The Secretary of State to the Minister in China (MacMurray)
97. Your telegram 114, March 6, 1 p.m., and telegram 37 from Tokyo to the Department, April 16, 11 a.m.
Careful consideration has been given to the situation regarding the Federal Company’s wireless contract with the Chinese Ministry of Communications. The United States Government has supported that original contract since it was signed, in its belief that the contract accorded with the policy of equality of commercial opportunity and the open door and that the Government of China preferred to have control over external radio communications independently rather than internationalization. This position has been supported by the Government of the United States when, at times, it seemed the Chinese Government itself appeared to be indifferent thereto. This Government has discouraged the American radio interests from participating in any arrangement in which internationalization of the external radio communications of China would be involved. The continued delay of the Chinese Government, and its unwillingness, apparently, to take any action to fulfill the contract made between the Ministry of Communications and the Federal Company raises the question whether the desires of the Chinese Government have been correctly understood by the Government of the United States. You are requested to explain the above to the Ministry of Foreign Affairs in Peking, provided it is feasible to do so at this time, reminding it that the United States Government has displayed patience in regard to the long delays in these negotiations which have involved for the private American interests considerable financial loss, and stating that the Government of the United States hopes that the Chinese Government will make some decision by June 30th next. You will state that the Government of the United States hopes to have been informed by the Chinese Government, by that date, that it has taken action to carry out the contract, in good faith, as proposed in the notes exchanged last October. If, by the date mentioned, the Chinese Government should fail to take such action, this Government could not avoid concluding that the Chinese Government had determined upon a modification of the position it has taken heretofore. The Government of the United States would then, while reserving all the American company’s rights conferred by its contract and reserving any claim the company may have owing to the Chinese Government’s failure to complete its contract, feels free to permit such arrangement [Page 1062] to be made by American radio interests as they may care to work out for radio communications in China with radio interests in other countries, subject to the single provision that if any arrangement is made which establishes or perpetuates any monopoly either as to the ownership or the operation of radio in China, they will not receive support from the Department of State.
For your information: The Department has been informed by the Radio Corporation that its intention is to recall Davis, effective about June 30. Davis may be informed of the contents of this telegram.