893.74/458 The Secretary of State to the President of the Radio Corporation of America (J. G. Harbord) WASHINGTON, April 26, 1924. SIR: I have received the letter of April 18, 1924, in which you quote a resolution adopted on that date by the Board of Directors of your corporation, with reference to a letter understood to have been addressed on April 8 to the Directors of the Federal Telegraph Company of California by Mr. Rudolph Spreckels, a Director of that company, in which (referring to the contracts originally concluded on January 8, 1921, and September 19, 1921, between the Federal Telegraph Company of California and the Chinese Government, and thereafter assigned to the Federal Telegraph Company of Delaware by arrangement with the Radio Corporation and in accordance with a further agreement with the Chinese Government under date of July 13, 1923) he states that "After careful consideration, I am convinced that the language used in the Chinese contracts is deceptive in that they create a partnership, but do not disclose the fact that the Chinese Government is to actually provide the entire sum necessary to complete the project. "I cannot believe that the State Department at Washington has been correctly informed of the true situation in connection with these contracts." I have noted that the resolution of your Board of Directors further sets forth that, while your corporation believes that the contracts with the Chinese Government were not concluded without the full understanding of the Chinese Government and of this Department, it is nevertheless unwilling to proceed with the carrying out of these contracts if it be true that the Chinese Government has acted under misapprehension or lack of knowledge and if that Government so asserts; that your corporation would in that case be willing and ready to join with the Federal Telegraph Company of California in cancelling all the contracts in question; and that you are therefore instructed to take steps to ascertain whether the Department of State has been correctly informed of the true situation in regard to these contracts and whether the Chinese Government makes any claim or complaint of having signed these contracts under misapprehension of fact or lack of knowledge. In reply I am happy to inform you, for the reassurance of your Board of Directors, that I know of no basis whatsoever for the assumptions stated in the letter quoted in the resolution. As you are no doubt aware, the several contracts between the Federal Telegraph Company of California and the Chinese Govern ment in regard to this matter were all negotiated with the cognizance of the Department of State and in consultation with the American Legation at Peking, were witnessed by officials of that Legation, and were in each case communicated immediately to this Department, which considered the project to be of primary importance to American interests in China as a test of the practical application of the principle of the open door or equality of opportunity in such enterprises in China and as a means of establishing a direct and wholly independent Chinese-American circuit between the two countries. It is understood that the American interests concerned are to construct the proposed wireless stations for the Chinese Government at a cost to that Government of approximately $13,000,000, $6,500,000 of which is to be paid in bonds and the balance to be paid in cash over a period of ten years from the time of completing the last station; and that during the period to elapse until the cash payments are completed, the contractors are to participate with the Chinese Government, under an arrangement analogous to a partnership, in the operation of the stations. The project thus contemplated has not been the subject of any complaint by the Chinese Government to the Department of State, and I have no reason to believe that that Government misapprehends the arrangement or considers that the contracts establishing it were concluded under any misunderstanding or in ignorance of their scope and meaning. I am [etc.] 893.74/465 CHARLES E. HUGHES The British Ambassador (Howard) to the Secretary of State No. 434 WASHINGTON, May 15, 1924. SIR: In the note which you were so good as to address to Mr. Chilton on February 16th last, on the subject of radio and cable communications in China, you stated that, while frankly disappointed by what appeared to be the abrupt abandonment by the British Government of the position which it had urged the United States and other interested Governments to adopt, you were happy to note the assurance that this action of the British Government had been taken in no spirit of hostility to the American interests concerned. Under instructions from His Majesty's Principal Secretary of State for Foreign Affairs, I now have the honour to inform you, in order that there may be no misunderstanding of the attitude of my Government, that His Majesty's Government have not abandoned their position in this matter. His Majesty's Government continue in agreement with the United States Government in considering that the Washington recommendations provide a reasonable compromise and, like the United States Government, they still hope that those recommendations will furnish a basis for a satisfactory settlement of this complicated question. Since, however, the carrying out of the recommendations has been obstructed by a difference of view which concerns the United States and Japan, His Majesty's Government also feel that they are justified in drawing the attention of both the United States and the Japanese Governments to the fact that the cable companies have rights, which, in the absence of a general agreement based on the recommendations, cannot be ignored. In this connection, I am instructed to add that it is of course always open to the United States wireless interests to come to a reasonable arrangement with the cable companies. I have [etc.] ESME HOWARD 893.74/479 The Secretary of State to the President of the Radio Corporation of America (J. G. Harbord) WASHINGTON, August 21, 1924. SIR: The Department has received your letter of June 3 [30], 1924,10 with which you transmitted copies of correspondence which you exchanged with Mr. Rudolph Spreckels, Chairman of the Board of Directors of the Federal Telegraph Company of California. The following statement made in Mr. Brown's 11 memorandum dated June 28, 1924, a copy of which accompanied your letter of June 30 to Mr. Spreckels, is noted: 66 "... I therefore submit that the Delaware Company is clearly entitled to charges and reimbursement above production cost as above set forth. This subject has been thoroughly discussed with the Washington authorities, without their voicing objections. . . . If, as appears to be intended, this mention of "the Washington authorities" has reference to the Department of State, I feel it is due alike to this Department and to your corporation to obviate the possibility of any such misunderstanding as might arise out of the use of the language quoted from Mr. Brown's memorandum. The Department desires to state, therefore, that while the scope and effect of the contracts between the Federal Telegraph Company of California and the Chinese Government were the subject of discussion "Mr. William Brown, general attorney for the Radio Corporation of America. on the occasion of several of Mr. Schwerin's visits to the Department and although, in its letter to you of April 29 [26], 1924, the Department stated in a general way what its understanding of the obligations of the two contracting parties was, it should be stated that the Department has not considered the relations of the Radio Corporation of America, the Federal Telegraph Company of California and the Federal Telegraph Company of Delaware with each other or the respective rights of those companies, nor has the Department considered the question whether the contracts between the Federal Telegraph Company of California and the Chinese Government include the terms and conditions which are usually contained in such contracts or whether they contemplate the payment of reasonable or excessive compensation for the services to be rendered and the material to be furnished by the Company. This is a question which, of course, the contracting parties should consider and decide for themselves. In iteration and confirmation of what has already been orally communicated to Mr. Schwerin by representatives of this Department it should be stated that it is not within the province of the Department to negotiate contracts between foreign governments and American interests, and that the Department's activities in relation to the contracts between the Federal Telegraph Company of California and the Chinese Government have been calculated to obtain a practical application of the principle of the open door in China. and to assist the American interests concerned in their negotiations with the Chinese Government to the end that a circuit of communication might be established which would prove advantageous to the relations between the United States and China. I am [etc.] For the Secretary of State: 893.74/499: Telegram The Chargé in China (Mayer) to the Secretary of State PEKING, November 29, 1924-11 a. m. [Received November 29-6:43 a. m.] 457. Legation's despatch 2514, September 23 [20], 1924.12 Yeh Kung-ch'o who signed original Federal radio contract has assumed office as Minister of Communications and Chiang Tsun-wei [Chiang Tsun-i?], former Director General of Telegraphs, is also to be re "Not printed. appointed to that post. I am led to believe they will shortly reopen negotiations with a view to executing this contract and I respectfully suggest Department ascertain at once whether American parties prepared to proceed and how negotiations are to be conducted. If Federal Company has not abandoned plan I consider it most desirable that representative with full powers should come to Peking immediately. MAYER 893.74/499: Telegram The Secretary of State to the Chargé in China (Mayer) WASHINGTON, December 9, 1924—4 p. m. 308. The pertinent portion of your 457, November 29, 11 a. m., was communicated to the Radio Corporation which now has the matter under consideration with officers of the Federal Telegraph Company. The Federal Company does not contemplate abandoning the project and it seems probable that an agent will proceed to China in the near future to conduct negotiations. The Department will advise you as soon as the Company formulates definite plans. HUGHES EXPLANATIONS OF POLICY BY THE DEPARTMENT OF STATE RESPECTING QUESTIONS OF TREATY RIGHTS RAISED BY AMERICANS IN CHINA 693.11171/66 Report of the Annual Meeting of the Associated American Chambers of Commerce of China, at Shanghai, October 16 and 17, 1923 13 AMERICAN RELATIONS WITH CHINA "America has a definite and well-established policy toward China, based upon the open-door policy of John Hay and the principles of the Nine-Power Treaty adopted at the Washington Conference,“ but the trouble with America's relations with China at the present time is due principally to the lack of a definite program." This statement by a prominent American observer of conditions in China summarizes pretty well the general feeling of the American resi 13 Transmitted by the consul general at Shanghai with despatch no. 2026, Jan. 14, 1924. The Associated American Chambers of Commerce of China consisted of representatives of American Chambers of Commerce at Shanghai, Hankow, Tientsin, Peking, and Harbin. |