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| Home > Topics > Baghdad Railway > Deutsche Bank and the Baghdad Railway |
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One of the best known events in economic history is undoubtedly the construction of the Baghdad railway, in which Deutsche Bank participated as financier and operator.
Hardly any other railway caused as much excitement before the First World War as this one, which was planned to run from Haydarpasha Station in the Asian part of Istanbul to the Persian Gulf.
Sultan Abdul Hamid II had approached German financial circles in 1888. His proposition was to build a new railway that would open up, economically and strategically, the gigantic Turkish Empire from the Bosporus to Schatt el Arab.
After some initial skepsis, Deutsche Bank agreed to take part in the project. In October 1888 it received concessions for the first sections from Haydarpasha to Ismid and then on to Ankara.
The building work was carried out mainly by the Frankfurt firm of Philipp Holzmann. Despite the difficult terrain, work progressed quickly.
By the end of 1892, the almost 600-kilometre stretch to Ankara had been completed. The line to Konya, covering a further 400 kilometres, was opened in 1896.
Negotiations on the continuation of the line from Konya to Baghdad and then on to the Persian Gulf filled the subsequent years.
The railway was in the headlines time and again owing to the disputes with the other major European powers whose political and economic interests were affected by it. "I couldn't care less about the concession or the entire Baghdad railway", said Georg von Siemens, Spokesman of Deutsche Bank's Board of Managing Directors, in 1898, venting his anger. The many political obstacles made him so impatient with the Baghdad railway project that he even offered it to the Russian Minister of Finance, Witte, at the beginning of 1899. Witte declined with thanks.
The construction and operating concession for the railway was transferred to a separate Turkish-law stock corporation, the Anatolian Railway Company. Its shares were majority-owned by Deutsche Bank.
In March 1903, Deutsche Bank finally signed the so-called "Baghdad Concession".
Construction of the railway line continued from Konya across the Taurus and Amanus Mountains to Mosul, Baghdad and Basra in stretches of 200 kilometres at a time.
By the beginning of the First World War, roughly 600 kilometres had been completed. But Baghdad was still 650 kilometres away. War and the collapse of the Ottoman Empire brought the building work to a halt. The final section of the Baghdad railway was eventually built by the Iraqi State during the years from 1936 to 1940. The first train travelled from Istanbul to Baghdad on July 15, 1940.
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