The Secretary of State to the High Commissioner at Constantinople (Bristol)

No. 201

Sir: The Department has noted with interest your despatch No. 134 of March 15, 1922, transmitting copies of certain communications from Mr. Robert H. McDowell with regard to his negotiations [Page 974] with the Nationalist authorities concerning a concession for railway, mining and other rights in Anatolia. The Department has also received by courtesy of the Department of Commerce a copy of a recent letter from Mr. Julian E. Gillespie41 giving further data on this subject.

For your information and guidance it is desired to advise you that on April 17th last Mr. Franklin Remington, President of the Foundation Company, consulted the Department with reference to the question of securing concessions in Anatolia. He outlined the interest of his company in the Chester project and referred to the results of Mr. McDowell’s visit to Angora. He added that he himself or Mr. Doty of his firm expected shortly to proceed to Constantinople in order to investigate the situation. In the meantime he had authorized Mr. McDowell, in reply to a telegram from the latter, to assure the High Commission of the interest of the Foundation Company in the proposals put forward by the Angora authorities.

On the following day two representatives of the Edgar Howard Company, of Philadelphia, discussed the same question with the Department, further stating that Mr. McDowell had severed his connection with the Foundation Company and had entered the employ of their own firm. Mr. Gillespie’s letters of May 29th and 30th42 explain a situation which at the time appeared to the Department somewhat confused. It remains to be added, however, that various representatives of the Chester interests, and notably Major Clayton-Kennedy, a Canadian citizen, have repeatedly communicated with the Department in regard to a resumption of activity by that group. From statements made by Major Clayton-Kennedy and others the Department understands: that the Ottoman Development Company has been reorganized under the presidency of a Mr. Max Berg, and that George W. Goethals and Company, Pouch and Company, and other firms have apparently agreed to assist in financing the present needs of the Ottoman Development Company in return for a part interest in any rights acquired.

In reply to queries as to the attitude of the Department toward American promoters in Turkey, it has been pointed out that in view of the existing political situation this Government cannot be expected to accord full diplomatic support to any rights or concessions granted by unrecognized authorities. On the other hand, it has in each case been stated that the Department has no desire to discourage preliminary [Page 975] investigation by interested concerns, and that this Government will endeavor to secure for American enterprise in Turkey the benefits of most-favored-nation treatment.

The Department thoroughly approves and commends the opinion expressed in your despatch of March 15 to the effect that all proper assistance should be extended to responsible American business interests in Turkey. The Department realizes that the nationals of other Powers are actively engaged in the attempt to secure rights and concessions, and while there is no reason to encourage competitive negotiations with the Turkish authorities between American and European interests, there is every desire that the principle of equality of opportunity should be maintained in Turkey as well as in the Mandate territories.

In this connection reference is made to a letter dated April 13, 1922, addressed by Mr. Alexander V. Dye, American Trade Commissioner at London to Mr. Julian E. Gillespie, Assistant Trade Commissioner at Constantinople.43 A copy of this letter has been, submitted to this Department indicating that certain British firms are interested in concessions in Turkey. At the same time the Department has noted and called to your attention, recent reports that the Italian Government has concluded a commercial agreement with the Sublime Porte to cover rights and concessions in the so-called Italian Zone of Economic Influence. The correspondence between the British and French Governments concerning the Franco-Kemalist Agreement of October last, enclosed with your despatch No. 87 of February 20, 1922,43 also contains information regarding the efforts of French interests to secure rights in the Arghana copper mines and in Cilicia. It is further understood that French interests are still engaged with the project of the Samsun-Sivas railway, on the construction of which a French firm is stated to have commenced work, for the Ottoman Government, prior to the outbreak of the war.

With regard to French claims to railway and mining rights in Anatolia, and to the alleged Turco-Italian Treaty, you are instructed to submit specific reports. In general, however, it is important that the Department be kept fully informed of the endeavors of foreign interests to secure concessions in Asia Minor and of the progress made by American interests already in the field.

I am [etc.]

For the Secretary of State:
William Phillips
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