138 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.
In Germany the railroads are owned by the Government and considered
 by the latter not as a money-making institution but as a
public-service institution. Therefore when accounts show a profit on
freight, a reduction of rates is immediately effected, so that the more
goods carried the cheaper the rates. Another facility afforded
by the present railroad administration is the matter of sidetracks
und switches to satisfy the requirements of manufacturers who are
off the main lines so that they may be in position freely to develop
their business. The freight rates remain unchanged; only a small
annual charge, corresponding to the extent of the advantages obtained,
 is made by the Government.
Large financial institutions, like the Deutsche Bank, the Disconto-(resellschaft,
 the Dresdner Bank, the Schaaffhausenscher Bankverein,
 own the Deutsche Orient Bank, with main offices in Berlin
and a branch in Constantinople, and the Banque d’Orient in
Smyrna. These and other German banking houses in Turkey, such
as the Deutsche Paliistina Bank, finance all transactions with Germany
 on an extensive credit plan. The dividends these banks pay
are proof of the success of the system. The German chain of banks,
which extends from the smaller towns in the interior of Germany to
Berlin, from Berlin to Constantinople, and from Constantinople
to the smaller cities of Asia Minor, Syria, and Egypt, is not only
invaluable in financing German commerce in Turkey but also serves
as the medium for German investments in Ottoman public works.
Thus, the Deutsche Bank in Constantinople is intimately connected
with German railroad construction and German irrigation and reclamation
 undertakings in Anatolia and Mesopotamia. It is not considered
 practicable for the so-called Bagdad Railway (German) to
discriminate in favor of German goods. Its contract with the
Turkish Government would seem to entirely exclude such a possibility.
 However, the public works in Turkey undertaken by the
German banks are of the highest importance in the interest of German
 trade and render competition infinitely more difficult.
Among other enterprises closely allied with the general German
campaign in Turkey are the electric light and tramway concerns in
Constantinople and Krupp’s agency. The former, although a part
of an international syndicate, the ® Sofina,” with main offices in
Brussels, are managed entirely by Germans. They have absorbed
the Galata-Pera Tunnel Co., the Bayazid-Chichli Subway Co., and
the Stamboul Gas Works. German material is used almost exclusively.

To assist in this campaign of peaceful penetration, news and trade
papers have been established, such as the Deutsche Levante Zeitung
in Hamburg, a monthly commercial journal, managed by the
Deutsche Levante Linie, and the Osmanischer Lloyd in Constantinople,
 a daily newspaper, publishing also an edition in the French
language. It is reported that the Osmanischer Lloyd was started at
the suggestion of the German Emperor himself.
Perhaps the largest syndicate in Germany is the Eisen und Stahl
Verband, including most German producers of iron and steel, the
backbone of German economic life. This organization was at first
represented in Turkey by the numerous agents of the individual
members of the syndicate. Gradually, however, these agents were
eliminated, and the representation limited to two houses in Constan-