Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 5, 1881

No. 164.
Mr. Angell to Mr. Blaine.

Legation of the United States,
Peking, June 20, 1881. (Received August 1.)

No. 174.]

Sir: On the 12th instant there came into my possession an extraordinary paper, which I inclose. It was the draft of the agreement between the Chinese Government and the Northern Telegraph Company. You may remember that this is a Danish company, which owns the cable running from Shanghai down the coast, and also that running via Japan to Vladivostock, connecting with the overland line, thence to Europe. I was informed that the agreement had been signed on the 8th instant by Li Hung Chang, the viceroy of this province, and by Mr. Henningsen, an officer of the company.

You will observe that the first article of this agreement, among other things, pledges the Chinese Government to forbid any person or corporation, except the Northern Telegraph Company, to land telegraph cables anywhere in the empire, including all foreign settlements and the island of Formosa.

The second article binds the government to abstain from constructing, and to prevent others from constructing, submarine cables or land lines of telegraph in opposition to any of the company’s cables in China.

The third article needs no attention. In the fourth is the pecuniary compensation which the company makes for this monopoly, namely, it gives the government the privilege of transmitting free of charge its messages to and from its diplomatic representatives and consuls-general abroad.

The fifth article provides that, if not otherwise directed by the senders, messages for Europe shall be sent via Siberia, and not by the southern route. This is because the company owns the entire northern line, but only a portion of the southern line to Europe, and has to divide with other companies a portion of the proceeds of messages ransmitted via Singapore.

Such, is the general scope of this remarkable document. It should not be overlooked, however, that by the terms of the first article the government reserves to itself the right to refuse even to this favored company the permission to land any more cables.

Remembering that it was largely due to the hearty co-operation of the representatives of other powers than Denmark with the accomplished minister from that state, who first came here to secure a concession for the northern company that his effort was successful, and that it has been the uniform policy of the western powers to secure for all nations the commercial advantages gained in China for any one, you may well believe that the news of this attempt of the Danish company to secure a twenty years’ monopoly awakened in the legations at Peking other feelings than mere surprise.

Appreciating the deep interest we may have in laying a line of cable to China via the Hawaiian Islands at no distant day, I hastened to seek an early interview with the Tsung-li Yamên to prevent, if possible, the issuing of an imperial decree, without which this agreement could not bind the government. I met the ministers of the foreign office on the 13th instant. On my asking if it was true, as I had heard, that an agreement giving a certain monopoly to the Northern Telegraph Company had been signed, they profess to have only a general knowledge of the fact. They said they had had no communication from Li Hung Chang, and did not know the details. I expressed my astonishment that they had no official and exact information, as I had the text of the agreement in my pocket. They reiterated the assertion that they had not heard from the viceroy on the subject. But they desired to know what I thought of the plan. I assured them that I was very glad of an opportunity to express my opinion to them. I told them that in one word it was a great mistake, both economically and diplomatically.

• First. Just as they were beginning to expand their foreign trade rapidly and sending their own ships to foreign lands, they proposed to give to a company an exclusive privilege, which would enable it to keep a very high tariff for messages and so heavily burden the merchants of China and of foreign lands, who desired to communicate freely with each other.
• Secondly. If there is only one line, and that protected as a monopoly, in time of war an enemy might, and probably would, destroy it, and so prevent the government from communicating with its ministers abroad. The United States have indeed made vigorous efforts to bring nations to agree to observe the neutrality of cables in time of war, but so far no such agreement has been reached, and international law does not furnish a protection to the cable. But it is obvious that if there are several lines not protected in this offensive way, the government is much more likely to be able to maintain communication with its representatives in Europe and America.
• Thirdly. Such a monopoly as this is sure to be extremely distasteful to all the great foreign powers. Their ministers will doubtless soon confirm what I am saying. Speaking particularly for the United States, I am sure that I can hardly use too strong language in expressing the disapprobation with which this scheme will be regarded by my government. I may venture to remind you that in or about the year 1866, this government gave to Mr. Burlingame permission for Americans to lay a cable from Canton to Tientsin. You can hardly be less generous now than you were then. Furthermore, there are many of your people in the Hawaiian Islands and in the United States, and your trade with us is increasing. It is highly probable that before long American citizens will desire to lay a cable from San Francisco to the Hawaiian Islands, and thence to China. Such a line will be a great advantage to you as well as to us. And are you going in this sudden manner to make such an enterprise impossible? I beg you to give the subject your most serious consideration.

His excellency Mao assented warmly to what I said about the war question. His excellency Wang, who at present rather leads in the transaction of business, said he did not see how it would benefit China to have only one company, since probably other companies besides this one would be willing to send government messages gratuitously. If there were no telegraph in China, he added, the government might have something to say. But since the Danes have one line, he did not see why other nations should be denied the same privilege.

Their remarks were somewhat guarded, but the drift of them seemed in harmony with the views I was presenting. In parting Wang said, “We will write to the viceroy and ask about the matter; we have not had a line from him.”

The British and German ministers have also communicated with the foreign office on the subject.

I am not without hope that the agreement may fail to secure the approbation of the Emperor.

I have, &c.,

JAMES B. ANGELL.

[Inclosure in No. 174.]

1. The Chinese Government guarantees to the Great Northern Telegraph Company exclusive monopoly of their submarine cables already landed on Chinese territory. Should the company desire to land other cables in China, the permission of the Chinese Government must first be asked and obtained. Within a period of twenty years from date the Chinese Government will not allow any other person to land telegraph cables in the entire empire including all the foreign settlements and Formosa.

2. Within the same period of twenty years the Chinese Government will not construct or permit others to construct submarine cables or telegraph lines by land in opposition to any of the company’s cables in China. Where there is no competition with the interests of the company the Chinese Government will build lines at their pleasure.

3. Should the Chinese Government in future decide upon establishing new telegraph lines, preference will be given to the Great Northern Telegraph Company to do the work for the government, providing their terms are lower than those of competitors.

4. The Chinese foreign office and the two superintendents of trade for the southern and northern ports shall be entitled for a period of twenty years to exchange telegrams with the Chinese ministers and consuls-general residing abroad free of charges on the Great Northern Telegraph Company’s cables in China, Japan, and Europe.

Whenever such telegrams pass over other lines not belonging to the company the Chinese Government pays all charges payable to these lines and also whatever besides the company has to pay to other administrations.

All such official telegrams must be authenticated by the seal of the official sender of the same, otherwise they will be charged for in full.

5. The company’s cables being connected with foreign countries by two routes, namely, a southern, via Hong-Kong, and a northern, via Japan and Russia, the Chinese Government guarantees that when land lines have been established in China all telegrams to foreign countries handed in by the public and emanating from these lines shall, if not otherwise directed by the sender, be transmitted by the northern route.

6. In case of dispute hereafter the Chinese text will be guiding.