The British Chargé ( Chilton ) to the Secretary of State

No. 87

Sir: I have the honour to refer to the note which you were so good as to address to me on November 24th last,7 on the subject of radio and cable communications in China, and to inform you that, after giving the contents thereof the most careful consideration, His Majesty’s Government have come to the conclusion that the refusal of the Japanese Government to accept the recommendations signed by their expert at Washington8 has placed His Majesty’s Government under the necessity of maintaining the existing rights of the cable companies pending the conclusion of an agreement based on those recommendations.

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In coming to this decision His Majesty’s Government have been influenced by the fact that there is no difference of opinion between the United States Government and His Majesty’s Government, who both consider the recommendations to represent a practicable adjustment of the interests of the four Powers concerned and who both still hope that they may furnish a basis of a satisfactory understanding. The only point seriously at issue is between the United States and Japan in regard to Section 2 of the experts’ memorandum, and my Government greatly regret that they are unable to allow this divergence of view to operate to the disadvantage of the cable companies, whose existing agreements provide that until December 31st, 1930, no other party will be allowed without their consent “to establish telegraphic connections which might create competition with, or injure the interests of, the existing lines”.9

In these circumstances, His Majesty’s Ambassador at Tokio has been instructed to inform the Imperial Japanese Government that, while His Majesty’s Government would have been glad if the views of the United States and Japanese Governments could have been harmonised in respect of Section 2, they are in agreement with the United States Government in considering the experts’ recommendations as providing a reasonable compromise which it is hoped will still furnish a basis for a satisfactory understanding, but that His Majesty’s Government cannot allow this divergence of views between the United States and the Japanese Governments to operate to the prejudice of the existing contractual interests of the cable companies.

In bringing to your notice the sense of the instructions sent to Sir C. Eliot I have been directed to assure you that the action of His Majesty’s Government in China has been taken in no spirit of hostility to the United States interests concerned, but as the only course available in the circumstances to protect the existing rights of the Eastern Extension Telegraph Company.

I have [etc.]

H. G. Chilton