Russell Young to Frelinghuysen, November 28, 1882

No. 68. Mr. Young to Mr. Frelinghuysen.

Sir: I submit to the Department a series of inclosures in reference to a question of great interest now in discussion with the imperial cabinet.

On the 20th of October, the legation received a letter from Messrs. Russell & Co., of Shanghai, which is herewith inclosed, asking from the imperial cabinet permission for a company of foreign merchants doing business in China to lay a submarine cable between Shanghai and the ports of Foo-Chow, Amoy, and Swatow, terminating at Hong-Kong. The offer of the company was couched in the most liberal spirit, with a full recognition by the promoters of the sovereignty of China.

To this I responded that I would submit the proposition to the Department, but that in the mean time the enterprise commended itself to the judgment of the legation, as calculated to advance the best interests of the Chinese and the foreign residents, and that I would be glad to unite with my colleagues in any representation to the Tsung-li yamên “that would secure the desired concessions,” feeling assured that my action would meet the approval of the Department.

Applications of the same nature were made to other legations here by German, British, and French houses in Shanghai.

On the 23d of October I met my colleagues, Mr. Yon Brandt, the German minister, Mr. Bourée, the minister of the French Republic, and Mr. Grosvenor, the chargé d’affaires of the British legation. We discussed the matter at length, and agreed that the request was one which our respective legations should support. It was further determined that we should each send a note identical in terms to the yamên, asking imperial permission to lay the proposed cable.

In pursuance of this agreement, on the 24th of October I addressed his imperial highness Prince Kung a note, which is inclosed. In this it was pointed out that the present submarine-cable service was irregular and imperfect, to the detriment of business interests, and that the necessity for another cable had been made apparent by many losses and inconveniences on the part of our mercantile houses. I assured his imperial highness that the company proposed to do its work in good faith, and called special attention to the promise of its projectors to undertake no extension of their line without the “approval and sanction of the Chinese authorities and with due regard to the rights and interests of private persons.” I ventured to dwell also upon the many advantages that would accrue to the Chinese Government and people from the establishment of an independent line.

To this note his imperial highness, on the 31st of October, responded in a dispatch, which is inclosed. In this dispatch his imperial highness referred to the communications made to the cabinet by my predecessor, Mr. Angell, upon the grant of a telegraph monopoly to a Danish corporation known as the Great Northern Telegraph Company, by the grand secretary, Li Hung Chang. His imperial highness regarded that grant as valid, and contended that the grand secretary, in approving it, was initiating a policy which followed the precedents of France and Russia, and so informed Mr. Angell.

After the departure of Mr. Angell, Mr. Holcombe, acting as minister, again brought the question before the yamên. He was informed, in the words of the prince, that “whenever an American company desired to lay a telegraphic cable from Japan to China, satisfactory arrangements would most positively be made for them to do so.” At the same time the prince said that his excellency Li, in making his contract with the Great Northern Company, was “following a mode of procedure adopted by the western powers.” To assent, therefore, to the present proposition would, in the opinion of his imperial highness, not only conflict with the grant already made with Li, but would not be in accord with “the policy hitherto adopted in such matters by western powers.” The prince further added, in reference to the complaints as to the irregularity of the present submarine-cable service, that orders would be sent to Li to insist upon the lines being kept in good working order.

In this connection I would call your attention to a petition of the Great Northern Company, a translation from the Chinese text of which I inclose. This document will show the strange and inexplicable nature of the contract into which the Chinese Government was induced to enter.

The legation, on the 14th of November, in replying to the note of Prince Kung, entered at length upon the considerations suggested by this petition. The dispatch will show the Department the objection to any such concession as that granted to the Danish company, objections which concern the sovereignty and independence of China even more than the mere material interests of foreign capitalists seeking new enterprises as means of gain. There can be no reasonable doubt but that the Danish company profited by the inexperience of Chinese officials to lead the Chinese Government into covenants which no western Government would allow, covenants the nature of which must in time become apparent to the Chinese themselves, and probably be regarded to our detriment as another evidence of the unjust and grasping spirit of the western world in dealing with the Oriental people. If there were no American interests, therefore, to represent and defend, consideration for the best interests of China would alone justify the legation in the arguments so earnestly pressed upon Prince Kung.

By this contract the Government grants the Danish company for twenty years a monopoly of all the submarine cables already landed in China, during which time the government engages itself not to allow any cable whatever unless with the consent of the company. During this period the Government will not permit the construction of any land lines that may be in opposition to the submarine cables. Thus a concession for a submarine line is so worded as to put the whole land-telegraph system of this vast Empire at the mercy of a private corporation. Future telegraphs in China are to be controlled by the company, to the exclusion not only of the Government’s sovereign rights, but of all other foreign interests.

This concession, as the legation points out to Prince Kung, is a virtual surrender on the part of China of an essential element of sovereignty, namely, the control of its telegraph. If the Government chose to build its own lines, as in France and England and other countries, making them a part of the postal system, there could be no objection, and it would be our duty to recognize this as a step towards that progress in western civilization, the advancement of which is the aim of all who wish well to China. If private companies, no matter of what nationality, were to build lines in competition, we could make no objection, only advising our countrymen to take their chance with the others, knowing that success or failure would follow the laws of business enterprise and not be affected by diplomacy. If the Government declared it would only grant permission to build telegraphs to its own subjects, we might advance objections, but strong reasons could be given in favor of such a policy. The Government, however, * * * gives absolute control of its telegraph system to an alien, irresponsible corporation, exacting no guarantees for the performance of its pledges, and asking no assurance that it will in any way extend the system so as to confer upon the Empire the benefits of the telegraph. Practically, the whole question of the future of telegraphs in China, so important to the welfare and development of the Empire, is surrendered by the Government for twenty years.

The return for this is a privilege so paltry as to be unworthy of consideration. My hope is that the arguments thus presented will convince the Chinese Government of the blunders they have committed blunders which, as shrewd men, the members of the cabinet concerned for the interests of their Empire will not fail to see. To that end I repeated my request that “an American firm be allowed to land a cable at Shanghai, Foo-Chow, Amoy, and Swatow, or, if from political or military reasons the Chinese Government should prefer to see a land line established, to grant permission to lay such a line to the petitioners.”

In making this request the Department will observe that the legation is acting with the ministers of England, Germany, and France, the company which Russell & Co. represent having English, French, and German merchants in its direction. In our conferences upon this subject, and especially as to the best means of convincing the cabinet of the impropriety of granting monopolies like that given to the Danish company, there has been the utmost harmony and a general agreement as to the justice and moderation of our own demand.

I have, &c.,