893.74/691: Telegram

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


243. Your numbers 96, May 14, 1 p.m. and 97, May 14, 2 p.m.

No action on these two telegrams has been taken. I have waited for some semblance of government to emerge which at least should possess authority to handle the matter. No one is in charge of the Ministry of Communications. If the Minister who was designated by the Acting Premier should take office, seemingly there would be a prospect more favorable than hitherto for reaching the immediate objective, the conclusion of the “clarification agreement”.
Pursuant to your 96, paragraph 11, I have thought much on the possibility of giving American radio interests authority to deal in the first instance with the Mitsui Company. I have tried to consider the question from a point of view not biased by personal prejudices. Having been associated with this question from its beginning, I find myself still convinced of the unwisdom of the suggested procedure. Tuan originated the suggestion merely out of desire to avoid a dilemma and without any idea of attaining constructive results. It has never been approved by those officials of the Ministry of Communications who desire at heart to improve China’s external communications. The adoption of it would be interpreted as capitulation to the monopolistic pretentions of the Japanese and as subordination of American interests to Japanese interests; we would forego such standing with the Chinese as we have in this matter and would incur antagonism none the less intense because such action on our part had been controlled by a former chief executive who is regarded universally as a tool of the Japanese.
In the same spirit I venture to comment upon the procedure I am directed to take, if possible by June 30th, by your number 97. To intimate definitely to the Chinese an intention to abandon hope of executing the Federal contract and to arrange radio communication by means of combination with the interests of other nationalities, I fear, would be regarded by the political leaders of China as a challenge they could accept with impunity. Relief from the embarrassment they are subjected to by conflicting American and Japanese pressure would be thereby given to them, and they would be enabled to take against any proposals of a wireless consortium a purely defensive position—a position as strong tactically as the position they have taken in resisting a financial consortium. Competitive bidding for piecemeal construction contracts would probably be the result. By their adherence to the consortium the two American companies might be excluded from such bidding. In any case no Chinese Government, in the present state of aroused Chinese feeling against what is called foreign domination, can be expected to grant another contract (except through intimidation [sic] or corruption) as favorable as the Federal contract. If we once give up that contract, whose essential elements are already accepted and accomplished facts, my belief is that American interests, whether independently or associated with other nationalities, could not obtain in any foreseeable future a contract containing financial and technical safeguards which would be adequate to make the enterprise safe as a commercial venture. Therefore, I should urge that we should avoid, until the very last moment that the American radio interests can afford to hang on—and I for my part realize fully the fine spirit shown by the Radio Corporation in meeting the disappointments [Page 1064] and delays—conveying any intimation of our contemplating a possibility of abandoning hope that the Federal stations would be built under the contract. Therefore, to try to bring this matter to a head in connection with the departure of Davis, I would request authorization to be less specific than was contemplated in your number 97 regarding the attitude the United States Government takes toward possible arrangements being made between Radio Corporation and other national interests, and to inform the Chinese, in general terms only, that since China has not lived up to the opportunity presented, the whole question of developing radio communications in the Far East must be taken under advisement afresh by the American interests, reserving entire freedom of action, if occasion offered, to work with China, or, if their own advantage should so dictate, to work in disregard of Chinese interests.
I am conscious that no new or more expeditious or hopeful means of settlement of the question than we have already followed are presented by these views and suggestions. However, I believe that none of the other methods suggested could bring the question to a settlement without definite certainty that the effectiveness and the authority of the principle of equal opportunity would be impaired or without a grave risk that American interests would be barred from participating in Chinese wireless communications. … I see no way, however, in view of the failure of the Chinese Government to give the cooperation they asked of our Government in making the open door effective in this matter, by which we ourselves can abandon that objective without injuring a policy we feel vital to American interests, as well as to Chinese interests. As I see it, this is the whole crux of the question between ourselves and Japan. Circumstances have rendered impossible the full consideration of this matter with the Japanese Foreign Office which Saburi had hoped would take place, in regard to which see my telegram 35 of January 20, 7 p.m. Yet as he has explained it to me, the upshot amounted simply to the following: that the Radio Corporation should as a preliminary to any further negotiations arrange terms with the Mitsui Company upon which the Mitsui Company would be ready to give up its monopolistic rights; our suggestion, on the other hand, had been that the American company would be prepared to participate in tripartite negotiations for settlement if the Japanese, without express renunciation of the position they have taken, would simply permit the Federal Wireless Company’s contract to take its course without the Japanese raising objection. To me, their insistence that recognition of their claim to monopoly be taken as a basis seems to indicate that the reality of the open-door principle is what is at stake, for, although we may believe that Japan, at the Washington Conference [Page 1065] renewed her adherence to the doctrine of the open door with entire good faith, it is the fact nevertheless that the character of Japanese interests in China prompts a policy restricting the scope of interpretation of the open-door doctrine rather than of enlarging it. It seems impossible upon any other hypothesis to explain the pertinacity they have manifested in fighting our interests in this commercial matter, which involves but a relatively small radio station, and in seeking to turn the question by exaggeration into a major issue as between Japan and the United States, trying to wear down our patience, as it seems to me, in dealing with a perennial source of vexation. The Japanese Government’s recent importunities that its memorandum of June 1, 1925, be answered—which Baron Shidehara fully understood, last June when I conferred with him, was to receive only an oral answer, which I made to him in your behalf at that time—may indicate, I venture to suggest, that it is the patience of the Japanese themselves which is becoming exhausted, in which case there is a better hope on our part of inducing the Japanese to accept an arrangement in which no surrender of our fundamental position is involved.
I infer from your 96, paragraph 6, that Radio Corporation has in mind to allow 6 months before it definitely abandons its reliance upon the Federal contract. I am not able to hazard an assurance that the question can be adjusted within that period in favor of us along the lines we have followed. However, I strongly believe we should not abandon that hope, and as a last resort should attempt through a consortium to provide for wireless in China, until the expiration of that period.
Though I am venturing below to comment upon the matter of business organization only to the extent that it is involved in the peculiarities of China’s political situation, I give my full endorsement to the opinion I understand Davis has written to his company, which is, in effect, that a consortium or any other form of international cooperation in regard to radio communication with China should include that each separate station should be operated and controlled by a single foreign interest acting in conjunction with the Chinese. Traditional Chinese tendency to play off foreigners against each other in the interests) of China, and the nature of the international rivalries in China, probably would make the success of stations in China which were controlled by an international board less likely than in any other place in the world.
Meanwhile I again venture the suggestion that if a further reply to their proposal is insisted upon by the Japanese the answer should be in accord with the sense of my telegram 24, January 13, 9 p.m., paragraph 9, rather than with that of your 96, in order to leave the [Page 1066] responsibility upon the Japanese Government for demonstrating that the proposal it made would be workable so far as the Chinese are concerned, and that it is not merely a maneuver designed to have us compromise the present position we have with the Chinese.
I discussed these comments in an entirely frank way with Davis. He concurs in them.
I request permission to send copies of this and your telegrams referred to above to Embassy, Tokyo.
  1. Telegram in two sections.