867.602 Ot 81/292: Telegram

The Secretary of State to the Special Mission at Lausanne


122. Your telegram 268 of April 28, final paragraph. It is stated that C. A. Barnard, a Canadian, controls 2,550 of the 5,000 shares [Page 1210] of the stock of the Ottoman-American Development Company, as it was reorganized in April, 1922. However, a voting trust agreement was made on December 6, 1922, between Barnard, General Goethals, who is President of the Company, Admiral Rousseau, and H. C. Sheridan. This agreement provided that for five years control of Barnard’s stock should be vested in the three Americans and that a new company would be set up after the concession was confirmed, in which Barnard should receive 49 percent of the stock. The substantial claims of the Chester interests under Barnard’s contract of April 12, 1922, with Admiral Chester, must be satisfied out of this 49 percent.

It is also provided in the agreement that the remaining 51 percent of the capital stock of the new company must be held at all times by American citizens. It is to be issued in order to secure the necessary capital to carry out the concession.

We are informed that the above agreement is still in force. No steps for the formation of the new company have been taken as yet but the parties chiefly interested will hold a conference this week at which that subject will be considered among others. In speaking of the company use the greatest caution, stressing its private character.