I
[This Document is the Property of His Britannic Majesty's Government.]
CHINESE LOANS AND CONCESSIONS.
CONFIDENTIAL.
[F 1203/181/10]
No. 1.
547
[April 14.]
SECTION 1.
Earl Curzon to Mr. Butler Wright.
Sir,
Foreign Office, April 14, 1921.* ON the 15th February Mr. Davis communicated to this Office a memorandum in which he referred to the signature, on the 8th January last, of a contract with the Chinese Government for the construction and opening of wireless stations at Shanghai, Peking, Harbin and Canton by the Federal Telegraph Company, an American concern,
2. Mr. Davis expressed the amazement of the United States Government that, under the instructions of His Majesty's Government, His Majesty's Minister at Peking should have protested to the Chinese Government against this contract and should have pressed for its cancellation,
8. Mr. Davis's note reveals the fact that there are several aspects of this matter in regard to which the opinions of the United States Government differ from those of His Majesty's Government. I therefore propose to place before you the following considera- tions, which I trust will convince the United States Government that the action of His Majesty's Government in protesting against the contract between the Chinese Government and the Federal Telegraph Company of San Francisco is less ill-founded than Mr. Davis's memorandum would seem to infer.
4. As the result of negotiations that had been proceeding for some time, an agreement was signed between the Chinese Government and the Marconi Company on the 24th May. 1919. Under this agreement a joint-stock limited liability company was constituted in partnership between the Chinese Government and the Marconi Company, entitled the "Chinese National Wireless Telegraph Company." The objects of the company were to be the manufacture of wireless telegpli and telephone apparatus, material and supplies; the sale of such apparatus, material and supplies; and the repair and maintenance of wireless installations then existing or thereafter established in China. For the period of the agreement the Chinese National Wireless Telegraph Company was to have the exclusive use in China of all Marconi patents, rights, designs, drawings and processes, past, present and future, for wireless telegraphy and telephony. The Chinese Government, on their part, recognising that in the case of a puidic utility such as wireless telegraphy and telephony substantial support is essential to success, agreed that, if the goods supplied by the company were neither lower in quality nor higher in price than those offered by other firms, the Government would during the duration of the contrac-a period of twenty years apply to the company for all its wireless supplies, and would further entrust them with the repair and maintenance of all Chinese Government wireless telegraphs and telephone equipment in China.
5. In view of these explicit obligations on the part of the Chinese Government it is indisputable that the contract signed by the Chinese Government with the Federal Telegraph Company on the 8th January last if a contract for the erection of stations on behalf of the Government) constitutes a direct violation of the earlier obligations of the Chinese Government to the Chinese National Wireless Telegraph Company.
6. The United States Government base their present representations upon the assumption that the rights assigned to the Chinese National Wireless Telegraph Company constitutes a monopoly or preference of such a nature as to debar United States citizens from contracting freely with the Chinese Government, and they suggest that the action of His Majesty's Government in holding the Chinese Government to their contractual engagements with the Marconi Company raises a doubt as to the efficacy of recent efforts to affirm effectively the principles of equality of opportunity and of the "open door" in China.
7. Should this be the case, His Majesty's Government would undoubtedly share the concern of the United States Government; they trust, however, that the following observations will serve to dispel any misgivings which the United States Government may entertain in that respect. ·
[6061 0—1] x
Handed to Mr. Butler Wright by Lord Curzon on April 18.