893.74/59: Telegram

The Minister in China (Crane) to the Acting Secretary of State

41. My 16, January 9, 1 p.m.4 Outline of Federal contract published in papers. British Legation has entered protest with the Chinese on the ground provisions in Marconi agreement for prior rights of China National Wireless Company for sale wireless materials to Chinese Government.5 Proceeding on the assumption that the contract will be approved by the Department and the company, I am furnishing Ministry of Communications with arguments to defend [conclusion of] Federal contract against [British] protest.

  1. Not printed.
  2. The pertinent clauses of the agreement between the Chinese Government and Marconi’s Wireless Telegraph Co., Ltd., May 24, 1919, read as follows (file no. 693.119/300):

    “1. A joint stock limited liability Company, under the terms and conditions hereinafter contained, is hereby constituted, …

    “2. (a) The said Company shall be known as ‘The Chinese National Wireless Telegraph Company’ (hereinafter referred to as ‘The Chinese Company’).

    . . . . . . . . . . . . . .

    “6. 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 to those offered by other Companies, the Government 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 Chinese Company shall be exclusively entrusted with the repair and maintenance of all wireless telegraph and telephone apparatus and equipment in China.

    . . . . . . . . . . . . . .

    “12. The Marconi Company hereby covenants that during the period when the Chinese Company shall under the terms of Clause 3 above be entitled to the use of the patent rights, designs, drawings and secret processes of the Marconi Company, the Marconi Company will not grant similar rights to any other person for use in China in whole or in part, and during the period of this agreement the Marconi Company and their associated Companies shall not sell wireless telegraph and telephone apparatus material and supplies in China except through the Chinese Company, and the Government, on its part, covenants that it will use all its power during the said period to prevent any other person within China infringing any of these rights causing loss to the Chinese Company, provided that previous application is made by the Chinese Company to the Government asking for the necessary protection.”