867.602 Ot 81/393: Telegram

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


169. The Ottoman-American Development Company has informed the Department that Clayton-Kennedy is leaving at once for Turkey to have the option on the Samsun-Sivas line extended six months if possible. The Department has now received a copy of the arbitral award of August 23.73 By this award the Barnard-Kennedy interests will take control of the concession when they have made certain specified payments to the Chester interests. There is an initial payment of $8,500 due on October 1, and by November 23, 1923, a satisfactory bond must be deposited guaranteeing payment of $200,000 by December 31, 1924. If this is not done the Chesters regain their rights. They claim that they are prepared to carry out the concession and to send Mr. J. W. Colt, who was formerly associated with the Chester interests, to Turkey.

It is understood that Clayton-Kennedy has with him a copy of the arbitral award and is carrying copies of letters to Feizi Bey and yourself from Blackall as manager of the company. The letter to you requests that you forward to Angora the letter to Feizi Bey. The originals have been sent here to be transmitted by pouch, but the Department has indicated that you cannot transmit the letter to Feizi Bey as it is not clear that it involves an undoubted American interest. However, for your confidential information copies of these letters are being sent by pouch.

According to the latest reports which the Department has received, Barnard and Clayton-Kennedy were trying to raise money in New York to buy out the Chesters and to make the carrying out of the concession by them as an American enterprise possible. The Department [Page 1243] has no information that they were successful, and possibly they may turn now to foreign capital. On this point, however, we have no direct information.…

We will mail a full report, but the above summary will give you a sufficient idea of the confusion which prevails and the uncertainty as to whether the project now has a substantial American interest back of it. Under these conditions we do not feel that in connection with representations which Clayton-Kennedy may make to you or to the Turks you would be justified in taking action which would give the Turks the impression that we are satisfied with respect to the bona fide and substantial American character of the interests which are behind the project. If these interests should establish themselves in control of the concession you should, however, carefully avoid taking any action which might be construed as detrimental to such interests, since it is still possible that American interests may obtain control, although this seems uncertain. We hope soon to be able to give you more definite information.

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