America Embarks upon an Uncharted Sea
The Great War was accompanied by a definite growth of American prestige in the Near East. After the entry of Turkey into the war against the Allied Powers, American schools and missions were left practically a free hand in the Ottoman Empire; and inasmuch as the United States did not declare war against Turkey, American institutions were not disturbed even after 1917. Carrying on their work under the most trying circumstances, these educational and philanthropic enterprises established a still greater reputation than they formerly possessed for efficient and disinterested service. In consequence, an American official mission to the Near East in 1919 was able to report that the moral influence of the United States in that region of the world was greater than that of any other Power. President Wilson was looked upon as the champion of small nations and oppressed peoples. Americans were considered to be charitable and generous to a fault. The United States was hailed as the only nation which had entered the war for unselfish purposes.[38]
Since the armistice of 1918 events have not materially decreased the prestige which the War built up. “From Adrianople to Amritsar, and from Tiflis to Aden, America is considered a friend. It has become a tradition in the Near East to interpret every action of the European Powers as an attempt at political domination. America is the only power considered strong enough to provide the Orient with the capital and expert knowledge for its industrial development, without aiming at more than a legitimate profit. The Oriental feels that he needs coöperation with the West; but he is anxious to restrict that coöperation to the economic field. And he considers the United States the only power which would replace Europe’s political ambitions by a sound, matter-of-fact, and sincere economic policy.”[39]
During the Great War the economic situation of the United States underwent certain fundamental changes which seem to forecast increasing American interest in imperialism. Before the War, America was practically self-sufficient in raw materials; its export trade was composed very largely of foodstuffs and raw materials which found a ready market in the great industrial nations of Europe; financially, it was a debtor, not a creditor, nation. The enormous industrial expansion of the United States during the Great War, however, has changed these conditions. Raw materials have become an increasingly greater proportion of the nation’s import trade, and American business men are becoming concerned about foreign control of certain essential commodities such as rubber, nitrates, chrome, and petroleum. American export trade has experienced an unparalleled period of expansion, and American manufactured articles are competing in world markets which formerly were the exclusive preserves of European nations. Furthermore, the export of American capital has almost kept pace with the export of American goods, so that by 1920 the United States had taken its place alongside Great Britain and France as one of the great creditor nations of the world. As time goes on American business will be reaching out over the world for a fair share of the earth’s resources in raw materials, for new markets capable of development, and for opportunities for the profitable investment of capital.[40]
These new tendencies were quickly reflected in American relations with the Near East. As early as the spring of 1920 the Government of the United States was engaged in a lengthy correspondence with His Britannic Majesty’s Government regarding the right of American capital to participate in the exploitation of the oil resources of Mesopotamia.[41] About the same time the Guaranty Trust Company of New York—the second largest bank in the United States—established a branch in Constantinople and proceeded to inform American business men regarding the opportunities for commercial expansion in the Near East. In a booklet entitled Trading with the Near East—Present Conditions and Future Prospects, the bank had this to say:
“The establishing of a Constantinople branch of the Guaranty Trust Company of New York brings forcibly to mind the growing importance of the Near East to American foreign trade. Up to the present time American business in Constantinople has been seriously handicapped by the absence of American banking facilities. Our traders were forced to rely on British, French, or other foreign banks for their financial transactions. This was not only inconvenient, but it was devoid of that business secrecy which is so necessary in exploiting new fields.
“Before the war merchandise from the United States was a negligible factor in the business life of Constantinople, and a vessel flying the Stars and Stripes was a rare sight. Today one will find four or five American liners in the Golden Horn at all times.... Today a dozen important American corporations have permanent offices there, and many other American concerns are represented by local agents.
“The future possibilities of imports from and exports to the Eastern Mediterranean, the Sea of Marmora, and the Black Sea ports from the United States are of almost unbelievable proportions. These entire sections must be fed, clothed, and largely rehabilitated. Roads, ports, railways, and public works of all kinds are needed everywhere. The merchants of the Near East have valuable raw products to send us in exchange for the manufactured goods which they so urgently need.“
This estimate of the situation was confirmed by the American Chamber of Commerce for the Levant when, in urging upon the Department of State the vigorous defence of the “open door” in Turkey, it said: “The opportunities for the expansion of American interests in the Near East are practically unlimited, provided there is a fair field open for individual enterprise.... In fact, with the conclusion of peace, there is the economic structure of an empire to be developed.”[42]
The rapid development of American economic interests in Turkey can be most effectively presented by reference to the trade statistics. American exports to Turkey at the opening of the twentieth century amounted to only $50,000. In 1913 they had risen to $3,500,000. But between 1913 and 1920 they showed a phenomenal increase of over twelve hundred per cent, reaching the sum of $42,200,000. Nor was this trade one sided, for during the period 1913–1920, American imports from Turkey increased from $22,100,000 to $39,600,000.[43]
The Chester concessions are another important step in the development of a new American policy in the Near East. They provide for the construction by the Ottoman-American Development Company—a Turkish corporation owned and administered by Americans—of approximately 2800 miles of railways, of which the following are the most important:
1. An extension of the old Anatolian Railway from Angora to Sivas, with a branch to the port of Samsun, on the Black Sea.
2. A line from Sivas to Erzerum and on to the Persian and Russian frontiers, with branches to the Black Sea ports of Tireboli and Trebizond.
THE CHESTER CONCESSIONS
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3. A line from Oulu Kishla, on the Bagdad Railway, to Sivas via Kaisarieh.
4. A trans-Armenian railway from Sivas to Kharput, Arghana, Diarbekr, Mosul, and Suleimanieh, including branches to Bitlis and Van.
5. A railway from Kharput to Youmourtalik, a port on the Gulf of Alexandretta.
No more elaborate project for railway construction in Asiatic Turkey has ever been incorporated in a definitive concession. That it should be entrusted to American promoters and American engineers is one of the most significant developments in the long and involved history of the Eastern Question.
But the Chester concessions do not stop at railway construction alone. As in the case of the Bagdad Railway, the Turkish Government is obliged to offer the financiers powerful inducements to the investment of capital in railway enterprises which, in themselves, may be unremunerative for a time. The German promoters of the Bagdad Railway obtained a kilometric guarantee, or subsidy; the American promoters of the Chester lines are granted exclusive rights to the exploitation of all mineral resources, including oil, lying within a zone of twenty kilometres on each side of the railway lines. The Bagdad Railway mortgaged the revenues of Imperial Turkey; the Chester concessions mortgage the natural resources of Nationalist Turkey. The Ottoman-American Development Company, furthermore, is authorized to carry out important enterprises subsidiary to the construction of the railway lines and the exploitation of the mines aforementioned. It may, for example, lay such pipe lines as are necessary to the proper development of the petroleum wells lying within its zone of operations. It is permitted to utilize water-power along the line of its railways and to install hydro-electric stations for the service of its mines, ports, or railways. It is required to construct elaborate port and terminal facilities at Samsun, on the Black Sea, and at Youmourtalik, on the Gulf of Alexandretta.
There are other respects in which the terms of the Chester grant are strikingly similar to those of the Bagdad Railway concession of March 5, 1903.[44] Lands owned by the Turkish Government and needed for right-of-way, terminal facilities, or exploitation of mineral resources are transferred to the Ottoman-American Development Company, free of charge, for the period of the concession (ninety-nine years). Public lands required for construction purposes—including sand-pits, gravel-pits, and quarries—may be utilized without rental, and wood and timber may be cut from State-owned forests without compensation. As public utilities, the Chester enterprises are granted full rights of expropriation of such privately owned land as may be necessary for purposes of construction or operation. Like the Deutsche Bank, the Ottoman-American Development Company is granted sweeping exemption from taxation, as follows: “The materials, machines, coal, and other commodities required for the construction operations of the Company, whether purchased in Turkey or imported from abroad, shall be exempt from all customs duties or other tax. The coal imported for the operation of the [railway] lines shall be exempt from customs duties for a period of twenty years, dating from the ratification of the present agreement. For the entire duration of the concession the lines and ports constructed by the Company, as well as its capital and revenues, shall be exempt from all imposts.”[45]
From the Turkish point of view, the Chester concessions may be justified on the grounds that the new railways will bring political stability to Anatolia[46] and will initiate an era of unprecedented economic progress. From the point of view of those American interests which believe in the stimulation of foreign trade, likewise, the Chester project has much to commend it. Exploitation of the oilfields of the vilayets of Erzerum, Bitlis, Van, and Mosul, and the development of the mineral resources of Armenia—including the valuable Arghana copper mines—will provide rich sources of supply of raw materials. In the construction of railways, ports, and pipe lines there will be a considerable demand for American steel products. Economic development of the vast region through which the new railways will pass promises to furnish a market for American products, such as agricultural machinery, and to offer ample opportunity for the profitable investment of American capital. The Chester project may well become an imperial enterprise of the first rank.
With the exception of the temporary advantage which they hoped to gain at the second Lausanne Conference, the Turkish Government wished no political importance to be attached to the Chester concessions. As Abdul Hamid had awarded the Anatolian and Bagdad Railway concessions to a German company because he believed Germans would be less likely to associate political aims with their economic privileges, so the Government of the National Assembly has awarded the Chester concessions to an American syndicate because Turkish Nationalists are convinced that Americans have no political interests in Turkey. This was made clear by Dr. I. Fouad Bey, a member of the National Assembly, in a semi-official visit to the United States during April, 1923. “We Turks wish to develop our country,” he said. “We need foreign coöperation to develop it. We cannot do without this coöperation. Now, there are two kinds of foreign coöperation. There is the foreign coöperation that is coupled with foreign political domination—coöperation that brings profit only to the foreign investor. We have had enough of that kind. There is another kind of coöperation—the kind we conceive the Chester project and other American enterprises to be. This kind of coöperation is a business enterprise and has no imperialistic aim. It is a form of coöperation designed to profit both America and Turkey, and not to invade Turkish sovereignty and Turkish political interests in any way. That is why we prefer American coöperation. That is why the Grand National Assembly at Angora is prepared to welcome American capital with open arms and secure it in all its rights.”[47]
These sentiments found a ready echo among American merchants. At a dinner given in honor of Dr. Fouad Bey by the American Federated Chambers of Commerce for the Near East, one of the speakers said: “Turkey, in our opinion, is destined to have a magnificent future. It is on the threshold of a new and great era. Its extraordinary resources, amazingly rich, are practically untouched. Although in remote ages of antiquity these vast regions played a great rôle in history, they have for many centuries lain practically fallow. The tools, appliances, machinery and methods which have been so highly perfected in the United States are appropriate to and will be needed for the development of this marvelous latent wealth. Our capital likewise can be very helpful. The members of our Chamber of Commerce have a keen interest in the furtherance of trade relations between Turkey and the United States. We want both to increase the imports of its raw materials into our country and to stimulate the export of our manufactured articles to Turkey. We are inspired by no political aims. We seek no annexation of territory. We desire no exclusive privileges. Our motto, if we had one, would be ‘A fair field and no favors.’ In the development of commercial relations with Turkey, in seeking the investment of our capital there, we ask for nothing more than an open door.”[48]
The American press, likewise, is in accord with a policy of governmental non-intervention in the ramifications of the Chester project. The following editorial from the new York World of April 23, 1923, is perhaps representative:
“There is no reason why the State Department should make itself the attorney for or the promoter of the Chester business enterprises. If the Angora Government has granted privileges to the Admiral’s company, then the Admiral’s business is with Angora and not with Washington.
“Certainly the American people have no more interest in taking up the Chester concessions diplomatically than they would have if the Admiral were proposing to open a candy store in Piccadilly, a dressmaking establishment in the Rue de la Paix, or a beauty parlor on the Riviera. If the Admiral and his friends wish to invest money in Turkey, they no doubt know what they are doing. They will expect profits commensurate with the risks, and they should not expect the United States Government, which will enjoy none of the profits, to insure them against the risks.”
It is difficult, nevertheless, to see how the Chester concessions, and their affiliated enterprises can be kept scrupulously free from political complications. The French Government, in defence of the interests of its nationals, has announced semi-officially that American support of the concessions might lead to “a diplomatic incident of the first importance.”[49] Furthermore, the United States Navy is said to be vitally interested in the Chester project. The oilfields to which Admiral Chester’s Ottoman-American Development Company obtain rights of exploitation may prove to be important sources of fuel supply to American destroyers operating in the Mediterranean—Mr. Denby, Secretary of the Navy, said apropos of the concessions that the Navy “is always concerned with the possibility of oil supplies.”[50] Furthermore, an American-built port at Youmourtalik, on the Gulf of Alexandretta, might conceivably be utilized as an American naval base. Such a station, less than 150 miles from Cyprus and less than 400 miles from the Suez Canal, could hardly be expected to increase the British sense of security in the Eastern Mediterranean.
The American Navy has already been very active in the Near East. “Soon after the armistice, Rear Admiral Bristol was sent to Constantinople to command the small American naval forces there. A large part of his efforts was immediately devoted to the promotion of American business in that unsettled region, including the countries bordering on the Black Sea. He soon established for himself such an influential position by sheer force of character and by his intelligent grasp of both the political and economic situations that he was appointed high commissioner by the State Department.
“Early in 1919 several American destroyers were ordered to Constantinople for duty in the Near East. Although these destroyers are good fighting ships, it costs some $4,000,000 a year to maintain them on this particular duty, which does not train the crews for use in battle.... The possible development of the economic resources of this part of the world was carefully investigated by representatives of American commercial interests. These representatives were given every assistance by the Navy, transportation furnished them to various places, and all information of commercial activities obtained by naval officers in their frequent trips around the Black Sea given them. The competition for trade in this part of the world is very keen, the various European countries using every means at their disposal to obtain preferential rates. The Navy not only assists our commercial firms to obtain business, but when business opportunities present themselves, American firms are notified and given full information on the subject. One destroyer is kept continuously at Samsun, Turkey, to look after the American tobacco interests at that port. ... The present opportunities for development of American commerce in the Near East are very great, and its permanent success will depend largely upon the continued influence of the Navy in that region.”[51] This is the situation as diagnosed by the Navy Department itself.
“With the assistance of a small force of destroyers based on Constantinople,” according to an instructor in the United States Naval Academy, “our commercial representatives are establishing themselves firmly in a trade which means millions of dollars to the farmers of the American Middle West. By utilizing the wireless of destroyers in Turkish ports, at Durazzo, and elsewhere, commercial messages have been put through without delay.... Destroyers are entering Turkish ports with ‘drummers’ as regular passengers, and their fantails piled high with American samples. An American destroyer has made a special trip at thirty knots to get American oil prospectors into a newly opened field.” Here is “dollar diplomacy” with a vengeance! “If this continues, we shall cease to take a purely academic interest in the naval problems of the Near East. These problems are concerned with the protection of commerce, the control of narrow places in the Mediterranean waterways, and the naval forces which the interested nations can bring to bear. They cannot be discussed without constant reference to political and commercial aims.”[52]
Americans would do well to take stock of this Near Eastern situation. Mustapha Kemal Pasha invites the participation of American capital in railway construction in Anatolia for substantially the same reasons which prompted Abdul Hamid to award the Bagdad Railway concession to German bankers. In 1888, Abdul Hamid considered Germany economically powerful but politically disinterested. Today, Mustapha Kemal Pasha believes that American promoters, engineers, and industrialists possess the resources and the technical skill which are required to develop and modernize Asia Minor. And, from the Turkish point of view, the political record of the United States in the Near East is a good record. America never has annexed Ottoman territory or staked out spheres of interest on Turkish soil; America has not participated in the Ottoman Public Debt Administration; America has few Mohammedan subjects and therefore is not fearful of the political strength of Pan-Islamism; America did not declare war on Turkey during the European struggle; America was not a party to the hated treaty of Sèvres. America alone among the Western Powers seems capable of becoming a sincere and disinterested friend of Turkey.[53] The avowed foreign policies of the United States appear to confirm the opinion of the Turks that Americans can be depended upon not to infringe upon Turkish sovereignty. America must be kept scrupulously free from all “foreign entanglements”; therefore an American mandate for Armenia has been firmly declined. Splendid isolation is declared to be the fundamental American principle in international affairs.
The political theory of isolation, however, is not altogether in harmony with the economic fact of American world power. The enormous expansion of American commercial and financial interests during and since the Great War brings the United States face to face with new, difficult, and complicated international problems. American business men will be increasingly interested in the backward countries of the world, in which they can purchase raw materials, to which they can sell their finished products, and in which they can invest their capital. American financiers, manufacturers, and merchants will look to their government for assistance in the extension of foreign markets and for protection in their foreign investments. Already there is grave danger that the United States may “plunge into national competitive imperialism, with all its profits and dangers, following its financiers wherever they may lead.”[54]
The situation is not unlike that which faced the German Empire in 1888. When the Deutsche Bank initiated its Anatolian railway enterprises, it inquired of the German Government whether it might expect protection for its investments in Turkey. Bismarck—who desired to avoid imperialistic entanglements and to limit German political interests, as far as possible, to the continent of Europe—replied with a warning that the risk involved “must be assumed exclusively by the entrepreneurs” and that the Bank must not count upon the support of the German Government in “precarious enterprises in foreign countries.” But Bismarck’s policy did not take full cognizance of the phenomenal industrial and commercial expansion of the German Empire, whose nationals were acquiring economic interests in Asia and in Africa and on the Seven Seas. William II was more sensitive than Bismarck to the demands of German industrial, commercial, and financial interests that they be granted active governmental support and protection abroad. Bismarck tolerated German enterprises in Turkey; William II sponsored them. It was under William II, not under Bismarck, that Germany definitely entered the arena of imperial competition.[55]
The development of American interests in Turkey puts the Government of the United States to a test of statesmanship. The temptations will be numerous to lend governmental assistance to American business men against their European competitors; to utilize the new American economic position in Turkey for the acquisition of political influence; to use diplomatic pressure in securing additional commercial and financial opportunities; to emphasize the economic, at the expense of the moral, factors in Near Eastern affairs. To yield to these temptations will be to destroy the great prestige which America now possesses in the Levant by reason of disinterested social and educational service. To yield will be to forfeit the trust which Turkish nationalists have put in American hands. To yield will be to intrench the system of economic imperialism which has been the curse of the Near East for half a century. To yield will be to involve the United States in foreign entanglements more portentous than those connected with the League of Nations, or the International Court of Justice, or any other plan which has yet been suggested for American participation in the reconstruction of a devastated Europe and a turbulent Asia.
The Chester concessions may be either promise or menace. They will give promise of a new era in the Near East insofar as they contribute to the development and the prosperity of Asia Minor, without infringing upon the integrity and sovereignty of democratic Turkey, and without involving the Government of the United States in serious diplomatic controversies with other Great Powers. They will be a menace—to Turkey, to the United States, and to the peace of the world—if, unhappily, they should lead republican America in the footsteps of imperial Germany.