Papers Relating to the Foreign Relations of the United States, 1922, Volume I
893.74/551
The Expert Assistant to the American Delegation at the Conference on the Limitation of Armament (Squier) to the Secretary of State
I have the honor to transmit herewith a letter4 from Mr. J. W. Elwood of the Radio Corporation of America inclosing copies of letters of December 7, 1921, to Mr. James R. Sheffield, and December 12, 1921, to the Honorable Elihu Root, relative to communications in the Far East.
Major General, U. S. Army
The Chairman of the Board of the Radio Corporation of America (Young) to Mr. James R. Sheffield5
Dear Mr. Sheffield: As you know, prior to the war, the American Marconi Company was the largest and most successfully operated wireless communication company in the United States. This Company had not been in the full confidence of the Government, because a large percentage of its stock was owned in Great Britain.
Prior to the war and during it, the General Electric Company developed certain radio apparatus which carried the bulk of radio [Page 831] traffic between this country and Europe from about June, 1918, to March 1, 1920. The operation of this apparatus was so successful and the feeling against the American Marconi Company, whether justified or not, led the representatives of the United States Government to appeal to the General Electric Company to set up an all American owned and operated wireless company.
Acting on the appeal of the representatives of our Government, the General Electric Company opened negotiations with the British Marconi Company, which led to the purchase by the General Electric Company of the British holdings in the American Marconi Company, and the formation of what is now the Radio Corporation of America.
Since the formation of the Radio Corporation of America, in order that this American owned and operated company might be successful from a communication standpoint, the wireless patents of the American Telephone and Telegraph Company, the Western Electric Company, the United Fruit Company, and the Westinghouse Electric and Manufacturing Company have been mobilized in the Radio Corporation of America, and each of the above companies have taken a financial interest, represented by preferred and common stock, in the Radio Corporation of America, and have representatives on its Board of Directors.
Prior to the war, there was no reliable international wireless service. At the present time, the Radio Corporation, with a little less than three years history, is carrying on direct communication by wireless with England, France, Germany, Norway, Italy, the Hawaiian Islands, and Japan. The Radio Corporation has the benefit of the patent rights of the principal operating companies in Germany, France, and England, and has the full confidence of the representatives of those companies.
Recently, the representatives of the Radio Corporation, the British Marconi Company, (the British Company), the Compagnie Générale de Telégraphie Sans Fils, (the French Company) and the Gesellschaft Für Drahtlose [Telegraphie, m. b. H.], (the German Company), met in Paris for over two months, and concluded an arrangement for the development of the communication of the South American countries, which was substantially as follows.
All four parties have granted all their external wireless communication rights in the South American Republics to Trustees to be held for the four parties in equal shares. The Radio Corporation of America, in addition to its trustees, names the Chairman, who shall be a prominent American, not connected with the Radio Corporation. The Chairman may break a tie or veto any action of the majority of the trustees, which, in his opinion, is unfair to the minority, so [Page 832] that no effective action can be taken without American approval, thus carrying the principle of the Monroe Doctrine into the field of communications in the Western Hemisphere and giving the Americans effective leadership. It is proposed that under the trusteeship, national companies will be formed in each of the South American countries for the conducting of their international communication services. Each station so erected, is to be under the direct control of an operating committee, one representing the British, one representing the French, one representing the Germans, and one representing the Americans. The purpose of this operating committee is to insure against discrimination between the nationals in the freedom of communication. Acting under this program, a station is now being erected in the Argentine and a concession has been obtained and financial commitments made in Brazil.
The communication situation in the Far East, and especially in China is not dissimilar from the situation which existed in South America before the present arrangement was concluded in Paris. In China at the present time, the British Marconi Company and the Chinese Government own together the Chinese National Wireless Company, which, I understand, has a concession for international wireless communication; the Federal Telegraph and Telephone Company of California hold a concession from the Chinese Government for wireless communication; and the Mitsui Bussan Kaisha hold a concession from the Chinese Government for wireless communication, which will allow them to build and operate stations capable of carrying on an international service. It is also reported that the Great Northern Telegraph Company, a Danish Company, hold a complete monopoly for all of the external communications of China under a cable concession which the Chinese Government gave to the Telegraph Company in 1896. The question as to the rights and privileges under the three above mentioned wireless concessions is a subject of diplomatic negotiation, not only between the representatives of the American, British, Japanese, and Chinese Governments, but also between these parties and the Danish Government.
The fact is, however, that the Japanese under their concession have built a station in China capable of long distance work which can be put into operation shortly.
If the objective be to obtain promptly adequate communications between China and the other countries of the world without discrimination and without undue waste of the available wave lengths and capital, we suggest that the Americans, English, French and Germans and Japanese join in the immediate transfer of all of their concessions, rights and property in and for China, including the Japanese station, to a Board of Trustees, upon which each [Page 833] of the nationals shall be equally represented and upon which the Chinese shall have such additional representation as seems appropriate under the circumstances. The Chinese, subject to the approval of the other nationals, shall select an eminent Chinese who shall act as Chairman of the Board with such powers as may also under existing circumstances seem appropriate. That the existing station and all others to be constructed, shall be in charge of an operating committee similar to that described heretofore in the South American setup, the purpose of which will be to insure fairness and equality in communication as between all nationals. That the Chinese Government shall grant a concession for such stations as may be necessary for adequate external communication with appropriate provisions, if so desired, for the Chinese Government to take over such stations when financial and other conditions in China are such as will insure continued development and operation of the stations.
An arrangement such as outlined above would give China direct international communication within six months or at the outside a year. It would insure an open door policy in communication, cooperation of all of the principal Governments, and bring to China the technical and financial resources of all of the principal wireless companies of the world.
Such cooperation will insure not only that the most modern stations in radio practice will be made readily available in China, but also in the principal countries of the world stations will be made available for the carrying on of communications with China immediately. Such an advantageous position for China could not be brought about by dealing with China alone as a segregated unit.
If the American, British, French, Japanese and Chinese Governments will commit themselves in principle to the method of solution of the external communication problem of China as outlined above, the Radio Corporation of America is confident that the cooperation of the great wireless companies of the world can be obtained. The chief executive officer of the French Company is now in Washington attached to the French delegation.6 We believe representatives of the British, Germans, and Japanese companies could be assembled in Washington and the entire matter finally settled almost immediately.
The Radio Corporation of America, having been formed as the result of an appeal of our Government, regards it as part of its mission to develop communication of the United States and looks upon it as an obligation to our Government to bring the matters herein outlined to the attention of our delegates to the Disarmament [Page 834] Conference who are discussing questions of communication, and I would be glad, my dear Mr. Sheffield, if you would use this letter as will best serve the interests of the United States as those are the interests of the Radio Corporation of America.
Very respectfully yours,
The Chairman of the Board of the Radio Corporation of America (Young) to Senator Elihu Root
My Dear Senator: The Radio Corporation of America has suggested a method for the prompt economical and adequate development of the external radio communications of China with all the principal countries of the world. The primary question is whether the suggestion is sound in principle and practical in application. The secondary question is how to accommodate justly and fairly the interests of the Federal Telegraph Company of California, which holds a concession in China and has already received the support of our Government in that field, and the Radio Corporation of America which has the technical and financial support of the great electrical concerns of America other than the telegraph and cable companies. The Radio Corporation of America also has exchange agreements with the great French, English and German companies which make available to it their inventions in the radio field.
The Radio Corporation of America made its suggestion for the comprehensive development of Chinese radio communications, not with the idea of superseding the Federal Telegraph Company of California in China or injuring its position there. The Radio Corporation of America made the suggestion because it does not believe that the radio communications of China can be developed by competitive duplication of stations or that the Federal Telegraph Company of California can execute successfully a program based on that theory. Stations are too expensive—business too meagre—wave lengths all too rare, and national feeling with reference to control of Chinese communications runs too high to permit successful execution of such a program.
The Radio Corporation of America is ready to cooperate with and assist the Federal Telegraph Company of California in carrying out the comprehensive program suggested in its letter to Mr. Sheffield, dated December 7, 1921, the original of which you have, on the following conditions.
- (1)
- —That the Federal Telegraph Company of California is and will remain free from domination and control of cable interest of the [Page 835] world and will devote itself whole-heartedly to the development of the external communications of China by radio.
- (2)
- —That the American end of Chinese communications shall be handled by the Radio Corporation of America, which has large investments in facilities and organization on the Pacific coast of the United States and in the Hawaiian Islands.
- (3)
- —That terms fair alike to the Federal Telegraph Company of California and the Radio Corporation of America can be made as the basis of such cooperation. To insure fairness of such terms, the Radio Corporation of America, subject to the two conditions first above named, offers to reach an agreement with the Federal Telegraph Company of California as to terms—and failing—to submit to the award of an impartial arbitrator as to such terms. It respectfully suggests that it will accept as arbitrator anyone whom you may name as competent and impartial.
In addition, the Radio Corporation of America will undertake to use its good offices in persuading the other great wireless companies of the world to accept the Federal Telegraph Company of California, acting in cooperation with the Radio Corporation of America, as a participant in the comprehensive program which it has suggested.
Yours very truly,