File No. 793.94/344.
Minister Reinsch to the Secretary of State.
Peking, April 5, 1915.
Sir: The progress of the negotiations has been reported to the Department in the following telegrams: March 8, 7 p.m.; 12, 7 p.m.; 13, 10 p.m.; 17, 7 p.m.; 22, 6 p.m.; 24, 12 p.m.; 25, 12 p.m.; 31, 8 p.m., and April 2, 3 p.m. I shall therefore confine the present despatch to a few observations on the general nature of the negotiations and on some incidental features.
I. While, as it appears, a distinction was made by the Japanese Government, in conversations with other Governments, between “demands” and “requests,” no such differentiation has been observed here. The demands as presented to the Chinese Government on January 18 last (communicated to the Department in connection with my No. 571 of March 6) include those matters which have been subsequently characterized as “requests”; nor has the Japanese Minister in his negotiations with the Chinese Foreign Office ever placed these matters in a different category from the rest of the demands.
II. In official declarations made on behalf of the Japanese Government it has been repeatedly stated that the demands made on China are simply “discussions of outstanding questions.” Only in the sense that Japan already has interests in China and that anything she may possibly ask may be considered an extension of her existing influence could the majority of the present demands be considered as at all relating to pending questions. However, as far as their specific substance is concerned, the following are new demands, not in any direct sense concerned in previously pending negotiations:
- 1.
- The right of residence and land-ownership in Manchuria.
- 2.
- The right of railroad building and loan preference in Manchuria.
- 3.
- Exclusive mining rights within large areas.
- 4.
- All demands respecting Inner Mongolia.
- 5.
- The extensive implications of the articles relating to the Han-yeh-ping Company.
- 6.
- The compulsory employment of advisers.
- 7.
- The compulsory purchase of military supplies.
- 8.
- The joint organization of police.
- 9.
- Industrial preference in the Province of Fukien.
The demand with respect to the propagation of Buddhism in China had been discussed from 1903 on between China and Japan on the basis of the most-favored-nation clause. In 1908 the attempt to claim the right under this principle was abandoned by Japan. It is apparent that as far as the most-favored-nation clause goes, it is only the Christian missionaries from Japan who might claim the benefit of its operation; discrimination could be urged only by the Buddhist church; but as this is one of the great religions of China, it is plain that it could not argue discrimination against itself.
III. Among the demands notified to the Powers is one relating to the Hanyehping mines enterprise; it was, however, communicated in a very reduced version, viz:
| demand as made upon china. | demand as communicated by japan to the powers. |
| III. | III. |
| The Japanese Government and the Chinese Government, seeing that Japanese financiers and the Hanyehping Company have close relations with each other at present and desiring that the common interests of the two nations shall be advanced, agree to the following articles: | Agreement in principle that, at an opportune moment in future, Hanyehping Company should be placed under the Japanese and Chinese cooperation. |
| Article 1. | |
| The two contracting parties mutually agree that when the opportune moment arrives the Hanyenping Company shall be made joint concern of the two nations; and they further agree that without the previous consent of Japan, China shall not by her own act dispose of the rights and property of whatsoever nature of the said company nor cause the said company to dispose freely of the same. | |
| Article 2. | |
| The Chinese Government agrees that all mines in the neighborhood of those owned by the Hanyehping Company shall not be permitted, without the consent of the said company, to be worked by other persons outside of the said company; and further agrees that if it is desired to carry out any undertaking which it is apprehended may directly or indirectly affect the interests of the said company, the consent of the said company shall first be obtained. |
It will be seen that all the features that would make this demand inimical to the independence of China and the treaty rights of foreign nations were omitted. Not only is it asked that the Chinese Government shall limit the rights of the Chinese company freely to dispose of its property (Article 1), but the most far-reaching of interference with all mining and allied enterprises without limitation of locality is involved in Article 2. In granting the second article the Chinese Government would give to a company controlled by Japan the right to give or withhold its consent to any enterprise or undertaking which may directly or indirectly affect the interests of the said company; in other words, the company would be made the arbiter of mining development in China.
Only on condition of entirely relinquishing their treaty rights and abdicating all opportunities for sharing on an equal and self-respecting basis in the development of the natural resources of China could the foreign Powers consent to such an arrangement. In conflict with existing treaties, such an arrangement could not be made valid by agreement between Japan and China except with respect to such Powers as may subsequently give their assent thereto.
IV. From the point of view of the sovereignty and independence of China, the dangerous character of the present demands lies in the fact that many of them would not be satisfied through concessions for definite enterprises dealing with a limited area commensurate with the scope of the undertaking; they are such as import a direct interference with the general operations of government and expressions of sovereignty. Such is the case with the demand to allow to a Japanese-controlled company an important voice with respect to industrial enterprises in China; such would be the effect of agreeing to purchase any fixed quantity of military supplies from a foreign Power, as this would involve allowing such Power an insight into the complete military system of China, as well as the right to determine the types of her armament. Other demands affecting China’s independence are those relating to residence in the interior without relinquishment of extraterritoriality; the compulsory appointment of advisers; compulsory preference to one nation in certain provinces, and dictation as to what missionary activities are to be permitted in the interior, while extraterritoriality lasts.
The Chinese Government is confronted with a serious dilemma of inviting the hostile attitude of Japan through failure to grant such concessions and, on the other hand, of irretrievably resigning important rights of sovereignty if the concessions are made; the latter alternative would also involve the danger of entirely forfeiting the confidence of the Chinese people, who have been assured that the Government is in this negotiation strongly protecting their interests. It is therefore feared that should Japan succeed in extorting these far-reaching concessions from China, a powerful movement of opposition against the Government which has made such concessions would rise as soon as the facts would become known; thus the Chinese Government finds itself between the dangers of a foreign war and of internal revolution.
V. American residents in China, in common with the British and other Europeans, are greatly apprehensive as to the outcome of the present negotiations. It is believed that the effect upon Japan of [Page 122] successfully carrying through the present venture and thus imposing her will upon China will not result favorably to the peace of the Far East or of the world, in the immediate or more distant future.
The position of this Legation has not been without difficulty. Considering the feeling of real friendship for America which animates the Chinese people and the expectation connected therewith that the United States would not without protest permit the independent rights of China to be overridden, there has been some difficulty in preserving an attitude of friendliness while carefully avoiding to give an encouragement to the idea that the United States might actively intervene in behalf of China for the sake of friendship and in the cause of international justice. In cases where a discussion of these matters could not be avoided, I have strictly confined myself to the position that, notwithstanding what the demands of Japan and the action of China might turn out to be, American treaty rights here could be affected only with the consent of the American Government, and that, therefore, Americans would expect to continue to participate in the commerce and cultural development of China on an equal and independent basis. During the course of negotiations I have been repeatedly consulted by Chinese officials with respect to various aspects of the problems presented, and I have restricted the expression of my views to a consideration of the legal implications of the questions presented, avoiding anything that might be taken as advice on matters of political action.
I have [etc.]