File No. 763.72/1354

The Japanese Embassy to the Secretary of State

The Japanese Government have decided to take over the control and operation of the German railway system, known as the Shantung Railway. In deciding upon this course, the following points have been carefully considered.

1.
The entire railway system in question had its origin in the convention of March 6, 1898, between Germany and China respecting the lease of Kiaochow, and is inseparable from the lease of Kiaochow itself. It may justly be considered a part, or an extension, of the leased territory. In fact, it is one of the most important organs of the German administration of Tsingtao and is German property of a public nature. Further, the terms of the grant of concession to the Shantung Eisenbahn Gesellschaft for the construction and operation of the railway, issued by the German Imperial Chancellor, June 1, 1899, as well as the terms of the articles of incorporation of the above railway company go to show not only that the railway system is placed under complete control of the German authorities, but that the railway company is even made to directly contribute to the expenses of the administration at Tsingtao. In this connection, extension of the police administration of the leased territory over the entire railway system may be particularly noted.
2.
After the outbreak of hostilities the railway in question has been actually used in facilitating and augmenting military operations on the part of the Germans, such as carrying troops, arms and munitions of war.
3.
Military operations extending to a portion of the railway system east of Weihsien cannot but result in cutting off the other portion of the line to the west of Weihsien to Tsinan, and in losing its administrator, to end in the stoppage or complete demoralization, of communication. Even considered as a measure of expediency to serve the public interests of the localities to be thus affected, it is deemed imperative for the Japanese authorities to take over control of the entire line. In order to avoid any misapprehension regarding the subject, it may be added that the above steps on the part of the Japanese authorities do not imply extension of the belligerent zone.