867.602 Ot 81/424: Telegram

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


209. Your telegram 292 of November 6. The information which the Department has does not indicate that any American company or group has the slightest interest in advancing funds to make it possible for the Ottoman-American Development Company to begin work on the Samsoun-Sivas line. It was recently stated by Arthur Chester that in accepting the Samsoun-Sivas line, Clayton-Kennedy had exceeded his powers. The suggestion was made that later the company might wish to take the position that it was not a valid acceptance.

Chester also indicated that he had received information that directors of the Ottoman-American Development Company who were friendly to Barnard had resigned, that failure was admitted by Clayton-Kennedy, and that the company’s affairs were so hopelessly tangled that Chester did not have any hope that the company could be put on its feet. He then made the suggestion that there was only one possible course of action. That was to induce Turkey to make a new grant of the concession to a genuine American company. The Department offered no comment on this.

We believe that in the present circumstances you should take no action indicating approval of Clayton-Kennedy’s activities.