CO129-470 - Public Offices - 1921 — Page 322

The Document is the Property of His Britannic Majesty's Government,]

MEMORANDUM RESPECTING BRITISH CABLE AND WIRELESS

RIGHTS IN CHINA.

320

1. This memorandum deals with two cognate questions:-

I. The existing monopolies of the associated British and Danish cable

companies in China.

II. The clash between the British (Marconi) and the American (Federal

Telegraph Company) wireless interests in China.

2. The recommendations of the Imperial Communications Committee are requested at their early convenience on both these questions. Copies of the full correspondence have already been submitted to them.

I. Existing Monopoly of Cable Companies and General Position.

3. In a letter dated the 22nd October last (see Annex 1) Sir J. Denison Pender, the chairman of the Eastern Extension Telegraph Company, informed the Foreign Office that the Chinese Telegraph Administration bad approached the Great Northern Company and his own company through M. Ericksen, adviser to the Administration, then in England, with regard to laving a triplicate cable between Hong Kong and Shanghai. This cable, in addition to connecting Amoy and Foochow, would land at Swatow, where there had long been a demand for the same by the foreign community.

4. Further, the Administration and the companies were considering the advisability of laying a duplicate cable between Shanghai and Chefoo, for the manu- facture of which the Administration had already, so it appeared, placed an order with a Japanese firm. For all this the Chinese Government wished to borrow 1.500,000, at 5 per cent.. in return for which they would extend the existing cable monopoly of the companies another twenty years, i.e., from the 31st December, 1930, to the end of 1950. In asking for an interview, Sir J. Denison Pender pointed out that the Chinese appeared to have no good security to offer.

5. On the 19th November he called at the Foreign Office, and was informed that (1) as there was to be no public issue, the proposed loan did not conflict with our engagements to the consortium, (2) as regards the proposed extension of the companies monopoly, he should not complete any negotiations without first obtaining our approval. He himself stated on the occasion of his visit that if there was great opposition on the part of the Japanese some pooling arrangement might, in the last resort. be agreed upon amongst the consortium Powers.

6. These proposals were telegraphed to His Majesty's Chargé d'Affaires at Peking, but, before dealing with Mr. Clive's observations, it may be advisable to recall briefly the position as regards the whole question of telegraphy in China.

7. There are three aspects to this question:

(A.) Cable.

(A.) Cable telegraphy.

(B.) Wire telegraphy.

C.) Wireless telegraphy and telephony.

8. The situation is governed by a mass of intricate agreements between the Eastern Extension Company (British), the Great Northern Company (Danish), and the Chinese Government. From the advent of cable communication to the Far East, these two cable companies were in the field. But it was the Danish company, which, in 1881, obtained exclusive landing rights in China in return for certain services rendered. Later, the British company became their partners in these privileges. and eventually, in 1886, the two companies signed an agreement known as the "Joint Purse Agreement," under which and its renewals they have acted since in China. By a later agreement between the two companies and the Chinese Telegraph Administration of the 23rd January, 1899. the exclusive cable rights of the

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