The Minister in China (Reinsch) to the Acting Secretary of State

No. 2572

Sir: In connection with my telegram of even date28 I have the honor to enclose the following papers:

Telegram from the southern delegation at the Shanghai Peace Conference to the Dean of the Diplomatic Body, dated March 3rd;29

Memorandum from the Japanese Minister concerning disbandment of the War Participation Army;

Communication made by the Japanese Minister through a Secretary to the Acting Minister for Foreign Affairs;30

An Aide-Memoire presented March 7th;

The substance of the Armament Loan Agreement and the War Participation Loan Agreement as given out in the Japanese Press; and

Further inter-change of telegrams between Mr. Tong Shao-yi, the British Minister, and the Premier as given out by the Intelligence Bureau of the Constitutional Government of China and reprinted in the North China Star of March 6th.31

It will be noted, it is claimed that the Japanese Arms syndicate was given preferential rights to supply arms to China in the future. Such preferential arrangement could, of course, not be upheld in the face of general treaty provisions.

An article from The Peking Leader of March 6th, concerning the War Participation Loan, which is a moderate expression of current Chinese opinion, is also herewith enclosed.32

The attitude of the Shanghai Peace Conference to these matters will be reported on in a separate despatch.

I have [etc.]

Paul S. Reinsch
[Page 311]
[Enclosure 1]

The Japanese Minister in China (Obata) to the British Minister in China (Jordan)


The Japanese Government have given their serious consideration to the proposal of the British Government for a joint action to be taken at Peking by the Representatives of the Allied and Associated Powers with a view to strengthening hands of President Hsu Shih-chang against General Tuan in the matter of the disbandment of the War Participation Army. They fully realize that the question of the new army forms one of the difficulties with which the Conference of the Northern and Southern Delegates now in session at Shanghai is being confronted. They are not informed whether the British Government following the same line of the policy now proposed have in contemplation similar action by the foreign Representatives in Peking with regard to the other points of differences standing equally in the way of an early reunion of China. In any case the action suggested by the British Government does not seem to be wholly reconcilable with the declaration of the Japanese, British, French, Italian and the United States Governments embodied in the Aide-Memoire of December 2nd, 1918,33 in which the five Governments specifically disclaim any “desire to control or influence the particular terms of adjustment which must remain for the Chinese themselves to arrange”. Such action, with all its good intentions, will no doubt be regarded as an attempt to influence one of the terms now awaiting adjustment at the Shanghai Conference, and the Japanese Government are strongly of opinion that it would be unwise for the foreign Powers to interfere in the settlement of any of those terms in favour of one contending faction against the other. It would be added that the Japanese Government have not the slightest intention to raise any difficulty to China’s abandoning of plan for organization of a new army. On the contrary, they are quite ready to do all that lies in their power to facilitate work of the Shanghai Conference consistent with the declaration of the five Powers of December 2nd. They do not, however, consider [themselves] justified in taking part in the action which seems to them to imply departure from policy adopted in common accord and declared in an official communication by the Allied and Associated Governments. In thus communicating to His Excellency the British Minister the views which the Japanese Government feel it due to frankness [Page 312] to state, the Japanese Minister sincerely trusts that these views will commend themselves to the favourable reply of the British Government.

[Enclosure 2]

The Representatives of France, Great Britain, Italy, and the United States to the Chinese Acting Minister for Foreign Affairs


The Representatives of France, Great Britain, Italy and the United States desire to associate themselves with and give their full support to the communication already made to the Chinese Government by their Japanese Colleague in which the hope is expressed that, in view of the general state of affairs, the Chinese Government will, in order to promote early reunion of the North and the South, refrain for the present from drawing on the proceeds of the War Participation Loan now on deposit in the Japanese Bank.

[Enclosure 3]

Article on “Sino-Japanese Agreements” Published in the “Peking Times”, March 1, 1919

“Nichi Nichi” Discloses “Secrets”

The Nichi Nichi publishes what purports to be details of the Arms Loan and the National Defense Army Loan Agreements, concluded between Japan and China, which have been made the basis of so much diplomatic rancor during the last few weeks. The Arms Loan contract consists of the following clauses:

“The Chinese Government shall purchase from the Taihei Kumiai arms manufactured in Japan.

“Japan shall supply to China through the Taihei Kumiai 25,000 rifles, 5,000 machine-guns, mountain, field, quickfiring guns and 160 12-inch mortars, with ammunition required for these guns, as well as saddles, wagons, leather and engineers’ supplies to the value of Yen 30,000,000 (including Yen 184,000 transport charges).

“The Chinese Government shall not use these arms for the purposes of internal strife.

“The Taihei Kumiai shall have preferential rights in supplying arms to China when necessity arises in the future.

“Japanese officers’ should be engaged as instructors for the training of Chinese troops.”

[Page 313]

arms partly delivered

The Nichi Nichi understands that the above contract became an accomplished fact in January [September] 1918, and the first instalment consisting of 120 field-guns, 60 mountain-guns, 20,000 rifles and 60 machine-guns, was supplied last year and a second instalment was delivered some time ago. The delivery of the remainder, however, will be withheld.

national defense loan

Particulars of the National Defense Army Loan are as follows:

“A syndicate of Japanese bankers will loan to the Chinese Government the amount of Yen 20,000,000.

“The Chinese Government shall use the proceeds of the loan for the organization of three army divisions, chiefly for the purpose of national defense.

“For the organization of the army, the Chinese Government shall engage Japanese instructors and the necessary arms shall be bought from Japan.

“The syndicate of Japanese bankers shall deliver to the Chinese Government Yen 300,000 each month.”

american loan failed

The Nichi Nichi further says that the foregoing contract was signed between China and the Japanese syndicate in February [September], 1918, in accordance with the stipulations of the Sino-Japanese Military Agreement, concluded in the same year.34 At first China wanted, at the advice of the French Government, to borrow funds required for the dispatch of an expedition to Europe from America, but as the negotiations with American capitalists failed the matter was referred to the Japanese bankers. The latter agreed to advance money on condition that the funds should be used for the purpose of organizing a national defense army.

During last year the syndicate paid Y3,700,000 to China, but as there was a possibility of the money being used for the purposes of internal strife the delivery of the remainder of the loan has been withheld and the amount is on deposit with the Chartered Exchange Bank of China.

will beat covenant out

Although it seems to be the desire of the Chinese delegates in Paris, continues the Nichi Nichi, that the question of the repudiation of these agreements be decided upon by the peace conference, even [Page 314] before the consummation of a league of nations, this will not be possible. As the Japanese authorities are convinced that the revision or abrogation of these agreements will be necessitated by the consummation of a league of nations, it seems to be their intention to carry out the terms of the agreements in a suitable manner before such a contingency arises.

  1. Post, p. 316.
  2. Not printed; for the most part identical with the manifesto printed on p. 308, but concluding: “Knowing that Your Excellencies have China’s interest at heart, we are taking this opportunity to make another appeal for your friendly advice and guidance at this critical moment.”
  3. Not printed; in substance the same as communiqué published by Japanese Foreign Office on Mar. 6; see p. 317.
  4. See pp. 304307.
  5. Not printed.
  6. Foreign Relations, 1918, p. 134.
  7. Foreign Relations, 1918, p. 224; see also post, p. 342.