No. 68.
Mr. Young to Mr. Frelinghuysen.

[Extract.]
No. 64.]

Sir: I submit to the Department a series of inclosures in reference to a question of great interest now in discussion with the imperial cabinet.

On the 20th of October, the legation received a letter from Messrs. Russell & Co., of Shanghai, which is herewith inclosed, asking from the imperial cabinet permission for a company of foreign merchants doing business in China to lay a submarine cable between Shanghai and the ports of Foo-Chow, Amoy, and Swatow, terminating at Hong-Kong. The offer of the company was couched in the most liberal spirit, with a full recognition by the promoters of the sovereignty of China.

To this I responded that I would submit the proposition to the Department, but that in the mean time the enterprise commended itself to the judgment of the legation, as calculated to advance the best interests of the Chinese and the foreign residents, and that I would be glad to unite with my colleagues in any representation to the Tsung-li yamên “that would secure the desired concessions,” feeling assured that my action would meet the approval of the Department.

Applications of the same nature were made to other legations here by German, British, and French houses in Shanghai.

On the 23d of October I met my colleagues, Mr. Yon Brandt, the German minister, Mr. Bourée, the minister of the French Republic, and Mr. Grosvenor, the chargé d’affaires of the British legation. We discussed the matter at length, and agreed that the request was one which our respective legations should support. It was further determined that we should each send a note identical in terms to the yamên, asking imperial permission to lay the proposed cable.

In pursuance of this agreement, on the 24th of October I addressed his imperial highness Prince Kung a note, which is inclosed. In this it was pointed out that the present submarine-cable service was irregular and imperfect, to the detriment of business interests, and that the necessity for another cable had been made apparent by many losses and inconveniences on the part of our mercantile houses. I assured his imperial highness that the company proposed to do its work in good faith, and called special attention to the promise of its projectors to undertake no extension of their line without the “approval and sanction of the Chinese authorities and with due regard to the rights and interests of private persons.” I ventured to dwell also upon the many advantages that would accrue to the Chinese Government and people from the establishment of an independent line.

To this note his imperial highness, on the 31st of October, responded in a dispatch, which is inclosed. In this dispatch his imperial highness referred to the communications made to the cabinet by my predecessor, Mr. Angell, upon the grant of a telegraph monopoly to a Danish corporation known as the Great Northern Telegraph Company, by the grand secretary, Li Hung Chang. His imperial highness regarded that grant as valid, and contended that the grand secretary, in approving it, was initiating a policy which followed the precedents of France and Russia, and so informed Mr. Angell.

[Page 143]

After the departure of Mr. Angell, Mr. Holcombe, acting as minister, again brought the question before the yamên. He was informed, in the words of the prince, that “whenever an American company desired to lay a telegraphic cable from Japan to China, satisfactory arrangements would most positively be made for them to do so.” At the same time the prince said that his excellency Li, in making his contract with the Great Northern Company, was “following a mode of procedure adopted by the western powers.” To assent, therefore, to the present proposition would, in the opinion of his imperial highness, not only conflict with the grant already made with Li, but would not be in accord with “the policy hitherto adopted in such matters by western powers.” The prince further added, in reference to the complaints as to the irregularity of the present submarine-cable service, that orders would be sent to Li to insist upon the lines being kept in good working order.

In this connection I would call your attention to a petition of the Great Northern Company, a translation from the Chinese text of which I inclose. This document will show the strange and inexplicable nature of the contract into which the Chinese Government was induced to enter.

The legation, on the 14th of November, in replying to the note of Prince Kung, entered at length upon the considerations suggested by this petition. The dispatch will show the Department the objection to any such concession as that granted to the Danish company, objections which concern the sovereignty and independence of China even more than the mere material interests of foreign capitalists seeking new enterprises as means of gain. There can be no reasonable doubt but that the Danish company profited by the inexperience of Chinese officials to lead the Chinese Government into covenants which no western Government would allow, covenants the nature of which must in time become apparent to the Chinese themselves, and probably be regarded to our detriment as another evidence of the unjust and grasping spirit of the western world in dealing with the Oriental people. If there were no American interests, therefore, to represent and defend, consideration for the best interests of China would alone justify the legation in the arguments so earnestly pressed upon Prince Kung.

By this contract the Government grants the Danish company for twenty years a monopoly of all the submarine cables already landed in China, during which time the government engages itself not to allow any cable whatever unless with the consent of the company. During this period the Government will not permit the construction of any land lines that may be in opposition to the submarine cables. Thus a concession for a submarine line is so worded as to put the whole land-telegraph system of this vast Empire at the mercy of a private corporation. Future telegraphs in China are to be controlled by the company, to the exclusion not only of the Government’s sovereign rights, but of all other foreign interests.

This concession, as the legation points out to Prince Kung, is a virtual surrender on the part of China of an essential element of sovereignty, namely, the control of its telegraph. If the Government chose to build its own lines, as in France and England and other countries, making them a part of the postal system, there could be no objection, and it would be our duty to recognize this as a step towards that progress in western civilization, the advancement of which is the aim of all who wish well to China. If private companies, no matter of what nationality, were to build lines in competition, we could make no objection, only advising our countrymen to take their chance with the others, [Page 144]knowing that success or failure would follow the laws of business enterprise and not be affected by diplomacy. If the Government declared it would only grant permission to build telegraphs to its own subjects, we might advance objections, but strong reasons could be given in favor of such a policy. The Government, however, * * * gives absolute control of its telegraph system to an alien, irresponsible corporation, exacting no guarantees for the performance of its pledges, and asking no assurance that it will in any way extend the system so as to confer upon the Empire the benefits of the telegraph. Practically, the whole question of the future of telegraphs in China, so important to the welfare and development of the Empire, is surrendered by the Government for twenty years.

The return for this is a privilege so paltry as to be unworthy of consideration. My hope is that the arguments thus presented will convince the Chinese Government of the blunders they have committed blunders which, as shrewd men, the members of the cabinet concerned for the interests of their Empire will not fail to see. To that end I repeated my request that “an American firm be allowed to land a cable at Shanghai, Foo-Chow, Amoy, and Swatow, or, if from political or military reasons the Chinese Government should prefer to see a land line established, to grant permission to lay such a line to the petitioners.”

In making this request the Department will observe that the legation is acting with the ministers of England, Germany, and France, the company which Russell & Co. represent having English, French, and German merchants in its direction. In our conferences upon this subject, and especially as to the best means of convincing the cabinet of the impropriety of granting monopolies like that given to the Danish company, there has been the utmost harmony and a general agreement as to the justice and moderation of our own demand.

I have, &c.,

JNO. RUSSELL YOUNG.
[Inclosure 1 in No. 64.]

Messrs. Russell & Co. to Mr. Young.

Sir: We are requested to ask the favor of your exerting your influence with the Tsung-li yamên to obtain for an association of merchants here permission to lay a submarine telegraph cable between Shanghai and the ports of Amoy, Foo-Chow and Swatow, and terminating at Hong-Kong.

If this permission be granted it is the intention of those who are interesting themselves in the project to invite the co-operation of Chinese merchants and others here, and at the different stations on the proposed line.

The telegraphic service on the coast of China and between this port and Hong-Kong has long been unsatisfactory. The one existing cable has been subject to interruptions in its working for several years past, but during the last few months these interruptions have been so frequent and so prolonged that the necessity for a new and independent line forces itself still more and more upon communities at the ports named.

There is good reason to believe that if permission to land the cable at those of the open ports on the coast which we have indicated is obtained from the imperial Government, the capital required will be subscribed among this, the foreign and Chinese communities.

The undertaking is purely of a commercial character, and originates among merchants who find great inconvenience and loss arise from the many interruptions which occur on the present line, and who desire also to have the advantage of a more extended system of inter-port communication.

[Page 145]

If permission be granted to land cables at certain points on the coast near to the ports we have mentioned, the company will, if further permitted, construct land lines connecting these with their offices. In doing so every care will be taken to carry out the necessary works with the approbation of the local officials and with due regard to the rights of the people.

We beg to mention that letters of a similar tenor to this have been addressed by Messrs. Alfred Dent & Co. to the British chargé d’affaires, by Messrs. Siemssen & Co., to the minister for the German Empire, and by Messrs. Ulysse Pila & Co., to the minister for France at Peking, and we trust that you maybe able to co-operate with their excellencies in obtaining the desired permission.

We have, &c.,

RUSSELL & CO.
[Inclosure 2 in No. 64.]

Mr. Young to Messrs. Russell & Co.

Gentlemen: I have the honor to acknowledge your letter of the 12th instant, in which you ask the legation to obtain from the Tsung-li yamên permission for an association of merchants to lay a submarine telegraph cable between Shanghai and the ports of Foo-Chow, Amoy, and Swatow, terminating at Hong-Kong. You inform me that it is the desire of yourselves and your associates to “invite the co operation of Chinese merchants and others in Shanghai, and at the different stations on the line.” It is, furthermore, your intention to use every care to “carry out the necessary works with the approbation of the local officials, and with due regard to the rights of the people.” You say, in conclusion, that other mercantile houses in Shanghai have addressed my French, German, and English colleagues, asking them to make an application of the same tenor to the Tsung-li yamên, and express the hope that. I “may be able to co-operate with their excellencies in obtaining the desired permission.”

I shall submit your proposition to the Department of State. In the mean time your enterprise meets with my hearty approval, as one that will be a benefit alike to the Chinese and the foreign residents. I shall be glad to unite with my colleagues in any representation to the Tsung-li yamên that may secure the desired concession, feeling assured that my action will meet the approval of the Government.

I am, &c.,

JNO. RUSSELL YOUNG.
[Inclosure 3 in No. 64.]

Mr. Young to Prince Kung.

The undersigned has the honor to bring to the knowledge of his imperial highness Prince Kung and their excellencies the ministers of the Tsung-li yamên that the following request, to be laid before the yamên, has been addressed to him by an American firm at Shanghai, acting on behalf of a number of mercantile houses in China.

The telegraphic communication along the Chinese coast and between Hong-Kong and Shanghai having been irregular for a considerable time, in consequence of frequent accidents happening to the single cable existing between these places, great inconveniences and losses have been thus caused to the mercantile communities in China. During the last few months the interruptions of the telegraphic service have become so frequent that the necessity of another independent cable being laid has made itself more and more felt.

A company formed by merchants of all nationalities is willing and desirous to undertake the work of laying a cable between Shanghai, Foo-Chow, Amoy, Swatow, and Hong-Kong, and, the permission of the imperial Chinese Government once obtained, to invite Chinese merchants residing at the above-mentioned places to join them in the undertaking.

The ends which the company have in view being purely commercial ones, it would aim less at pecuniary advantages than to do away with the existing disadvantages of the present system and others which are likely to arise from it in future.

If the company should obtain permission to land the cable in the neighborhood of the above-named places, it promises that, where it shall be necessary, to join the cable by a land line to the offices of the company in those places, such work shall be undertaken only with the approval and sanction of the Chinese authorities and with due regard to the rights and the interests of private persons.

[Page 146]

While bringing this request for the permission of laying a cable between Shanghai, Foo-Chow, Amoy, Swatow and Hong-Kong to the knowledge of the Tsung-li yamên, and recommending it most warmly to the favorable consideration of the Chinese Government, the undersigned begs to draw the attention of his imperial highness Prince Kung, and their excellencies the ministers of the yamên, to the many advantages which must result to the Chinese Government and people from the establishment of an independent telegraphic communication between Shanghai and Hong-Kong and the intervening ports by a company composed of Chinese merchants and foreign merchants residing in China, having its seat in China and offering to the Chinese Government all the political, financial, and commercial guarantees which these facts must carry with them.

A request similar to the one now laid before the Tsung-li yamên has been addressed by mercantile houses of other nationalities to the representatives of Great Britain, France and Germany, and will be brought to the knowledge of the yamên at the same time as the one contained in this note; but all these requests refer to one company only, and to one cable to be laid.

While hoping for an early favorable reply from his imperial highness and their excellencies, the undersigned profits, &c.,

JNO. RUSSELL YOUNG.
[Inclosure 4 in No. 64.]

Prince Kung to Mr. Young.

Your Excellency: In June of last year Minister Angell came to this yamên and stated that the Danish Great Northern Telegraph Company had secured from the grand secretary, Li, a monopoly for the laying of sea cables for a period of twenty years. This yamên maintained that his excellency Li, in initiating this policy and entering into an agreement for a term of years, was following a precedent established by the two Governments of Russia and France, and so replied to Minister Angell. Thereafter he came to this yamên repeatedly to discuss the question, and more than one communication passed between us on it.

After Minister Angell returned to the United States, Mr. Holcombe, then chargé d’affaires, addressed a dispatch to me inquiring whether the agreement concluded between his excellency Li and the Great Northern Telegraph Company had been confirmed by the throne. In response he was informed that whenever an American company desired to lay a telegraph cable from Japan to China, satisfactory arrangements would most positively be made for them to do so, and that the agreement referred to was a petition prepared by the Great Northern Telegraph Company, submitting certain propositions to his excellency, Li, which had been approved by him.

I am now in receipt of a communication from your excellency, setting forth a request made to you by certain American merchants resident at Shanghai, acting on behalf of a number of mercantile houses at the various ports in China. The substance of their request is that the telegraphic communication along the Chinese coast and between Shanghai and Hong-Kong having been very irregular in the past because of frequent accidents to the single existing cable, a company formed by merchants of all nationalities is willing and desirous to lay a cable between Shanghai, Foo-Chow, Amoy, Swatow and Hong-Kong. If the permission of the Chinese Government can be obtained for this scheme, Chinese merchants residing at the several ports will be invited to join in the undertaking. Whenever it shall be necessary to join the cable by a land line to the offices of the company in these places, such work shall be undertaken only with the approval and sanction of the local authorities, &c.

Your excellency calls my attention to the many advantages which would result to China from the construction of such a cable by Chinese and foreign merchants residing in China, and offering political, financial, and commercial guarantees. And you express the hope that I will give the request careful consideration, and favor your excellency with an early response, &c., &c.

It appears that the public policy of the various western powers in the construction of railroads, telegraphs, and similar works, has in the past been determined by each Government for itself. In some the Government has initiated such enterprises itself. In others they have been intrusted to public companies. Last year his excellency Li, in the construction, with the Great Northern Telegraph Company, of a Chinese telegraph line, simply followed a mode of procedure adopted by the western powers. And further, the Great Northern Telegraph Company has a monopoly for thirty years with Russia, and one for twenty-five years with France. These are all on record. But in this case of the construction of telegraph lines by China, his excellency Li only granted to the Great Northern Telegraph Company a monopoly for twenty years.

[Page 147]

And now foreign merchants of various nationalities desire, in addition to the existing Chinese telegraph line, to lay another cable from Shanghai via Foo-Chow, Amoy and Swatow to Hong-Kong. This would not only conflict with the agreement entered: into between his excellency Li and the Great Northern Telegraph Company, but I fear it would also not be in accord with the policy hitherto adopted in such matters, by western powers, and hence I find it difficult to agree to the proposition.

With regard to what is said about the frequent accidents happening to the Chinese line, &c., such things cannot certainly be allowed. Instructions must be sent by this yamên to his excellency Li to most positively direct the Great Northern Telegraph Company to see to it that the various telegraph lines within the domains of China are constantly kept in a condition for service; that no interruptions must be allowed, and that certainly constant increase in the tariff of charges will not be permitted, as all these result in loss and inconvenience to the Chinese and foreign public. And I beg, in conclusion, to inform your excellency that in consequence of the receipt of your note instructions as above have been sent to his excellency Li.

[Inclosure 5 in No. 64.]

Petition of the Danish Great Northern Telegraph Company, asking the approval of the six following articles of agreement in regard to the construction of telegraph lines in China.

[Approved by his excellency Li Hung Chang, &c., upon the twelfth day of the moon in the following indorsement: “The plan proposed in the petition is approved, and will hereafter, by the necessary instructions, be carried into effect. Of the two foreign copies, let one be sealed and returned to the petitioners, and the other placed on record.”]

The petition of the Danish Great Northern Telegraph Company to his excellency the northern superintendent of foreign trade respectfully submits that some definite preliminary understanding should be reached in regard to the interests which affect in common the telegraph lines constructed by China and those of the above-mentioned company. They therefore submit six articles for which they pray the approval of His Imperial Majesty, that they may be carried into operation, to the end that this company may receive the benefits arising from the protection granted to it by the Government, and may not be deprived of such advantages as lie within the sovereignty of China. And this company begs leave in support of this petition to submit the following statement. Last year this company, at the orders of the foreign office and the northern and southern superintendents of trade, transmitted over the lines to Russia a sum total of about 10,000 words, and to other points about 6,000 words, making a total of 16,000 words sent. Messages were received amounting to about 8,000 words, making a total received and sent of, say, 24,000 words. The cost of transmission for this number of words amounted to $52,800. If the arrangement proposed in the fourth article had been in operation last year, China in her telegraphic correspondence with Russia would have expended only $7,500, and with other parts only $12,000, being a sum total of only $19,500. The expense of transmission on the lines of this company would have been remitted, and the Government would have saved a total of $33,300.

From this statement it is evident that, under the arrangement proposed of mutual concession, both parties to it will secure great advantages; and if the request of this company be granted the utmost care will in future be taken in all sincerity to protect the interests of China.

proposed articles.

I.
The Chinese Government guarantees to the Great Northern Telegraph Company an exclusive monopoly for their sea-cables already landed within Chinese territory. Should the company desire to land other cables in China, the consent of the Government of China must first be had.
For a period of twenty years, reckoned from the date of the ratification of this agreement, the Chinese Government will not permit other Governments or other companies to lay telegraph cables within its territory, nor, within the above-mentioned term of years, to land telegraph cables within the foreign concessions or Formosa.
II.
Within the same period of twenty years the Chinese Government will not construct telegraph cables or land lines which will conflict with any of the lines of the Great Northern Telegraph Company. Between points where there will be no conflict with the lines of the Great Northern Telegraph Company the Chinese Government will build lines at its pleasure.
III.
If, hereafter, the Chinese Government should establish additional telegraph lines the Great Northern Telegraph Company will be employed by the Government to construct them, provided their terms are lower than those of other parties.
IV.
Messages of the Chinese foreign office, northern and southern superintendents of foreign trade, Chinese diplomatic agents and consuls-general abroad shall be sent free of charge by the Great Northern Telegraph Company over its lines in China, Japan and Europe, for a term of twenty years. Whenever such messages are intended for points not reached by the lines of the company they will be forwarded to their destination over the lines of other companies, and the Chinese Government will pay the charges levied by such other companies. But the Great Northern Telegraph Company will remit the charges on such messages only of the class specified as bear the official seal of the sender in evidence of their being genuine.
V.
The Great Northern Telegraph Company’s line connecting at Hong-Kong with European lines is called the “southern line.” That via Japan, connecting with the Russian system, is called the “northern line.” After the completion of the Chinese telegraph line all messages sent by Chinese and foreign residents in China to foreign parts and delivered by the Chinese telegraph line to the Great Northern Telegraph Company for transmission, unless such messages are indorsed to be forwarded by the “southern line,” will be sent by the “northern line” as being more speedy.
VI.
Hereafter in cases of dispute the Chinese text of this version shall be accepted as authoritative.

Signed by
—— Henningsen
, for the Great Northern Telegraph Company.
[Inclosure 6 in No. 64.—Informal.]

Mr. Young to Prince Kung.

Your Imperial Highness: I have the honor to acknowledge the receipt of your imperial highness’s letter of the 31st ultimo, being an answer to my letter of the 24th of the same month, in which I laid before your imperial highness the request of an American firm at Shanghai, acting on behalf of a number of mercantile houses in China, to be allowed to lay a telegraph cable from Shanghai via Foo-Chow, Amoy and Swatow to Hong-Kong.

Your imperial highness refers in the preamble of your letter to certain conversations and correspondence which Minister Angell and Chargé d’Affaires Holcombe had with your imperial highness last year on the subject of a rumored grant of a monopoly to the Great Northern Telegraph Company, and you remind me that in that correspondence you informed this legation that his excellency Li, in initiating this policy and entering into an agreement for a term of years, was following a precedent established by Russia and France.

Your imperial highness further points out that this legation was informed that whenever an American company desired to lay a cable from Japan to China satisfactory arrangements would be made for them to do so, and that the agreement referred to was a petition prepared by the Great Northern Telegraph Company, submitting certain propositions to his excellency Li, which had been approved by him. But your imperial highness omits to add that you informed this legation that these propositions had not been submitted to His Imperial Majesty, and consequently had not been approved by him. From this declaration Mr. Holcombe, then in charge of this legation, drew the natural and, indeed, necessary inference that the proposed monopoly was void and of no effect, and hence he did not lay before your imperial highness further and more positive declarations as to the light in which my Government would view the granting of the proposed monopoly which he was instructed to place before you, and which it may become my duty to submit to your imperial highness.

As the foreign office has but recently again informed this legation, in a verbal communication with Mr. Holcombe, that the petition of the Great Northern Telegraph Company has still not been laid before the throne nor approved by it, I feel bound to express the earnest hope that your imperial highness will find no difficulty in recommending to His Imperial Majesty that the petition of the company should be put aside, and the injurious effects removed which an approval or upholding of it would have upon the interests of China herself and her relations with other powers.

The request which I thus address to your imperial highness is not based upon any wish to injure the legitimate ends and interests of the Great Northern Company, to which I wish every success which it may be able to obtain in fair competition with other companies or individuals, but is dictated solely by the necessity of frustrating the unwarrantable attempt of the company to obtain a monopoly which is contrary [Page 149]to the spirit of the international engagements entered into by the Chinese Government and the often repeated assurances of your imperial highness that all foreigners were to be treated alike in China, as well as injurious to the political, military and commercial interests of China herself.

That such is really the case and that the arrangement proposed by the Great Northern Company in its petition is in no way the same as similar arrangements concluded, by other powers, but that it is an unscrupulous attempt of the company to profit by the inexperience of the Chinese officials and obtain from or through them such advantages as would never be granted by any other Government, I shall now proceed to prove by taking, point for point, the arguments put forward in your imperial highness’s letter of October 31, and which I believe may fairly be considered to represent the arguments of the advocates of the arrangement proposed by the company.

These points are:

1.
That, according to the public law of Europe, the right to regulate the railway and telegraphic intercourse belonged to the Government of each country.
2.
That the arrangement proposed by the company to his excellency Li was the same as the arrangements usually made under similar circumstances by European Governments, and even less favorable to the company than those concluded by them with France and Russia.
3.
That it was at a moment when telegraphic communication had to be established for China that his excellency Li approved of a monopoly to the company, but only for twenty years.

With regard to the first point, the right of the Chinese Government to regulate its own policy in railway and telegraphic questions, it seems to me that the fact that I transmitted the petition of an American firm to your imperial highness indicates clearly enough that I recognize this right of the Chinese Government. Your imperial highness will, however, have to bear in mind that even the most indisputable right must be exercised with a certain caution and with due regard to the rights and interests of other parties.

The Chinese Government has the undoubted right to shape its own course in the question of telegraphic intercourse, but the grant of a monopoly for the whole Empire to a single company and the exclusion of all other companies and individuals from this line of industrial enterprise is certainly an unfriendly act, and will be viewed in that light by all foreign Governments whose subjects and interests suffer under the exclusion pronounced against them by the Chinese Government.

Your imperial highness states further that the arrangement proposed by the Great Northern Company to his excellency Li is the same as those concluded by the Great Northern Company with other Governments. This I must contradict most positively.

The arrangement between Russia and the company was entered into by the Russian Government because it wanted to obtain telegraphic communication between its possessions on the Pacific and China and Japan. Not wishing to disburse the heavy outlay which the construction of such a line would necessitate, the Russian Government accepted the offer of the Great Northern Company to construct it at their own expense and risk, and in order to compensate them for this work, which was of the utmost importance to the Russian possessions on the Pacific, the Russian Government granted to the company for thirty years the exclusive right of landing a cable on the shore of its possessions on the Pacific coast, a nearly uninhabited country, with a few towns, with hardly 10,000 inhabitants, and possessing neither industry nor commerce. The value of this concession for the company lies, it is true, in the fact that they can join their cable to the Russian land line from the Pacific coast through Siberia to Europe, but the Russian Government profited itself largely by the fact that this part of the telegraphic communication between Europe and Eastern Asia was gained for the Russian line. With the single exception of the Pacific coast, however, that is to say, of a small part of the Russian dominions, no concession to the exclusion of others was granted to the company. Can this be compared with the action of China, which excludes all competition and enterprise from its whole seashore, teeming with towns counting their inhabitants by millions, as well as from the interior of the Empire, and all for no advantage whatever save a doubtful economy of a few thousand dollars!

And again, the contract between France and the company.

Telegraphic communications between France on the one side and Denmark, Sweden and Russia on the other, had existed for a long time, but they all led through neighboring countries, and, in case of political difficulties, were likely to be interrupted, and so to cause serious embarrassments to the Government as well as to private individuals. Under these circumstances it was quite natural that the French Government should seek to establish new lines of communication with the northern countries, and so save herself from the danger of being cut off from them. To obtain this end, a concession was granted to the Great Northern Company for the construction of a single line from either Calais or Dunkerque to Denmark, Sweden and Russia. But no monopoly was granted to the company for the remainder of the French coasts or dominions, nor for her communications with other countries.

[Page 150]

But, says your imperial highnesses letter, the concession to the company was granted when telegraphic communication had to he established for the Chinese Government.

To this statement I beg to demur most emphatically.

The contract between the China Telegraph Company, acting under the auspices and the orders of his excellency Li Hung Chang, and the Great Northern Company, referring to the construction of a telegraph line from Tien-Tsin to Shanghai, was signed on December 22, 1880. By it the Great Northern Company engaged itself to furnish a certain quantity of material and a certain number of engineers for the China Telegraph Company at certain prices and salaries and within and for a certain given time. The material had to be delivered in China by May 15, 1881, and for the work entailed thus upon the Great Northern Company a commission of 10 per cent. on the total value of the material, i. e., 3,932 taels, was given to it. The engineers to be employed in the construction of the line were to be paid certain salaries fixed in the agreement. There was so little thought then of a concession to be granted to the Great Northern Company, in order to induce it to accept these proposals, that, on the contrary, Article 4 of the agreement contains the following stipulation:

“For the maintenance of friendship, the China Telegraph Company hereby promises that should a separate sea cable be established at Shanghai, they will give their business to the Great Northern Telegraph Company, providing their rates be the same as those of the other company.”

The so-called arrangement between his excellency Li Hung Chang and the Great Northern Telegraph Company was concluded on the 8th of June, 1881; that is to say, six months after the conclusion of the contract before mentioned, and after it had been executed already; it is therefore impossible to say that the Chinese Government was bound to make the concessions contained in the latter arrangement in order to secure the conclusion of the former. Even the petition of the Great Northern Company contains no argument to this effect.

Now, what are the concessions made to the Great Northern Company?

1.
The Chinese Government grants the company exclusive monopoly for the submarine cables already landed on Chinese territory.
2.
Within a period of twenty years the Chinese Government will not allow any other company or person to land cables in the entire Empire, including all foreign settlements and Formosa.
3.
Within twenty years the Chinese Government will not construct or permit others to construct cables or land lines in opposition to any of the company’s cables.
4.
Preference in the construction of new telegraph lines by the Chinese Government will be given to the company.
5.
All telegrams for foreign countries emanating from Chinese lines shall, unless directed otherwise by the sender, be forwarded over the company’s cables to the Russian possessions on the Pacific coast and thence over the Russian land line.

And what are the obligations of the Great Northern Company in the face of these immense and unheard of concessions by which the Chinese Government, if they were ratified, would deprive itself of the right to extend its own telegraphic system and offend all friendly powers by excluding their subjects from a fair competition in an industrial enterprise?

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

It is, therefore, as I had the honor to remark before, for the doubtful gain of a paltry sum of a few thousand dollars (the agent of the Great Northern Company in this petition fixed the pecuniary gain which the Chinese Government might have made in a year of unprecedented political activity at $33,300) that the Chinese Government, if it ratifies the arrangement with the Great Northern Telegraph Company, will barter away its own sovereign rights and the protection of its political, military and commercial interests.

But, might somebody remark, it was in order to gain the advantages accruing to China from the cable between Shanghai and Hong-Kong that the agreement was entered into with the Great Northern Company.

This view again could not be sustained by the fact.

It is by Articles 1 and 10 of the agreement concluded in October 11, 1869, between Russia on the one side and the Great Northern Company on the other, that the company bound themselves to lay a cable from the Russian possessions on the Pacific to Nagasaki, in Japan, and from there to Shanghai, Foo-Chow, and Hong-Kong. It was, therefore, not to serve the interests of China that the cable along its shores was laid, and no concession from China was necessary to maintain it there, as the company was bound to that course already by its engagements with Russia.

On the contrary, for many years the Chinese authorities objected most strongly to the landing of the cable of the company, and its being carried from the landing-place to the company’s offices in the settlements; and even so late as the autumn of 1877, the [Page 151]superintendent of the southern ports sent instructions to the local authorities at Shanghai to have the land line of the company between Wusung and Shanghai destroyed.

Your imperial highness having referred in your letter more than once to the usages and laws of Europe with regard to telegraphic conventions, and having compared the one attempted to be imposed by the Great Northern Telegraph Company on China with those in existence with other powers, I have seen myself obliged to enter into the above details with regard to the arrangement under discussion, and I can assure your imperial highness, as I believe you will have convinced yourself from the foregoing remarks, that no concession similar to the one claimed by the Great Northern Company has ever been conceded by any foreign Government, and that none similar would ever be conceded by any one.

It is not from a desire or the intention to meddle directly or indirectly with the internal administration of China that I address your imperial highness again on the subject, but from the firm conviction that it is in the interests of the Chinese Government themselves, as well as of the Chinese and foreign mercantile community, that the telegraphic communication between China and the outer world should not be intrusted to a single company. Where the erection of a land line or sea line through a company can be obtained only by the grant of a concession, the Chinese Government will be fully entitled to take such a course with regard to that line; but generally speaking, where more than one company are willing to run the risk of establishing lines at their own expense and without claiming any special advantages, it will be in the interests of every one to grant such request, as competition is certain to insure cheaper rates and better work, while it does away with the apprehension for the Government to see their linear of communication endangered by political complications or conflicts.

I have therefore the honor to place again before your imperial highness the request of an American firm at Shanghai to be allowed to land a cable at Shanghai, Foo-Chow, Amoy and Swatow, or if from political or military reasons the Chinese Government should prefer to see a land line established, to grant the permission to lay such a line to the petitioners, who, I have no doubt, will in either case be willing to give to the Chinese Government the same privileges on their land lines or sea lines which foreign Governments claim under similar circumstances, or which the Great Northern Company offers to the Chinese Government, viz, free passage over their lines for messages exchanged by the Tsung-li yamên and the two superintendents of the northern and southern ports with the Chinese minister and consuls-general residing abroad.

I have, &c.,

JNO. RUSSELL YOUNG.
[Inclosure 7 in No. 64.]

Mr. Young to Messrs. Russell & Co.

Gentlemen: On October 21, I acknowledged your letter to the legation, dated October 18, proposing the formation of a new submarine cable company in conjunction with other foreign houses, and asking me to obtain the necessary permission so to do from the imperial authorities. I had a conference with the representatives of Germany, France and England, and we united in a dispatch to the yamên asking that your request be granted, which was presented on the 24th of October.

On the 31st of October Prince Kung replied, declining the required permission on the ground that a monopoly had been granted by the viceroy Li Hung Chang to the Great Northern Telegraph Company for the period of twenty years. His highness claimed that in doing so the Chinese cabinet had followed the example of western powers, notably Russia and France.

On the 14th of November the legation again addressed the yamên in a long dispatch, claiming that under our treaties such a monopoly was void, and also showing that the terms of the concession to the Great Northern Company were in the highest degree injurious to the best interests of China, and that no western Government would allow any private company a franchise so comprehensive, irresponsible and vast. We claimed that under the treaties the monopoly was void.

To this dispatch no answer has been received. My impression is that the subject has been referred to the viceroy at Tien-Tsin.

I write this to acquaint you with the state of the business intrusted to our care. I can express no opinion as to our success, although I am quite hopeful. The temper of high Chinese officials in some recent dealings with foreigners does not encourage us in hoping for much sympathy with western interests. But the discussions between [Page 152]the yamên and the foreign legations cannot end without a recognition of our rights so complete and absolute that merchants like yourselves, in the legitimate pursuit of commerce and industry, and under the protection of treaties, will hereafter have no trouble.

I am, &c.,

JNO. RUSSELL YOUNG.