Chester concession

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The Chester concession, approved by the parliament of the newly founded Republic of Turkey on April 10, 1923, would have allowed United States development of oil and railways. The United States Senate refused to ratify the treaty, and consequently Turkey annulled the concession. It was an award of 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 that led the Ottoman Empire to World War I. Germany had obtained concessions from Ottoman Empire that allowed German companies to construct railways. The U.S. 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 subsidiary activities such as the laying of pipelines, 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 sandpits, gravel pits, 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...