File No. 893.77/1588
Minister Reinsch to
the Secretary of State
No. 1368
American Legation,
Peking,
January 30, 1917.
Sir: I have the honor to enclose a copy of the
answer, under date of the 20th instant, of the Japanese Minister to my
note of January 3, a copy of which was transmitted to the Department
with my No. 1331 of the 3d instant, as well as a copy of my reply of
January 29. It seemed to me of the greatest importance at this time to
make the Japanese Minister understand two points:
- First, that while we have no intention of pursuing an
obstructionist policy towards Japan, the so-called “special
position” of Japan in Manchuria has not yet been recognized
beyond the specific grants and concessions, the sum total of
which makes up what may be called the legal position of Japan in
that region; and
- Second, that if cooperation is to be talked of between the
United States and Japan, it may perhaps be more suitable for the
Japanese to offer cooperation in enterprises which they control
than to ask for a part in the one or two American enterprises;
at any rate, when the latter form of participation is asked, it
is important to know what is thought of the former.
It follows from the above that any rights or privileges which Japan may
claim in Manchuria cannot be deduced from an abstract conception of a
“special position” there, but must be shown as flowing from particular
grants or concessions; and that the latter cannot be admitted to have
superseded prior rights or concessions held by others which have not
been voluntarily given up.
I believe that if this position is adhered to, it may be possible to
obtain from Japan, if it is desired, a large measure of participation in
Manchurian development and the engagement to refrain from seeking
special rights and privileges in China proper in return for
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a more specific recognition on
our part of the “special position” which Japan is trying to establish
for herself in Manchuria. To recognize the existence of such a “special
position” without getting some such assurances as are mentioned above,
would be to make to Japan a gratuitous concession—a gift—instead of
giving the transaction a form under which the recognition and tolerance
of the position aimed at by Japan would be made to yield desirable
results, both for the protection of American trade and of Chinese
independence.
I have [etc.]
[Inclosure 1]
The Japanese Minister
to Minister Reinsch
Japanese Legation,
Peking,
January 20, 1917.
My dear Colleague: I have read with great
interest your letter of the 3d instant on the subject of the
possibility of cooperation between the financial interests of our
two countries in railway undertakings in China and now have the
honour to address to you the following by way of a reply of personal
character.
It is true that there is in the Ssupingkai-Chengchiatun Railway Loan
Agreement concluded by the Yokohama Specie Bank in December 1915, a
provision authorizing the said bank to float the whole or a part of
the loan in London, Paris or New York. With regard to this loan I
have ascertained that the total sum was only five million yen and
the bonds covering it were already issued in home market in May
last.
The above mentioned loan agreement has its origin in an engagement
made by the Chinese Government in October 1913, in favour of the
Imperial Government, which provides that the Chinese Government will
construct the railway lines: (1) Ssupingkai-Chengchiatun-Taonanfu,
(2) Taonanfu-Changchun, (3) Kaiyuan-Hailung with the fund to be
supplied by Japanese capitalists, and that, when the Chinese
Government will in future construct the railway lines: (1)
Taonanfu-Jehol, (2) Hailung-Kirin with foreign capital, it should
first negotiate with Japanese capitalists for funds required.
Besides the last mentioned engagement, the Japanese Government
secured from China in May 1915, a general preferential right
concerning railway investments in South Manchuria and Eastern Inner
Mongolia.
Further I may add that, for all the lines other than that between
Ssupingkai and Chengchiatun which has a very short length of some
fifty miles only, no loan agreement has ever been concluded or is
being negotiated by Japanese capitalists.
I believe the above informations are exactly what you want to know
and hope that they will serve your purpose.
With regard to the general principle of cooperation between Japanese
and American capitalists with the object of developing natural
resources in China, I may assure you most positively that I share
the sentiment so spontaneously expressed in your letter. But as
regards the practical side of the question in applying the said
principle of cooperation to railway enterprises in South Manchuria
and Eastern Inner Mongolia, it is more desirable that I shall be
allowed to reply at a later date upon further consideration on
account of the special position enjoyed by us in the said
regions.
In the meantime, I should be very much obliged if you would be good
enough to furnish me with sufficient information regarding the scope
and character of the railway agreement recently concluded by the
American International Corporation with the Chinese Government
together with an explanation as to whether there is any possibility
of cooperation for Japanese capitalists in the undertaking provided
therein.
With the assurance [etc.]
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[Inclosure 2]
Minister Reinsch
to the Janpanese Minister
American Legation,
Peking,
January 29, 1917.
My dear Colleague: I beg to acknowledge
and to thank you for the very interesting letter of the 20th
instant, in which you so frankly set forth your personal views in
reply to my informal inquiries as to the possibilities of
cooperation between American and Japanese capital in the development
of railways in Manchuria.
I have noted with interest the fact “that, for all the lines other
than between Ssupingkai and Chengchiatun which has a very short
length of some fifty miles only, no loan agreement has ever been
concluded or is being negotiated by Japanese capitalists”.
I also note that with respect to the remaining alignments dealt with
in the agreement of October 1913, as well as to other possible
railway enterprises in Southern Manchuria, you think it more
desirable “to reply at a later date upon further consideration on
account of the special position enjoyed by us in the said regions.”
I confess that your statement would come to me with a sense of
surprise were it your intention to imply a doubt as to whether the
specific concessions and rights held by your country, of which its
legal position in that region is made up, would permit of the
participation of American capital in particular enterprises there;
and I look forward with much interest to the opportunity to learn
your considered views as to the point so raised. I of course take it
for granted, and believe that you will agree with me, that any
subsequent undertakings entered into by your Government would not be
maintained to have impaired any previously existing rights of other
nationalities, such as those conferred by the Preliminary Agreement
of October 2, 1909, in regard to the Chinchow-Aigun Railway.
In response to your request for sufficient information regarding the
railway agreement recently concluded in behalf of American
interests, I shall take pleasure in requesting Messrs. Siems-Carey
& Company to forward to you a copy of their contract of May 17
last, for such use as you may care to make of it. I imagine that you
have in your files a copy of the Preliminary Agreement of October 2,
1909, but if not, I should be happy to furnish you one. As I find
that our Legation has no copies of the Agreement of October 1913, to
which you make reference in your letter, might I with propriety ask
if you would be good enough to let me have a copy?
I shall be greatly pleased, at any time, to continue informal
discussion of these matters upon which we are having an exchange of
opinions.
With the assurance [etc.]
