File No. 793.94/345.

Minister Reinsch to the Secretary of State.

No. 598.]

Sir: I have the honor to transmit a copy of a memorandum on the rights of residence in South Manchuria which was handed to the Japanese Minister by the Chinese Minister for Foreign Affairs on April 3. The memorandum is important as indicating the insistence upon the part of Japan upon the full measure of its demands on this topic; the manner in which the Chinese Government has yielded step by step; and the reservation of its complete rights which it is attempting to make with respect to Eastern Inner Mongolia.

I have [etc.]

Paul S. Reinsch.
[Inclosure.]

[Untitled]

memorandum on rights of residence in south manchuria, handed to the japanese minister by the minister for foreign affairs on april 3, 1915.

It is evident that the intention of Articles 2 and 3 in the second group of demands asking for an unhampered right of residence, trade, farming, and ownership of land in South Manchuria and Eastern Inner Mongolia, is to obtain for Japanese subjects in those regions a status beyond the terms of the treaties now existing between the two nations; and to give them a freedom of action which will be a restriction on China’s sovereignty and a serious infringement of her administrative rights. Should Japanese subjects be granted the [Page 123] right of owning land, it means that all the landed property in the aforesaid regions might fall into their hands, thereby endangering China’s territorial integrity. Moreover, residence in the inland is incompatible with the existence of extraterritoriality, the relinquishment of which is necessary to the actual enjoyment of the privilege of inland residence, as evidenced in the practice of other nations.

Japan’s unconditional demand for the privilege of inland residence, accompanied with a desire to extend extraterritoriality into the interior of China and to enable the Japanese subjects to monopolize all the interests in South Manchuria, is also palpably irreconcilable with the principle of equal opportunity. For this reason the Chinese Government were, in the first instance, unable to accept this demand as a basis of negotiation. Their profound regard for the friendly relations of the two countries, however, persuaded them to exert their utmost efforts, in spite of all the inherent difficulties, to seek a solution of a question which was practically impossible to solve. Knowing that the proposal made by Japan was incompatible with treaties, they nevertheless sought to meet her wishes within the limits of treaties; accordingly they submitted a counterproposal to open more places in South Manchuria to international trade and to establish Sino-Japanese joint reclamation companies.

This suggestion was made in the thought that the places to which Japanese subjects would desire to resort for purposes of trade could not be other than important localities; if all these localities were opened to commerce, then they could go there and reside, trade, and lease land for joint reclamation within any of them. Thus Japanese subjects might enjoy the essence of the privilege of inland residence and would still be able to reconcile their position with China’s treaties and the principle of equal opportunity.

After the Japanese Government declined to accept this suggestion, China withdrew it and replaced it with an amendment to the original articles. It was proposed in this amendment to grant to Japanese subjects the extra-treaty privilege of inland residence with the provisos that Japanese subjects in places outside of trade marts should observe Chinese police regulations and pay taxes in the same manner as Chinese, and that civil and criminal cases of such Japanese subjects should be adjudicated by Chinese authorities, the Japanese Consul attending merely to watch the proceedings. This suggestion was not an innovation; it was based upon the modus operandi now in force as regards the Korean settlers in inland districts of Chientao. But the Japanese Government again declined to accept it.

The Chinese Government thereupon made a third proposal along the lines of what constitutes the present practice in Turkey and Siam, making a distinction, however, in favor of Japanese subjects, in the exercise of jurisdiction over civil and criminal cases. This was once more objected to by the Japanese Government.

Now the Chinese Government proposes to concede another step—the fourth time. They propose to agree to the full text of Articles 2 and 3 relative to the question of inland residence, except that “the right of owning land”, is changed into “the right of leasing land”, and to the phrase “cultivating land” is added this clause: “the regulations for which shall be determined separately”; and, further, to add a supplementary article which embodies a modus operandi which the Chinese Government has constrained itself to make, out of a desire to come to a settlement over this question. The view advanced in this supplementary article is based upon your excellency’s declaration made on March 6, 1915, that a separate article embodying some compromise might be added to the original Articles 2 and 3 for the purpose of avoiding any conflict with China’s sovereignty or the system established by treaties.

Since China now agrees to Articles 2 and 3; since there already exists a harmony of views on the question of observing Chinese police regulations and paying taxes; since as regards the question of jurisdiction criminal cases are to be dealt with as heretofore and civil cases in a slightly different way from what prevails now—since this is a concession which the Chinese Government feels unable to improve upon, they request your excellency to be so good as to inform your Government of its nature and extent and invite them to agree thereto, to the end that this question may be brought to a conclusion.

As regards Eastern Inner Mongolia, there is altogether a different state of things there, quite different from what exists in South Manchuria. I have stated on several occasions that these two regions could not be discussed together, and I am glad to recall that your excellency has already given your endorsement of my views.