Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 7, 1915

File No. 793.94/292.

Minister Reinsch to the Secretary of State.

No. 571.]

American Legation,
Peking, March 6, 1915.

Sir: In continuation of my despatch No. 540 of the 15th ultimo and referring to my telegrams of February 15, 10 p.m.; 17, 7 p.m.; 20, 5 p.m.; 23, 8 p.m.; and 26, 7 p.m., I have the honor to report briefly on the state of the negotiations between the Japanese and Chinese Governments.

Diplomatic conferences were held on February 28 and March 3. In both of these the demands relating to Shantung and Manchuria and Mongolia were discussed. No definite point of agreement was secured, except that the Chinese Government declared its readiness in principle to open additional treaty ports in Shantung and to extend the leases of Port Arthur and Dairen and of the railways in South Manchuria. The Chinese Government is ready to accede to Article II of Section 1³² by way of issuing a non-alienation decree.

With respect to Article III (Section 1) of the Japanese demands, the Chinese Government is ready to make a contract with Japan providing for the building of a Chinese Government railway from Chefoo or Lungk’ou to Weihsien with a Japanese loan and under Japanese engineering and auditing control, following herein the accustomed terms of railway contracts in China. The Japanese Government seems ready to accept this, but insists, however, on the right of fixing the terminals of the railway. As it is feared that it may be the desire of Japan to develop Lungk’ou and entirely to isolate Chefoo, leaving the latter port without railway connection, the Chinese Government is desirous of securing the assurance that the railway may be built to Chefoo without opposition by Japan. Incidental negotiations dealing with this question have been reported in my despatch No. 558 of the 1st instant.²¹

The Japanese Government has strongly insisted upon the adoption of the preamble to Section 2. The Chinese Government is, however, resisting with all its force the acknowledgment of a special position of Japan in South Manchuria and Inner Mongolia. As the Japanese demand on this point conflicts with existing treaty rights, the position of the Chinese Government is strong, if it would only be given the support of the nations holding rights under these treaties.

With respect to the extension of the leases mentioned in Article I (Section 2), the Chinese Government is willing to grant an extension, even in the case of the railways, although this amounts directly to the grant of an important money value, since the Chinese Government is, under the terms of the contract, to become the proprietor, absolutely and without payment, of the railways at the end of the lease. The Chinese Government is not so ready to extend the term provided in the railway contract for the period (thirty-two [thirty-six] years) after which it is to have the right to redeem the railway properties upon payment of their value.

It is recognized that Articles II and III (Section 2) would, if granted, open the regions concerned to all foreigners for trade, farming and residence, through the operation of the most-favored-nation clause. While such a grant would therefore not conflict with existing treaties, it is considered by the Chinese to involve a serious menace to their sovereignty, since all foreigners entering these regions are exempt from Chinese jurisdiction. It is moreover, of course, anticipated that should these demands be conceded the enjoyment of the privileges granted would through natural causes fall almost entirely to the Japanese, tending to make the whole region a Japanese colony. It is for this reason that the Chinese are very unwilling to grant these demands and propose to solve the difficulty by opening additional places to foreign residence and trade.

The remaining articles have not yet been discussed in detail. I have the honor to submit a copy of the original Chinese document handed to President Yuan Shih-k’ai by Mr. Hioki, the Japanese Minister, on January 18. There is also enclosed a translation of this document which was given to me by one of the staff of the Foreign Office on February 20. For convenience of reference this translation has been arranged parallel with the statement of the demands as handed to me by the Japanese Minister of the 14th ultimo. In the translation, as transmitted, certain corrections have been made by Dr. C. D. Tenney, the Chinese Secretary of Legation, as noted therein.

I have [etc.]

Paul S. Reinsch.

[Inclosure.]

Translation of document handed to President Yuan Shih Kai by Mr. Hioki, the Japanese Minister, on January 18, 1915.	Handed to the American Minister by the Japanese Minister on February 14, 1915.
I.	I.
The Japanese Government and the Chinese Government being desirous of maintaining the general peace in Eastern Asia and further strengthening the friendly relations and good neighborhood existing between the two nations, agree to the following articles:	In relation to the Province of Shantung:
article i.	article i.
The Chinese Government engages to give full assent to all matters upon which the Japanese Government may hereafter agree with the German Government relating to the disposition of all rights, interests and concessions which, by virtue of treaties or otherwise, Germany possesses in relation to the Province of Shantung.	Engagement on the part of China to consent to all matters that may be agreed upon between Japan and Germany with regard to the disposition of all rights, interests and concessions which, in virtue of treaties or otherwise, Germany possesses in relation to the Province of Shantung.
article ii.	article ii.
The Chinese Government engages that within the Province of Shantung and along its coast no territory or island will be ceded or leased to a third power under any pretext.	Engagement not to alienate or lease upon any pretext the Province of Shantung or any portion thereof, and any island lying near the coast of the said province.
article iii.	article iii.
The Chinese Government consents to Japan’s building a railway from Chefoo or Lungkou to join the Kiaochou-Chinanfu Railway.	Grant to Japan of the right of construction of a railway connecting Chefoo or Lungkou and the Tsinan-Kiaochou Railway.
article iv.	article iv.
The Chinese Government engages, in the interest of trade and for the residence of foreigners, to open by herself as soon as possible certain important cities and towns in the Province of Shantung as commercial ports. What places shall be opened are to be jointly decided upon by the two Governments in a separate agreement.	Addition of open marts in the Province of Shantung.
II.	II.
The Japanese Government and the Chinese Government, since the Chinese Government has always acknowledged the special position enjoyed by Japan in South Manchuria and Eastern Inner Mongolia, agree to the following articles:	In relation to South Manchuria and Eastern Inner Mongolia:
article i.	article i.
The two contracting parties mutually agree that the term of lease of Port Arthur and Dalny and the term of lease of the South Manchurian Railway and the Antung-Mukden Railway shall be extended to the period of 99 years.	Extension of the terms of lease of Kwantung, the South Manchurian Railway and the Antung-Mukden Railway.
article ii.	article ii.
Japanese subjects (literally, Japanese officials or common people) in South Manchuria and Eastern Inner Mongolia shall have the right to lease or own land required either for erecting suitable buildings for trade and manufacture or for farming.	(a) Acquisition by the Japanese of the right of residence and the ownership of land. (b) Grant to Japan of the mining rights of the mines specified by Japan.
article iii.
Japanese subjects (literally, Japanese officials or common people) shall be free to reside and travel in South Manchuria and Eastern Inner Mongolia and to engage in business and in manufacture of any kind whatsoever.
article iv.
The Chinese Government agrees to grant to Japanese subjects (literally, Japanese officials or common people) the mining rights of all the mines in South Manchuria and Eastern Inner Mongolia. * As regards what mines are to be opened they shall be decided upon by the two Governments jointly. * (As regards the opening of each mine there shall be a separate agreement.—C. D. T.)
article v.	article iii.
The Chinese Government agrees that, in respect of the (two) cases mentioned herein below, the Japanese Government’s consent shall be first obtained before action is taken: (a) Whenever permission is granted to the subject of a third Power to build a railway or to make a loan with a third Power for the purpose of building a railway in South Manchuria and Eastern Inner Mongolia. (b) Whenever a loan is to be made with a third Power pledging the local taxes of South Manchuria and Eastern Inner Mongolia as security.	Obligation on the part of China to obtain in advance the consent of Japan before she grants railway concessions to any third Power, procures the supply of capital from any third Power for the construction of a railway, or raises from any third Power a loan on security of any duties or taxes.
article vi.	article iv.
The Chinese Government agrees that if the Chinese Government employs political, financial or military advisers or instructors in South Manchuria or Eastern Inner Mongolia, the Japanese Government shall first be consulted.	Obligation on the part of China to consult Japan before employing advisers or tutors regarding political, financial or military matters.
article vii.	article v.
The Chinese Government agrees that the control and management of the Kirin-Changchun Railway shall be handed over to the Japanese Government for a term of 99 years dating from the signing of this agreement.	Transfer of the management and control of the Kirin-Changchun Railway to Japan.
III.	III.
The Japanese Government and the Chinese Government, seeing that Japanese financiers and the Han-yeh-ping 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, Han-yeh-ping Company should be placed under the Japanese and Chinese cooperation.
article i.
The two contracting parties mutually agree that when the opportune moment arrives the Han-yeh-ping Company shall be made a joint concern of the two nations; and they further agree that, without the previous eon-sent 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 ii.
The Chinese Government agrees that all mines in the neighborhood of those owned by the Han-yeh-ping 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.
IV.	IV
The Japanese Government and the Chinese Government, with the object of effectively preserving the territorial integrity of China, agree to the following special article: The Chinese Government engages not to cede or lease to a third Power any harbor or bay or island along the coast of China.	Engagement, in accordance with the principle of maintenance of the territorial integrity of China, not to alienate or lease any ports and bays on, and any land [island] near the coast of China.
V.
article i.
The Chinese Central Government shall employ influential Japanese (literally, Japanese who have strength, power, or influence) as advisers in political, financial and military affairs.
article ii.
Japanese hospitals, churches and schools in the interior of China shall be granted the right of owning land.
article iii.
Inasmuch as the Japanese Government and the Chinese Government have had many cases of dispute between Japanese and Chinese police to settle, cases which caused no little misunderstanding, it is for this reason necessary that the police departments of the important places (in China) shall be jointly administered by Japanese and Chinese or that the police departments of these places shall employ numerous Japanese, so that they may at the same time help to plan for the improvement of the Chinese police service.
article iv.
China shall purchase from Japan a fixed amount of munitions of war (say 50 per cent or more of what is needed by the Chinese Government) or that there shall be established in China a Sino-Japanese jointly worked arsenal. Japanese technic-experts are to be employed and Japanese material to be purchased.
article v.
China agrees to grant to Japan with the right of constructing a railway connecting Wuchang with Kiukiang and Nanchang, another line between Nanchang and Hanchou, and another between Nanchang and Chaochou.
article vi.
If China needs foreign capital to work mines, build railways and construct harbor-works (including dockyards) in the Province of Fukien, Japan shall be first consulted.
article vii.
China agrees that Japanese subjects shall have the right to propagate Buddhism (In Chinese text, reference is to religion and not especially to Buddhism) in China.

32. Throughout this despatch the words “article” and “section” correspond to the paragraph and article, respectively, of preceding references; see the Chinese memorandum, ante.
21. Not printed.