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Government and the Harconi Company, the latter receiving two-
thirds of the profits in return for the grant of their patent
rights to the Chinese Goverment. The control is vested in a
Board of Directors consisting of three nominees of the Govern.
ment and three nominees of the Karooni Company, the latter
having a casting vote so long as the Government is indebted to
them. The instalments due from the Chinese Government in respect
of their shares will be advanced by the Marconi Company against
8 per cent. sterling Treasury notes to be issued by the Govern-
ment and secured on the interest of the Goverment in the Com-
pany. But Article 6 contains the kernel of the whole matter:
"The Government, recognising that the Chinese Company's success
depends upon mutual co-operation, hereby agrees that if the
goods supplied by the Chinese Company are not lower in quality
nor higher in price than those offered by other companies, the
Goverment will purchase exclusively from the Chinese Company
all its present and future requirements in wireless telegraph
and telephone apparatus, material and supplies, and further if
the Government suffers no loss by giving such work to the
Chinese Company, the latter shall be exclusively entrusted with
the repair and maintenance of all wireless telegraph and tele-
phone apparatus and equipment in China".
Commenting on this agreement, Sir J. Jordan says: "As far
as paper agreements go the task of establishing the Marconi
Company in the wireless field in China may now be said to be
complete, and they have secured a position which should enable
them to compete successfully with rivals of any other nationality.
FOREIGN OFFICE, August 14th, 1919.
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