Chester concession
Encyclopedia
The Chester Concession, approved by the congress of the newly founded Republic of Turkey on April 10, 1923, allowed United States
development of oil and railways. It was an award of the significant importance and marked the introduction of U.S. 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 German
companies to construct railway
s.
The U.S. corporation would have the rights to all the mineral resources
, including oil field
s, found within a 20-kilometer zone on each side of the railway lines, as well as the privilege of carrying on 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 corporation could utilize the resources of the public lands, including sand pits
, gravel pit
s, quarries
and timber
, without compensation and was granted exemption from taxation
. Retired Rear-Admiral Colby Mitchell Chester
led the U.S. syndicate
, thus the name Chester concession was employed, although the official name of the syndicate was the Ottoman-American Development Company.
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 guarantee U.S. support at the Treaty of Lausanne
, where negotiations were taking place regarding the relationship between the new Turkish state and the European powers. Also a factor was the Turkish Government's pragmatic need to develop which overwhelmed fears of imperialism. The railroad grant applied to an extension of the old Anatolian Railway from Ankara
to Sivas
, with a branch to the port of Samsun
on the Black Sea; a line from Sivas to Erzurum
and thence on to the Persia
n and Russia
n frontiers, with branches to the Black Sea ports of Tirebolu
and Trebizond; a line from Ulukışla
on the Baghdad Railway
to Sivas via Kayseri
; a railway from Sivas to Harput and thence to Mosul
with branches to Bitlis
and Van
; and a railway from Harput to Yumurtalık
, a port on the Gulf of Iskenderun
.
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 U.S. side, and in part because it called for the development of rail into the Basra province, which did not come under Turkish control (Basra became part of the British mandate), 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 Ankara government in which it characterized the whole procedure as being deliberately unfriendly. In 1923, the Ankara Assembly
abruptly declared that the concession had lapsed, owing to failure of the concessionaire
s to fulfill in the allotted time certain conditions of the grant; but Mr Clayton Kennedy, as the representative of the syndicate, went to Ankara in person and, it was reported in 1924, succeeded in reopening the question.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
development of oil and railways. It was an award of the significant importance and marked the introduction of U.S. capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
for the first time on a large scale into the Near East
Near East
The Near East is a geographical term that covers different countries for geographers, archeologists, and historians, on the one hand, and for political scientists, economists, and journalists, on the other...
. The same type of agreement
Ottoman-German Alliance
The Ottoman–German Alliance was established between the Ottoman Empire and the German Empire on August 2, 1914. It was this binding alliance that ultimately led the Ottoman Empire to enter the First World War on the side of the Central Powers....
(Baghdad Railway
Baghdad Railway
The Baghdad Railway , was built from 1903 to 1940 to connect Berlin with the Ottoman Empire city of Baghdad with a line through modern-day Turkey, Syria, and Iraq....
) was a major cause of the anxiety which led the Ottoman Empire
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
to World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
. Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
had obtained concessions from Ottoman Empire
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
which allowed German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
companies to construct railway
Rail transport
Rail transport is a means of conveyance of passengers and goods by way of wheeled vehicles running on rail tracks. In contrast to road transport, where vehicles merely run on a prepared surface, rail vehicles are also directionally guided by the tracks they run on...
s.
The U.S. corporation would have the rights to all the mineral resources
Mineral
A mineral is a naturally occurring solid chemical substance formed through biogeochemical processes, having characteristic chemical composition, highly ordered atomic structure, and specific physical properties. By comparison, a rock is an aggregate of minerals and/or mineraloids and does not...
, including oil field
Oil field
An oil field is a region with an abundance of oil wells extracting petroleum from below ground. Because the oil reservoirs typically extend over a large area, possibly several hundred kilometres across, full exploitation entails multiple wells scattered across the area...
s, found within a 20-kilometer zone on each side of the railway lines, as well as the privilege of carrying on subsidiary activities such as the laying of pipe lines
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
, the utilization of water power for construction, and the building of port and terminal facilities on the Black Sea
Black Sea
The Black Sea is bounded by Europe, Anatolia and the Caucasus and is ultimately connected to the Atlantic Ocean via the Mediterranean and the Aegean seas and various straits. The Bosphorus strait connects it to the Sea of Marmara, and the strait of the Dardanelles connects that sea to the Aegean...
and the Gulf of Alexandretta. The corporation could utilize the resources of the public lands, including sand pits
Sandpit
A sandpit or sandbox is a low, wide container or shallow depression filled with sand in which children can play. Many homeowners with children build sandpits in their backyards because, unlike much playground equipment, they can be easily and cheaply constructed...
, gravel pit
Gravel pit
Gravel pit is the term for an open cast working for extraction of gravel. Gravel pits often lie in river valleys where the water table is high, so they may fill naturally with water to form ponds or lakes. Old, abandoned gravel pits are normally used either as nature reserves, or as amenity areas...
s, quarries
Quarry
A quarry is a type of open-pit mine from which rock or minerals are extracted. Quarries are generally used for extracting building materials, such as dimension stone, construction aggregate, riprap, sand, and gravel. They are often collocated with concrete and asphalt plants due to the requirement...
and timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...
, without compensation and was granted exemption from taxation
Tax exemption
Various tax systems grant a tax exemption to certain organizations, persons, income, property or other items taxable under the system. Tax exemption may also refer to a personal allowance or specific monetary exemption which may be claimed by an individual to reduce taxable income under some...
. Retired Rear-Admiral Colby Mitchell Chester
Colby Mitchell Chester
Colby Mitchell Chester was a United States Navy admiral. He is the only naval officer to have actively served in the Civil War, the Spanish-American War, and World War I.-Biography:...
led the U.S. syndicate
Syndicate
A syndicate is a self-organizing group of individuals, companies or entities formed to transact some specific business, or to promote a common interest or in the case of criminals, to engage in organized crime...
, thus the name Chester concession was employed, although the official name of the syndicate was the Ottoman-American Development Company.
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 guarantee U.S. support at the Treaty of Lausanne
Treaty of Lausanne
The Treaty of Lausanne was a peace treaty signed in Lausanne, Switzerland on 24 July 1923, that settled the Anatolian and East Thracian parts of the partitioning of the Ottoman Empire. The treaty of Lausanne was ratified by the Greek government on 11 February 1924, by the Turkish government on 31...
, where negotiations were taking place regarding the relationship between the new Turkish state and the European powers. Also a factor was the Turkish Government's pragmatic need to develop which overwhelmed fears of imperialism. The railroad grant applied to an extension of the old Anatolian Railway from Ankara
Ankara
Ankara is the capital of Turkey and the country's second largest city after Istanbul. The city has a mean elevation of , and as of 2010 the metropolitan area in the entire Ankara Province had a population of 4.4 million....
to Sivas
Sivas, Turkey
Sivas is a city in east-central Turkey and the seat of Sivas Province. According to the 2007 Turkish census, its population was 300,795.The city, which lies at an elevation of in the broad valley of the Kızılırmak river, is a moderately-sized trade center and industrial city, although the economy...
, with a branch to the port of Samsun
Samsun
Samsun is a city of about half a million people on the north coast of Turkey. It is the provincial capital of Samsun Province and a major Black Sea port.-Name:...
on the Black Sea; a line from Sivas to Erzurum
Erzurum
Erzurum is a city in Turkey. It is the largest city, the capital of Erzurum Province. The city is situated 1757 meters above sea level. Erzurum had a population of 361,235 in the 2000 census. .Erzurum, known as "The Rock" in NATO code, served as NATO's southeastern-most air force post during the...
and thence on to the Persia
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
n and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
n frontiers, with branches to the Black Sea ports of Tirebolu
Tirebolu
-Geography:Tirebolu itself is a small town of 14,303 people located on the hill named Ayana which rises from the Black Sea shore just to the west of the Harşit River estuary...
and Trebizond; a line from Ulukışla
Ulukisla
Ulukışla is a town and district of Niğde Province in the Central Anatolia region of Turkey. It covers an area of 1,502 km², and the altitude is 1,427 m...
on the Baghdad Railway
Baghdad Railway
The Baghdad Railway , was built from 1903 to 1940 to connect Berlin with the Ottoman Empire city of Baghdad with a line through modern-day Turkey, Syria, and Iraq....
to Sivas via Kayseri
Kayseri
Kayseri is a large and industrialized city in Central Anatolia, Turkey. It is the seat of Kayseri Province. The city of Kayseri, as defined by the boundaries of Kayseri Metropolitan Municipality, is structurally composed of five metropolitan districts, the two core districts of Kocasinan and...
; a railway from Sivas to Harput and thence to Mosul
Mosul
Mosul , is a city in northern Iraq and the capital of the Ninawa Governorate, some northwest of Baghdad. The original city stands on the west bank of the Tigris River, opposite the ancient Assyrian city of Nineveh on the east bank, but the metropolitan area has now grown to encompass substantial...
with branches to Bitlis
Bitlis
Bitlis is a town in eastern Turkey and the capital of Bitlis Province. The town is located at an elevation of 1,400 metres, 15 km from Lake Van, in the steep-sided valley of the Bitlis River, a tributary of the Tigris. The local economy is mainly based on agricultural products which include...
and Van
Van, Turkey
Van is a city in southeastern Turkey and the seat of the Kurdish-majority Van Province, and is located on the eastern shore of Lake Van. The city's official population in 2010 was 367,419, but many estimates put this as much higher with a 1996 estimate stating 500,000 and former Mayor Burhan...
; and a railway from Harput to Yumurtalık
Yumurtalik
Yumurtalık is a small city and a district in Adana Province of Turkey. It is a Mediterranean port at a distance of about from Adana center. Yumurtalık's population does not exceed 5,000 in winter, but in summer, it rises to 30 to 40,000 people since many inhabitants of Adana have holiday homes here...
, a port on the Gulf of Iskenderun
Gulf of Iskenderun
The Gulf of İskenderun is a gulf or inlet of the Levantine Sea, the easternmost part of Mediterranean Sea, of which it forms the easternmost tip, on the southern coast of Turkey near its border with Syria. It also contains the northernmost point of the Levantine Sea...
.
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 U.S. side, and in part because it called for the development of rail into the Basra province, which did not come under Turkish control (Basra became part of the British mandate), 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 Ankara government in which it characterized the whole procedure as being deliberately unfriendly. In 1923, the Ankara Assembly
Grand National Assembly of Turkey
The Grand National Assembly of Turkey , usually referred to simply as the Meclis , is the unicameral Turkish legislature. It is the sole body given the legislative prerogatives by the Turkish Constitution. It was founded in Ankara on 23 April 1920 in the midst of the Turkish War of Independence...
abruptly declared that the concession had lapsed, owing to failure of the concessionaire
Party (law)
A party is a person or group of persons that compose a single entity which can be identified as one for the purposes of the law. Parties include: plaintiff , defendant , petitioner , respondent , cross-complainant A party is a person or group of persons that compose a single entity which can be...
s to fulfill in the allotted time certain conditions of the grant; but Mr Clayton Kennedy, as the representative of the syndicate, went to Ankara in person and, it was reported in 1924, succeeded in reopening the question.