[Enclosure]
The Danish Minister for Foreign Affairs
(Scavenius) to the American
Minister (Grew)
Copenhagen, March 29,
1921.
Monsieur le Ministre: In your note of
February 23rd no. 71 concerning a protest lodged with the Chinese
Government by the Danish Legation at Peking against a contract
signed by the said Government
[Page 423]
and the American Corporation, The Federal
Telegraph Company for the construction and operation of wireless
stations in China, you have been good enough, while referring to
your earlier note no. 68 of February 16th,34 and
under instruction of your Government, to set forth the reasons why
the Government of the United States of America consider the said
Corporation entitled to enter into such an agreement with the
Chinese Government.
The Danish Government are not able to acknowledge that the arguments
put forward are well founded, and take the liberty to make the
following remarks on the subject.
In the first paragraph of your note you state that the Chinese
Government are precluded by treaty obligations from creating any
monopoly. The Danish Government are, however, unaware of any
treaty-engagement contracted by the Chinese Government which would
prevent the said Government from entering into the agreement in
question with the Great Northern Telegraph Company Ltd. Moreover
there is in this case not a question of a monopoly in the usual
sense of the word, but of an agreement of a specific nature.
Generally the right to construct and operate wireless stations
cannot be claimed by private individuals or companies, but is in
several countries, such as for instance in Denmark, reserved for the
State. To construct and operate telegraph-connections is an
enterprise which under modern conditions form a natural task for the
State, just like the mail distribution. For that reason one cannot
consider a restriction of the admission for private individuals to
carry on such enterprise as expressive of a movement towards
monopoly in the usual sense of the word.
The State is justly interested in seeing that not everybody should be
able to establish telegraph-connections with foreign countries from
its territory. This view seems to gain ground also in the United
States of America, at least in respect to the landing of submarine
cables and probably also in respect to wireless telegraphy, compare
“Hearings before a sub-committee of the committee on interstate
commerce United States Senate, 66 Congress, 3rd Session on p. 4301
(a Bill to prevent the unauthorized landing of submarine cables in
the United States) Washington 1921.”
The Chinese Government instead of laying down the necessary cables
etc., themselves have preferred, for practical reasons, to make an
agreement on the matter with certain companies, which quite
naturally must involve an exclusive privilege for these
companies.
This procedure on the part of the Chinese Government can, however, in
no way be adduced by other private individuals or companies as the
basis for a plea that such activity therefore can be freely
exercised by everybody.
[Page 424]
In your note you furthermore specially refer to the treaty of 1858
between the United States and China, which treaty giving expression
to the general most-favoured-nation principle lays down that if the
Chinese Government should grant to any nation or to merchants or
citizens of any nation any right, privilege, or favour connected
either with navigation, commerce, political or other intercourse
which is not conferred by this treaty, such right, privilege and
favour shall at once freely enure to the benefit of the United
States, its public offices, merchants and citizens.
According to the view of the Danish Government a most-favourednation
clause, however, only concerns the legal position of the citizens in
general, while it cannot be put forward to set aside an actual
agreement based on civil law between the Government and a private
company. This clause might have been adduced by the American
Government if the Chinese Government had granted to Danish citizens
in general certain rights which do not belong to American citizens.
This is however not the case. The actual agreement entered into
between the Chinese Government and the Great Northern Telegraph
Company Ltd. does not grant to the Danish State or to Danish
citizens as such any further rights than such as also belong to
other states or their citizens.
From the opposite point of view the Chinese Government would be
precluded from making any agreement based upon civil law with the
citizens of another country, because the citizens of a
mostfavoured-nation in this case could request that such an
agreement should be set aside, and then demand for themselves to
enter as contracting parties upon the same terms.
In your note of February 23rd in fine reference is made to the purely
contractual character of the rights of the Great Northern Telegraph
Company. It would appear herefrom that the American Government
themselves recognize that in the present case there is a question
not of a general concession of a constitutional or an international
nature but exclusively of contractual rights.
I furthermore beg to observe that it cannot be admitted by the Danish
Government that the insufficiency of the telegraphic connection
between the United States of America and China can be attributed to
the Great Northern Telegraph Company Ltd. or to the rights held by
the said company in China, since this connection is owned by the
American Company, Commercial Pacific Cable Company, which already
has landed one cable in China, and would be free to land another
cable there whenever it should so desire. At any rate such
considerations of a practical nature cannot in the opinion of the
Danish Government be adduced in order to set aside a right expressly
agreed upon.
[Page 425]
In your note it is furthermore stated that the agreement concluded
between the Chinese Government and the Great Northern Telegraph
Company Ltd., does not concern wireless telegraphy. This, however,
is not consistent with the Danish Government’s comprehension of the
substance of the agreement. It is expressly stipulated in the
additional agreement of December 22nd, 1913, a copy of which I
already have had the honour to forward to you,35
not only that till the 31st of December 1930, no other party will be
allowed without the consent of both the said parties, to land
telegraph-cables on the coast of China and islands belonging
thereto, or to work such cables in connection with the Chinese
lines, but also that till the date mentioned nobody will be allowed,
without the consent of the parties, “otherwise to establish
telegraph connections which might create competition with or injure
the interests of the existing lines belonging to China or to the
cable-companies.”
The Chinese Government have moreover at several occasions
acknowledged that China is not entitled to grant concessions for
wireless connections with other countries to anybody without first
having obtained the consent of the companies in question in
accordance with the agreements concluded between China and the
companies.
In your note it is also said that the existing state of affairs is
contrary to the “open-door” principle. In the opinion of the Danish
Government this principle however only entails that China cannot
close her frontiers to every trading intercourse with other states
nor permit one single or some individual states, with exclusion of
other states, to trade with her. The open-door principle is one of
an international or a political nature and it cannot be adduced as a
means to rescind agreements based upon civil law.
Finally it is stated in the last paragraph of your note that
contractual rights cannot be a hindrance to the utilization of any
field of industrial or commercial activity in China by the citizens
of another country. The Danish Government are not aware on what
considerations this view is based. They are of opinion that
industrial and commercial enterprises cannot obtain any sound
development, unless rights already acquired are held in respect. In
this connection I take the liberty to refer to the fact that the
rights of the Great Northern Telegraph Company Ltd. in China have
been generally known, without either the American Government or any
other Government having offered any objection to them on the basis
of the principles now put forward by the American Government.
Requesting you to be so good as to bring the above considerations to
the knowledge of your Government, I avail myself [etc.]
