Chester concession

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The Chester Concession, approved by the congress of the newly founded Republic of Turkey on April 10, 1923, allowed American development of oil and railways. It was an award of the first importance and marked the introduction of American capital for the first time on a large scale into the Near East. The same type of agreement (Baghdad Railway) was a major cause of the anxiety which led the Ottoman Empire to World War I. Germany had obtained concessions from Ottoman Empire which allowed Germans to construct railways.

The American corporation would have the rights to all the mineral resources, including oil fields, found within a 20-kilometer zone on each side of the railway lines, as well as the privilege of carrying on such subsidiary activities such as the laying of pipe lines, the utilization of water power for construction, and the building of port and terminal facilities on the Black Sea and the Gulf of Alexandretta. The Company might utilize the resources of the public lands, including sand pits, gravel pits, quarries, and timber, without compensation and was granted exemption from taxation. Rear-Admiral Colby Mitchell Chester (retired) led the American syndicate, thus the name Chester concession is employed. The official name of the syndicate was the Ottoman-American Development Company.[1]

Despite the Turkish Government's desire to be free of foreign economic influence (which had caused their Ottoman predecessors a great loss of autonomy), the concession was approved because it would help guarantee US support at Lausanne, where negotiations were taking place over what the relationship of the new Turkish state would be to the European powers.[2] Also, the government's pragmatic need to develop overwhelmed fears of imperialism. The railroad grant applied to an extension of the old Anatolian Railway from Angora to Sivas, with a branch to the port of Samsun on the Black Sea; a line from Sivas to Erzerum and thence on to the Persian and Russian frontiers, with branches to the Black Sea ports of Tireboli and Trebizond; a line from Oulu Kishla on the Baghdad Railway to Sivas via Kaisarieh; a trans-Armenian railway from Sivas to Kharput and thence to Mosul with branches to Bitlis and Van; and a railway from Kharput to Youmourtalik, a port on the Gulf of Alexandretta.

It was estimated that $300,000,000 would be needed to carry the plan through. The deal collapsed in part because of financing problems on the American side, and in part because it called for development of rail into the Basra province, which never fell under Turkish control (Basra became part of the British mandate),[3] and the British-controlled Turkish Petroleum Company. The French Foreign Office, on behalf of nationals with whose claims the Chester grant conflicted, despatched a note to the Angora government in which it characterized the whole procedure as being deliberately unfriendly.[1] In 1923, the Angora Assembly abruptly declared that the concession had lapsed, owing to failure of the concessionaires to fulfill in the allotted time certain conditions of the grant; but Mr Clayton Kennedy, as the representative of the syndicate, went to Angora in person and, it was reported in 1924, succeeded in reopening the question.

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[edit] References

  1. ^ a b New International Encyclopedia
  2. ^ Karpat, Kemal. Turkey's Politics. Princeton: Princeton University Press, 1959. (85, footnote 16)
  3. ^ Barlas, Dilek. Etatism and Diplomacy in Turkey: Economic and Foreign Policy Strategies in an Uncertain World. Leiden: Brill, 1998 (90)