893.74/602: Telegram

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

361. My telegram number 360, August 29, 4 p.m. Davis requests following message be transmitted to Radio Corporation:

“Energetic action by the American Minister doubtless has prevented, at least temporarily, cancellation of our contracts. The Minister received, August 28th, from the Chinese Government, a proposal as follows:

Wireless stations to be erected by China itself for direct communication abroad, the funds to be borrowed from two countries, the United States and Japan, and to be devoted to the exclusive use of erecting wireless stations and may not be transferred for other use; the principal and interest of such loans to be secured by the receipts of wireless station and to be repaid in annual installments.

During the period of construction [of] the wireless station the creditors to have the right to supervise the expenditure of the funds; during operation the creditors to have the right of auditing the receipts and expenditures. As to the selection of employees, the administration, and the operation of the stations, the management of each to be considered as lying within the sphere of the Government’s jurisdiction, and to be entirely managed by China itself, the two countries, the United States and Japan, in compliance with the provisions of the first clause of the first article of the treaty ratified by the nine Washington Conference powers, respecting the spirit of China’s sovereignty and independence,26 and both parties refraining from interference.

As to the detailed articles, these are to await the settlement of the general agreement, China with the approval of American and Japanese companies to make appropriate revision of the principal and subdivision of contracts and annexes regarding the Hsuang Chiao wireless station concluded between the Ministry of the Navy and the Japanese company on February 21, and March 5, 1918, on wireless matters, and of the principal and subordinate contracts and annexes concluded between the Ministry of Communications and the American company on January 8th and September 19, 1921, and July 13, 1923.27

You will perhaps believe that a proposal for us to lend China money to build wireless stations which Chinese are to manage pending payment of the debt does not furnish an acceptable basis to a revision of our existing contracts. The “probable purpose of the proposal is to draw us into negotiations which will apparently justify China[’s] executing the so-called provisional arrangement with the Japanese, referred to in the American Minister’s cable August 22nd.

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Should we accept the principles of the proposals, negotiations for revision of our existing contracts probably would never be satisfactorily concluded, meanwhile the Japanese monopoly under the so called provisional arrangement would continue indefinitely. We are continuing to press the Chinese Government for answer whether it intends to carry out our contracts. May we ask the American Minister on behalf of the Federal Company to reject this proposal, but in manner not to permit demagogues to assert we are trying to infringe China’s sovereignty.”

  1. Foreign Relations, 1922, vol. i, p. 276.
  2. See List of Contracts of American Nationals With the Chinese Government, etc, annex viii.