways, the British gained sway over the Western Anatolian region very rapidly. Railway construction was followed by an upswing of British trade in the region and British investments shifted to other sectors like mining and municipal services. Besides these, the completion of the railway and the introduction of the land law in 1866, which enabled foreigners to own land, encouraged the British to establish capitalist farms.¹⁷ The expectations of the Ottoman rulers were also met to a great extent. With the resolution of the transportation problem, security was ensured and production increased. The trade volume in İzmir exceeded that of İstanbul.¹⁸ The success of the Aydın and Kasaba lines encouraged the Ottoman administrators to extend these lines further and to start the construction of news ones, primarily towards the Persian Gulf.¹⁹

However, due to the dependency of production on British industry, crises in the British economy had a direct impact on Ottoman producers. The emery stone is explanatory in the sense that it was produced in Western Anatolia by the British, transported through the British railway and exported to Britain. As for the type of minerals that were entirely isolated and excluded from the regional economy, they included manganese, antimonite, chromium and borax. While the British enhanced productivity in Western Anatolia as a consequence of their intervention, they at the same time rendered the region dependent on British industry.Consequently, the Ottoman economy, which had been articulated with the capitalist world economy through external dynamics, became vulnerable to the cyclical depressions of capitalism. Economic activities in Western Anatolia went through consecutive periods of depression and relative wellbeing following Britain with a time-lag of two years.²⁰

Cotton is one of the best examples of products that Britain subsidized in the region to meet its own demand for raw material. The Cotton famine engendered by the American Civil War had compelled British industrialists to subsidize new cotton production areas. The Manchester Cotton Purchasing Union decided to subsidize cotton production in Western Anatolia based on a report drawn up by the British Consul to İzmir. It is interesting to note that in addition to distributing seeds free of charge, providing machinery support to the producers and organizing courses to improve quality, the Union also decided to support the İzmit – Aydın railway line. As a matter of fact, the areas where cotton production rose were all connected to the Aydın railway line.

The British constructed railways also in the European part of the empire with the intention of connecting fertile Ottoman hinterlands to the capitalist world economy. One of these was the Constanza – Cernavoda line, which was granted for 99 years and inaugurated in 1860.²¹ The concession of the 220-km Varna – Ruse line was granted in 1861, again for 99 years. Among these, the Cernavoda line remained within the Romanian borders in the aftermath of the war with Russia. The Varna – Ruse railway, on the other hand, was inaugurated in 1866 and then turned over to Bulgaria in accordance with the Treaty of Berlin. Sultan Abdulaziz’s first experience with railways was during his journey on this line: according to the Times, the sultan was fully satisfied.²² In addition to the economic boom that they created, both of these railways precipitated the penetration of separatist/nationalist ideas into the region.

2- A Fruitless Effort: State Railways

The Ottoman railways that we have examined up to now were all short-distance lines, aimed at mobilizing the trade potential of a limited area. From then on, a comprehensive railway project to connect the Ottoman territory to Europe was on the table. Since the period of Ottoman Reforms, the Tanzimat, Ottoman rulers had attached great importance to political integration with Europe. The positive atmosphere created in Europe after the Crimean War and the proclamation of the Reform Decree, called the Islahat Fermani, fueled their aspiration to construct a railway line that would tie the Ottoman Empire with Europe. Moreover, Abdulaziz’s trip to Europe with Murad and Abdülham id inspired the sultan and the princes about railways.²³

At some stage, it was proposed that the government construct a railway connecting the empire to Europe, but this idea was abandoned due to financial difficulties and lack of know-how and technical expertise. Instead, European investor circles were invited. After several initiatives, in 1869, a concession agreement was signed with the Austrian banker, Baron Hirsch. According to the agreement, Hirsch was granted the concession of the 2,000-km railway with a guarantee of 22,000 francs per kilometer.²⁴

It soon became clear that Hirsch did not have the financial capacity to run such a project and was merely an adventurer. Actually, Hirsch tried to attract small capital owners by issuing lottery bonds in order to secure the required capital. With this purpose, he issued 1,980,000 security bonds at 400 francs par value with an annual interest of 12 francs. The bondholders stood to win prizes as high as 600,000 francs from the lotteries.²⁵

As can be predicted, things did not go as planned. For one thing, the French and British governments did not allow the bonds to enter the Paris and London stock markets. In order to overcome the existing problems, Hirsch and the Ottoman governers came together in 1872 and made significant amendments in the terms of the concession agreement. Most importantly, the railway concession was reduced from 2,000 km to 1,279 km. According to the revised agreement, Hirsch would not have to construct the most demanding and expensive sections of the project. Moreover, the Baron would receive 72,727 francs per kilometer of the lines that he would construct, for a total of 93,017,833 francs. This amount was paid in advance out of the bond yields that were issued. Although the Ottoman Empire would in the end have a railway of 1,279 km, these lines would not be connected with the Austrian network. That is to say, the Tanzimat-era pashas’ dream of connecting with Europe via railways did not materialize. Publications on that period record that Grand Vizier Mahmut Nedim Pasha and many other administrators were bribed to make sure that the revised agreement would favor Baron Hirsch.²⁶

The unfortunate experience with Hirsch²⁷ did not detract from the importance of railways for the Ottoman rulers. In 1871, Sultan Abdulaziz issued a decree encompassing the idea of surrounding the entire Asian territory with a railway network. The main line was to be constructed between İstanbul and Baghdad. The railway would be connected to the Black Sea, the Mediterranean and the Persian Gulf by extension lines. The mishap with Baron Hirsch had shattered the credibility of private entrepreneurs. Therefore, the government decided to construct the railway on its own. Pursuant to a decree issued on August 4, 1871, the government started laying the rails from Haydarpasha to İzmit. Next year, on October 4, the line had reached only as far as Tuzla. It took two years to connect Haydarpasha with ...

Table of contents

• Front Cover
• Autho Bio
• Title Page
• Copyright Page
• Editor
• Contents
• List of Illustration
• Abbrivation
• Map
• Introduction
• 1. The Historical Development of Railway Construction in the Ottoman Empire
• 2. Decision to Construct the Hejaz Railway
• 3. Financing the Hejaz Railway
• 4. The Construction of the Hejaz Railway
• 5. Forces Resisting the Hejaz Railway
• 6. Were the Expectations Fulfilled?
• Conclusion
• Notes
• Bibliography
• Back Cover