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ANNEX 1.
Eastern Extension Australasia and China Telegraph Company to Foreign Office. -(Received October 25.)
Sir,
Electra House, Finsbury Pavement,
London, October 22, 1920. I HAVE the honour to inform you that in consequence of the great increase in traffic over the Eastern Companies cables during and since the war, the necessity for providing a triplicate cable between Hong Kong and Shanghai is now under consideration by the Chinese Telegraph Administration and the Eastern Extension and Great Northern Telegraph Companies.
In addition to connecting the treaty ports of Amoy and Foochow en route, it is proposed to land the cable at Swatow, provided the necessary financial details can be satisfactorily arranged with the administration and the telegraphing community of that port.
Many years ago the latter appealed to my company to assist them in endeavouring to obtain improved communication with the outer world and although representations were, at the time, made to the administration on the subject, no practical result followed.
A few months ago another appeal was made to the Eastern Extension Company through the Shanghai Chamber of Commerce, and the administration now appear to be more inclined to favourably consider the matter. provided they are safeguarded against loss of local revenue by the establishment of the desired connection.
The advisability of duplicating the Chefoo-Shanghai cable has also been under consideration by the companies and the administration. and the latter recently advised the companies that they had contracted with a Japanese firm in Yokohama for the manufacture of a Shanghai-Chefoo cable on their behalf. They also asked for the companies' assistance in the testing, transport and laying of the cable.
When the German Government cable between Shanghai, Kiaochow and Chefoc was able to transmit the traffic during interruptions of the existing cable, the need for a duplicate communication was not seriously felt. but now that the German cable is no longer available, a second cable is really required to meet traffic requirements. The administration have also proposed that the companies should grant the Chinese Government a further loan of at least 1,500,000, at 5 per cent. interest. repayable by instalments spread over a period of years. In consideration of this financial assistance, the Chinese Government would be prepared to extend the administration's agreements with the companies, and the latter's monopoly in China. for an additional twenty years beyond 1930, when they would otherwise expire.
The Chinese Government appear to have no tangible security to offer to the companies for the proposed loan, as the whole of their telegraph revenue is already fully mortgaged; first, to the companies in respect of the international cables supplied by them in the north of China during the Boxer troubles, and the subsequent loan of 500,000. made to the Chinese Government, with the approval of the British Government in 1911; and, secondly, to the Japanese, who have recently granted to the Chinese Government a further loan of 15,000,000 yen, and agreed to the period for repaying the loan of 20,000,000 yen, arranged in 1918, being extended until 1934. I would mention that the instalments to be paid by the administration to the companies between the present time and the end of 1930, in respect of the "Boxer cables and the existing loan above referred to, represent about 638,000.. and the loan instalment of 21.018, due on the 30th June last. has not yet been paid.
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The European adviser to the administration (M. Eriksen) is now in London, with instructions to negotiate with the companies in regard to the above questions, but, before making any responses in his approaches I have told him that it will be necessary to learn the views of His Majesty's Government thereon, especially as to the proposed further loan.
May I. therefore, request the honour of an interview with yourself, or any official you may wish to represent you, in order that any explanation or additional information may be afforded, if required. M. Eriksen wishes to leave Europe for China next month, and I should therefore be glad to hear from you respecting the desired interview at your early convenience.
I have, &c.
J. DENISON PENDER, Chairman.
ANNEX 2.
Sir J. Jordan to Mr. Balfour.-(Received January 21ì
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(No. 519.) Sir,
Peking, November 25, 1918. MY despatch No. 108 of the 5th March having dealt with the history of the Marconi Wireless Telegraph Company's negotiations with the Chinese Government between the first interruption caused by the signature of the Larsen contract on the 16th November, 1917, and the second interruption caused by the signature of the Mitsui contract on the 21st February, 1918, I now have the honour to report briefly on the further course of these negotiations which resulted in the conclusion of the Wireless Telephone Agreement of the 27th August and the Wireless Telegraph Agreement of the 9th October.
Although the abrupt entry of the Japanese into the field had increased the difficulties confronting the Marconi Company, the simultaneous direction of active Anglo-Chinese interest towards the Central Asian problems arising out of the Russian revolution afforded an excellent opening for approaching the Chinese Government in favour of the company on grounds of national advantage rather than of commercial rivalry, while the arrival in Peking of Mr. Ginman, the first technical representative of the company to visit China, supplied the skilled advice essential to the effective prosecution of any negotiations.
My telegram No. 363 of the 23rd April acquainted you with the suggestion to offer British wireless installations to the Chinese Government for the purpose of establishing reliable communication between Peking and Kashgar, and the approval conveyed in your telegram No. 266 of the 11th May enabled me to approach the Government Departments concerned with a definite proposal reinforced with the technical explanations of Mr. Ginman, whom I introduced personally to the Ministry of Communications.
While the Premier and General Staff readily admitted in principle the advantage to China of placing the Central Government in proper touch with her outlying provinces in Central Asia, the Minister of Cominunications was not slow to find objections to effecting this by means of a contract with the Marconi Company. Mr. Tsao Ju-lin had, in fact, only recently concluded with the Japanese the Telegraph Loan Agreement reported in my despatch No. 285, and his tacit opposition backed by that of the pro-Telefunken officials of his Ministry to the British Company's proposals was responsible for long delays in the negotiations.
In the meantime. representatives of other Government Departments interested in the purchase of "war material," on hearing that a British firm was prepared to quote for the delivery of such, approached Mr. Ginman with offers to purchase various kinds of wireless equipment. As I considered it desirable in the interests of the Kashgar negotiations that the Marconi Company should neglect no opportunity of obtaining a footing in general wireless business in China. Mr. Ginman, with my approval, agreed to discuss these different proposals, and when the Ministry of War eventually offered in return for a loan of 300,000. to adopt the Marconi system of wireless telephone for ten years, and to give the company a first option for the construction of a Sino-foreign wireless factory in China, I felt justified in recommending in my telegram No. 539 of the 27th June that His Majesty's Government should sanction the proposed business.
On receipt of your telegram No. 362 of the 8th July, which contained a message from the Marconi Company to their representative approving the proposed terms, and authorising the latter to sign the agreement. I informed Mr. Ginman that he was at liberty to proceed with the negotiations, and I subsequently made represen tations on his behalf to the Premier and to the Minister of War, when the Chinese negotiators raised difficulties regarding the efficiency of the wireless telephone equipment offered by the company.
After many delays the agreement was finally signed on the 27th August, and was officially communicated to me by the Wai-chiao Pu in a note dated the 30th August, copy of which I have the honour to enclose herewith.
The negotiations with the Ministry of Communications regarding the provision of semi-high power wireless telegraph stations between Peking and Kashgar had
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