867.602 Ot 81/225
Major General George W. Goethals to the Chief of the Division of Near Eastern Affairs, Department of State (Dulles)
Dear Mr. Dulles: I am in receipt of a communication dated October 20th, file marked NE, from the Department of State.49
The Ottoman-American Development Company is organized under the laws of the State of Delaware. The authorized stock issue is 5,000 shares of no par value. The stock record shows that a large majority of this stock is held by American citizens.
The by-laws provide for four directors, and they are the following: F. S. Blackall, Kermit Roosevelt, C. A. Barnard51 and myself:—three Americans and one Canadian. I am President of the Company; Mr. Barnard is Secretary and Treasurer.
From the foregoing, the Ottoman-American Development Company is an American corporation, officered, with one exception, by Americans.
The control of the Company is in the hands of the stockholders, and the stock list shows 4,347 shares held by American citizens and 623 shares by citizens of Great Britain.
While I knew that the stock list indicated a majority of stock in the hands of American citizens, whether it was all held unqualifiedly was a matter to be cleared up, which could not be done until I could see Mr. Barnard. He could not entirely satisfy me on this point. His own stock was transferred and assigned and appears in the name of an American citizen who is to return to Mr. Barnard [Page 979] any benefits that may accrue to stock transferred to him by Mr. Barnard and who, I assume, will be guided in his actions by such instructions as Mr. Barnard may from time to time care to issue. I assume that other Canadian stock holdings have been disposed of in the same way, but on this point I have no information.
Apparently, therefore, the majority of the stock, while held by American citizens, may be controlled by Canadian interests.
Mr. Barnard states that he and his associates have transferred their stock in good faith, but if this be not satisfactory, they are willing to pool all stock and create a voting trust composed of three American citizens, who will be given unrestricted authority to vote the stock, thereby giving control of the Company to Americans.
Under the contract with the Chesters a large amount of cash was to be paid in installments and I understand negotiations are now under way by which stock holding interests will be substituted for these cash payments, in which case the Chester family would be large holders. The Canadian interests have thus far advanced practically all of the money that has been expended in the venture.
The foregoing are all the facts in the case that I have been able to ascertain and they are submitted in response to the inquiry of the Department whether the Ottoman-American Development Company is an American corporation, officered and controlled by American interests. Major Kennedy, a Canadian citizen, is the representative of the Ottoman-American Development Company in Turkey.
Sincerely yours,