893.74/238: Telegram

The Secretary of State to the Minister in China (Schurman)

123. Your 216 May 12, 4 p.m.

Federal Company states it is now completing financial, mechanical and traffic arrangements: that its engineers now in New York expect to arrive Peking end of June.

[Paraphrase.] The necessity is facing the Federal Telegraph Company to sell Chinese bonds in order to meet the cost of erecting the proposed stations in China and also to raise a fund sufficient to provide American territory with the necessary communicating stations. You are aware of the reasons why the sale of Chinese bonds is practically impossible for the time being. As the present high-powered Honolulu and San Francisco stations are not fully utilized and are not particularly profitable, it is difficult to finance additional competing stations. The above-mentioned existing stations are owned by the Radio Corporation of America which was at first inclined to join the British, Japanese, and French radio interests for developing radio in China. At this moment the Federal Telegraph Company and the Radio Corporation of America are endeavoring to reach a general arrangement by which the present Honolulu and San Francisco high-powered stations can be utilized and the latter company can aid in financing the execution of the concession granted the Federal Company. These two companies have been working upon an agreement for some time and simultaneously their engineers have been working together with regard to the stations in China. The Federal Telegraph Company now gives assurances that, no matter what the details of its arrangement with the Radio Corporation of America may ultimately prove to be, an agreement will not only be arrived at, but the agreement’s character will insure American control of wireless between the United States and China.

It is of the utmost importance that nothing be known regarding these negotiations until the Radio Corporation is in a position formally to take up this question with the Chinese Government, on account of the corporation’s close relations elsewhere with the German, French, and British radio interests and on account of the nature of the concession held by the Federal Company. [End paraphrase.]