867.602 Ot 81/239

The Vice Consul in Charge at Angora ( Imbrie ) to the Secretary of State

Sir: I have the honor to inform the Department that about the middle of September Mr. Arthur Chester arrived in Anatolia for the purpose of re-opening negotiations with the Turkish Nationalist Government looking toward the acquisition of railroad concessions in Anatolia and, as incident thereto, mining concessions, such concessions to be substantially coextensive with those embraced in the original, so-called, “Chester Project”, whose inception, as the Department is aware, dates back to 1908–1909.

Accompanying Mr. Chester was a Major K. E. Clayton-Kennedy, who carried no passport, whose cards, samples enclosed, showed him as representing (1) National Aeronautical Committee of Canada, (2) The Aircraft Manufacturing Company of Canada and (3) the Ottoman-American Development Company—the company in behalf of which Mr. Arthur Chester is conducting his negotiations—and who Mr. Chester informed me was a Canadian citizen and British Subject.

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I advised Mr. Chester that, in my opinion, it was a tactical mistake to associate himself with a British subject in his negotiations at this time, since, owing to the British attitude in the Near East Sphere, the Turkish Government and people were antipathetic to anything or person British. I further informed him, that in view of this and also in view of the fact that I considered to intervene in behalf of, or support, any person not an American would weaken my influence and lessen my usefulness in assisting Americans and American interests, I could not vouch for, introduce or be associated in any way with Kennedy. At the same time, I offered to give Mr. Chester, himself, every assistance possible and introduce him to the various Ministers with whom he might wish to conduct negotiations. This I have done.

Mr. Chester came to Angora and Mr. Kennedy, as being associated with him, was permitted to accompany him. After several weeks of negotiation, Kennedy left Anatolia for Constantinople, to obtain, I was informed, some thirty odd thousand dollars, the deposit required by the Nationalist Government as a condition precedent to further negotiations. Chester remained in Angora to further confer with the Government.

Some time after Kennedy’s departure, the Angora Government advised me that he had made application for permission to return to Anatolia and inquired whether I wished such permission granted and whether I would guarantee Kennedy. I replied that Kennedy, not being an American citizen, I could neither ask for his admission nor guarantee him. The Government then informed me that it had proof that Kennedy was in the British Intelligence Service and an agent of the British Government.

Early in November Kennedy again entered Anatolia, this time by way of Hydar Pasha, and reached Ismet [Ismid]. Here he was stopped by the Turkish authorities, arrested and jailed. After being held a week, he was deported. About this time, Chester left Angora for Constantinople and since then there has been no one here representing these interests.

The impression created among Government circles here, and generally in fact, is that there is little back of the Chester proposition. The prolonged negotiations, covering a period of nearly three months, have apparently led to nothing definite. The deposit, an insignificant sum when the magnitude of project is considered, has not been forthcoming. The Kennedy incident has created an unpleasant impression, and led to the suspicion that, perhaps, the project is backed by British interests. The Minister of Public works informs me, so far, there has been nothing but “talk”. The proposition has received wide newspaper publicity within Anatolia [Page 983] and, if nothing results, the retroactive effect will unquestionably be injurious to American commercial interests and prestige.

If the Department can advise me as to its attitude toward the project generally and can inform me as to the status, financial and otherwise, of the Ottoman American Development Company and the interests back of it, I shall be greatly appreciative.

I have [etc.]

Robert W. Imbrie