867.602 Ot 81/420: Telegram
The Secretary of State to the High Commissioner at Constantinople ( Bristol )
201. Your telegram 283 of October 27. There is no legal power or authority vested in this Department to exercise effective direction and control with respect to the affairs of American concession seekers. You must appreciate this and that any effort to assume extralegal authority for this end would soon prove futile, not to mention the difficulties which most likely would be created by such unauthorized conduct. This Department must limit itself to giving genuine American enterprise appropriate diplomatic support. It cannot assume obligations which the Government would be powerless to discharge.
The consequences of whatever disappointments may result from particular failures would be slight in comparison with those which would result, should the Administration adopt an incorrect attitude and assume authority, both entirely contrary to the traditional policy of this Government and unjustified by law.
The Department cannot entertain your suggestion that it should interfere with the internal affairs of the Ottoman-American Development Company. This company is a stock company and the Government has no control in matters concerning stock control and corporate management. For the Government to intervene in an American company’s internal affairs would of necessity mean the assumption of a responsibility which the Government cannot undertake. The condition of the Ottoman-American Development Company is to be regretted but the causes for it are not within the control of the Department. It serves as an illustration of the undesirability of having this Government actively espouse commercial undertakings in which it does not have a financial stake. In their initial stages such enterprises might be of such a character that perhaps they could not be ignored on account of the representations of the American interest involved, yet later it might develop that this interest was not substantial or was not so organized as to make itself effective. This Government quite obviously is not able to supply [Page 1249] capital for such enterprises as the Chester project, to undertake the responsibility of seeking to procure American investments, or to dictate to persons who consider that they have interests needing protection.
Unfortunate as the Ottoman-American Development Company’s failure may be, the Department cannot share the view that our political and economic prestige in Turkey for the future depends upon the failure or success of any particular business undertaking. Apparently the terms of the concession have not been looked upon by American business men as a practical proposition. This should not be forgotten. The Department, furthermore, has been led to believe by the circumstances under which the concession was granted that the Turkish Government was seeking to further its own political purposes, as well as endeavoring to obtain American economic assistance, and that it is not the prestige of the American Government but that of a particular Turkish Cabinet which is involved in the failure or success of a concession which the Turks granted without making any serious attempt to obtain assurance as to the possibility of the realization of their desires. As an example, I call your attention to your despatch no. 636 of January 15, 1923,78 in which you quote Adnan Bey79 to the effect that although he thought the Chester concession would be approved by the Assembly, he doubted whether the company would fulfill its engagements.
The Department has again and again in its telegraphic instructions indicated its attitude of reserve, and it is our understanding that this position has been scrupulously adhered to by the High Commission and its representatives at Angora.