The Secretary of State to the British Ambassador (Howard)

Excellency: I have the honor to acknowledge the receipt of Your Excellency’s note No. 5 of January 4, 1928,34 and of the Aide-Mémoire dated December 3, 1927,35 left at the Department on December 6, 1927, both of which concern the attitude of the Government of the United States toward the proposed formation of an international consortium to conduct the development of radio facilities in China. The inquiry was made whether the Government of the [Page 559] United States is now prepared to endorse the formation of such a consortium and whether it is the view of this Government that negotiations for its formation can be pursued on the basis that no monopoly for any one of the wireless interests concerned shall be recognized and that the maintenance of direct wireless communication between China and the United States shall be guaranteed.

In replying to a proposal for a consortium made by the Japanese Ambassador under date of December 24, 1924,36 the Government of the United States expressed doubt whether such an international arrangement for radio development would be acceptable to the Chinese Government and stated that it desired to be reassured on that point before giving further consideration to the matter. With the same reply there were transmitted statements made by the American radio interests concerned, in which the view was expressed that the complications that would necessarily arise from an attempt to conclude entirely new arrangements with China for the creation and operation of wireless facilities through the instrumentality of a consortium would militate against a practical and helpful solution of the problem by this method. The further view was expressed that many grave difficulties would be avoided if the wireless stations provided for by the Japanese and American contracts were to be completed and brought up to date and thereafter managed separately according to the provisions of the contracts, but coordinated in order to obtain the best operative efficiency, the gross receipts of the stations being pooled and divided on an equitable basis between the different parties concerned. This was described as a “consortium of final results”.

The Government of the United States has not had reason to alter its belief that the formation of an international consortium to undertake wireless enterprises in China would not be acceptable to Chinese public opinion or to the future government of China. The practical disadvantages to which reference was made above still appear to exist.

The Government of the United States has no objection in principle to interpose to any operating arrangements that American interests may conclude that do not prejudice direct wireless communications between China and the United States and do not create monopolistic rights in this field of enterprise. For the reasons already set forth, however, it is not prepared to endorse the formation of a wireless consortium on the part of the Powers concerned in the manner suggested by the Japanese Government in the memorandum of December 24, 1924.

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In the Aide-Mémoire of December 3, 1927, reference was made to a conversation held in September last between Mr. Kellaway, Managing Director of the Marconi Company, and General Harbord, President of the Radio Corporation of America. I have the honor to state that in commenting on this conversation to the Department of State the Radio Corporation reported that General Harbord stated that he assured Mr. Kellaway that the Corporation was aware of the interest of the British Marconi Company in the Japanese wireless station at Peking and that there was no intention to exclude the Marconi Company from ultimate participation in arrangements finally made, but that it was believed that negotiations had better proceed between representatives of the Chinese and of the Japanese and American companies, rather than at the time to bring in other foreign interests.

Accept [etc.]

Frank B. Kellogg
  1. Not printed.
  2. Foreign Relations, 1927, vol. ii, p. 479.
  3. Memorandum from Japanese Embassy, ibid., 1925, vol. i, p. 890; Department’s reply of Feb. 28, 1925, ibid., p. 900.