Foreign Relations of the United States Diplomatic Papers, 1938, The Far East, Volume IV

893.70/38: Telegram

The Consul General at Shanghai (Lockhart) to the Secretary of State

Shanghai, August 16, 1938—4 p.m.
[Received 4:23 p.m.]

1116. Ambassador’s No. 34, January 15, 11 a.m., Shanghai’s [Departments] No. 18, January 13, 7 p.m. and [our] No. 1074, August 6, 6 p.m., and despatches 1210 [1412], May 6, 1938 and 1219 [1432], May 16, 1938.⁵⁶

1. Managers of Commercial Pacific Cable Company, Great Northern Telegraph Company, and the Eastern Extension Telegraph Company have received a letter dated August 4 from the Special Service Section of the Japanese Army notifying the companies that with the establishment of the Central China Telecommunications Company on July 31 all the enterprises of telecommunications in Central China will be controlled by the new company. The Special Service Section requests that all the documents regarding the calculations of the international telegram charges which have been sent to the office for International Telecommunications traffic charges of the Ministry of Communications of the National Government by the three companies should in the future be sent to the office of the Central China Telecommunications Company at Sassoon House, Shanghai, and that the monthly expenses of $8000 is also to be remitted to the same company by the 20th of each month. It is stated that a joint registration office has been established by the Central China Telecommunications Company and that all abbreviated addresses registered with the three companies must be notified to the new company once a day and that the fees for each registration must be deposited with the new company.

2. The above notification virtually amounts to the administrative control of the acceptance and delivery office of the three foreign companies by the Central China Telecommunications Company, provides for checking the accounts of the three companies by the new company and requires registration of telegraphic addresses by the new company. The three foreign cable companies are more concerned over this development than over previous demands of the Japanese military authorities for control, inasmuch as the Reformed Government appears one of the principal stockholders in the new enterprise.

3. At a meeting yesterday at which were present the managers of the three cable companies concerned and the Danish Minister, the British Consul General and myself, the matter was discussed at length, and it appeared to be the concensus of opinion that every effort should be made by the cable companies to maintain the status quo as long as possible and at least until such time as the Danish, British and American diplomatic and consular officers could receive an indication from their respective governments of their attitude on the question. My own view is that, unless the three companies feel that their interests in Japan and elsewhere might be seriously jeopardized, the managers of the three companies should be advised to inform the Japanese that the companies are not in a position to meet the wishes of the Special Service Section in this matter because (1) the companies do not concede that the Japanese have any rights per se by [to?] the cable companies under their contracts with the Central Government, (2) that it is necessary to keep the cable office on a strictly neutral basis and (3) that the cable companies should be unrestricted in their operations to and from foreign countries under existing arrangement or agreements. The Department’s instructions are respectfully requested.

Repeated to Chungking, Peiping, and by mail to Tokyo.

Lockhart

56. Neither despatch printed.