File No. 893.811/231
Minister Reinsch to the Secretary of State
Peking, September 25, 1916.
I am informed that on September 15 the Japanese Legation informally filed with the Chinese Government a memorandum stating that the Japanese Legation understands that the Conservancy Bureau has concluded an agreement with the American International Corporation for the improvement of the Grand Canal in Shantung and observing that if foreign assistance is asked in this matter application must first be made to Japan. This claim is based on the conventions between China and Germany of March 6, 1898, and between China and Japan of May 25, 1915. I am informed that the Minister for Foreign Affairs intends to reply that incorporeal treaty rights respecting Snantung have not yet accrued to Japan; the action suggested by Japanese Legation would therefore anticipate the assent of Germany to transfer of such rights and that the [omission] of the treaty of 1898 as developed in practice has actually been confined to railway and mining enterprises.
It is the impression of the Minister for Foreign Affairs that the Japanese desire not so much to exclude the Americans from this particular enterprise as to safeguard themselves against having the situation in Shantung materially changed to their disadvantage before a treaty with Germany can be made. But there is no assurance of this until the Japanese have been further heard from. While the negotiations were proceeding I quite frankly informed Minister Hioki concerning the projected enterprise.