867.602 Ot 81/189

Memorandum by the Economic Adviser of the Department of State (Millspaugh)

Major Kennedy,38 who visited me on March 9 (see attached memorandum39), came for the purpose of obtaining certified documents or a statement showing the status of the Chester project for railway and oil concessions in Turkey.

He indicated that it was the purpose of the people who are now interested in the Chester project to endeavor to obtain the ratification by the Angora Government of the concession which was pending in the Turkish Parliament in 1909. He said that he had assurance [Page 972] of the favorable attitude of the Angora authorities toward American interests.

He showed me letters from Pouch and Company, Calloway, Fish and Company, and George W. Goethals and Company, stating in effect that these people would consider participating in the enterprise if a valid claim existed.

Major Kennedy indicated that each of these firms had taken a very small interest in the proposition, apparently in the form of a few shares of stock in the Ottoman American Exploration Company. He stated that the Foundation Company had an interest amounting to 2% and that Admiral Chester had a majority of the shares. He stated that it was the intention to incorporate a new company to take over the claims of the Ottoman American Exploration Company, and said he thought Judge Tracy, who was with Mr. Taft in the Philippines, was taking steps at Albany toward the incorporation of the new company. He said that Mr. Mac-Arthur had a small interest but that he did not think that James L. Laidlaw had any interest.

Major Kennedy said that he is going to Turkey with Admiral Chester and will be followed by Arthur Chester. He says that he realizes that Admiral Chester does not have a completed concession but that he is sure that he has enough to afford a basis for negotiations with the Angora Government. He said that his associates were willing to take the risk of the unrecognized status of Angora.

I asked him how the ratification of the concession would have any effect in Mesopotamia and Syria, parts of which were included in the old concession. He said that the concession would be dated back to 1909; but he seemed to have a very vague idea as to how this would be done.

I told him again, as I had told him previously, that I could not give him any documents or statements regarding the concession for the following reasons: (1) that no such statement would present an exact picture of the situation since all information may not be in the Department; (2) that the information might work injury to an American company.

I told him that if any information were given it should be given formally and every step should be on record. The request for it should come from some person financially interested in the company. I suggested that Goethals, Calloway, MacArthur or Chester make such a formal request of the Department. Major Kennedy said that Calloway was a very close friend of the Secretary and he asked if Calloway should see the Secretary. I suggested that a statement might be made in the letter that if the Department felt an interview [Page 973] would be desirable Mr. Calloway or someone else would visit the Department.

Major Kennedy said that he would have such a letter written.

A. C. M[illspaugh]
  1. K. E. Clayton-Kennedy, a Canadian citizen.
  2. Not printed.