If you want absolutely the contracted form, your only choice is the disable-output-escaping of xsl:text as linked in the comments above. I think this is a bit dirty, and more, you have to indicate it within a template:
<!DOCTYPE html>
Alternative cleaner solution, W3C defines for HTML5 a specific DOCTYPE legacy string that can be used by HTML generators which can't display the doctype in the shorter format. So, to stay with pure XSLT you can use:
Sample Corporation #1
Hello this is a test
Goodbye!
