m **j+ The Foreign Relations of China: A History and a Survey BY Mingchien Joshua Bau, M.A., Ph.D. Graduate Tsing Huh College, Yale, Columbia and Johns Hopkins Universities. Sometime Holder Carnegie Endowment International Law Fellowship, etc. ■. York ( Bl Fleming H. Revell Company I ON DOM AMD I DUtBUBBB Copyright. 1921, by FLEMING H. RE\ ELL COMPANY Printed in the United States of America New York: 158 Fifth Avenue Chicago : 17 North Wabash Ave. London : 21 Paternoster Square Edinburgh : 75 Princes Street to DEDICATED TO MY SUFFERING PEOPLE IN CHINA PREFACE The purpose of this work is to study the foreign re- lations of China, and to work out for her a foreign policy. To achieve this object, the author was com- pelled to study the foreign relations of China as a whole, rather than to confine himself to any particular phase of the subject. Conscious of the danger of its extending over too wide a field, he has limited the scope of his work to the salient features only, omitting the minor and un- important ones. Aware also of the possible risk of sac- rificing quality to quantity in undertaking a task of these dimensions, he has, so far as time and sources of in- formation permitted, brought each chapter to the requi- site standard. In undertaking this work the author was confronted at every turn by the difficulty due to the absence of any regular official publication of the Chinese Ministry of Foreign Affairs. While there are a few separate pamphlets that have been issued, there is no series of publications comparable with the Foreign Relations of the United States or the State Papers of Great Britain. Hence the author was obliged to resort to the archives of the Foreign Offices of other nations to find the neces- sary material. As far as feasible, he has endeavored to use first-hand sources, Buch as treaties, diplomatic docu- ments, substantiated facts of history, etc., and has used viii PREFACE dary sources, only in so far as they helped him h the originals and understand the same. Conscious of the danger of expressing ill-considered opinions or of reaching injudicious conclusions relating to so grave a subject as the foreign relations of China, the author has entered into the work with an open mind, and has aimed only to reach the truth. Particularly with respect to Japan, with which country China has lately had such serious differences, he has attempted to Stud) its policy and problems from the point of view of Japan, striving to arrive at the real difficulties and causes behind the actions of that Empire. It is his conviction that, as the interests and destinies of the two countries are so interwoven, China cannot solve her own problems without at the same time solving those of Japan ; nor can Japan solve hers without at the same time solving those of China. To this end, he has striven to obtain a dilution for both countries at the same time. The author has undertaken his work with a sense of duty to his country and to humanity. Probably there is no question in the history of China which deserves the attention of her citizens more than her foreign relations and the formulation of a proper and fitting foreign policy to meet the situation. Ever since the opening of the country, the history of China has been dominated by foreign contacts. Hence a proper understanding of the foreign relations of China and a formulation of an ap- propriate foreign policy are indispensable to her pres- ervation and well-being. Going a step further, China's ny and welfare are intimately associated with the destiny and welfare, not only of the neighboring states PREFACE ix of the Far East, but also of the entire world. Carryin her citizens feel, the mission of promoting world peace, China's foreign relations and policy will probably be the keynote, or at least an essential factor, in world peace. In doing this work, therefore, the author feels that he is discharging a duty to his nation, and an obligation to mankind. The book is divided into six parts, and thirty-two chapters. As an understanding of the diplomatic history of China is necessary to the study of the whole subject, Part I covers the diplomatic history of China, divided into four periods, the opening of China (1689-1860), the loss of dependencies (1860-1895), the international struggle for concessions (1895-1911), and international cooperation and control (1911 ), each constituting a chapter. Part II treats of the policies of the Great Powers in China, — Russia, France, Germany, Great Britain and the United States. As Japan occupies such an important and dominant position in the foreign re- lations of China, Part III is devoted exclusively to the policy of Japan in China. It being necessary to observe the impairments of China's sovereignty, so as to lead to suggestions as to the policy of recovery, Part IV relates to the various forms of impairment, such as extraterri- toriality and consular jurisdiction, concessions and settle- ments, leased territories, spheres of influence or interest, the most favored nation clause as applied in China, and tariff autonomy. I'ari V deals with questions arising since the war, — the New International Banking Con- sortium, the League of Nations and China, and the Shantung Question. — pointing out the significance in. and x PREFAi E the effect upon, the international relations of China, and, in the case of the Shantung Question, offering a solution for the problem. Part VI formulates a foreign policy for China, including the policy of preservation, the policy of recovery, the policy of the Golden Rule and the policy of world welfare, ending with a special policy toward Japan. I he author wishes to acknowledge his deep indebted- ness to all the authors whose works he has consulted, many of which appear in the references or footnotes, to the Department of State for valuable assistance in ob- taining some necessary documents, to J. P. Morgan & Company, Hew York, for the information regarding the New International Banking Consortium, to his revered teacher, Professor W. W. Willoughby, Johns Hopkins University, under whose supervision and guidance this work was done, and to Professor Harlan P. Beach, Yale University, for kindly criticisms and suggestions. Mingchien Joshua Bau. Johns Hopkins University, Baltimore, Maryland. CONTENTS PART I A Sketch of the Diplomatic History of China I. The Opening of China (1689-1860) . II. The Loss of Dependencies (1860-1895) III. The International Struggle for Con- cessions (1895-1911) . IV. International Cooperation and Con- trol (1911 ) . PART II Policies of the Great Powers in China V. The Policy of Russia . VI. The Policy of France . VII. The Policy of Germany VIII. The Policy of Great Britain . IX. The Policy of the United States PART III The Policy of Japan in China X. The Development of Japan's Policy in China XI. Policy of Economic Exploitation XII. Policy of Territorial Expansion XIII. Policy of Paramount Influence XIV. Policy of Political Control XV. The "Asiatic" Monroe Doctrine XVI. The "Twenty-one Demands" as Exponent of Japan's Policies in China XVII. THE Wisdom OF Japan's POLICY in- China TAGE 3 18 37 62 93 110 120 132 149 AN 181 192 207 216 230 243 254 263 Xll CONTENTS PART IV Impairments of China's Sovereignty PAGE XVIII. Extraterritoriality and Consular Jurisdiction 285 XIX. Concessions and Settlements . . 309 XX. Leased Territories .... 324 XXI. Spheres of Influence or Interest . 337 XXII. The Most Favored Nation Treat- ment 351 XXIII. Tariff Autonomy 371 PART V New Problems Arising Since the War XXIV. The New International Banking Consortium 389 XXV. The New International Banking Consortium (Continued) . . . 405 XXVI. The League of Nations and China 416 XXVII. The Shantung Question . . . 427 PART VI A Foreign Policy for China XXVIII. Policy of Preservation . . . 475 XXIX. Policy of Recovery .... 485 XXX. Policy of the Golden Rule . . 493 XXXI. Policy of World Welfare . . .500 XXXII. A Policy Toward Japan in Par- ticular 505 PART I A SKETCH OF THE DIPLOMATIC HISTORY OF CHINA I. The Opening of China II. The Loss of Dependencies III. The International Struggle for Concessions IV. International Cooperation and Control THE OPENING OF CHINA (1689-1860) The diplomatic history of China can be divided into four periods. The first period covers the years from 1689, when China made the first treaty with a Western Power, to 1860 when she first consented to enter into formal diplomatic relations with the Powers at Peking. This period is characterized by the gradual opening of China to the trade and intercourse of the Western world, and so it may rightly be called the period of the opening of China. Prior to the opening, China was more or less an iso- lated nation. She had had little to do with Western countries. Although there were some travelers like Marco Polo who had come to China long before she was opened, she had had little intercourse with the Occident. This isolation was not a result of the deliberate choice of the Chinese. It was rather an inevitable consequence of the geographical setting. On the North she is bounded by the Mongolian deserts. As if these natural barriers were not enough, she built the Great Wall extending over the entire length of her Northern boundary, thus effec- tively shutting out the aliens from the North. On the West she was buttressed by the Himalaya Mountains, which offered such an effective obstruction that few peo- ple were likely to cross them. On the South and East she was limited by seas and oceans which separated her effectively from the rest of the world. As a result of this geographical isolation she devel a type of civilization that was unique and quite differ- ent from the main branches of European civilization. She also became the mother of ( Iriental civilization and ex- 3 4 THE DIPLOMATIC HISTORY OF CHINA tended her influence as far as the geographical setting would allow her. Toward the North she extended her civilization to the Mongols and the Manchus. Toward the West she carried her civilization to Chinese Turk< Sinkiang and Tibet. Toward the South she sowed the seeds of culture in Burma, Annani and Siani. On the East she extended her civilization to Korea and Japan. This superiority, however, achieved in geographical isolation, soon resulted in self-complacency and pride. Supreme in the Far East, she had no rivals. As a re- sult, she became self-satisfied and unprogressive. She remained so until Western contact woke her from her lethargy. Thus we can clearly understand why, when the West came knocking at the door, she was proud and regarded all Westerners as barbarians and subjects of vassal states. We can also understand why she refused to have her tranquillity and isolation disturbed by the intrusions of the West. The Portuguese were the first to arrive. They landed in 1517 at St. John's Island in South China, and later in 1557, they occupied the present city of Macao, which became the chief trading port of South China — before the rise of Hongkong. Next to the Portuguese came their rivals, the Spaniards, who crossed over from Manila in 1575. Then came the Dutch in 1622 who occupied the Island of Formosa until 1661, when they were driven out by the conquering Koxinga. In 1655 they sent an em- bassy to Peking, asking for privileges of trade. They performed all the rites required of them — kneeling and prostration (kowtow) — and also offered tribute as from a vassal state. In spite of their efforts, however, they only obtained the privilege of coming to trade once in eight years and each time not exceeding a hundred men. About the same time, in 1653, Russia also came over by land and asked for commercial privileges, but as the embassy refused to kowtow, the mission was not granted an audience. THE OPENING OF CHINA 5 The first treaty of China was commonly called the Treaty of Nerchinsk, August 27, 1689. It was made in consequence of the Russian construction of some forts at Albazin and Karmarskai-Astrog which the Chinese thought was an invasion of their territory and for which reason they attacked the forts and demolished the one at Albazin. Thereupon, a border war ensued, with alter- nating triumphs for both sides. This treaty signed at Nerchinsk ended the war. The rivers Rerbetchi and Ergone were made boundaries. The fortress built at Albazin was to be demolished. Extradition and extra- territoriality of a primitive character were provided. The right to travel with passports and to trade was recipro- cally given. Subsequently, further treaties were made with Rus- sia. On October 21, 1727, the treaty of Kiakhta was concluded. The boundary at and near Kiakhta was de- fined. Frontier trade was regulated and jurisdictional differences were settled. A Russian embassy was per- mitted to reside in Peking, and four youths and two adults were permitted to study the Chinese language and four priests to practice their cult. This treaty of Kiakhta was amended in 1768, regulating more specifically fron- tier extradition and criminal jurisdiction. In 1792 a further convention was signed by the Governor of Ir- kutsk and the Chinese frontier officers, regulating com- merce at the border. These treaties with Russia did not open China up in any way. either for foreign trade or diplomatic inter- course. What the Russians obtained through these trea- . as trade privileges at the frontier and the right of nee for tin- Russian Embassy at Peking. Hence, ; [is arrived at Canton i<>v trade, the Imperial order decreed that Russia, having the privilege of trading at the land frontier, was nut allowed to trade by sea, and, therefore, excluded from a trade of China. Later, Admiral Count Initiation was 6 THE DIPLOMATIC HISTORY OF CHINA commissioned as Russian Envoy and came to Peiho and asked for the privilege of maritime trade and upon being refused there, he went down to Hongkong in 1857 and joined the Allied diplomats of England and France and sought for maritime trade privileges under the aegis of \llied forces, then in operation against China dur- ing the second war between Great Britain and China. So far none of the European States was able to effect the opening of China. The task finally fell on the shoulders of Great Britain. Not without initial rebuffs and adverses, however, did Great Britain perform the task. In 1793 Lord Macartney came to Taku, and thence he was convoyed to Peking in boats and carts bearing the inscription "Ambassador bearing tribute from the country of England." * His mission resulted in failure. Again in 1816 Lord Amherst went to Peking, but as he refused to kowtow, and to be hurried to an Imperial audience early in the morning immediately upon his arrival, he had to depart in disappointment. Rebuffed but not discouraged, Great Britain persisted in her task. In 1834, she abolished the monopoly en- joyed by the East India Company and instituted free trade in Canton ; and, to supervise British trade, three superintendents were appointed, of which Lord Napier was chief. The latter came to China with the su- preme resolve to open up China and to assert national equality. He came to Canton from Macao without per- mit from the Chinese local authorities, which was re- quired at that time ; and besides, he intended to deliver a letter and not a petition to the Viceroy. His action so incensed the Viceroy that he was refused a conference until he had retired to Macao and come up in accordance with the established ruie, which Lord Napier refused to do. A deadlock between the Viceroy and Lord Napier ensued, resulting in the stoppage of British trade. Mean- while, malarial fever overtook Lord Napier, which com- THE OPENING OF CHINA 7 pelled him to retire to Macao, where he died on October 11, 1834. After the death of Lord Napier, the superintendents who succeeded him adopted a quiescent policy, com] liv- ing generally with the regulations of the Canton authori- ties. But in 1836 Captain Eliot was appointed chief superintendent, and with his advent, events took a sharp turn, leading to the first war between China and Great Britain (1840-1842). In 1838 Lin Tse-Hsi was appointed Imperial High Commissioner at Canton. He came with the Imperial Commission to exterminate the opium traffic which for- eign traders, mainly the British, had been illegally carry- ing on with the connivance of corrupt Chinese officials. His policy was first to destroy all the opium in the pos- session of foreign traders, and then to safeguard the future by requiring them to deposit bonds as a pledge that they would not deal in opium thereafter. lie therefore demanded the surrender of all the opium in possession of the foreign communities.- Upon refusal of the foreign communities to deliver up the opium, he declared martial law and put the British factory and community under military quarantine. He made the blockade so effective that, in a few days, deprived of food and other supplies, the foreign community was on the verge of starvation. Consequently, Eliot yielded on March 27, 1839, and surrendered the stock of opium amounting to 20,291 chests, 3 whereupon the blockade was lifted. Immediately thereafter, Captain Eliot ordered his coun- trymen to prepare to leave in a body; and also an- nounced that he would ask the Queen to exacl due indemnity for the opium so arbitrarily seized. On May 24, 1839, the whole British community moved from Can- ton to Macao, where Captain Eliot waited for instruc- tions from home. 8 THE DIPLOMATIC HISTORY OF CHINA Meanwhile, another event transpired which made war inevitable. A party of British sailors, while on the Kowloon side of the Hongkong anchorage, murdered a Chinese named Lin Wei-li during the course of a riotous search for intoxicating liquor. Commissioner Lin de- manded an immediate redress by the surrender of the British murderer. Having obtained no satisfaction, to enforce his demands, he moved his forces to Heungshan, and issued two orders on August 15, 1839, one cutting off the supplies of the British in Macao and the other ordering all Chinese servants to leave their British mas- ters, whereupon the British moved from Macao to Hong- kong. On October 25 he issued a peremptory order for the surrender of the murderer, and three days later threatened to blockade Hongkong and to effect the arrest of the murderer himself. On November 3, 1839, the first naval battle was fought in Chuenpi, which marked the beginning of the first war between China and Great Britain. The issues of the war were quite clear. On the part of the Chinese, opium was the great issue. To extermi- nate the opium evil was the supreme aim of the war. The jurisdiction over criminals of the homicide class was a subsidiary issue. On the part of the British, how- ever, reparation for the loss of opium, the granting of better trade privileges and the recognition of national equality were the primary causes, while opium was a mere incident. The British won the war. As a result, the treaty of Nanking'* was signed on August 2 1 ', 1842. Five treaty ports were opened, — Canton. Amoy, Foochow, Ningpo and Shanghai. Hongkong was ceded in per; Britain. An indemnity of twenty-one million dol- lars was paid. Equal status in diplomatic correspondence was I rved. Tariff was to be uniform and fair. A supplementary treaty of October 8, 1843, was subse- quently signed, providing for a conventional tariff of THE OPENING OF CHINA 9 five per cent ad valorem and extra-territoriality. 5 Follow- ing the British, the Americans signed the Treaty of Commerce on July 3, 1844, and the French, on October 24, 1844. Belgium secured trade privileges by an Im- perial rescript of July 25, 1845 ; Sweden and Norway signed, on March 20, 1847, a Treaty of Commerce, vir- tually the same as the American Treaty of 1844. The first war with Great Britain accomplished only a part of what the British had set out to do. It opened up five ports of South China to the trade of the world. It provided for a semblance of national equality in diplo- matic dealings. But still it failed to open up the whole of China, especially the Yangtze Valley, which was the goal of British merchants. It further failed to provide for diplomatic dealings direct with the Peking court. All these were left to be accomplished by the second war between Great Britain and China (1858-1860). As the first war was not decisive, the Chinese were not convinced that they were inferior to the Westerners, nor were they willing to welcome Western intercourse thus imposed on them. They still cherished hopes of keeping Occidentals at a distance and indulged in thoughts of Oriental superiority. Thus when the opening of Can- ton was due, the Cantonese resisted, and, as a result, a violent riot took place. The entry into Canton was there- fore postponed, but it was not waived. In the next year it was definitely postponed to 1849. ' But when the time came for opening, the Cantonese still obsti- nately refused to comply with the agreement. During this interval, the Cantone.se became more and more hostile. They felt they wen wronged by tin- British who forced the opium traffic on them. They ■ •'1 deeply the intrusion and compulsory intercourse of the unwelcome Western barbarian. Tiny entertained the hope that, as si nm as a chance should offer itself, would expel all Western disturbers •>!' their | 10 THE DIPLOMATIC HISTORY OF CHINA The prevailing sentiment of that time can be well dis- cerned in the following extract of a placard, the like of which was quite common during these years of irrita- tion and excitement. 8 "If the barbarians make a single move, then sound the tocsin, in every place, and, united in mind and strength, at one beat of the drum we will take them, and absolutely kill every one of the barbarian rebels, and not leave a blade of grass an inch high, nor allow the creepers to spread." On the other hand, the British, on account of their victory, became quite arrogant and insolent. They cast aside their former respect for the wonders of Chinese civilization and openly asserted that they would, and could, thereafter dictate their demands to the Chinese. In a letter to his plenipotentiary instructing the latter to protest against the growing hostile feeling of the Can- tonese, Lord Palmerston used the following language : 9 10 "Now they appear to be encouraging and exciting among the people of Canton hostile feelings towards British subjects; but let them not deceive themselves. The forbearance which the British Government has hitherto displayed arises, not from a sense of weakness, but from the consciousness of superior strength. The British Government well knows that, if occasion required it, a British military force would be able to destroy the town of Canton, not leaving one single house standing, and could thus inflict the most signal chastisement upon the people of that city." Chafing under the dissatisfaction of the existing ar- rangements, a movement was put on foot to effect a re- vision of treaties. In accordance with the American and French Treaties, the revision was to take place at the end of twelve years, 11 that is, in 1856. While the Treaty with Britain did not provide for revision, the operation of THE OPENING OF CHINA 11 the most favored nation clause 12 would nevertheless give the British the same right. They first attempted to induce Commissioner Yeh of Canton to enter into a treaty revision, but the latter declined. They then went North, first to Nanking and from thence to Peiho, but at each turn they were told that no material or radical modifications could be made and that the only channel of diplomatic intercourse and hence of treaty revision was Commissioner Yeh of Canton. Baffled by this opposition, they became convinced that the only way to bring about a treaty revision was to use force, or, in other words, to make another war. Events soon developed that excuses were found. On February 29, 1856, Auguste Chapdelaine was executed by the local Chinese authority of Kwangsi after a judicial trial. He was convicted of the crime of coming out of the five treaty ports where the foreigners were supposed to be confined, and also of stirring up rebellions in Kwangsi against the government. The French envoy protested. He pointed out that in accordance with the treaty pro- vision regarding extra-territoriality, Frenchmen should be punished only by French authorities. 13 As no satisfaction could be obtained, France was ready to declare war. Availing herself of the cooperation with Great Britain in the Crimean War (1854-1856) which had just drawn to its close at that time, she proposed to Great Britain that the two Allies should continue their cooperation and make war in common on China, to which the British readily assented. The primary motive of the French was to protect Catholic missionaries in China; that of Great Britain, to obtain treaty revision. Shortly after another incident occurred, which gave the Britisli an added impetus to enter upon the second war. On October 8, 1856, the lorcha Arrow was boarded by Chinese soldiers, and twelve of the Chinese crew were taken away. The Arrow was one of those boats owned by the Chinese but flying a British flag 12 THE DIPLOMATIC HISTORY OF CHINA under registration at Hongkong, engaged generally in the :: not infrequently in smuggling. The British at once protested. They claimed that the Ar- row, flying a British flag, was British territory and that ould be made thereon only with the consent of British. The Chinese on the other hand, contended that the lorcha was a Chinese hoat and that they were only seeking a notorious rohber among the Chinese crew. It was later discovered that the lorcha's license under British protection had, according to the law of Hongkong, ex- pired eleven days before the incident, which meant, of course, that the lorcha was no more under the British protection. 14 To this the British made the rebuttal that it was impossible for the lorcha to reach Hongkong in time for the renewal of the annual license when engaged in coasting trade. The war would have commenced earlier, had not the Indian Mutiny intervened on May 13, 1857, which neces- sitated the temporary diversion of the British land forces. Naval warfare, however, began in the summer of 1857. Thus arose the second war between China and Great Britain, and this time France was an added factor in the contest. 15 The Allies won the war. As a consequence, Great Britain concluded the treaty of Tientsin, June 26. 1858, France, on June 27, Russia, on June 13, and the United States, on June 18. These four treaties were, in general, approximately the same, and, because of the most favored nation clause, the privileges conceded to one were ex- tended to all the others. We shall, therefore, take the British Treat}- as the model which has determined diplo- matic relations of China with the Western world ever since. The treaty of Nanking of August 2'\ 1842, was confirmed (Article l). 1 " The trade regulations of July, L843, writ- abrogated and likewise the supplementary treaty of October, 1843 (Article 1). "His Majesty the Emperor of China hereby agrees, that the Ambassador, THE OPENING OF CHINA 13 Minister, or other diplomatic agents so appointed by her Majesty the Queen of Great Britain may reside with his family and establishment, permanently at the Capital, or may visit it occasionally at the option of the British Government" (Article 3). Rights of diplomatic immuni- ties as established in international usages were accorded to the British (Article 4) and the Chinese representative reciprocally. Religious tolerance was provided. "Brit- ish merchant ships shall have authority to trade upon the great river (Yangtze)." Chinkiang was to be opened at once to foreign trade; Hankow and Kiukiang were later selected as the other trade ports (Article 10) ; Nevv- chang, Chefoo, Taiwan, Swatow and Kiungchow were to be opened to foreign trade (Article 11). "All ques- tions in regard to rights, whether of property or per- son, arising between British subjects, shall be subject to the jurisdiction of the British authorities" (Article 15). Tariff revision might be demanded at the end of ten years (Article 27). Transit duties were fixed at the rate of two and one-half per cent ad valorem — half of the tariff rate. Most favored nation treatment of the most comprehensive kind was accorded : "The British Government and the sub- jects are hereby confirmed in all privileges, immunities, and advantages conferred on them by previous treaties; and it is hereby expressly stipulated that the British Gov- ernment and its subjects will be allowed free and equal participation in all privileges, immunities, and advantages that may have been or may be hereafter granted by his Majesty the Emperor of China to the government or subjects of any other nation" (Article 54). A supple- mentary agreement was signed at Shanghai on November 8, 1858, regulating trade and fixing the tariff at five per- cent, ad valorem with a free list. The ratification of the British, French and Russian Treaties was t<> he effected at Peking within one year from tlu- date of signature. ' 'nly thf American Treaty did not so provide. The French and the British accord- 14 THE DIPLOMATIC HISTORY OF CHINA ingiy went up North to secure ratification, but upon arrival at Taku, the Allies found that the forts were re- constructed and the river was blockaded by heavy chains. In an attempt to force their way through, they were dis- astrously repulsed by the fire of the Taku forts. Reen- forced, they came up again and this time silenced the forts, and pushed up the river until they reached Chang- chiawan, whereupon the Peking Court sued for peace. The provisions that were most obnoxious to the Im- perial Court were the residence in Peking of the diplo- matic representatives, the opening of the Yangtze to for- eign trade and the right of purchase of goods in the in- terior. These distasteful provisions led to the renewal of resistance on the part of the Imperial Court. Compromise might have been reached and peace con- cluded, had not another unfortunate event occurred which impelled the Allied forces to march to Peking. On September 18, 1860, a British reconnoitering party and also a French party were ambushed at Changkiawan by the Imperial forces and carried to Peking, where they were subjected to torture and imprisonment. This led to the onward march of the Allies to Peking. As an act of revenge, the British set fire to the beautiful Summer Palace, Yuan Ming Yuan. Thereupon, the Im- perial Court fled to Jehol, leaving Prince Kung to ar- range the terms of peace. The subsequent treaties of peace signed at Peking on October 24, with the British, and on October 25, 1860, with the French, concluded the war. An apology was to be offered for the obstruction given by the Taku forts. 17 The Treaty of Tientsin was confirmed and rati- fied. The right of diplomatic representatives to reside at Peking was confirmed. An indemnity of eight mil- lion taels was to be paid to the British and the French Government respectively. Tientsin was to be opened as a treaty port. Kowloon was to be ceded to Great Britain as a buffer to Hongkong. The Americans, un- THE OPENING OF CHINA 15 willing to be unfriendly to China, had exchanged their treaty of Tientsin on August 16, 1859, at Peitang. During the advance of the allied forces on Peking and their subsequent occupation thereof, the Russian rep- resentative, General Ignatieff, played a most skillful diplo- matic game. On the one hand, he threatened that a Rus- sian fleet would be ordered to Peitang. On the other, he offered cannon and supplies to the Imperial Court and persuaded the Allies to withdraw. Posing as the savior of China, he pressed for the cession of the Trans- Usuri territory. 18 As a reward for his service, he caused the Imperial Court to conclude the treaty at Peking on November 14, 1860. It was to be a supplement to the previous treaty of Aighourn of May 16, 1858, and the treaty of Tientsin of June 13, 1858. It was mainly to fix unsettled boundary lines and to regulate commercial and diplomatic relations. The Eastern frontier was defined ; the territory North of the Amur was to belong to Rus- sia, and that to the South to China. 19 By this agreement China lost her maritime province east of the Usuri. The Western frontier was also delimited. 20 Thus, it can be said that the opening of China was a slow process. Up to 1842, foreign trade was largely confined to Canton with Macao as the base, except the Russian trade at the Northern frontier. The first war between China and Great Britain resulted in the opening of South China through the portals of the five treaty ports as provided in the Treaty of Nanking, 1842. The Treaty of Tientsin of 1858 effected the opening of the Yangtze. It was not, however, until I860, that by tin- Treaty of Peking in 1860, North China was opened through the door of Tientsin, and the diplomatic relation with the Imperial Court was definitely established. Thus, while the process of opening is still going on in China, - as the interior of China IS, as yet, not open to foreign trade and residence, — it may nevertheless he said that 16 THE DIPLOMATIC HISTORY OF CHINA the period of 1689-1860 marked the intial stage of the opening uf China. NOTES TO CHAPTER I 1. Morse, the International Relations of the Chinese Empire, Vol. I, p. 54. 2. Ibid., p. 216. His order reads in part as follows : "I now proceed to issue my commands. When this order reaches the foreign merchants, let them with all haste pay obedience thereto, and let them deliver up to the government every particle of the opium on board their store-ships. Let the Hong merchants make a list of the opium delivered by each firm, in order that all surrendered may be accounted for, so that it may be burnt and destroyed, and that thus the evil may be entirely extirpated. There must not be the smallest atom concealed or withheld. At the same time let these foreigners give a bond, written jointly in the foreign and Chinese language, making a declaration to this effect; 'That their vessels, which shall hereafter resort hither, will never again dare to bring opium with them: and that, should any be brought, as soon as discovery shall be made of it, the opium shall be forfeited to government, and the parties shall suffer extreme penalties of law : and that such punishment will be willingly submitted to.'" 3. Morse, Vol. I, ibid., p. 229. 4. Hertslet's China Treaties, Vol. I, pp. 7-13. 5. The treaty was abrogated by Article 1 of the Treaty of Tientsin, June 26, 1858, and embodied in the subsequent Treaty. 6. The Convention of April 4, 1846, Hertslet's China Treaties, Vol. 1, pp. 15-16. 7. Agreement of April 6, 1847, Hertslet, 17-18. 8. Morse, op. cit, Vol. I, p. 396. 9. Ibid., p. 398. Lord Palmerston to Mr. Bonham, No. 68, August 18, 1849. 10. Meanwhile the Russians in the North were making ad- vances in frontier trade. On July 25th, 1851 (Hertslet, Vol. I, pp. 449-454, No. 79), the Treaty of Kouldja was signed between Russia and China regulating the trade between Hi and Tarbagatai. The appointment of consuls was provided to supervise the fron- tier trade. The disputes were to be decided by these agents. The frontier commerce was to be freed from all duties. Ex- tradition of criminals was provided. Pasturages were to be al- loted for beasts of burden of Russian merchants and to be kept by them, and plots of ground to be allotted to Russian merchants to build their houses and factories. Two sheep out of every ten imported at Hi or Tarbagatai were to be given over to the Chinese government for an equivalent in cloth. THE OPENING OF CHINA 17 11. Hertslet, op. cit, p. 268, Article 35, Treaty of Whampoa, October 24, 1844; also Morse, Vol. I, op. cit., p. 414. 12. Article 8, supplementary treaty, October 8, 1843, State Papers, Vol. 31, p. 133. 13. Hertslet, Article 28, Treaty of 1844, p. 267. 14. Papers relating to proceedings of H. M. naval forces at Canton, October to December, 1856, presented to both Houses of Parliament, 1857, pp. 1-10. Cf. Morse, Vol. I, op. cit., p. 422. 15. While the war was proceeding unfavorably against China, Russia took advantage of the situation. She caused China to sign the Treaty of Aighoun of May 16, 1858. (Hertslet, op. cit., 454-5, Xo. 80.) The boundaries was defined along the course of the Amur River. "La rive gauche du flueve Amour, a partir de la riviere Argoun jusqu' a l'enbouchure de I'Amour, appar- tiendra a l'Empire de Russie, et Sa rive droite, en aval jusqu' a la riviere Oussouri, appratitnera a l'Empire Ta-Tsing; lis territoires et endroits situes entre la riviere Oussouri et la mer, comme jusqu' a pre sent, seront possedis en common par l'Empire Ta-Tsing et l'Empire de Russie, en attendant que la frontiere entre les deux Etats y soit reglee." (Art. 1, Hertslet, op. cit., p. 454.) The navigation of the Amour, Sungari, and Ussuri was to be opened onlv to the Russian and Chinese vessels. 16. Hertslet, op. cit., Vol. I, pp. 19-35, No. 6. 17. Ibid., Vol. I, pp. 48-52, 287-291. 18. Morse, op. cit., Vol. I, p. 613. 19. Hertslet, op. cit., Vol. I, pp. 462-471, Article 1. 20. The civil disputes were to be settled amicably by the parties themselves, by means of arbitrators chosen by themselves and with the help and cooperation of the consuls and local authorities (Article 8). Criminal cases are to be adjudged ac- cording to the laws of their own country. II THE LOSS OF DEPENDENCIES (1860-1895) The second period of the diplomatic history of China dates from the close of the war with Great Britain and France (1857-1860) to the end of the war with Japan (1894-1895), covering a span of thirty-five years. It continues the first period in that it carries on the process of the opening up of China, which, as we have seen, was the chief feature of the first peroid. It, however, has its own distinctive feature which differentiates it from the first period. This distinctive feature is the gradual loss of China's dependencies. As if Western aggression worked from outside, the opening of China was followed by the loss of her dependencies ; the integrity of her own soil was not threatened until the period ensuing. During this period China lost no less than nine dependencies, — the Liuchiu Islands to Japan in 1881, the Western parts of Hi to Russia in 1881, Tongkin and Annam to France in 1885, Northern Burma to Great Britain in 1886, and Sikkim to the same in 1890, and Korea, Formosa, and the Pescadores, to Japan in 1895. As I have said, this period continues the first period in that it carries on the process of the opening up of China. During the period other Western nations came into treaty relations with China. To the list of the Treaty powers, which hitherto was limited only to Great Britain, the United States, France, Russia, Nor- way and Sweden, were added the newcomers which signed their treaties of friendship, commerce and navi- gation. 18 THE LOSS OF DEPENDENCIES 19 Germany, September 2, 1861. l * Denmark, July 13, 1863. 2 Netherlands, October 6, 1863. 3 Spain, October 10, 1864. 4 t Belgium, November 2, 1865. 6 Italy, October 26, 1855. 7 Austria-Hungary, September 2, 1869. 8 Japan, 1872. 9 Peru, June 26, 1874. 10 Brazil, October 3, 1881. " Portugal, December 1, 1887. 12 1 These treaties of friendship, commerce and navigation were, in general, virtually the same as the Treaty of January 26, 1858, signed at Tientsin between China and Great Britain, which had served as the model for sub- sequent commercial treaties. Diplomatic relations between China and the Treaty powers were, and remained, for the first half of this period most unsatisfactory. The Tsungli Yamen, sup- posed to be the Foreign Office, was not organized as were the other departments of the government, but composed of the leading ministers or Grand Secretaries of the Imperial Court. It was really not a department, but the Cabinet itself. What is worse, it did not attend to the most important diplomatic affairs. It often re- ferred them to Li Hung-chang, the viceroy of Chili, who dominated the foreign relations of China throughout the period. It was he that negotiated most of the treaties and conventions of this period, while the Tsungli Yamen was merely the office of record. Diplomatic intercourse was again hampered by the * With a supplementary commercial convention of March 31, 1880, and an exchange of notes on the same date regarding tonnage dues. t With a subsequent convention of Nov. 17, 1877 a regulating nigration to < )uba. | With a supplementary convention of the same date respecting the opium trade of Macao 11 and a separate agreement of the •ame date respecting the collection of duties on opium. 14 20 THE DIPLOMATIC HISTORY OF CHINA persistent refusal of the Imperial Court to grant an audience with the Emperor, whose minority was offered as the excuse. Thus, the foreign ministers remained at Peking with their credentials undelivered. And it was not until June 29, 1873, when the Emperor had reached his majority, that an Imperial audience was granted for the first time. Diplomatic intercourse was further rendered inade- quate by the absence of any Chinese ministers resident abroad. While the foreign ministers were pounding on the doors of the Tsungli Yamen for proper and satis- factory relations and for an Imperial audience, the Chi- nese Government remained ignorant of the necessity of despatching ministers abroad. Thus, China was de- prived of adequate means of diplomatic intercourse with other states, except through the foreign embassies that had made their residence in Peking. And the situation was not corrected until late in 1877 when the first Chi- nese envoy, Kuo Sung-tao was sent to London. A year later resident ministers were established in most of the capitals of Europe and America. In addition, the popular feeling of the Chinese toward foreigners was yet hostile. They felt that their glorious isolation was annulled, and their superiority challenged by the Western nations. They resented the enforced Occidental intercourse, and therefore their feeling was anything but friendly toward foreigners. In fact, the hostile feeling increased as Western aggression increased. The culmination occurred in the Boxer Uprising of 1900, when the Chinese of North China made a fa- natical endeavor to drive the "foreign devils" into the sea. During this period one notable manifestation of this hostile feeling occurred, namely, the Tientsin Mas- sacre of 1870. The French Catholic missionaries estab- lished an orphanage in Tientsin and adopted the prac- tice of paying any one who delivered to the asylum THE LOSS OF DEPENDENCIES 21 children found or rescued from lack of parental care. As a consequence, some evil-minded Chinese kidnaped well-to-do children and brought them to the orphanage in return for monetary rewards. Thus rumors became current that the French missionaries were sending out agents to kidnap Chinese children. These rumors so infuriated the Chinese of Tientsin that on June 21, 1870, they assembled before the French Cathedral and demanded redress. The French Consul rushed out from his consulate with two pistols in his hands and fired at the magistrate who was trying his best to control the mob, hitting one of the magistrate's servants. This made the mob furious. The French Consul was surrounded and killed. They then set fire to the Cathedral and the mission and killed the Sisters of Mercy within the asylum. 15 The French immediately demanded redress, but be- cause of pre-occupation with the Franco-Prussian War of 1870, they did not resort to force as they had done in 1858-1860. The settlement was finally arranged, by which the Chinese Government was to pay an indemnity of 250,000 taels, to banish the prefect and magistrate to Amur for life, to put to death some twenty culprits and to send a mission of apology to Paris. 16 Another instance during this period of hostile mani- festation toward the foreigner was the murder of Mar- gary in 1875. Margary was a British consul detailed to assist the British mission of investigation that was to travel from British India to Yunnan through Bhamo. While on his way to meet the mission, and on the bor- der between Yunnan and Burma, he and his Chinese associates were set upon by the untwined tribes of the borderland under the jurisdiction of China. The affair was finally amicably settled by tin- Chef OO convention, 17 September 13, 1876, signed by 1 .i Hung-chang for the part of China and Mr. Thomas F. Wade for the part of Great Britain. The convi ntion was divided into three 22 THE DIPLOMATIC HISTORY OF CHINA sections. The first section dealt with the Yunnan case. The right of a second mission from India to Yunnan was granted (Article 4). An indemnity of 200,000 taels was to be paid on demand (Article 5). An Imperial letter of regret was to be despatched (Article 6). The second section treated of official intercourse and con- sular jurisdiction. The British Supreme Court for China and the Chinese Mixed Court at Shanghai were recognized. Judicial proceedings in criminal and mixed cases were defined. The third section dealt with trade. Foreign concessions were exempted from likin. Ichang, Wuhu, Wenchow and Pakhoi were to be opened to trade. Six ports of call were to be opened on the Yangtze River, Tatung, Nganking, Hukou , Wusueh, Luchikou and Shashih. 18 * The one redeeming feature, however, of this period of unsatisfactory relation was the Anson Burlingame mission to the Powers. He was the American Minister in Peking, 1862-1867. When he was about to retire from office in November, 1867, he was asked to head the Chinese Mission. Urged by Sir Robert Hart, who was the sponsor of the Mission, 20 he accepted the ap- pointment and went abroad on behalf of China. On arrival in the United States he toured throughout the country with his magnetic oratory, depicting China as about to reform and take on the new garb of Western civilization. At Washington, on July 28, 1858, he signed the Treaty of Washington,'- 1 as forming additional arti- cles to the Treaty of Commerce between the United States and China, June 18, 1858. Free emigration into either country was declared to be "the inherent and in- alienable right of man." 22 The most favored nation treatment with respect to travel, residence and education, except the privilege of naturalization, was reciprocally ac- corded. 23 From the United States he proceeded to Eu- * In a separate article, the right of the British Mission to Tibet was granted. 19 THE LOSS OF DEPENDENCIES 23 rope. There he was not so warmly received, nor did he succeed in concluding any further treaties with Eu- ropean powers, but he did succeed, in a reasonable measure, in enlisting the sympathy of the west for China, and, to no small extent, in softening the European impetuosity for an aggressive policy in China. His un- timely death at St. Petersburg, however, brought his mission to an abrupt end. The first dependency that was to disappear at this period from among the satellites of the Chinese Empire was the Liuchiu Islands. It was done in such a subtle way that it illustrates almost all the later cases of the loss of China's dependencies. The Liuchiu Islands first sent tribute to China in 1372 and to Japan in 1451. The Princes of the Islands had received investiture of office from the Emperor of China since the reign of Yunglo (1403-1425). In 1609, however, the Islands were con- quered by Prince Katsuma of Japan, and from that date on the Princes received their investiture of office from both China and Japan. Thus, the Islands remained under the joint suzerainty of China and Japan. In 1871 an incident occurred which brought the question to the front. Some Liuchiu sailors were shipwrecked on the coast of Formosa and were cruelly murdered by the wild tribes thereof. The Japanese immediately made repre- sentation to the Peking Imperial Court demanding re- dress for the wrong. Li Hung-chang was inclined to have China accept tin- responsibility of the case, but the Tsungli Yamen decided that China had no jurisdiction over the Eastern half of Formosa— the section inhabited by wild triln^, and therefore, declined to assume the responsibility. Thereupon Japan took advantage of the decision, ami fitted out an expedition in 1S74 to Formosa and began to punish the wild tribes, these being considered as out- side of tlie Chinese jurisdiction. This bold affront the 24 THE DIPLOMATIC HISTORY OF CHINA Peking Court resented and demanded that Japan should withdraw her forces from Formosa, — a territory belong- ing to China, — and supported the demand by the despatch of a large Chinese army to Southern Formosa. The two hostile armies stood facing each other on the Island, and for a while war seemed to be inevitable. But through the friendly mediation of the British Minister, a settlement was finally effected. The action of Japan was justified; Japan pledged to withdraw; China agreed to pay an indemnity of half a million taels. After this settlement the Liuchiu Prince still sent tribute missions to the Peking Court, against which the Japanese Min- ister entered vigorous protests. In 1879 General U. S. Grant, while on his tour around the world, advised that the Liuchiu Islands be partitioned between China and Japan. In 1881, however, the Liuchiu Islands were definitely recognized as being under the suzerainty of Japan. Thus, by a clever maneuver of diplomacy, Japan successfully asserted her claim of sovereignty over the Liuchiu Islands ; and thus, through sheer ignorance and incompetency, China lost her claim of suzerainty. Com- menting on this, H. B. Morse said : "More significant even than this readiness to pay was the facile abandonment of the Liuchiu Islands, which had paid tributes for five centuries — a prelude to the successive lopping off of all the tributary dependencies, one after the other — Annam, Korea, Burma; and, more or less completed, Manchuria, Mongolia and Tibet." 25 The next Chinese dependency to bear the brunt of Western aggression was Hi, a part of the great north- western territory of China. In 1866 a series of rebel- lions broke out in Hi and Kashgaria. Out of the tur- moil emerged the Conquerer Yakub Beg, who established his rule over Kashgar and Yarkand. Simultaneously the Dungani Tribe rose and conquered the eastern part of the northwestern territory, overran the Chinese THE LOSS OF DEPENDENCIES 25 province of Kansu and menaced Shensi and Hupeh. In 1867, Tso Tsung-tang, a veteran general of the Taiping rebellion, was commissioned to pacify the re- gion. He first drove back the Dungani Tribe from Hupeh and Shensi, and then he advanced to Kansu where he took Suchow after a continuous seige of three years. During this time he made his troops grow crops and thus fed his own army. Having captured Suchow, he advanced straight on and conquered city after city. By 1878, he had the entire territory pacified and brought under the control of the Chinese Government. Prior to this, and taking advantage of the rebellions, Russia in 1871 moved troops into Kuldja and occupied Hi, promising to restore the territory to China as soon as China should be able to assume the functions of a territorial sovereign. So when Tso Tsung-tang had successfully pacified the rebellions, the Chinese Govern- ment demanded the restoration of Hi. In 1879, Chung- chow was sent to Russia, and there he negotiated the treaty of Livadia, signed on September 15, 1879. The western and richer part of Hi was to be ceded to Russia. The strategic passes of Tienshan were to be also surrendered to Russia. Five million roubles were, in addition, to be paid for the restoration of the rest of Hi. 26 "Such conditions might be imposed after defeat in war, but never granted as the result of negotiations." 2T Chungchow was condemned to death and his life was saved only through the gracious interposition of Queen Victoria. The next year, 1880, Marquis Tseng, the son of the illustrious General Tseng Kuo-fan of the Taiping re- bellion, was sent to Russia to open the negotiation again for the restoration of Hi. lie succeeded in signing, on February 24, 1881, the Treaty of St. Petersburg,-" with a protocol-" and supplementary regulations for inland trade.' 1 " The Chinese authority in Hi was reestablished (Article 1) 31 but the western part of Hi was ceded to 26 THE DIPLOMATIC HISTORY OF CHINA Russia. 32 The Takkas Valley and all the passes between Hi ami Kashgaria and the parts of Eastern Turkestan, ceded to Russia by Chungchow, were all regained, Rus- sia still, however, retaining the western part of Hi, for- merly ceded to them by Chungchow. 8 ' The Russians were to have the right to trade in Mongolia and Hi free from payment of duties, 34 but the Russian caravans were to stop at the frontier of China proper, whereas Chung- chow had allowed them to march as far inland as Han- kow. 35 An increased indemnity, however, of nine million roubles was to be paid. Thus, the western parts of Hi were lost to Russia, and the eastern and greater part thereof was rescued from the grasp of Russia only by the diplomatic genius of Marquis Tseng, and martial zeal of General Tso Tsung-tang. The third dependency that was to pass out of the control of China was Annam. Annam was conquered by China and became a vassal during the Han Dynasty. In 1407 it was again conquered by Emperor Yunglo of the Ming Dynasty, and this time it was annexed to China. As an integral part of the Empire, it was ad- ministered in the Chinese manner. It was divided into fifteen fus, forty-one chows, and two hundred and eighty hsiens. 36 But twenty years later it reverted to the old condition of a vassal state. Ever since then, there had been no evidence in existence that it had failed to re- ceive the investiture of its King from China or send a mission of tribute once in four years. 37 During China's second war with Great Britain and her French ally, Annam began to break away from China. In 1858, France and Spain, because of succes- sive murders of their missionaries, sent an expedition to Annam. The war that ensued continued for three years and a half, and terminated with the Treaty of Saigon, June 5, 1862. Spain was to receive a part of the indemnity of four million dollars; and France THE LOSS OF DEPENDENCIES 27 to obtain the cession of Saigon, three provinces of Cochin-China and the Island of Pulo Condor. The next step in the alienation of Annam from China was the Treaty of Alliance between France and Annam concluded on March 15, 1874. France recognized the complete independence of Annam and pledged to pro- tect the integrity of the same. Thus, by this pretext, France supplanted China as overlord, and Annam changed her allegiance. The last step in the control of Annam was the estab- lishment of the French protectorate by the Treaty of June 6, 1884. Annam recognized and accepted the pro- tectorate of France. France controlled the relations of all foreign Powers, including China, with the Annamese Government. 3S Cochin-China was to be enlarged. Ton- kin was to be administered by French residents. Annam was still to be under the Annamese except the customs and public works. The Red River was to be guarded by French military posts. Having thus clinched her protectorate over Annam, France saw that the only obstacle standing in the way of the complete consummation of absorption was China. In 1881, China protested through Marquis Tseng at Paris against the French recognition of the complete independence of Annam and asserted her claim of suzerainty. She also reenforced her protest by the despatch of Imperial troops who cooperated in the Red River Basin with the Black Flags, the remnants of the Taiping rebels, who had been guarding the Red River ever since 1873. In order to remove this obstacle, France at last resorted to war. On March 15, 1883, a war credit of 5,500,000 francs was voted and an expedition was thereafter senl to the Kci] River. Several engage- ments took place, and while the Chinese made a stub- born stand, the French were at last successful in cap- turing the important centers of the Red River, Hanoi, Bontag and Bacninh. 28 THE DIPLOMATIC HISTORY OF CHINA At this juncture, and in order to avoid further blood- shed, the convention of Tientsin was entered upon, .May 11, 1884, between Li Hung-chang representing China and Commandant Fournier representing France. 89 France engaged to respect and protect the Chinese frontiers bordering on Tonkin (Article 1). China was to with- draw her garrisons from Tonkin and to respect the treaties between France and Annam (Article 2). France was to renounce her demand for indemnity (Article 3), but in return was to receive the privilege of frontier trade between Annam and China (Article 3). An unfortunate misunderstanding, however, soon oc- curred, which brought on the war between France and China. Li Hung-chang and Commandant Fournier had arranged that the Chinese Imperial garrisons should withdraw from the Kwangsi border within twenty days, that is, by June 6, and from the Yunnan frontier within forty days, that is, by June 26, but the French advanced to Langson before the lapse of the time allowed for evacuation and were severely repulsed at P.acle by the Chinese garrisons who had not yet received instruction for withdrawal. Thereupon the French demanded an indemnity of 250,000,000 francs but later reduced the amount to 80,000,000 francs. In July Admiral Courbet sailed with his fleet into Foochow Harbor with the cordial welcome of the Chinese authorities, but on August 23, and with- out previous warning, attacked a Chinese fleet lying in the same harbor, and practically annihilated it. The Chinese Government thereupon declared war. On sea France was victorious, but on land China stood her ground. On March 28, 1885, the Chinese recaptured Langson. On June 9, 1885, the treaty of peace was signed, vir- tually reaffirming the convention of Tientsin of May 11, 1884.*° The French engaged to respect the Chinese southern boundary between China and Tonkin (Arti- THE LOSS OF DEPENDENCIES 29 cle 1). China agreed to respect the treaties between Annam and France (Article 2). The privilege of fron- tier trade between Tonkin and China was granted Article 5). Trade regulations between Tonkin and Yunnan, Kwangsi, and Kwangtung were to be made by a joint commission (Article 6). China was to ask France for assistance, both in personnel and material, in the construction of railways between Tonkin and Yunnan, but this was not to be construed as to give exclusive right in favor of France (Article 7).* 1 Closely following the alienation of Annam came the loss of Burma, a vassal state conquered by the Mongols during the reign of Kublai Khan in 1284 A.D., 42 and which sent missions of tribute once every ten years. As early as 1862, Great Britain seized lower Burma just at the time when France seized Cochin-China. In 1886, one year after the French occupancy of Annam and the subsequent recognition by China of the transfer of suzerainty, Great Britain completed her seizure of Up- per Burma and won the recognition by China of the British rule over the whole of Burma by the convention signed on July 24, 1886. 43 Burma was still allowed to send her decennial tribute mission to Peking, Article l). 44 China recognized British authority and rule in Burma : "China agrees that, in all matters whatever ap- pertaining to the authority and rule which England is now exercising in Burma, England shall be free to do whatever she deems fit and proper." Article 2). 45 In 1890 the British protectorate over Sikkim was rec- ognized by the convention of March 17, 1890. 48 The boundary between Tibet and Sikkim was defined (Ar- ticle 1 ). The British protectorate over Sikkim was recog- nized by China (Article 2) : "It is admitted that the Brit- ish Government, whose protectorate over the Sikkim State is hereby recognized, has direct and exclusive control over the internal administration and foreign relations of that 30 THE DIPLOMATIC HISTORY OF CHINA state, and except through and with the permission of the British Government, neither the ruler of the Slate nor any of its officers shall have official relations of any kind, formal or informal, with any other country." 47 The last group of dependencies to be severed from the control of China were the Pascadores, For- mosa and Korea. Korea was a vassal state of China for many centuries. In 1637 she was conquered by the Manchus. Ever since then, for more than two cen- turies the relation of Korea as a vassal state to China had never been questioned. In 1876, however, Japan made her first move which led to her subsequent control of that land. She covenanted with Korea on February 26 of that year, recognizing the full independence of Korea, thus ignoring the suzerainty of China. 48 Arti- cle 1 read: "Chosen (Korea) being an independent state, enjoys the same sovereign rights as does Japan." 49 On December 4, 1884, a violent riot broke out. The Chinese Resident General Yuan Shih-kai, who later be- came President of China, led his Chinese troops and proceeded to protect the Imperial Palace of the Korean Emperor, but upon his arrival he found the palace oc- cupied by Japanese troops. Thereupon, Yuan Shih-kai attacked the Japanese guards. A general commotion ensued, amidst which the Japanese fought their way out from Seoul to Chemulpo, where they boarded a Japa- nese steamer. To settle this incident, the convention of Tientsin was signed on April 18, 1885, 50 by Li Ilung-chang rep- resenting China and by Ito representing Japan. Both agreed to withdraw their troops from Korea within four months. The Korean King was to be asked to employ military instructors of a third Power to drill a sufficient force for the preservation of order and peace. "In case of any disturbance of a grave nature occurring in Korea which necessitates the respective countries or THE LOSS OF DEPENDENCIES 31 either of them to send the troops to Korea, it is hereby understood that they shall give, each to the other, pre- vious notice in writing of their intention so to do, and that after the matter is settled they shall withdraw their troops and not further station them there." 51 In March, 1894, another riot broke out in Korea led by the Tonghaks, — a Korean political party with the platforms of reform and expulsion of all foreigners. "Down with the Japanese and all foreigners," was one of their watchwords. 52 During the same month another event occurred which aggravated the situation. One of the leaders of the riot of December, 1884, by the name of Kin Ok-Kim, who was in refuge in Japan, was de- coyed to Shanghai in March, 1894, and there treacher- ously murdered by a Korean. At the request of the Korean King, both the murdered man and the murderer were conveyed to Korea, where the former was desig- nated as a rebel and his dead body decapitated and quartered, while the murderer was set free as a national Jiero. The Korean King appealed to the Peking Court for protection and help in the face of the Tonghak rebellion and the general excitement over the murder of Kin Ok-Kim. To this appeal the Chinese Government re- sponded by the despatch of troops to Korea. In com- pliance with the Treaty of Tientsin, April 18, 1884, notice was given to Japan, but this did not satisfy Japan. She charged China with breach of faith for not giving notice before the despatch of troops, though she herself sent even a larger body of soldiers. Meanwhile, the Tonghaks had been put down by Korean soldiers. Thus, although the cause of the trouble was already eliminated, the two hostile armies stood face to face in Korea watching each other. China suggested a simultaneous withdrawal of troops and a mutual refrainnunt from any interference in the internal administration of Korea, to which Japan ob- 32 THE DIPLOMATIC HISTORY OF CHINA jected. As a counter move, she suggested that China should cooperate with her in the reform of the internal administration of Korea, from which China dissented. Meanwhile an event occurred which led to the declara- tion of war on both sides. A British steamer by the name of Kozvslicng transported Chinese troops to Korea under the convoy of Chinese cruisers and flying a British flag. It was stopped at Prince Jerome Gulf by a Japa- nese squadron. Upon examination of the papers, the Japanese signaled "follow me," which the Chinese troops on board the ship refused to obey. The Naniwa then hoisted the red flag and opened fire. The Kozl'sIiciuj was sunk in less than half an hour, and most of the Chinese soldiers on board were drowned. 'War was thereupon declared by both countries. Let us endeavor to find the real motives of Japan which brought about this war. China had already con- sented to withdraw ; the Tonghaks had been suppressed ; and yet Japan still refused to be satisfied. She insisted that China should cooperate with her in the reforma- tion of Korea, when it was an open question as to the legal and ethical rights of Japan in enforcing reforms on another country. The real motives, as we find, how- ever, appeared to be that Japan wished to incite a war with China at that juncture, so that she could achieve her own position of equality. For up to this time she had been making desperate endeavors to secure the abrogation of extraterritoriality and tariff restraint from the Treaty Powers, and so far she had only suc- ceeded in gaining the consent of Great Britain on June 16, 1884. She needed a demonstration of her military prowess so that she could convince the rest of the Powers that she was entitled to a complete recovery of her judicial and tariff autonomy. Added to this was the motive that the integrity of Korea was necessary for the safety of Japan. In fighting lor the independ- ence of Korea, Japan was fighting for her own inde- THE LOSS OF DEPENDENCIES 33 pendence and integrity. This was verified by the testi- mony of a Japanese diplomatic representative in Europe: "This, at least, I can tell you for certain, we neither can nor will Leave Korea again until our aim has been obtained in one way or another. We are fighting in Korea for our own future — I might also say for our independence. Once let Korea fall into the hands of a European power, and our independence will be threat- ened." " The victories of Japan both on land and sea are known to the world. The war was finally concluded by the Treaty of Shimonoseki, signed on April 17, 1895. 54 The independence of Korea was fully recognized by China (Article 1). The Liaotung peninsula, Formosa and the Pascadores were to be ceded to Japan (Article 2). An indemnity of 200,000,000 Kuping taels was to be paid (Article 4). All previous treaties between China and Japan were to be terminated and new treaties, based on "the treaties, conventions and the regulations now sub- sisting between China and the European powers," were to be concluded (Article 6). 57 The most favored nation treatment was to be accorded to Japan and her subjects (Article 6). Shashih, Chung-King, Soochow, and Hang- chow were to be opened to trade (Article 6). M Hardly had the treaty of Shimonoseki been made than the Three-Power intervention occurred. Russia, Germany and France each presented identical notes, mutatis mutandis, to the Japanese Government advising the latter not to occupy the Liaotung Peninsula in per- petuity. Consequently the convention was signed on November 8, ' For the retrocession of Liaotung, in return for which China paid an additional indemnity of 30,000,000 Kuping tael>. A year later, iii pursuance of Article 6 of the Treaty of Shimon. hi providing for the annulment of all pre- vious treaties between ( hina and Japan and for the 34 THE DIPLOMATIC HISTORY OF CHINA conclusion of new treaties, a treaty of commerce and navigation was signed on July 21, 1896, virtually plac- ing [apan on a par with the other treaty Powers. Con- sular jurisdiction for the Japanese subjects was provided (Articles 20, 21, 22). 00 The most favored nation treat- ment was accorded to Japan and her subjects "in all privileges, immunities and advantages that may have have been or may hereafter be granted by his majesty the Emperor of China to the government or subjects of any other nation" (Article 25). 01 A subsequent protocal was signed at Peking on October 19, 1896, re- specting the Japanese settlements in the newly opened ports and also other matters. 02 This concludes the second period of the diplomatic history of China. In recapitulation, it may be said that it witnessed two general tendencies or forces at work. First, it witnessed the further opening of China which was a continuation of that of the first period. Addi- tional' treaty ports were opened to trade ; more commer- cial treaties were concluded ; and other Western states arrived to enter into treaty relations with China. As a reaction against this unwelcome intercourse and aggres- sion, hostile feeling was engendered among the Chinese which manifested itself in spasmodic murders of mis- sionaries and finally culminated in the Boxer Uprising, which we shall discuss in the next chapter. Second, this period witnessed the initial onslaught of Western aggression resulting in the loss, on the part of China, of a large number of her dependencies. It witnessed the loss of the western part of Hi to Russia, of Annam and Tonkin to France, of Burma and Sikkim to Great Britain, and of the Liuchiu Islands, the Pascadores, For- mosa and Korea to Japan. The attack on the integrity of China did not, however, occur until the next period when we shall note the general scramble for leases and concessions. THE LOSS OF DEPENDENCIES 35 NOTES TO CHAPTER II 1. Hertslet's China Treaties, Vol. 1, pp. 331-350. 2. Ibid., pp. 249-258. 3. Ibid., pp. 407-414. 4. [bid., pp. 512-522. 5. Ibid., pp. S22-S27. 6. Ibid., pp. 223-234. The Belgians were granted the privilege of trade by an Imperial letter dated July 25, 1845, which, how- ever, did not assume a treaty form. 7. Ibid., pp. 354-361. 8. Ibid., pp. 215-223. 9. State papers, Vol. 62, pp. 321-329. 10. Hertslet, op. cit., pp. 415-420. With a special agreement of the same date respecting Chinese immigrants in Peru (Hertslet, Vol. I, pp. 420-422). 11. Ibid., pp. 234-240. 12. Ibid., pp. 423-434. 13. Ibid., pp. 434 ; 435. 14. Ibid., pp. 435-436. A treaty of friendship, commerce and navigation was signed between Portugal and China on Aug. 13, 1862, but it was not ratified because of the dispute over the sovereignty of Macao — state papers, Vol. 55, pp. 790-800; Herts- let, ibid., p. 422. 15. For a full account see H. B. Morse, The International Relations of the Chinese Empire, Vol. II, pp. 239-261. 16. Ibid., Vol. II, pp. 257-258. 17. Hertslet, No. 12, pp. 73-80. 18. Ibid., p. 77. 19. Also see No. 14, pp. 84-88; Hertslet, No. 16, pp. 90-91; No. 18, pp. 94-96. 20. Morse, op. cit., Vol. 2, p. 189. 21. Hertslet, No. 96, pp. 554-557. 22. Ibid., p. 556, Art. 5. 23. II. id., pp. 556-557, Arts. 6 and 7; also see No. 97, pp. 558- 560, Hertslet, p. 561, Art. 2; p. 562, Art. 4; No. 99, pp. 563-565; p. 563, Art 1. 25. Morse, <>p. cit., VoL II, p. 275. 2',. [bid., Vol. II, p. 332. 27. Ibid., VoL II, p. 332. 28. State papers, Vol. 72, pp. 1143-1150; Hertslet No. 85, PP. 483 I 29. State papers, Vol. 72, pp. 1150-1151. 30. State papers, Vol. 72, pp. 1151-1157. 31. Slate papers, Vol. 72, p. 1144; Hertslet, p. 483, Art. 1. 32. State papers, Vol. 72. p. 1144; Hertslet, p. 484, Art. 1. 33. Morse, op. cit, Vol. 2, p. 3, 34. Hertslet, p. 488, Art. 12. 35. Morse, op. cit., VoL 2, p. 338. 36 THE DIPLOMATIC HISTORY ( >l- CHINA 36. Ibid., Vol. 2, p. 341. 37. Ibid., Vol. 2, pp. 341-342. 38. [bid., Vol. 2, p. 351. 39. Hertslet, No. 44, pp. 293-294. 40. Hertslet, No. 46, pp. 296-300. 41. Slate papers, Vol. 76, p. 246, et. seq. 42. Encyclopaedia Britannica, 11th edition, Vol. 4, p. 843. 43. Hertslet, No. 15, pp. 88-90. 44. The Burmese sent her usual mission of tribute in 1895, but after that year the tribute missions stopped. 45. The boundary between Burmah and China was later deter- mined by a subsequent convention of March 1, 1894 (Hertslet, No. 20, pp. 99-109). Kulong was given to Great Britain and Kokang to China (Art. 3). Munglem and Kiang Hung were ceded to China, for which China pledged not to alienate them without the previous consent of Great Britain. This convention of 1894 was modified bv a subsequent agreement of Feb. 4, 1897 (Hertslet, No. 22, pp. 113-119), bj which China, in con- sideration of the consent of the British Government "to waive its objections to the alienation by China, by the Convention with France of June 20, 1895, of the territory forming a portion of Kiang Huny" (Hertslet, Vol. 1. p, 113), was to compensate Great Britain by territorial cessions including the State of Kokang and perpetual leases of certain tracts south of the Namwan River. The non-cession of Munglem and Kiang Hung without the previous consent of Great Britain was reiterated. A special article opened, as treaty ports, Wuchow, Sanshui and Kong Kun, and as ports of call, Kongmoon, Komchuk, Shuihing and Takhing. The convention of September 6, 1894 (Hertslet, pp. 110-113) affected the junction of the Chinese and Burmese telegraph lines. 46. Hertslet, No. 17, pp. 92-94. 47. To this convention was later appended a set of regulations signed on Dec. 5, 1893. Hertslet, No. 19, pp. 96-98. 48. State papers, Vol. 67, pp. 530-533. 49. State papers, Vol. 67, p. 531. 50. Hertslet, No. 61, pp. 361 -3o2. 51. State papers, Vol. 76, pp. 297-298; I bit, let, Vol. I, p. 362. 52. Morse, op. cit., Vol. Ill, p. 19. 53. Kolnischer Xeitung, July 25. 1894, cited in North China Herald, Sept. 7, 1894, quoted in Morse, op. cit., Vol. III. p. 29. 54. State papers, Vol. 87, pp. 799-804; Hertslet, pp. 362-369, No. 62. 57. Hertslet, p. 365, Art. 6. 58. HertsKt, pp. 368-369. 59. State papers, Vol. 87, pp. 1195-1197; Hertslet, Vol. I, No. 63, pp. 37i» 373. Hertslet, p. 379; cf. State papers, Vol. 62, pp. 322 and 323, Art,. 8 and 1_'. '■1 Hertslet, p. 381, Art. 25. 62. Hertslet, No. 65, pp. 382-383. Ill THE INTERNATIONAL STRUGGLE FOR CONCESSIONS (1895-1911) The third period of the diplomatic history of China dates from the close of the Chino-Japanese War ( 1895) to the beginning of the Chinese Revolution (1911). It is a period characterized by the international struggle for concessions. The first period (1689-1860), as we have seen, opened China to the trade and intercourse of Western nations. The second period (1860-1895), while continuing the first in the process of the opening of China, was chiefly characterized by the loss of dependencies. The third period, which is our present theme, witnessed the international struggle for concessions, which is prob- ably the most interesting in our study of the foreign relations of China. The last period, by the loss of her dependencies, had exposed China to the attacks of the West. For centuries China had surrounded herelf with a cordon of depend- encies which were to protect her from assault from the outside world. But now a large number of these depend- encies were taken away and China was exposed to the onslaught of Western Powers. Further, the Chino-Japanese War revealed to the world the relative incompetency of the Chinese Government. Hitherto China had fought with Western Powers, and although she had been beaten several times, she was nev- ertheless not considered so weak as to attract the un- scrupulous aggression of the West. In fact, during the Chino-French War of 1884-1885, the Chinese army stood li'i own ground very well. Put the war with Japan changed the opinion of the world. Japan was consid- 37 38 THE DIPLOMATIC HISTORY OF CHINA ered a secondary power in Asia. By one stroke she brought the giant to the ground. This was a victory of one Asiatic state over another. The world became convinced that China was following in the wake of Africa and that the nations should lose no time in taking what they could. Thus, during this period, China's integrity was ex- posed to Western aggression, first by the loss of de- pendencies and then by the disastrous defeat suffered at the hand of Japan. From this time on. until checked by the Chinese Revolution of 1911, the diplomatic his- tory of China was marked by a series of unscrupulous attacks on the sovereignty and integrity of China. And this onslaught could not but produce the most strenu- ous reaction on the part of the Chinese, which mani- fested itself in the rise of Chinese nationalism. In its first blind reaction, it took the form of the Boxer Uprising, by which the Chinese, and especially the Manchu rulers, thought that they could liberate them- selves from the deadly intrusions of the West. Find- ing this impossible, as evidenced in the disaster of 1900, the next reaction took the form of the Chinese Revo- lution of 1911, by which the Chinese wrested the reins of government from the incompetent hands of the Man- chus and sought to find shelter in their own republican form of government. Besides Chinese nationalism, this international strug- gle for concessions brought into existence another con- dition of affairs, which is commonly called the sphere of interest or influence. In the heat of contest, the ag- gressive states carved out the various spheres of influ- ence for themselves, Russia in North Manchuria and Outer Mongolia, Japan in South Manchuria and Inner Mongolia, Germany in Shantung, Great Britain in the Yangtze Valley, Thibet and Szechuan, France in Kwang- tung, Kwangsi and Yunnan. And to create these spheres of influence the Powers cm- THE STRUGGLE FOR CONCESSIONS 39 ployed definite means. The first step was to secure a base, from which to radiate their forces of influence. After this, the railroad was usually employed to extend from the base to the interior, thus dominating the eco- nomic life of the sphere. To finance the railway, min- ing, and other forms of economic exploitation, a foreign bank was usually established. Thus came into existence what was commonly called the policy of conquest by rail- road and bank. And in order to avoid international con- flicts, the powers made agreements among themselves that they would respect each other's spheres of influence. Having seen the general characteristics of the period, let us now return to the point where we left off at the last period, that is, the Chino- Japanese War. As we have seen, this war imposed on China an indemnity of 230.000.000 taels to be paid in seven years with interest or in three years without interest. In order to save in- terest, the Chinese Government strove to pay off the in- demnity in three years. To this end, foreign loans were contracted, and here we first witnessed international rivalry or struggle. France and Russia obtained in 1895 the concession of the first loan of 400,000,000 francs. 1 This excited the jealousy of Great Britain, who feared that the success of the Franco-Russian diplomacy would upset the balance of power and hurt British prestige. So the subsequent loans were obtained by Great Britain in partnership with Germany. - As we recall, the retrocession of Liaotung was due to the tripartite intervention on the part of Russia, Ger- many and France. These three Powers did not i neer their intervention merely for the of China, but rather to charge the account of service to the Em- pire. On June 20, 1895, by two separate conventions, France obtained a delimitation of the boundaries be- tween Tonkin and China, much in favor of France, including the alienation of a pari of Kiang Hung, 1 for 40 THE DIPLOMATIC HISTORY OF CHINA which China was later penalized by Great Britain by the agreement of February 4, 1887, * according to which China lost her sovereign rights over some frontier lands bordering on Burma. France also secured the opening to trade of Lungchow, Mengtze, Ho-Keou, ft and Szemao, special mining privileges in Yunnan, Kwangsi, and Kwangtung,' and the right of extension of the Annum railway into China. 8 Russia was not slow in exacting her share of reward. By the Convention of September 8, 1896,° she secured the right to extend the Trans-Siberian Railway through Northern Manchuria to Vladivostok, thereby obviating the longer and more expensive route of running along the Amur and Ussuri rivers, earmarked Kiaochou and Port Arthur as the naval bases of Russia, and obtained the mining privileges in Heilungkiang, Kirin, and along the Long White Mountain Ranges. Germany was the third of the tripartite Powers that composed the Liaotung intervention of 1895. She waited for her chance of obtaining her reward. When, in No- vember, 1897, two of her Catholic priests were murdered in Kiachwang, Shantung, she immediately seized Kiao- chow Bay and demanded its lease besides redress for the murder. As a consequence of this high-handed ac- tion, the ECiaochow lease convention was signed on March 6, 1898. 10 Under Section 1 Kiaochau was leased to Ger- many for ninety-nine years (Art. 2). The jurisdiction over the leased territory was to be exercised by Germany (Art. 3). A neutral zone of fifty kilometers was pro- vided, in which Germany was to have the right of free passage of her army, and China was to abstain from taking any measures without the previous consent of the ( r( rman Government. Under Section 2 Germany ob- tained the concessions of two railways in Shangtung, one to run from Kiaochau to Chilian and the Shantung fron- tier, the other from Kiaochau to I-Chou, and thence past THE STRUGGLE FOR CONCESSIONS 41 Laiwuhsien to Chinan. Under Section 3 she secured the first option in any undertaking in which foreign assist- ance was needed. 10 This was the first wanton assault on the sovereignty and integrity of China. By the doctrine and operation of the balance of power, the other European states im- mediately followed suit. Russia seized Port Arthur and Talienwan in December, 1897, and later demanded the lease thereof. Consequently the agreement was signed on on March 27, 1898. u Port Arthur and Talienwan were leased to Russia (Art. 1) for a term of twenty-five years, with the privilege of the renewal (Art. 3). The jurisdiction of the leased territory for the term of the lease, was to be exercised by Russia (Art. 4). A neutral territory north of the leasehold was to be provided, in which the Chinese Government was still to retain its jurisdiction, but was not to send any troops except with the consent of Russia (Art. 5). Port Arthur was to be a closed port (Art. 6), which only Chinese and Russian vessels were allowed to use, but Talienwan, with the exception of a part reserved like Port Arthur, was to be an open port (Art. 6). The right of extension from a point in the Trans-Siberian Railway in Northern Man- churia to a point in Liaotung Peninsula was granted on the same principle as that applied in the grant of the Trans-Siberian Railway through Northern Manchuria in 1896. Subsequently, on May 7, 1898, an additional agreement between China and Russia was signed re- specting the boundaries of Port Arthur and Talienwan 1J and defining the Russian rights in the neutral zone. Following upon the heels of Russia came 1'" ranee. She demanded the lease of Kwangchouwan, the right t<> build a railway from Tonkin to Yunnan, and a representative of the French nationality for the head of the Chinese Post ( Mtiee staff. By an exchange of notes of .April 9/10, 1898, 11 all these concessions were granted. In the draft convention for the lease of Kwangchouwan of 42 THE DIPLOMATIC HISTORY OF CHINA 189S, 11 the lease was arranged for ninety-nine years (Art. 1 ) ; the French administration of the leased terri- tory was conceded (Art. 3); the right of fortification and garrison by France (Art. 4) and the concession of a railmad from ECwangchouwan to Leichou or to a point in the neighborhood thereof (Art. 7) were also granted. Compelled by the driving force of the balance of power, Great Britain could not stand idle. To compen- sate for the damages incurred by the gains of the other Powers, Great Britain likewise stretched out her hands and snatched concessions and leases necessary for self- defense and for the preservation of the balance of power. On February 4, 1897, by the agreement modifying the Convention of 1894 relative to the boundaries between Burma and China, in order "to waive its objections to the alienation by China, by the Convention with France of the 20th of June, 1895, of territory forming a por- tion of Kiang Hung, in derogation of the provisions of the Convention between Great Britain and China of the 1st March, 1894," 15 Great Britain secured a re-delimita- tion of the boundaries between Burma and China, much to the favor of Great Britain, and also obtained a con- cession for the connection of the Yunnan and Burmese Railway. 10 By the Convention of June 9, 1898, the territory of Hong Kong was extended to include Deep Bay and Llirs Bay and the lease of the extension was for ninety-nine years. 17 Finally, by the Convention of July 1, 1898, 18 Great Britain obtained the lease of Wei- haiwei, "for so long a period as Port Arthur shall re- main in the occupation of Russia." 10 "The territory leased shall comprise the Island of Liu Kung, and all the islands in the Bay of Weihaiwei, and a belt of land ten English miles wide along the entire coast line of the Bay of Weihaiwei. Within the above-mentioned ter- ritory hased Great Britain shall have the sole jurisdic- tion." 20 On February 13, 1898, Great Britain further THE STRUGGLE FOR CONCESSIONS 43 obtained the declaration that the Inspector-general of the Maritime Customs should be a British subject while British trade predominates. 21 Following the example of the other great Powet Europe, Italy, in February, 1899, also attempted to lease a naval base in China. She demanded the Sanmen Bay in Chekiang. But she came too late. The control of the Peking Court had already changed hands from the feeble Emperor Kwang Hsu, to the master mind, the Empress Dowager, Tse Hsi. The latter ordered the Yangtze viceroys on the seacoast to make preparations to resist with force. In face of this determined resistance, Italy withdrew her demands. In addition to leases and concessions, the Powers put in the prior claims on their various spheres of influence by means of the declaration of non-alienation. On their face these declarations were nothing more than mere utterances from a territorial sovereign that these various spheres of influence would not be ceded in any form to any power; but in reality, and in spirit, the Powers understood them to mean that, by receiving these pledges of non-alienation, they had a prior claim to their respec- tive spheres of influence. Accordingly, France obtained the declaration of non-alienation of the Island of Hainan on .March 15, 1897." Later, on April 10. 1898. she secured the declaration of non-alienation of the terri- tory bordering on Tonkin.-' 1 Likewise, on February 11, 1898, Great Britain procured the declaration of non- alienation of the Yangtze Valley. 84 On April 26, 1898, Japan received a declaration concerning the non-aliena- tion of Fukien. 88 By an exchange of notes annexed to the Treaty of May 25, I'M 5, respecting the Province of Shantung, Japan also secured the pledge from China that "within the Province of Shantung or a '• coasts no territory or island shall he 1. ased or c< <1 :d to any for- eign power under any pretext."-" By the I 'residential Mandate of May 13, L915, 81 and in response to the 44 THE DIPLOMATIC HISTORY OF CHINA Twenty one Demands of Japan, China made the declara- tion of non-alienation of the entire coast of China. The leases and declarations of non-alienation having thus been obtained, the international struggle entered into a second stage, which, though not so dramatic as the first violent assaults, was nevertheless animated by the same spirit of international rivalry and resulted probably in the same derogation, though in a much milder and safer form, of Chinese sovereignty. The foreign strategic rail loads in China were projected by the three powers composing the tripartite Liaotung intervention of 1895. As we have seen, by the "Cassini" Convention of 1896, Russia secured the right for the Trans-Siberian Railway to cross Northern Manchuria to Vladivostok, and later by the Convention for the lease of Port Arthur and Talienwan, the right to construct a line connecting a point in the trans-northern Manchurian line (Harbin), to a point in the Liaotung Peninsula. By the Treaty of June 20, 1895, France obtained the right to extend her Annam Railway into Chinese territory, which was later confirmed by an exchange of notes in 1898. Like- wise, by the Kiaochou Convention, Germany procured the right for the construction of two railways in Shan- tung. All these are foreign-owned and controlled lines. As a compensation for the overturn of the balance of power, Greal P>ritain obtained the right to connect the Burmese Railway with the Yunnan Railway. These, however, were but the beginning of the inter- national scramble for railway concessions in China. Fol- lowing the grant of these strategic railways, the com- mercial powers all contested for railway concessions. The most crucial struggle was over the Peking-Hankow line, which was to be the most important trunk line, connecting the capital of China with the heart of the i/e Valley. Great Britain, the United States, and Belgium (supported by France and Russia) all contested THE STRUGGLE FOR CONCESSIONS 45 for this premier concession. Finally Belgium underbid all the others and won the concession. 28 Great Britain was most chagrined over the Belgian success, especially when the latter was supported by her rivals, Russia and France, and so she demanded a series of concessions in the Yangtze Valley, partly to compensate the damage she had suffered in the overturn of the balance of power, and partly to forestall any future intrusion of railway enterprise by the other powers into the Yangtze Valley. By a vigorous demand and naval demonstration, she procured the concessions : the Peking-Newchang, 29 the southern portion of Tientsin-Pukow, the Shanghai-Nan- king, 30 the Pukow-Hsinyang, the Soochow-Hangchow- Ningpo, the Kowloon-Canton railways, and the right of extending the Burmese Railway as far as the Yangtze Valley, besides valuable mining rights in Shansi,* 1 Ho- nan, 82 Chekiang 33 and Chili. Likewise, as a compensa- tion, the American China Development Company obtained the concession 34 of the Hankow-Canton Railway with the proviso that the rights should not be transferred to any other nationality than American. Similarly, Russia procured the concession of the Chingting-Taiyuan, 88 and France, the Lungchow-Nanning and the Pakhoi-Nan- ning, 36 and Germany, the northern section of the Tientsin- Pukow Railway. This international struggle for concessions and leases, as we have just seen, could not but call forth a natural reaction ; for unless this process of spoliation should be stopped, the days of the independence of China would In- numbered. The reaction outside of China came from the United States, which had successfully forestalled the extension of the European game of the balance of power to the Western Hemisphere by the enunciation of the Monroe Doctrine. For fear that the operation of the European balance of power would obliterate China from the map, and to prevent any further aggravation of the various spheres of influence, John I lay announced the 46 THE DIPLOMATIC HISTORY OF CHINA ( >]h n Door doctrine in 1899 by a circular to the Powers, 37 first to England, Germany and Russia on September 6, 1899, and then later to France, Italy and Japan. In this circular note. John Hay set forth the doctrine of equal opportunity of trade in China. To this all the Powers addressed, except Russia, who made a more or less in- definite reply, 38 gave their assent. Later, in 1900, when the P>oxer Uprising imperiled the integrity of China, John Hay again, on July 3, 1900, reaffirmed the principles of the Open Door policy, but this time he openly pro- claimed that the United States policy in China was, not only to maintain the equal opportunity of trade, but also to preserve the integrity of China. 30 The reaction within China first took the form of the reform in 1898. Under the guidance of Kang Yii-wei, Emperor Kwang-Hsu attempted to reform China by pa- per edicts. But in his zeal for reform, he injured the vested interests of the conservative officials, and thus the coup de'etat occurred in 1898, bringing into power Em- press Dowager Tse Hsi. With the reappearance of the latter the reaction took a wrong direction. Bigoted and anti-foreign, she turned her efforts against the invasions of the Western states, and, availing herself of the Boxer movement then on foot with the object of driving out all "foreign devils," she secretly encouraged the Boxers and thus brought to pass the Uprising of 1900. The effects of this Uprising are known to all the world. Having violated the law of nations in an attack on the foreign legations, China stood a "criminal" before the bar of civilization. Resumption of friendly relations, how- ever, was finally established by the Protocol of Septem- ber 7, 1901. 40 Therein were provided reparations for the assassination of Baron von Kettlcr, German Minister al Peking (Art. 1), and of M. Suyiyama, Chancellor of the Japanese Legation (Art. 3), and indemnity of 450,- 000,000 Haikuan taels to be repaid in thirty-nine years at four per cent interest and secured on the Chinese Mari- THE STRUGGLE FOR CONCESSIONS 47 time Customs, Chinese native customs in the open ports, and the salt Gabelle (Art. 6), the improvement of Peiho and Whangpoo rivers (Arts. 6 and 11), the rights of an exclusive legation quarter and of the stationing of legation guards (Art. 7), the razing of the Taku forts (Art. 8), the abolition of the Tsungli Yamen, and the institution of a regular Foreign Office (Art. 12). In pursuance of Article 6 of the Protocol of Septem- ber 7, 1901, providing for the raising of tariff duties to an effective five percent and the conversion of ad valorem duties to specific duties, a subsequent agreement was signed on August 29, 1902, stipulating new rates of tariff in accordance with the average prices of 1897, 1898 and 1899. 41 Likewise, in pursuance of Art. 11 of the Protocol of 1901 providing for amendment and revision of the Treaty of Commerce and Navigation, 42 Great Britain and China entered into the treaty of September 5, 1902, respecting commercial relations. The Likin v. to be abolished, and the Chinese tariff to be raised to not more than twelve and one-half per cent on imports and seven and one-half per cent on exports (Art. 8, Preamble), provided, however, China should secure the consent of the other states enjoying, or who may enjoy, the most favored nation treatment before January 1, 1904, without conceding any political concession or any exclusive commercial concession. 4::A Changsha, Wanh- sien, Nganking, Waichow, and I [ongmoon were to be opened to trade (Art. 8, Sec. 12). The extraterritorial rights were to be surrendered upon the satisfactory re- form of China's judi ial system (Art. 12). Similarly, Japan ent< red into the suppl( mentary treaty of commerce and navigation on October 8, 1903,* 8B opening Mukden and Tatungkou to trade (Art, 10), and providing almost similar stipulations regarding the abolition <>t Likin (Art. 1; and e\l; a -ten itorial rights (Art. 11) as found in the British commercial treaty of 1902. Likewise, the United States entered into the treaty of < Ictober 8, 48 THE DIPLOMATIC HISTORY OF CHINA 1903," opening Mukden and Antung to trade (Art. 12) and stipulating similar provisions concerning the substi- tution of tariff surtax for the abolition of Likin (Art. 4) and the surrender of extraterritorial rights on condition of satisfactory judicial reform (Art. 15). After the final settlement of 1901, the focus of atten- tion of the world was shifted from China to the im- pending conflict between Russia and Japan. From the Boxer Uprising to the Russo-Japanese War, the diplo- matic history of China was rather quiet, and the inter- national struggle for concessions seemed to have come to an end. Although there were a few minor railway con- cessions granted, such as the Cheng- Tai Railway to France in 1902, the Kaifeng-1 [onan Railroad to Belgium in 1903, the Taokow-Chinghua Railroad to Great Britain in 1905, 45 and the Changchun-Kirin Railway to Russia in 1902, 48 the center of interest was shifted to the coming grapple between Russia and Japan. Although the con- test was between two foreign powers, yet the subject of the struggle was the integrity of China in Manchuria and the definition of the spheres of influence in China, and for this reason this conflict can be well regarded as a vital part of the diplomatic history of China. Taking advantage of the Boxer Uprising, Russia oc- cupied Manchuria. Her troops occupied the various strategic points in Manchuria. She entered Mukden on October 2, 1900. She hoisted her flags over the New- chang Customs House on August 4, 1900. On August 25 she declared 47 that her occupation of Manchuria was a mere temporary measure of military necessity, and that as soon as peace and order should be restored she would withdraw her troops, "provided such action did not meet with obstacles caused by the proceedings of other Powers." * 8 When the Allied forces had arrived at Peking and re- lieved the beleaguered legations, Russia pretended to be THE STRUGGLE FOR CONCESSIONS 49 the best friend of China : she proposed that the Allied forces and agents should withdraw from Peking to Tientsin and there wait for negotiations. 49 Her proposal failing to receive support, she then attempted to con- clude a separate treaty of peace with China, with a view to making Manchuria her exclusive sphere of in- fluence, if not virtually her protectorate. In November, 1900, Admiral Alexieff made an agreement with the Tartar General Tseng of Mukden. 50 by which the Province of Fengtien was to be disarmed, its mili- tary government was to be invested in Russian hands, its civil government, though left in the hands of Chinese officials, was yet to be under the supervision of a Russian political resident to be stationed at Mukden. Against the ratification of this agreement, Japan, Great Britain, Germany and the United States made formal representations of protest/' 1 Because of the opposition the agreement failed to obtain the necessary ratification. Thereupon Russia made a fur- ther attempt by the conclusion of what was known as the Lamdorff-Yangyu Convention, - restricting China's sovereign rights with respect to armament in Manchuria, the employment of foreign instructors other than Rus- sians to drill troops in North China, conceding of mining rights and the construction of railways in Manchuria, Mongolia, Tarbagatai, Hi, Kashgar, Yarkand, Khoten, etc., and at the same time granting to Russia a railroad concession from a point in the Russian Manchurian line to the Great Wall in the direction of Peking. As against the pressure of Russia to ratify the convention, the Em- peror of China, on February 28, appealed to Germany, Japan, Great Britain and the United States for mediation. In response vigorous representations were made caution- ing China not to sign the convention. Thus the second attempt of Russia was foiled. 'otiations continued. Proposals and counter- proposals were exchanged, fa addition to the conven- tion, Russia now pressed for the monopoly of the indus- 50 THE DIPLOMATIC HISTORY OF CHINA trial development of Manchuria to be granted to the Bank." Against the monopoly, John Hay 1 Likewise, it is unnecessary to state that Japan and Great P.ritain had more than once entered ous protests against the Russian demands. While the negotiations between Russia and China were thus in an unsettled state, Japan and Great Britain con- clude! the Anglo-Japanese Alliance on January 30, 1902, 55 directed mainly against the aggressive designs of Russia in the Far East. In face of this determined opposition, Russia quickly changed front and concluded the con- vention of March 26, 1902/'° pledging to restore the Shanhaikwan-Ncwchang-Sinminting Railway, and to complete the evacuation of Manchuria in three succes- sive periods of six months each. When the specified date for the first stage of evacua- tion came, Russia only effected a nominal withdrawal. She of course left the parts that she had pledged to evacuate, but she concentrated her withdrawn troops in the strategic centers of Manchuria where she was still permitted to remain. But when the date for the second stage of evacuation came, she not only did not fulfill her engagement, but she shortly after presented seven ar- ticles as conditions of further evacuation, 81 demanding, inter alia, the non-alienation of Manchuria and the clos- ing of Manchuria against economic enterprises of any other nation except herself. Thereupon Japan, Great Britain and the United States again made vigorous pro- tests. From this point on, Japan stepped into the shoes of China and waged a diplomatic duel against Russia, lead- ing finally to the Russo-Jaj anese War of 1904-5. On August 12, 1903, Japan presented to Russia six articles, as a basis of understanding, among which she demanded that the integrity of China and Korea should be mutually respected, and that reciprocal recognition of Japan's pre- THE STRUGGLE FOR CONCESSIONS 51 ponderate influence in Korea and Russia's special inter- ests in Manchuria should be given." As counter- proposals, Russia presented, on October 3, 1903, eight articles. She proposed to respect the integrity of Korea, but she failed to mention the integrity of China in Man- churia, as was demanded in the Japanese proposals, which revealed most clearly the true intention of Russia. She also proposed that she would recognize Japanese pre- ponderating influence in Korea, but in return she asked Japan to consider Manchuria as outside her sphere of influence. In addition she proposed the creation of a neutral zone north of the thirty-ninth parallel. 59 In answer to the Russian counter-proposals, Japan presented to Russia, on October 24, 1903, the irreducible minimum. She conceded that Manchuria would be out- side of her sphere of influence, and also the creation of a neutral zone between Korea and Manchuria, but she insisted on the engagement "to respect the independence and territorial integrity of the Chinese and Korean em- pires." 60 The Russian note in reply, on December 11, 1903, virtually reiterated the first counter-proposals of Russia except the clauses regarding Manchuria and Japan's right to assist Korea in the latter's reform, 01 still omitting any mention as to the integrity of China in Man- churia. The Japanese reply of December 23, 1903, re- emphasized the importance of coming to an amicable understanding as to where the interests of the two nations conflicted — Korea and Manchuria — and also suggested amendments to two counter proposals of Russia, and the cancellation of the clause for the establishment of a neu- tral zone.' J The Russian reply of January <>, 1904," Still Omitted any mention as to the integrity of China, but in- sisted on the recognition of Manchuria as being outside of Japan's sphere of influence and the establishment of a neutral zone. Japan's la>t proposal eanie on January 13, 1904," refusing to agree to the establishment of a neutral zone, but conceding Manchuria to be outside 52 THE DIPLOMATIC HISTORY OF CHINA o! Japan's sphere of influence, but this only on condi- tion of "an engagement on the part of Russia to respect the territorial integrity of China in Manchuria." To this last proposal of Japan Russia made no reply. Diplo- matic relations were thereupon severed and war was declared by both sides. During the war the great problem of China was to maintain neutrality. On February 10, 1904, John Hay issued a circular note urging the belligerent powers to respect the neutrality and administrative integrity of China, and to limit their activities within the zone of hostility. 00 Later, in 1905, at the instance of the Kaiser, William II, who feared that the Powers might take advantage of the Russo-Japanese War to seize China's territory, John Flay sent out the circular note of January 13, 1905, 66 requesting that in the final negotia- tions between Russia and Japan no claims be made at the expense of China's territorial integrity. The war was concluded by the Treaty of Portsmouth, September 5, 1905. 6T Russia recognized the paramount political, military and economic interests of Japan in Korea and pledged not to obstruct any measure of pro- tection and control which Japan might take in Korea (Art. 2). Russia transferred to Japan, with the consent of China, the lease of Port Arthur and Talienwan and the southern half of the Russian Railway from Changchun to Port Arthur. She ceded the southern half of Saghalien Island to Japan. In the additional articles, the with- drawal of troops from Manchuria was arranged, and the railroad guard was fixed at not more than fifteen per kilometer. To secure China's consent to the transfer of the lease of Porth Arthur and Talienwan and the southern portion of the Chinese Eastern Railway, Japan concluded the Treaty of December 22, 1905, with China, 68 by which China gave her consent to the transfers made by Russia to Japan by the treaty of Portsmouth. In THE STRUGGLE FOR CONCESSIONS 53 the additional agreement of the same date, the conces- sion of Antung-Mukden Railway was granted for fifteen years (Art. 6) and a number of specified places in Manchuria were opened to trade (Art. 1). The victory of Japan over Russia was a great inspira- tion to the Chinese. It stirred the hearts of the Chinese as nothing had done. It convinced them that an Asiatic nation, by the adoption of western methods, would be capable of defeating a European state. Furthermore, the fact that Japan, so much smaller and less endowed by nature, and once a disciple of China, should be able to rise to such eminence in world politics, drove the Chinese to the irresistible conviction that they could likewise do the same by following the path of Japan. Thus the indirect effect of the Russo-Japanese War was the strengthening of Chinese nationalism. Shortly after the Russo-Japanese War, the interna- tional struggle for concessions was again resumed. As if the Boxer Uprising and the Russo-Japanese War had temporarily suspended the international rivalry, the new struggle soon commenced again after the settlement of the spheres of influence between Russia and Japan. Fol- lowing the law of historical continuity, the first stage of the resumed struggle was to complete the undertakings of the concessions acquired in the great scramble of 1898. Germany and Great Britain signed, on January 13, 1908, " 9 the Tientsin-Pukow loan agreement, and later, on Sep- tember 28, 1910, 70 a supplementary loan agreement for the same railway. Great Britain signed the Canton- Kowlon Railway loan agreement on March 7, 1907," the Shanghai-Hangchow-Ningpo Railway loan agreement on March 6, 1908, 72 the Peking-Hankow Railway re- demption loan agreement on October 8, 1906,™ and another loan agreement for the same purpose on August 1, 1910. 74 The Peking Syndicate, however, sur- rendered its mining rights in Shansi for a repayment of 54 THE DIPLOMATIC HISTORY OF CHINA Rung Pin taels, 2,700,000, by the agreement of Janu- ary 21, 1909." The new member who became a participant in the struggle for concessions by virtue of a successful war was Japan. She was comparatively a late comer in this contest. Ey virtue of her brilliant victories she suc- ceeded to the southern half of the Chinese Eastern Railway from Changchun to Port Arthur by the treaty of Portsmouth, September 5, 1905. In addition she now contested other railway concessions. For the Hsinmin- ting-Mukden and the Changchun-Kirin Railways, she signed successive agreements, first on April 15, 1907, 78 then a supplementary loan agreement on November 12, 1908. 77 then two detailed agreements on August 18, 1909. 78 one for the Hsinminting-Mukden Railway and the other for the Changchun-Kirin Railway. On March 27, 1907, 7;| however, Japan transferred the Hsinminting- Mukden Railway to the control of China. On August 19, 1919, 80 she also signed the memorandum regarding the reconstruction of the Antung-Mukden Railway. The United States seemed to be the only power that was not quite so successful in the international struggle for concessions. She obtained the Canton-Hankow Rail- way concession in 1898 after she had failed to secure the Peking-Hankow Railway. In the supplementary ment of 1900 it was stipulated that "the object of making this supplementary agreemenl of equal force with the original agreement is to permit the benefits being transmissible by the American Company to their suc- igns, but the Americans cannot transfer the rights of this agreement to other nations or people of other nationalities." 81 But the American China Develop- ment Company which had this concession allowed the shares for the Canton-Hankow Railway to fall into the hands of the Belgians who soon acquired a con- trolling share in the line and began to assume the di- rection of the work. Thereupon the Chinese Government THE STRUGGLE FOR CONCESSIONS 55 protested. Finally the concession was cancelled on Au- gust 29, 1905,* 2 by the payment of $6,750,000 gold, which the Chinese Government borrowed from the Hongkong Colonial Government on September 9, 1905. 83 Having completed the agreements for the concessions they had obtained in the past, they now entered into a contest over the other railway concessions which had as yet not been appropriated. The struggle of this sec- ond stage centered around the trunk line running from Hankow westward to Szechuan and southward to Can- ton. — commonly known as the Hukuang Railway. In securing the loan from the Hongkong Colonial Gov- ernment for the redemption of the Hankow-Canton Rail- way concession, Viceroy Chang Chi-tung, in his letter of September 9, 1905, to the British Consul at Hankow, Mr. E. H. Fraser, 84 promised to give Great Britain the first option on the future loan for the Canton-Hankow Rail- way, and so in 1909 when the construction of the railway was decided upon, Chang Chi-tung approached the British and Chinese Corporation for a loan. During the nego- tiation, the British insisted on the Canton-Kowloon terms, while Viceroy Chang Chi-tung insisted on the Tientsin- Pukow terms which were much more favorable. As the British would not accept the Tientsin-Pukow terms, Chang Chi-tung broke off the negotiations and turned to a German syndicate and succeeded in signing a loan agreement. Thereupon the British charged him with breach nf faith and claimed that the option was ofi not to any one British syndicate, but rather to the na- tion as a whole. On the other hand, Chang Chi-tung retorted that since the British and Chinese Corpora- tion which represented the British Railway enterprises in China would not take the concession at Tientsin- Pukow terms, he was no more hound by the original pledge, but was free to offer the concession to syndi- cates of other nationalities. Accusations and recrimina- tion-, ensued Finally the controversy was settled at the 56 THE DIPLOMATIC HISTORY OF CHINA Berlin conference of bankers when the British capi- talists agreed to combine with the French and the Ger- mans and to extend the concession so as to include the 1 lankow-Szechuan Railway. It was agreed that the French and the English should construct the Hankow- Canton line under a British engineer, while the Germans should construct the Hupeh section of the Hankow- Szechuan line. The preliminary agreement with China was signed on June 6, 1909, 85 for a loan of £5,500,000 on Tientsin-Pukow terms. Four days after the conclusion of the preliminary agreement, the United States protested. She claimed that an American Syndicate had been granted the right of participation in the Hankow-Szechuan line together with the British, basing her claim on the letter from the Chinese Foreign Office to Minister Conger dated August 15, 1903, 86 and also the letter of Prince Ching to Minister Conger dated July 18, 1904." Recalling, however, the experience with the American China De- velopment Company in connection with the Hankow- Canton concession, Chang Chi-tung refused to admit American interests. Finally a personal cable from Presi- dent Taft to the Prince Regent of China, on July 15, 1909, 88 changed the attitude of the Chinese Government and brought American interests into line with the four- Power group. On May 23, 1910, the four Powers en- tered into an agreement at a conference of the represen- tatives at Paris, 80 by which the loan was increased from £5,500,000 to £6,000,000 to be shared equally by the four Powers. Their final agreement with China was signed on May 20, 191 1. 90 The resumption of the international struggle for con- cessions, as manifested in the Hukuang loan, could not but produce corresponding reactions. That on the part of the United States was the neutralization plan of Sec- retary Knox. Having secured the Chinchow Aigun con- THE STRUGGLE FOR CONCESSIONS 57 cession, 91 he proposed to the powers in 1909 92 the neu- tralization of all the Manchurian railways. According to his plan, China was to secure a large international loan from the powers and redeem the Chinese Eastern Rail- way and the South Manchurian Railway. Thus all the railways in Manchuria would henceforth belong to China, but the supervision thereof would be shared or con- trolled by the Powers concerned. In other words, this neutralization plan was a concrete assertion and appli- cation of the open door doctrine in relation to the rail- ways of Manchuria. It aimed to secure the equal oppor- tunity of trade by the establishment of an international syndicate which would supervise the railways, not for the sake of any single nation, but for the sake of all nations. It further aimed to preserve the integrity of China by vesting the property rights of the railways in the Chinese Government. China and Great Britain re- ceived the proposal with favor, but Russia and Japan rejected it. Thus failed the Knox plan of neutralization. The reaction from China, as provoked by the resump- tion of the international struggle for concessions, was the Chinese Revolution of 1911. The Chinese spirit of nationalism having been stirred to its depths by the Japa- nese victory over Russia in 1905, the people could not endure any longer these international struggles at their expense. Taking lessons from the painful experience of the Boxer Uprising in 1900, when blinded fury led them to the fanatical attempt to expel all foreigners, this time they wisely turned their resentment on the true source of their weakness, the Manchu Dynasty. Realiz- ing that Japan had forged her way to the forefront through the establishment of a strong and efficient gov- ernment, they also believed that, by taking the reins of their government from the feeble hands of the Manchus, they could erect a government of their own, which would shelter them henceforth from the onslaughts of the West. 58 THE DIPLOMATIC HISTORY OF CHINA With this deep conviction they waited for the mo- ment to strike. When the resumption of the interna- tional struggle for concessions manifested itself again in the i [ukuang Loan negotiations, the people with their newly aroused nationalism were determined to put a stop to this spoliation of their sovereign rights and mort- gage of their heritage. The gentries of the provinces affected — Hupeh, Hunan, and Szechuan — made the coun- ter move and started a campaign for the construction of the Hukuang railways by the people themselves. To this end they raised large sums of capital and actually commenced to construct the lines. The conclusion of the Hukuang loan in 1911, however, dashed to pieces their hopes and efforts, and imperiled their investment in the railways. The explosion of a bomb in Wuchang on October 10, 1911, brought the situation to a head and heralded the advent of the Chinese Revolution, which resulted in the overthrow of the Manchu Dynasty and the establishment of the Chinese Republic. In recapitulation, we may say that this period was one of international struggle for concessions. The first great scramble took place in 1898 and the second in 1908- 1911. In the interval between the two acts of the strug- gle was the conflict between Russia and Japan in 1904- 1905 over the integrity of China in Manchuria and the definition of their respective spheres of influence. The reaction on the part of the United States to the first general scramble was the enunciation of the Open Door Doctrine in 1899 and 1900, and to the second Btruggle in 1908-1911 was the Knox neutralization plan. The reaction on the part of the Chinese to the first scramble of 1898 was the fanatical Boxer Uprising and to the second act of the international struggle, the Chinese Revolution of 1911. During this period we may also say that the driving factor back of tin's international strug- gle for concessions was the national greed of the Powers THE STRUGGLE FOR CONCESSIONS 59 and the dynamic force of the European balance of power. We may further state that this period witnessed the beginning 1 of the foreign loans, that put China on the broad and dangerous road, which, unless checked early by popular control, would inevitably lead China to the preci- pice of bankruptcy and foreign control. We may also add that this period witnessed the deepest humiliation and greatest peril that China had ever undergone. As to how this darkest period of Chinese diplomatic his- tory was gradually changed into a period on the whole more favorable and yet in some respects more critical, it will be seen in the next chapter. 03 NOTES TO CHAPTER III 1. MacMurray, Treaties and Agreements with and concern- ing China, 1895/6; ci. F. H. Huang, Public Debts in China, p. 21. 2. F. H. Huang, ibid., pp. 22-23. 3. Hertslet's China Treaties, Vol. I, No. 52, pp. 321-323. 4. Ibid., No. 22, pp. 113-119. 5. Art. 2, ibid., p. 324. 6. Art. 3, ibid., p. 324. 7. Art. 5, ibid., p. 326. 8. Art 5, ibid., p. 326. 9. MacMurray, op. cit., 1896 10. Hertslet. op. cit., No. 59, pp. 350-354; also Shantung ques- tion, published by The Chinese National Welfare Society, 1920, p. 50. 11. !!■ it let, op. cit, \'.». 88, pp. 505-508. 12. [bid., No. 89, pp. 5 13. Ibid., No. 54, pp. 327-328. 14. [bid., No. 55, pp. 329-331. 15. Ibid., No. 22, p. 113. 16. Ibid., No. 22, pp. 113-110. 17. [bid., No. 24. pp. 120-122. Ibid., No. 25, pp. 122 123. 19. Ibid., No. 25, p. l 20. Ibid., p. 122. 21. Mar Mn '2. MacMurray, 1 I 8, p. Xi. 2.1. MacMurray, 1898/6; Doc Dip. Chine, 1894 8, p. 49. 24. MacMurray, 1 25. MacMurray, 1898/8. Shantung op cit, p 60 THE DIPLOMATIC HISTORY OF CHINA 27. MacMurrav, 1915/7. 28. MacMurray, l.s ( >s/13. MacMurray, 1898/20. 30. Mar Murray, 1903/2. 31. MacMurray, 1908/2. MacMurray, 1898/12. 33. M. C. Hsu, Railway Problems in China, pp. 41-44; Sir MacDonald to Lord Charles Beresford, British Blue Book, Af- fairs of China, Xo. 1, 1899, pp. 344-347. 34. Rockhill, p. 273, Art. 17. 35. MacMurray, 1902/8. 36. Hsu, op. cit., p. 40; Sir MacDonald to Lord Charles Beresford, British Blue Book, Affairs of China, No. 1, 1899, pp. 344-347. 37. U. S. For. Rel., 1899, pp. 128-143. 38. U. S. For. Rel., 1899, pp. 141-142, Count Mouravieff to Tower. 39. U. S. For. Rel., 1900, p. 299. 40. State papers, Vol. 94, p. 686 et seq. ; U. S. For. Rel., 1901, Appendix, Affairs in China, French text, pp. 306-312, English text. 312-318. 41. Hertslet, No. 27, pp. 148-170. 42. Hertslet, No. 28, pp. 171-188. 43A. Hertslet, No. 66, pp. 383-391. 43B. Art. 8, Sec. 14, Hertslet, No. 28, p. 180. 44. Hertslet, X,). 100, pp. 566-578. 45. W. W. Willouby, For. Rights and Interests in China, Ap- pendix, p. 572. 46. MacMurray, 1907/3. 47. Asakawa, Russo-Japanese Conflict, p. 151 ; China, No. 1, 1901, No. 256. 48. Ibid., p. 152; China, No. 1 (1901), p. 113, No. 256. 49. Morse, The International Relations of the Chinese Em- pire, Vol. 3, p. 305; U. S. For. Rel., 1901, Appendix, p. 19. 50. Asakawa, op. cit., pp. 166-167; China, No. 2, 1904, No. 5, Jan. 4, 1901. 51. Ibid., p. 169; China, No. 2, 1904, No. 8; No. 13; No. 12; No. 19. 52. Ibid., p. 174; The Times, February 28th, 1901, p. 5; China, No. 2, 1904, No. 6, No. 14. Nos. 25 and 42. 53. [bid., p. 193; U. S. For. Rel., 1902, pp. 273-274. 54. U. S. For. Rel., 1902, p. 275. 55. State papers, Vol. 95, pp. 83-84. 56. Hertslet, No. 90, pp. 509-512. 57. Asakawa, op. cit., pp. 242-244 ; China, No. 2, 1904 ; No. 94. 58. Ibid., pp. 303-304. 59. [bid., pp. 308-309. 60. [bid., pp. 324-325. 61. Ibid., pp. 328-329. 62. [bid., pp. 330-331. 63. Ibid., p. 333. THE STRUGGLE FOR CONCESSIONS 61 64. Ibid., pp. 337-339. 65. U. S. For. Rel., 1904, p. 118. 66. U. S. For. Rel., 1905, p. 1. 67. State Papers, Vol. 98, pp. 735-740; MacMurray, 1905/8. 68. Hertslet, No. 67, pp. 391-396. 69. MacMurray, 1908/1. 70. MacMurray, 1910/4. 71. MacMurray, 1907/2. 72. MacMurray, 1908/3. 73. MacMurray, 1908/13. 74. MacMurray, 1908/13. 75. MacMurray, 1909/2. 76. MacMurray, 1907/3. 77. MacMurray, 1908/18. 78. MacMurray, 1909/6, 1909/7. 79. MacMurray, 1907/5. 80. MacMurray, 1909/8. 81. The Canton-Hankow Railway Contracts, Irving Press, N. Y.; F. H. Huang, p. 32. 82. MacMurray, 1905/7. 83. MacMurray, 1905/9. 84. MacMurray, 1905/9. 85. MacMurrav, 1911/5. 86. U. S. For.' Rel., 1909, pp. 155-157; MacMurrav, 1911/5. 87. MacMurray, 1911/5. 88. U. S. For. Rel., 1909, pp. 178-180. 89. U. S. For. Rel., 1910, p. 280. 90. MacMurray, 1911/5. 91. MacMurray. 1909/12. 92. U. S. For. Rel., 1910, p. 234 et seq. 93. During this period four more states entered into treaty relations with China — Congo Free State, 1898; Korea, 1899; Mexico, 1899; Sweden, 1908. IV THE INTERNATIONAL COOPERATION AND CONTROL (1911 ) The fourth and present period of the diplomatic his- tory of China extends from the close of the Chinese Revolution. It is a period in which a radical change of policy on the part of the Powers took place. While in the preceding period the international struggle for con- cessions was the policy of the Powers, in this period the policy of international cooperation and control is the predominant note. This radical change was due to several vital reasons. The first was the unavoidable disadvantage of interna- tional cut-throat competition. It is well known in eco- nomic science that such competition leads inevitably to either mutual destruction or combination and tion. So likewise in the field of international politics, the same law holds true. International cut-throat com- petition must inevitably result cither in mutual destruc- tion of one another's ends or in international combina- tion and cooperation. For instance, as we have seen, in the case of the Peking-Hankow railway, the British, the American and the Belgian capitalists were all competi- tors, among whom the British were especially anxious to win the premier concession, passing as it does from the capit.al of China to the heart of the Yangtze Valley; but the Belgian capitalists, supported by Russia and France, underbid the other and won the concession. Again, in the case of the Hankow-Canton railway, the British capitalists, although holding a prior option by virtue of the pledge of Viceroy Chang Chi-tung, were defeated by German capitalists who were willing to accept the con- 62 COOPERATION AND CONTROL 63 cession on the Tientsin-Pukow terms which the British had rejected. It was because of the painful experience of this sort that the Powers began to realize the inex- pediency of international competition and favored the policy of international combination and cooperation. In addition, there was another cause for the radical change of the policy of the Powers in China, and that was the possible occurrence of the foreign control of China's finance. In the preceding period there were a few foreign loans made for the immediate payment of the war indemnity to Japan, but there were practically no loans made that were of an administrative character, most of the loans being largely for railway construction and other commercial purposes. But with the advent of the Republic, and the falling off of provincial reve- nues, which either were diverted to provincial uses or failed to reach Peking on account of the relatively inde- pendent position of the military governors in control of the provinces, the Peking Government was forced to resort to administrative loans for the purpose of meeting ordi- nary non-productive needs of the government. With the coming of administrative loans, there loomed the ghastly apparition of possible and probable bankruptcy, and hence there arose the possible eventuality of foreign con- trol of China's finance. As no one power would allow any other single power to have the exclusive control of her finances, the Powers were compelled to reach the conclusion that they must combine and cooperate, so that, in case there should be any foreign control of China's finance, it would be an international control rather than the control by any single Power. Toward the close of the preceding period, there were a few instances of international combination and coopera- tion, but on the whole they were not the results of de- liberate choice, but rather the consequences of inevitable circumstances. For instance, the Hukuang railway loan was equally shared by the four Powers — Great Britain, 64 THE DIPLOMATIC HISTORY OF CHINA the United States, France and Germany — not because they were willing to pool their interests, but rather be- cause the German capitalists had underbid the British and obtained the Hukuang railway concession, and there was no other solution of the tangled situation than the common sharing of the concession, which was effected by the Berlin Conference of Bankers ; and the United States was not granted participation until President Taft threw his whole personal weight of influence into the diplomatic controversy by cabling a personal despatch to the Prince Regent of China. Thus this notable in- stance of international combination and cooperation was an outcome to which the Powers were driven, relunct- antly but inevitably, by the force of circumstances. A real instance, however, of international combination and cooperation, commencing at the close of the pre- ceding period and extending nevertheless into this period, was the currency reform and Manchuria industrial de- velopment loan. The loan was initiated by the Chinese Government and first offered to the American Banking Group. The preliminary agreement for a loan of $50, 000,000 was signed by this Group on October 27, 1910. 1 But the United States Government deemed that such a gigantic undertaking as the currency reform and the Manchurian industrial development would need the sympathetic cooperation of the Powers and should be shared by all of them alike. So out of good will it ex- tended an invitation to the other Powers to join in the loan. As a consequence, France, Germany, Great Britain and the United States, through their respective financial agencies, signed the agreement on April 15, 1921 ■ for a loan of £10,000,000. On account of the Revolution of 1911, however, the loan was not floated, although an advance of sterling treasury bills amounting to the value of Shanghai taels 3,100,000 was delivered for the urgent needs of the Chinese Government on March 9, 1912. 1 Thus at the opening of the present period, through the COOPERATION AND CONTROL 65 experiences derived from the Hukuang Railway loan and the currency reform and Manchuria!! industrial develop- ment loan, the powers had already learned the lesson of the advantages of international combination and coopera- tion and were therefore quite ready to try this new policy. And the instrument through which the policy was to be put into effect was the quadruple syndicate or the old consortium, consisting of the banking groups of Great Britain, France, the United States and Germany, which was a direct product of the Hukuang and the currency loans. To this quadruple consortium were later added Russia and Japan. The working agreement of the sextuple group was signed on June 18, 1912, 4 at the Interbank Conference of Paris, setting forth the prin- ciple of equal participation on the basis of complete equality. The first subject the consortium was to deal with was the reorganization loan of £25,000,000. Shortly after his assumption of office, Yuan Shih-Kai, then Provisional President of China, commenced the negotiation for the loan. On making a request for a preliminary advance of 10,000,000 taels for administrative purposes, he had promised the original quadruple group that he would give first option to the group for the reorganization loan, provided their terms were as advantageous as those of the other banking groups. But when the negotiations started, it was soon found that the terms were too oner- ous. Pressed by immediate needs, a small Belgian loan of £1,000,000 was concluded on March 14, 19 12, 5 for which service preference for future loans was pledged. The conclusion of this loan called forth a stormy pro- test from the quadruple group. A.S a consequence, the loan was canceled. Thereupon the negotiation for the reorganization loan was resumed, and meanwhile, as we have seen, Japan and Russia were admitted to the con- sortium. 66 THE DIPLOMATIC HISTORY OF CHINA During the negotiation, it was soon discovered that the Powers concerned aimed to secure the supervision of China's finance. 8 To this China vigorously declined to accede. Later, as a result of the conference of the hank- ing groups at London, May 17-24, the Powers demanded the right to manage the loan funds for five years, the foreign supervision of salt gabelle, the right to appoint a foreign representative to be president of the auditing bureau and to appoint a financial adviser to the Chinese Government. 7 To these proposals the Chinese Govern- ment again refused to give its assent. A deadlock thus ensued. Pressed once more by urgent needs, China again turned to other sources for temporary relief. This time she o included, on August 30, 1912, with an independent British Syndicate (C. Birch Crisp & Co.) 8 for a loan of £10,000,000, for which preference was again given for future loans, provided the terms were equally advan- tageous as those otherwise obtainable. The conclusion of this loan, commonly called the Crisp Loan, once more called forth the protest of the Powers, in consequence of which the privilege of preference was withdrawn and the issue of the second half of the loan was canceled at a compensation of £150,000. 9A Thereafter negotiation were again resumed. By the end of January, 1913, the agreement was ready for signature. At this juncture, fiance and Russia made objections to the appointment of foreign advisers sug- gested by China. A shameless wrangle ensued. The controversy was finally settled by the agreement to have a Britisher as Inspector of the Salt Administration, a German as director of the National Loan Department, and two advisers, one French and the other Russian, for Auditing Bureau. During the time when the Powers were scrambling over the appointments of advisers, President Wilson, conscious of the precarious nature of the reorganization COOPERATION AND CONTROL 67 loan, withdrew the support of the United States Gov- ernment from the American banking group, and issued a proclamation on March 18, 1913, announcing that as the terms of the reorganization loan touched the adminis- trative integrity of China, the United States could not become a party thereto. 93 Consequently, the American group withdrew from the Sextuple Consortium. The final agreement was signed on April 26, 191 3. 10 The amount of the loan was to be £25,000,000 (Art. 1). The security was to be the Chinese Salt Administration (Art. 4). which was to be reorganized under foreign supervision (Art. 5). The rate of interest was to be five percent (Art. 8). The life of the loan was to be forty-seven years (Art. 9). Redemption after a lapse of seventeen years and up to the end of the thirty-second year was to be at a premium of two and one-half per- cent, but after the thirty-second year extra redemption could be made without premium (Art. 9). In reim- bursement of expenses connected with the payment of interest, and with the repayment of the principal of the loan, a commission of one- fourth of one percent was to be paid to the banks. For the flotation of the loan a commission of six percent of the nominal value was to be granted. The issue price was to be not less than ninety percent (Art. 13), securing to China a net price of not less than eighty-four percent. ( 'hina was to estab- lish an account and audit departmenl (Art. 14). 11 After the conclusion of the reorganization loan of 1913, the policy of international combination and coo tion came to a standstill. This was due to two main Causes. The first was the withdrawal of the United State- which inaugurated this policy during the i tiation of the currency loan and was it i real champion. With the absence of the United States there was no moral leader among the Powei could uphold the doctrine of equal opportunity of trade and the i i it • of China. As a result, the other Towers fell into their 68 THE DIPLOMATIC HISTORY OF CHINA old practice of international struggle for concessions. The other reason, which came later, was the Great War in Europe. That drew away the contending Powers from the concession scramhle in China to the battlefields of Europe. The policy of international combination and cooperation was therefore suspended until the close of the Great War, when the Powers instituted the New International Banking Consortum and came back to China with the former policy of international combination and cooperation. As we have seen, the withdrawal of the United States left the other Powers without a moral leader, and with- out an earnest champion of the policy of international combination and cooperation. As we have also seen, the consequence of the withdrawal was the falling off of the Powers into the old practice of international strug- gle for concessions. In pursuance of this old policy of competition, which brought on the Boxer Uprising of 1900 and the Chinese Revolution of 1911, the Powers again contended for concessions. On September 24, 1912, the Belgian Company, Compagnie Generale de Chemins de Fer et de Tramways en Chine, secured the concession of the Lung-Tsing-U-Hai Railway. 12 On December 12, 1912. the supplementary clause was signed, 13 and on May 1, 1920, another subsequent agreement for the loan was entered at Brussels. 14 On July 22, 1913, Belgium and France, through their respective financial agencies, jointly obtained the concession of the Tatung-Chengtu line. 15 France procured, besides the five percent indus- trial gold loan of 1914, in the contract for the L'hing-Yu Railway on January 21, 1914, 17 and the pledge of the Chinese Foreign Office regarding preference to French nationals in railway and mining enterprises in Kwangsi Province. 18 Germany acquired, by an exchange of notes, <>n December 31, 1913, ia the right of extending the Shan- tung Railway from Kaomi to Hanehuang and from Tsinan to Shunteh. 20 COOPERATION AND CONTROL 69 Following the general scramble, Great Britain obtained on Xovember 14, 191 3, " the contract for the Pukow-Sin- yang Railway; on December 18, 1913, the preliminary agreement for the Shasi-Shingyi Railway,-'- and on July 25, 1914, the final agreement for the same. 23 On March 31, 1914, she also obtained the Nanking-Hunan Railway agreement,- 4 and on August 24, 1914, the Nanchang- Chaochow concession. 2 '' The United States financial agents also obtained concessions. The American Inter- national Corporation secured, on May 13, 1916, 2U the agreement for the Huai River Conservancy Grand Canal Improvement Loan agreement. 27 The Siems and Carey Company obtained, on May 17, 1916, 28 the concession to construct 1,500 miles of railways in China, which was later reduced by the supplementary agreement of Sep- tember 29, 1916, to an aggregate of 1,100 miles. Likewise, Japan wrested many valuable concessions from China. By an exchange of notes, on October 5, 191 3, 29 she secured the concession from Supingkai via Chengchiatun to Taonanfu, from Kaiyuan to Hailung- cheng, from Changchun to Taonanfu. By the treaty of 1915 relating to the Province of Shantung, she also pro- cured the right to construct a railway from Chefoo or Lungkow to a point on the Kiaochau-Tsinan Railway. The Japan Advertiser of October 2, 1918, announced ad- ditional railway loans in Manchuria and Mongolia, — from Taonan to Jehol, from Kirin to Haiyuen via Ilai- lung, from a point mi the Taonan-Jehol Railway to a seaport, and the railway loans in Shantung, — the Tsinan- Shunteh and the Kaonii-1 Isuchow ;u concluded on Sep- tember 24, 1918. Under the Terauchi Cabinet there were also concluded with China the Communication I lank Loan,' 12 the Telegraph Loan," the Kirin-Hueining Kail- way Loan. ' and the loan of yen, 30,000,000. with all the forests and gold mines in both Kirin and I [eilungkiang provinces for security. 88 Russia was the onl\ greal Power during this period 70 THE DIPLOMATIC HISTORY OF CHINA that was not so much interested in the international strug- gle for concessions. What railway concession her finan- cial institutions gained in this period was the Pin-Hei Railway acquired by the Russo-Asiatic Bank on March 27. 1916. :i ° The interest of Russia rather lay in Mon- golia. Excepting the treaty of December 20. 1 Ml, 37 fix- ing the boundary between Russia and China from Tar- Dagh to Abahaitu, and along the Argun River to its confluence with the Amur River and the protocol of delimitation along the river Horgos, May 30-June 12, 1915, the successive treaties she made with China dur- ing this period were concerning Mongolia. On Novem- ber 3, 1912, 38 she concluded a convention with Mongolia pledging to assist the latter in maintaining its regime of autonomy and prohibiting the admission of Chinese troops or the colonization of the land by the Chinese. A year later, on November 5, 1913, she concluded a convention with China,"" exacting the recognition of the autonomy of Outer Mongolia, and the pledge not to interfere in the internal administration of Outer Mongolia, nor to send troops thereto, nor to colonize the territory. Subse- quently, on September 30, 1914, Russia again entered into an agreement 4 " with Outer Mongolia, binding the latter to consult Russia in the grant of railway conces- sions to other nations. To complete the settlement of the relationship between Russia. Outer Mongolia and China, the tripartite agreement was concluded on June 7, 1915. 41 Outer Mongolia recognized the Sino-Russian ( "(invention of November 5. 1913 (Art. 1). "Outer Mon- golia recognizes China's suzerainty, China and Russia recognize the autonomy of Outer Mongolia funning part of Chinese territory" (Art. 2). "Autonomous Mongolia has no right to conclude international treaties with for- eign | ting political and territorial questions (Art. 3). As regards questions of a political and terri- torial nature in ( >uter Mongolia, the Chinese Govern- ment was obligated to come to an agreement with the COOPERATION AND CONTROL 71 Russian Government through negotiations, in which the authorities of Outer Mongolia should have the right of participation (Art. 3). Thus the international struggle for concessions was re- vived after the withdrawal of the United States. When, however, the World War broke out, the struggle came to an end. Retiring from the arena of Far Eastern poli- tics, the Powers turned their full attention to the death struggle in Europe, thereby relieving China temporarily from the aggressions of Europe. This short moment of alleviation, however, was not to last long. Left alone and untrammeled in the Far East, and with China lying unprotected and almost help- less before her, Japan took advantage of the situation. She realized that the opportunity of a thousand years had come and that she must strike while the iron was hot. Therefore, on the pretense of the Anglo-Japanese Al- liance, she entered the war on the side of the Allies. On August 15, 1914, she presented an ultimatum to Ger- many, advising the latter to withdraw immediately all armed vessels from Chinese and Japanese waters, and to deliver to herself the leased territory of Kiaochow, not later than September 15, "with a view to the eventual restoration of the same to China." ,J and also asking for an unconditional acceptance of the advice by noon of August 23, 1914. hailing to receive a reply at the speci- fied time, she declared war on Germany on August 23, 1914. Thereupon s itched her forces to capture Kiao- chow. On September 3, t<> the surprise and indignation of the e, she landed her troops at Lungkow on the northern shop- of the Shantung Peninsula, about 150 miles from Kiaochow, while the British foi perat- ing in the campaign, landed on September 23 at Laoshan within the German leasehold. Confronted by the evident violation Of her neutrality and yet unwilling to conic to 72 THE DIPLOMATIC HISTORY OF CHINA a conflict with Japan, China, on the day of Japan's land- ing at Lunkow, proclaimed a war zone covering the east- ern part of Shantung Peninsula as t'ar west as Weihsien, and obligating the belligerents to observe the bounds thus set and not to encroach westward. But, unexpectedly, on October 6, the Japanese soldiers, despite the protest of the Chinese Government, went to Tsinan and seized the railway station there. Having oc- cupied the entire length of the railway from Tsingtao to Tsinan, the Japanese distributed soldiers along the rail- road and thus gradually displaced all the Chinese em- ployees of the railway. They also seized the mining properties of the Germans along the railway and operated them for their own benefit. During this time the siege of Tsingtao continued, until September 7, when the Germans surrendered the city. As the capture was completed, and it seemed that there was no more necessity for the Japanese troops to remain in Shantung, the Chinese Government asked the Japanese to withdraw from the Province and concentrate their forces at Kiaochow. This the Japanese refused to do. As a next step, and seeing that the exigency which called forth the proclamation prescribing the war zone had passed, the Chinese Government abrogated the declara- tion and duly notified the British and Japanese on Janu- ary 7, 1915, to that effect. To this note the Japanese Minister replied that the revocation of the war zone was an indication of want of international faith and of un- friendliness, and that the Japanese troops in Shantung would not be bound thereby. When diplomatic relations were thus in such a difficult pass, the Japanese Minister, to the dismay of the Chinese Government, presented on January 18, 1915, the now fa- mous Twenty-one Demands, divided into five groups. The first group related to Shantung. Japan was to have a railway concession from Chefoo or Lungkow to join the COOPERATION AND CONTROL 73 Kiaochow-Tsinan Railway, the opening by China of cer- tain commercial ports in the province, the pledge by China of the non-alienation of the coast or territory of Shantung, and, above all, the assent of China to any ar- rangement Japan might make with Germany at the end of the war relating to the German rights in Shantung. 4:i The second group dealt with South Manchuria and East- ern Inner Mongolia. Japan demanded the extension to ninety-nine years of the lease of Port Arthur and Dalny, and the South Manchuria Railway and the Antung-Muk- den Railway ; the right to lease and own land and to open mines and to engage in any business, manufacturing and farming; the requirement of the consent of the Jap- anese Government to the pledging of the local taxes as securities for any railway concession to a third Power and to the employment of foreign advisers ; and the transfer to Japan of the management and control of the Kirin-Changchun Railway for ninety-nine years. 44 The third group referred to the Hanyehping Company. Japan demanded joint partnership in the company and the monopoly by the said company of the mines located in the neighborhood of those owned by the company .*■ The fourth group treated of the non-alienation of the coast of China. 4,i The fifth group, which was the climax, de- manded the employment of influential Japanese advis- ers; the right to own land by the Japanese hospitals, churches and schools in the interior of China; the joint administration by Japanese and Chinese of the police al important places in China ; the purchase of a fixed amount of ammunition from Japan (say, fifty percent or mure), or the joint establishment of an arsenal in China; rail- way concc-vinns from Wuchang to Kiuchang and Nan- chang, from Manchang to Eiangchow, and fnom Nan- chang to Chaochou; the exclusive right of the economic development of Fukien; and the right of Japanese mis- sionary propaganda in China. The negotiations that ensued are known to the world, — 74 THE DIPLOMATIC HISTORY OF CHINA the Japanese first tried to conceal the demands and • 1 the Chinese Government t<> an immediate accept- ance in secrecy; how later, a^ the news of the demands leaked out, the Japanese denied their existence and pre- sented to the world only eleven articles, omitting the most important, including Group V.' ; As negotiations lagged, on April 26, 1915, Japan presented her revised demands in Twenty-four Articles. In the first group, relating to Shantung, there was practically no change except the demand of its non-alienation, which was changed to an exchange of notes.' 8 In the second group respecting South Manchuria and Eastern Inner Mongolia, the two regions, which had been treated alike in the original de- mands, were now differentiated. In South Manchuria, all the rights and concessions, as demanded originally, were still pressed, except the right of land ownership, which was omitted, and the right of inland travel and residence which was regulated by the existing and pre- vailing rules of extraterritorial jurisdiction in China. In other words, subject to certain limitations, all of South Manchuria was to be opened to the Japanese. In East- ern Inner Mongolia, whose status was originally placed on a par with South Manchuria, only an exclusive sphere of Japanese influence was now demanded. The granting of railway concessions and the pledging of local taxes as securities still required the consent of Japan, and the opening of certain commercial ports to the resideno trade of Japanese with the privilege of agricultural and industrial pursuits was still demand, In the third group dealing with the Hanyehping Company, the joint partnership was still demanded, but the demand for the monopoly of the mines in the neighborhood of those owned by the company was abandoned; but the limita- tions of non-conversion into a Slate enterprise or of con- tion and the prohibition of the use of any other for- eign capital than the Japanese were added. '" The fourth group treating of the non-alienation of China's coast was COOPERATION AND CONTROL 75 changed to a voluntary pronouncement on the part of the Chinese Government. In the fifth group respecting the political, military and financial control of China, all the previous demands, in one form or another, were still pressed with certain ex- ceptions. The one on the joint administration of police in important places of China was dropped. The one on the right of land owning hy the Japanese for the pur- pose of establishing hospitals, schools and churches was modified to the extent that the right of land-owning was changed to the right to purchase and lease land, and that the right to esablish churches in the interior of China was omitted. The one on the railway concessions in the Yangtze Valley was modified only by the self- denying limitation that there should be no objection from the Power interested in these concessions, meaning, of course, Great Britain, and by the prohibition not to grant these concessions by China to any foreign Power, "before Japan comes to an understanding with the other Power which is heretofore interested therein." The one on Fu- kien was changed from a demand for an exclusive Japan- ese sphere of interest to a prohibition of the construc- tion by any foreign Power of any naval and military base, and the use of foreign capital for the construction of the same. All the other demands such as the pur- chase of arms or the establishment of joint arsenals, the employment of Japan . the right of Jap missionary propaganda, as we have seen, were pressed in one form or another as before/' 1 In spite of revision, no agreement, however, could be ed to the satisfaction of both sidi s. ( In May 7, 1915, the Japanese presented an ultimatum demanding a sat- isfactory reply within two days. All the articles in groups 1, 2, 3, 4 and the article on Fukii n in ( iroup V of the re vised demands were | Group V excluding we have seen, the clause on Fukien, was detached and postponed for future negotiotion, "So, in spite of the 76 THE DIPLOMATIC HISTORY OF CHINA circumstances which admitted no patience, they have reconsidered the feelings of the government of their neighboring country, and, with the exception of the arti- cles relating to Fukien, which is to be the subject of an exchange of notes as has already been agreed upon by the representatives of both nations, will undertake to detach the Group V from the present negotiations, and discuss it separately in the future. Therefore the Chinese Government should appreciate the friendly feeling of the Imperial Government by immediately accepting, without any alteration, all articles of Groups 1, 2, 3 and 4 and the exchange of notes in the revised proposals presented on the 26th of April." 52 Coerced by the ultimatum, China yielded. On the next day, she replied and accepted the demands as set forth in the ultimatum." On May 25, 1915, two treaties were signed, one relating to Shantung and the other South Manchuria and Eastern Inner Mongolia, and thirteen notes were exchanged covering the rest of the articles as accepted. The only addition was the pledge of the Japanese Government to restore the leased territory of Kiaochow, subject to certain conditions. 5 * Thus ended the most sensational diplomatic negotia- tion of this period of Chinese foreign relations. By one hold assault on China, when the European powers were occupied in a death grapple on the battlefields of Europe, Japan made herself the virtual successor to Germany in Shantung; opened up the whole of South Manchuria to the exploitation of her subjects, made an exclusive sphere of interest of Eastern Inner Mongolia, preserved the Hanyehping Company for the joint cooperation of the Japanese and Chinese capitalists, and secured the pledge of the non-alienation of China's coast. What she had failed to force on China was Group V, which, had it been accepted, would have made China virtually a pro- tectorate or vassal of Japan. Analyzing the demands of Japan from the point of COOPERATION AND CONTROL 77 view of the international struggle for concessions, Jap- an's action was simply to consolidate her own position in China, especially in Shantung, South Manchuria, and Eastern Inner Mongolia, and Fukien, so that when the war should be over and the European tide of aggression should again flow back to China, she would be well en- trenched in these regions in any international struggle for concessions. Viewed, however, from the point of view of international cooperation and control, Japan's action was simply an attempt to forestall the possible international control of China, which she was far-sighted enough to forsee and to anticipate by the overture of Japanese control as embodied in Group V. Thus, right or wrong, Japan had taken good advantage of the oppor- tunity presented by the European War to consolidate her own position in China. The Treaties of May 25, 1915, however, did not satisfy the Japanese, especially the military party. To the lat- ter, the treaty was only a temporary adjustment, waiting for a future and more opportune moment to execute its complete program in China. Its aims, to put them in a nutshell, were nothing less than to secure a stranglehold of control over the whole of China, for which reason the Japanese Government reserved the right for future discussion of Group V, and to wrest the sovereign power from China over South Manchuria and Eastern Inner Mongolia, for which purpose an event soon occurred which gave the necessary pretense. In August, 1916, a conflict occurred between the Chinese and Japanese soldiers at Changkiatun, a Mongol-Man- churian town, resulting in casualties on both sides. The original cause leading to the armed conflict was a quarrel and fist-fighl between a Japanese sell fish at bis price, and several ( hinese soldiers who came to the rescue of the boy on the other. Taking advantage of this incident, the Japanese Government at once demanded nut only 78 THE DIPLOMATIC HISTORY OF CHINA reparation and apology, which were i I, but, to the surprise of China, the pol wer and military supervision of South Manchuria and a tnner Mon- golia also : ' "< 'hina to agree to the stationing of Japanese police officers in places in South Manchuria and Eastern Inner Mongolia where their presence was considered necessary for the protection of Japanese subjects," and "Chinese military cadet schools to employ a certain num- ber of Japanese officers as instructors." These demands again opened the wound of the Chinese as created by the Twenty-one Demands. As a result, viewing this as another attempt to revive Group V, the Chinese rose and resisted the demands with all their might. Meanwhile the Okuma Cabinet, which had en- gineered the Twenty-one Demands and also those for the Changkiatun incident, suff vere popular censure for the mishandling of Chinese relations, and were com- pelled to yield to the Terauchi Cabinet, which adopted a more conciliatory attitude. Consequently the case was closed without the concession of police power and the military supervision of South Manchuria and Eastern Inner Mongolia, but merely with the ordinary apology and compensation due to Japan. While Japan was thus bullying China, the question of China's entrance into the war on the side of the Allies came into prominence. At the beginning of the war, China had intimated her intention to join in the attack on Tsingtau, but the proposal was not favorably enter- tained. 50 Again, during the monarchial restoration in the latter part of 1915, Yuan Shih-kai, to win the sup- port of the Allies to his monarchial project, had again offered to join the Allies, a proposal which the Ru and French legations had favorably entertained, but from which Japan and Great Britain had dissented. 57 Then came the circular note of February 4, 1917, of the United States inviting the neutral nations to join in a COOPERATION AND CONTROL 79 diplomatic severance from Germany. At the urgent solici- tation of the United Slates minister and other Allied agents, China took the hold step on March 14, 1917, when she broke off her relations with Germany. Following the diplomatic break, the question naturally arose as to the declaration of war on Germany and Austria. The pros and cons of the argument were pre- sented. The opinion seemed to be evenly divided. Those favoring the step believed that the Allies were lighting for democracy and the rights of weaker nations, and that the entrance of China would give her a seat at the Peace Conference when she could defend her own in- terests. It must also be noticed here that the senti- mental ground of following the lead of her best and most disinterested friend, the United States, played no small part in influencing the decision of the Govern- ment. Those opposing it, on the other hand, feared that Germany might win the war, and then would visit retribution on China, and, moreover, they were not at all certain as to the professions of the Allies regarding their war aims. While Chinese opinion was so divided, Japan cast the weight of her influence on the side of the opposition. Her minister at Peking counseled President Li Yuan- hung not to follow the example of the United States. 08 Meanwhile, realizing that, in the event of China's en- trance into the war, she would certainly contest the Ger- man rights in Shantung at the Peace Conference, and, recalling the painful experience of the tripartite inter- vention in 1895 which deprived her of the Liaotung Peninsula, Japan moved to forestall such an eventuality. She approached the Allied Governments during February and March of 1917 for assurances as to the final dis- posal of the German Islands in the Pacific north of [uator and German rights in Shantung. The allied governments gave their pledges, one after the other, the British on February 16, the French on March 1, the 80 THE DIPLOMATIC HISTORY OF CHINA Russian on March 5, the Italian on March 23. 1917." I he agreement as to these secret assurances was not known to China nor to the United States, until the Peace Conference when the Shantung quest inn was con- sidered. Having thus received the secret pledges, Japan withdrew her opposition to China's entrance into the war. The withdrawal of Japan's opposition did not, how- ever, leave China free to take the momentous step. She had another obstacle to overcome which soon proved to be of vital consequence, and that was the opposition of the Chinese Parliament. Being dominated by the opposition, the Parliament refused to declare war under the leadership of the northern party. Thus a deadlock ensued between the Parliament and the Cabinet. To cut the knot, the President dismissed the Prime Min- ister, the leader of the northern party. Thereupon the northern party, threatened by the imminent loss of posi- tion, revolted and demanded the dissolution of the Par- liament. Under the pressure of the northern military governors, the President yielded and dissolved the Par- liament. The southern or so-called constitutional party forthwith left Peking in a body, and assembling at Can- ton, established a provisional military government in op- position to the Peking government, and at the same time declared war on the north. Thus the civil war com- menced. Meanwhile the northern party had again gained control of the Peking government by defeating General ( hang Hsun who had taken advantage of the situation by an attempt to reestablish the Manchu Dynasty. Once more firmly seated in the saddle in Peking, the northern military party declared war on Germany and Austria- Hungary on August 14, 1917. 80 In this connection it should be said that when the question of the declaration of war had plunged China into civil dissension, President Wilson, on June 7, 1917, COOPERATION AND CONTROL 81 addressed a friendly note to the Chinese Government, warning them against internal discord, and advising that the entry of China into the war was of secondary con- sideration, while the establishment of a central, united and responsible government was of prime importance. 81 To this note the Japanese took strong exception, and, in fact, deeply resented the unwarranted interference of the United States in the affairs of China without first consulting Japan. G - To secure the recognition from the United States of her special position in China and for some other minor affairs, and following the practice of the other powers then in vogue of sending war missions to the United States, Japan sent an Imperial Mission in August, 1917, to the United States under the leadership of Viscount Ishii. 03 As a consequence of the negotiations, an agree- ment was concluded on November 2, 1917, between Sec- retary Lansing and Viscount Ishii, now commonly known as the Lansing-Ishii Agreement. Japan and the United States reaffirmed the Open Door policy in China, and, in addition, they "deny that they have any purpose to infringe in any way the independence or territorial integrity" of China. The United States, however, on the other hand, recognized Japan's special interets in China, particularly in those sections where the territories are contiguous.* 4 This agreement was entered into without the knowl- edge of the Chinese Government. Fearful of what the recognition by the United States of Japan's special inter- in China might mean in the future, the Chinese Government despatched a declaration to the Govern- ment- of the United Stales and Japan.'' announcing that ( hina would nut he bound by any agreement entered into by other countries, and that she would respect special interests ot another nation due to territorial propinquity only in SO far as they are provided in the existing treaties. 82 THE DIPLOMATIC HISTORY OF CHINA Following the Lansing-Ishii agreement, the German menace in Siberia loomed large, threatening the very existence oi China and Japan. The Russian Soviets had just surrendered Russia to Germany, and German and Austrian prisoners were active in Siberia. To fore- stall the possible invasion through Siberia by the Ger- man and Austrian prisoners, Japan and China concluded, on March 19, 1918, two secret agreements, one relating to military cooperation and the other to naval. The agreements were to be enforced upon the commence- ment of hostilities, but "shall become null and void as soon as the military operations of China and Japan against the enemy countries of Germany and Austria come to an end." 00 On November 11, 1918, the Armistice of the Great War was declared, and on January 18, 1919, the Paris Peace Conference was organized. As an ally, China was admitted as one of the minor states with two pleni- potentiary seats at the peace table. China claimed, inter alia, the restoration of her rights in Shantung, including the leased territory of Kiaochau, the Tsingtao-Tsinan Railway, and the mines adjoining thereto. 07 On the other hand, Japan claimed the same German rights in Shantung on the strength of the secret pledges obtained from the Allied Governments in February and March of 1917, and her pledge that she would restore, sub- ject to certain conditions, the leased territory of Kiaochau. Thus the issues were joined. Both China and Japan claimed the same rights in Shantung, which Germany had held. The decision of the case, as we know, rested with lent Wilson. Great Britain and France, having already pledged to Japan, Lloyd George and Clemenceau were unable to do otherwise than to support Japan's claim. Italy had withdrawn from the Council of Five in consequence of the Fiume cmestion. President Wil- COOPERATION AND CONTROL 83 son was left alone to decide the case. If he should de- cide in favor of China, he might cause the exodus of the Japanese delegation, as he had witnessed a few days before the painful scene of the Italian withdrawal. If, on the other hand, he should decide in favor of Japan, he would compromise his principles of justice and right, especially in vivid contrast with the stand he had taken on the Fiume question. As he was bent on consummating the organization of the League, however, and as he could not afford to lose Japan from its mem- bership, he yielded, and on April 30, awarded the deci- sion to Japan. With the announcement of this decision, the Chinese Peace Commission was not only gravely disappointed, but also at a loss to know what to do: ''Shall China sign the Peace Treaty with Germany with the Shantung clauses in ? Or, shall she refuse to sign and thus not become a member of the League?" — That was the ques- tion. China could not assent to the Shantung decision, and yet she could not, and would not, be excluded from the membership of the League. In the face of these conflicting considerations, the Chinese Peace Delegation wisely decided to sign the treaty and thereby become a member of the League, but with a reservation on the Shantung clauses (Arts. 156, 157 and 158). To this end the Chinese Peace Delegation entered a formal res- ervation on May 6 at the Plenary Session of the Pre- liminary Peace Conference. To the disma) and sur- prise of the Chin< . however, th nation was rejected, and ev< n a declaration to the effect that the signature of the Chinese plenipotentiaries was not to preclude China from demanding at a suitable moment ■ consideration of tin- Shantung question. As China would rather lose membership in the League than her own warrant for the unjust disposition of German ■ in Shantung, the Chinese delegates refused t" sign the treaty on June 28, 1919.' s '1 Ik- signing, how- 84 THE DIPLOMATIC HISTORY OF CHINA ever, of the subsequent Austrian Treaty made China a member of the League. The effect on the Chinese people of the Shantung decision was of the greatest significance. It caused the Chinese to realize that the world had not yet attained a stage of development when right would always win on the merits of right only, but that the right to win must be backed by might. It also caused the Chinese to realize that it was useless to look for help from friendly Pow- ers, but they must find salvation among themselves. It further impressed on the Chinese mind that the source of weakness was due to the corruption and incompetency of the Chinese Government, rather than to the inherent weakness of the people themselves. As a result of these painful realizations, the Chinese nationalism, cut to its quick, burst out in magnificent exuberance. When the Shantung decision reached China, the students com- menced a strike, and drove out of office several most notorious pro-Japanese officials, who were believed to have betrayed China. Then followed a nation-wide boycott against the use of Japanese goods. On the other hand, the effect of the decision on Japan was not salu- tary. While victorious at the Peace Conference, she lost the confidence and admiration of many of her friends. As the war was over, the Powers, maimed hut not entirely disabled, returned to China again as their sphere of action in the Orient. Will they follow the policy of an international struggle for concessions, or of inter- national cooperation and control? This is the question that every earnest student of the foreign relations of China would wish to know. Hitherto all indications point to the conclusion that the Powers returning to China would adopt the policy of international coopera- tion and control. The United States, the champion of the Open Door policy, has abandoned her policy of aloof- COOPERATION AND CONTROL 85 ness, and is ready to participate in the affairs of China, and exert her influence tor the principles of the Open Door doctrine. Besides, the Powers were too much in- jured by the war to be able to enter into another heated contest for concessions, at least for the near future. Further, the close cooperation which they have experi- enced during the war will enable them to follow the policy of international cooperation and control rather than that of international struggle for concessions. To give concrete effect to this policy of international cooperation and control, the banking groups of the Al- lied Powers, — France, Great Britain, Japan and the United States, — at the invitation of the United States Government, met at the Paris Peace Conference on May 11 and 12, 1919. The step for such an international banking conference relating to China had been previ- ously determined at a conference of a number of Ameri- can bankers at the Department of State in June, 1918, which was convened in consequence of the request of the Chinese Government for a war loan. The Confer- ence of May 11 and 12, 1918, at Paris, resulted in the tentative formation of a New International Banking Consortium. The qualification for membership is the relinquishment in favor of the Consortium of all prior options to make loans in China. The bankers of the four Powers are to be organized into national banking groups, each participating in full partnership, ami <>n a basis of equality. The Consortium is nut to invade the field of private enterprises, but is to limit its sphere of action to public undertakings of a basic character. All agreements of the Consortium must be subject to the approval of the Governments of the national groups concerned. I he final agreement of the Consortium was signed on October 15, 1920, in New York City. It soon developed, however, that Japan was not in pel feel accord with the agreement of the Consortium. Prior to the final agreement of 1920, the Japanese Gov- 86 THE DIPLOMATIC HISTORY OF CHINA eminent qualified its assent by the reservation that South Manchuria and Eastern Inner Mongolia should 1 eluded fn-in the operation of the New Consortium. As such a reservation would be contrary to the principles of the Open Door doctrine, and would put Japan in a special status in the Consortium, it was not accepted by the other Powers. Japan, however, insisted, and that caused delay in the formation of the Consortium. Finally, to settle the difficulty, Thomas \Y. Lamont was requested by the American banking group, with the approval of the French and British groups, and the con- currence of the Department of State, to visit Japan, which Mr. Lamont did in March, 1920. As a conse- quence, a compromise was reached, whereupon Japan withdrew the reservation in toto, and authorized her banking group to enter into the Consortium without any qualification. 69 Viewing this period as a whole, in recapitulation, we can say that this was a period of international coopera- tion and control. The opening of this period saw the conclusion of the reorganization loan, which was a clear evidence of international cooperation and control. The close of the Great War witnessed the creation of a new international banking Consortium, which is a physical embodiment of the policy. This policy was interni] first by the withdrawal of the United Stales in 1913, which was followed by a temporary revival of the inter- national struggle for concessions, and then by the inter- position of the World War, which drew all rival nations to the battlefields of Europe, leaving Japan alone, su- preme and untrammeled in the Far East, the oppor- tunity of which she had fully availed herself. But during this period we may also notice that new forces have come into the life of China. I'he first is the Japanese effort to gain the control of China during the World War. In order to forestall the exigency of COOPERATION AND CONTROL 87 the international' control of China, Japan made the abor- tive attempt by the presentation of Group V of the 21 demands. The other is the full awakening and maturity of Chinese nationalism, which was touched to the quick by the Shantung decision and which promises to be the savior of Chinese independence in the days to come. This completes our sketch of the diplomatic history of China. Viewing the four periods as a whole, we clearly discern that there are definite tendencies and forces at work. First, we have seen that the Chinese did not welcome Western intercourse in the first and second periods, and, in fact, they were hostile to the unwarranted interfer- ence with their isolation and tranquillity. During the first period they were haughty, feeling themselves supe- rior to western barbarians. During the second period, while they had abandoned the conceit of superiority, they were still antagonistic to the west. This hostile attitude culminated in the Boxer Uprising of the third period in 1900. Thereafter, however, the Chinese attitude underwent a radical change. Instead of feeling superior, they regarded themselves as inferior; instead of being hostile, they welcomed Western contact, and were anxious to learn the best of Occidental civilization. On the other hand, the attitude of the Western na- tions, during the first period, was one of struggling for equality, and during the second period, that of treating China more or less on a basis of equality; bul when the third period eame, it distinctly changed for the worse and they regarded the Chinese as an inferior and down- trodden race destined to be ruled by the West. After, however, the Chinese Revolution took place in I'M 1 . it began to change for the better, and when China joined the Allies in 1917 and subsequently proved herself to be worthy of respect and admiration at the Paris Peace 88 THE DIPLOMATIC HISTORY OF CHINA Conference and in the League, Western states began to assume more and more an attitude of equality. Second, the method and nature of Western aggression have undergone a radical change during the four periods of Chinese diplomatic history. In the first period, the Western states were merely hent on opening China for trade and intercourse. In the second period, having opened China, they deprived her of one dependency after the other. In the third period, when protection from the dependencies was eliminated and the weakness of China was revealed by Japan's easy victory, they entered into an international struggle for concessions, victimizing China and threatening her very integrity. In the fourth and present period, however, they have changed their policy from struggle to cooperation, and from partition to control. On the other hand, the Chinese were determined to preserve themselves in the face of Western aggression. In the first period, while China was heing opened up, they were fast asleep. In the second period, when the outlying dependencies were being taken away one after the other, the Chinese were still asleep. In the third period, when Western nations began to threaten the very existence of China, they speedily woke up. They first resorted to the fanatical attempt to expel all "for- eign devils" from China, as was shown in the Boxer Uprising, and having failed in that endeavor and being humiliated, they directed their efforts at the reforma- tion of their government, as manifested in the Chinese Revolution of 1911. In the fourth and present period, Chinese nationalism was wide-awake, determined to save their land and independence from the encroachments of either the West or Japan. With this sketch of Chinese diplomatic history, let us now turn to the policies of the Great Towers in China, which will he treated in Parts II and III. 70 COOPERATION AND CONTROL 89 NOTES TO CHAPTER IV 1. MacMurrav, Treaties and Agreements with and Concern- ing China, 1911/2. 2. MacMurrav, ibid., China Year Book, 1912, p. 288. 3. MacMurrav. ibid., 1911/2. 4. MacMurrav, ibid., 1913/5. 5. MacMurrav, ibid., 1912/4. 6. For a full account, see F. H. Huang, Public Debts in China, ch. on The Reorganization Loan of 1913, pp. 56-71. 7. F. H. Huang, ibid., pp. 58-59; China Year Book, 1913, pp. 358-359. 8. MacMurrav, op. cit., 1912/9; China Year Book, 1913, pp. 359-364. 9A. China Year Book, 1914, p. 379. 9B. U. S. For. Rel., 1913, pp. 170-171. 10. MacMurrav, op. cit., 1913/5. 11. China Year Book, 1914, p. 387. 12. MacMurrav, op. cit., 1912/11. 13. MacMurrav, ibid., 1912/11. 14. Far Eastern Review, Jan., 1921, pp. 31-33. 15. MacMurray, op. cit, 1913/8. 16. MacMurrav, 1913/10. 17. MacMurrav, 1914/2. 18. MacMurray, 1895/5. 19. MacMurray, 1913/16. 20. It is to be observed here in this connection that later, on September 24, 1918, Japan secured the concession of these two railways, changing, however, Hancbuang to Hsuchowfu. 21. MacMurrav, op. cit., 1913/12. 22. MacMurrav, 1914/7. 23. MacMurrav, 1914/7. 24. MacMurray, 1914/4. 25. The Chino- Japanese Negotiations, published by the Chinese Government, 1915, pp. 10-11. 26. MacMurrav, op. cit., 1916/6. 27. MacMurray, 1916 28. MacMurray, \ ( >\(,/7. 29. MacMurrav, 1913/9. 30. MacMurrav. 1913/9. 31. MacMurrav, 1918/16. 32. MacMurrav. 1917/9. 33. MacMurray, 1918/7. 34. MacMurra 35. MacMurrav, 1918/11. 36. MacMurray, 1916/3. 37. MacMurrav. 1911/13. 38. MacMurray, 1912/12. 39. MacMurray, 1913/11. 90 THE DIPLOMATIC HISTORY OF CHINA 4(). MacMurray, 1914/12. 41. MacMurray, 1915 10. 42. The Shantung . officially presented by the Chinese Delegation t«> the Paris Conference of 1919. published by itional Welfare Society, 1920, pp. 39-40. 43. The Chino-Japanese Negotiations, p. 19. 44. Ibid., pp. 19-21. 45. Ibid., p. 21. 4o. Ibid., p. 21. 47. Millard, Democracy and the Eastern Question, Appendix, PP. Mh-2>77. 48. The Chino-Japanese Negotiations, op. cit., p. 23. 49. II .id., pp. 24-27. 50. Ibid., p. 27. 51. Ibid., pp. 28-29. 52. Ibid., p. 42. 53. Millard, op. cit., App., pp. 405-406. 54. The Chino-Japanese Negotiations, pp. 53-54. 55. B. L. Putnam Weale, The Fight for the Republic in China, p. 302. 56. The ShanUme Question, p. 40; Millard, op. cit., pp. 55-96. 57. Ibid., pp. 97-100.' 58. Ibid., p. 106. 59. Millard's Review, Supplement, July 17, 1920, China's Case at the Peace Conference, pp. 1-3. 60. The Shantung Question, App. to Vol. 2, No. 18, pp. 04-65. 61. W. R. Wheeler,' China and the World War, pp. 93-94. 62. Millard, Democracy and the Eastern Question, p. 118 et seq. 63. For a detailed account of the Mission, see The Imperial Japanese Mission to the United States, 1917, pub. by the Car- negie Endowment for [nternatl. Peace. 64. Hearings before the Committee on Foreign Relations in the United States Senate, 66th Congress, First Session, pp. 225- 226. 65. Millard, op. cit., p. 164. 66. Ibid.. App. C, pp. 421-425. 67. For the full t( xt of the claims, see Millard's Review, Sup- plement. July 17, 1920, China's Case at the Peace Conference, pp. 4-6. 68. For a full account, see Millard's Review, Supp., July 17, 1920, pp. 10-13. 69. For a full account, see Thomas W. Camont, Preliminary Report on the New Consortium for China, 1920; also see below the chapters on the New International Banking Consortium. 70. During this period Chile entered into treat] relations with China on Feb. 18, 1915 (MacMurray, 1915/2), and Switzerland, on June 13, 1918 (MacMurray, 1«'1878). PART II POLICIES OF THE GREAT POWERS IN CHINA V. The Policy of Russia VI. The Policy of France VII. The Policy of Germany VIII. The Policy of Great Britain IX. The Policy of the United States THE POLICY OF RUSSIA IN CHINA The policy of Russia in China has been one of terri- torial expansion. She has pursued this policy persistently until checked by the Russo-Japanese War of 1904-5, and interrupted by the Soviet Revolution of 1917. The ob- jective behind her policy was to reach an ice-free seaport. Russia had attempted to approach the Mediterranean through the Balkan Peninsula, but had been definitely blocked, for the Great Powers considered her advance in that direction dangerous to the integrity of the Ottoman Empire, and to the balance of power in Europe. She had then attempted to reach the Persian Gulf and the Indian Ocean through Persia and Central Asia, but that door had been effectively closed by England. Thus frus- trated, she finally concentrated all her energies on estab- lishing a foothold on the Pacific. After the acquisition of the maritime province by the Treaty of 1860 with China, she built the city of Vladivostok facing the Pacific but that was ice-bound for part of the year. So she was compelled to turn southward toward North China. To carry out this policy astutely, she adopted a method of reaching her ends, which was unique and, at the same time, unscrupulous. That is, she always pretended to be the friend of the weaker state which she aimed to absorb or annex by extending the protection of her alliance to the latter. Having thus broken down the wall of distrust, she would then obtain strategic points or concessions as a preliminary to her final occupation or absorption. In addition, she did not hesitate to re- sort to corruption, in case that could open up the way to her. Expressed in the words of E. J. Dillon: • 93 94 POLICIES OF GREAT POWERS IN CHINA "Russia's foreign policy in the past, whatever its real motives, may therefore be summarily described in the light of its effects as ruinous 'protection' of the feeble. It was the lethal hug of the polar bear. She would shield the government of a weaker neighbor from the immediate consequences of its own folly, and enable it to go on mis- governing its subjects, thwarting attempts at internal re- form, financial and administrative. The body politic would thus be left to decompose until it entered upon a stage sufficiently advanced to allow of its being digested almost without an effort. ... It is thus that Georgia, Persia, Turkey, China, Korea, were dealt with." In short, the Russian policy was imperialistic, unscrupu- lous, and opportunistic. Having seen the general nature of the Russian policy, we shall now trace its development. The Siberian ex- pansion of Russia was eilected in the 17th century, within a period of seventy years. It was done, not by the order of the Government, hut rather by the pluck and initiative of the freebooters of fortune who went there for self- interest and new abode. It was consummated very much as was the westward expansion of the United States, except that the Siberian expansion did not result in any great educational and economic development of the set- tled regions. Using the language of E. J. Harrison: 2 "It is equally important to note that the action of these Siberian pioneers was wholly voluntary and in no sense dictated by orders from the central government. Later on it was continued under the pretext of searching for 'free lands,' but personal gain was actually at the root of the movement from the first to the last, the empire occupying quite a secondary place in the calculations of these adventurers, although the Government had no ob- jection to recognizing an accomplished fact, and assumed nominal control over the lands thus subjugated. In truth, however, for three hundred years Siberia remained destitute of proper administration, means of communi- THE POLICY OF RUSSIA IN CHINA 95 cation, colonization, education, and real citizenship. . . . The ostensible- outward success of this enterprise was due, not to a species of epic pressure, or all-powerful national momentum but simply to the absence of resistance from the other side. . . ." This eastward expansion of Russia into Siberia could not but come into conflict with the Chinese. As early as about 1650 the Russian pioneers had penetrated the Amur region, which was then Chinese territory. At this time the Manchu Dynasty which had just established itself on the Chinese throne (1642) was busily occupied with the conquest and pacification of China proper. After about twenty years, however, the Manchus. having finally established themselves in China, turned their at- tention to the Russian encroachment. They wiped out the Russian settlements at Sungari and pushed the Rus- sians back far beyond the Amur region and established Aigun and Tsitsihar as advance posts against Russian aggression. Twice did the Russians return to Albazin, but twice were they driven back. As a conseepjence of this conflict, the Treaty of Nerchinsk was concluded in 1689. The Albazin fortress of Russia was demol- ished, and the Amur region became a de facto Chinese territory. Thus the Russians were pushed back by the Manchus in this early confiT I After the lapse of more than a century and a half, another adventure of the Russians was made. This time, however, the advance was ordered with the sup- port, and under the guidance, of the Russian Govern- ment. About 1854 the Russians occupied the Amur re- gion again. This move was made largely because the Crimean War of that time had blocked the Russian ambition to reach an ice-fret- seaport through Constan- tinople, and the Russian Government was consequently compelled to seize the Amur River as the possible out- let. 4 This advance on the part of Russia was not op- 96 POLICIES OF GREAT POWERS IN CHINA posed by the Chinese, for the Manchu Dynasty had then its hands full with the Taiping rebellion, which was threatening the safety of the Dynasty. Having accomplished the occupation, the Russian Gov- ernment proceeded to secure the recognition of a fait accompli from the Chinese Government. Characteristic of the foreign policy of Russia, the Czar's Government took advantage of the Taiping rebellion and offered to suppress the revolt in exchange for the cession of Man- churia, 5 which was, however, declined. Later, during the second war with Great Britain and France (1857- 1860), as the allied forces were advancing on Canton and Taku, Russia again took advantage of the situa- tion and secured the recognition from China of the north- ern bank of the Amur River as Russian territory by the Treaty of Aigun, 1858. 6 Finally, as the allied forces captured Peking in 1860 to enforce the ratification of the treaty of Tientsin, 1858, she posed as the friend and savior of the Manchu Dynasty by inducing the quick withdrawal of the allied forces from Peking. In rec- ognition of this service, the Aigun treaty was confirmed and the Treaty of Peking was signed, ceding to Russia, as we have seen, the territory east of the Ussouri River, including the maritime province. 7 Thus, backed by the Russian Government, and taking advantage of the Tai- ping rebellion and China's second war with Great Britain (and France), the second advance of Russia toward Manchuria was a success. Shortly after, Russia repeated the same practice again, but this time at another corner of China and not quite so successfully as in the Amur region. Again taking ad- vantage of the rebellions in Chinese Turkestan, Russia occupied Kuldja in Hi in 1871, with a proclamation that she would withdraw as soon as China was able to assume the functions of government in the territory. To repeat, by 1878 General Tso Tsung-tang having reconquered the rebellious region, China demanded the restoration of Hi. THE POLICY OF RUSSIA IN CHINA 97 By the Treaty of 1879, concluded by Chung Chow, Rus- sia was given the western parts of Hi, and the impor- tant military passes of the Ticnshan Mountains, with an indemnity of 5,000,000 roubles. This treaty was re- jected by the Chinese Government, and the second treaty was concluded by Marquis Tseng, in 1881, whose elo- quent tongue and diplomatic skill, together with the fiery zeal of General Tso Tsung-tang for military resistance, brought back to China the greater part of Hi, together with the strategic passes, through the payment, however, of an increased indemnity of 9,000,000 roubles. Thus, in this case, Russia, while gaining the western strip of Hi, was, on the whole, unsuccessful in her expansion in that part of China. Bent, however, on her policy of territorial expansion, she soon seized other opportunities that presented them- selves. In 1895, Japan had defeated China, and, by the Treaty of Shimonoseki, had snatched, besides Korea, the Pescadores and Formosa, and the Liaotung Penin- sula, including the strategic naval base, Port Arthur. When the news of the cession of Liaotung reached his ears, it was said Count Witte hurried to the Czar Nicho- las II and said to him: "We cannot allow Japan to quit her islands and get a firm foothold upon the Asiatic mainland. That would effectively block our Far-Eastern policy of peaceful pene- tration." 8 Therefore, again posing as the friend and savior of China, and in conjunction with Germany and France, she forced Japan to retrocede the- Liaotung Peninsula to China. Besid< -. she arranged an immediate loan of 400,000,000 francs for China upon the guarantee of the Imperial Russian Government, thus relieving the Chinese Government of the pressing need for the first payment of the Japanese indemnity falling due at that time. I l.iv- 98 POLICIES OF GREAT POWERS IX CHINA ing thus rendered effective assistance to China al her hour of need, she was read)' t<> demand compensation. At that time, the Trans-Siberian Railway, started in 1891, had just readied Lake Baikal. The question was as to which \\a\ it should extend, — by the kiakhta- Peking mute, or by the Amur River route, or via North Man- churia. As the Kiakhta-Peking route would surely arouse the suspicion of the other Powers, tnd as the Amur River route was confronted with great engineering diffi- culties and might also he accompanied by the possible risk of economic losses, the North Manchuria route was chosen. Having decided upon the route, the question naturally followed as to how to secure the consent of the I hinese Government to the construction of this rail- road. Opportunely, the Czar's coronation was to take place in May, 1895. Li Hung-chang was requested to be sent to attend the coronation. Before his departure, he had cute red into a tentative agreement with Count Cassini, the then Russian minister at Peking, as to the construc- tion of the Trans-Siberian Railway across the plains of North Manchuria to Vladivostok. While at the coro- nation, Count Witte convinced l.i Hung-chang that, to render effective armed assistance to China in case of a future struggle with Japan, it was necessary for Russia to send her troops quickly to Manchuria, and that, to do so, a railway would nerd to be constructed through North Manchuria toward Vladivostok. 9 In the words of Count Witte: "In ni\ conference with l.i Hung-chang, I dwell on the service which he had recently done to his country. I assured him that, having proclaimed the principle of China's territorial integrity, we intended to adhere to it ill the future; hut. to he able to uphold this principle, 1 argued, we must he in a position, in c -^rucw to render to China armed assistance. Such aid we would not be able to render her until both European Russia THE POLICY OF RUSSIA IN CHINA 99 and Vladivostok were connected with China by rail, our armed forces being concentrated in European Russia." ' As a result of negotiations, a secret agreement was reached which was virtually a secret defensive alliance. 11 Every aggression directed by Japan against Russia or China was to be deemed as necessarily bringing about the immediate application of the Treaty of Alliance (Art. 1). In this case, both Powers pledged to sup- port each other with all their military and naval forces (Art. 1). No treaty of peace could be made with the adversary without the consent of the other party (Art. 2). During the operations of the war. all parts of China were to be open to Russian warships which should receive the sary help (Art. 3). To facilitate military co- operation, Russia was granted the right to build a rail- road across Heilungkiang and Kirin in the direction of Vladivostok (Art. 4). The treaty was to last for fif- teen years subject to renewal (Art. 6). Thus, by the pretense of an alliance, Russia obtained the railway con- cession which was so necessary at that time to connect rn Siberia with European Russia. "It must he confessed that in the light of subsequent event- the conclusion of the agreement was in the nature of a diplomatic farce. Russia was bent upon aggression in Manchuria, and the promise of military assistance in certain eventualities was merely tendered as a me.r proteel I hinese amour propre." 1J Having entered into the Treaty of Alliance, not blindly. but with a full knowledge of Russia's ulterior aim-, Li Hung-chang wrote, 18 in July. 1895, shortly after the coronation of the Czar: "Russia is to-day our greatesl friend and our most-to- ired enemy. She i- our friend because < treat Britain and France i friends also. She wishes to he a 100 POLICIES OF GREAT POWERS IN CHINA better friend than they. She is our greatest enemy, be- cause what the- Russians call the trend of her destiny makes her so. She dominates all Northern Asia and hopes some day to have preponderating influence in China. She will help us to keep Japan out, because she herself wants to get in." No sooner had this prescience been recorded than the actual fulfillment came. Germany had seized Kiaochau in November. 1897, which was formerly earmarked by Russia in the so-called Cassini Convention. The ques- tion was whether Russia should seize Port Arthur and Talienwan, the ice-free ports of North China, which had been the goal of Russian territorial expansion in Asia. Count Wittc, a believer in the policy of peaceful pene- tration which presupposed the integrity of China, re- vealed later that he opposed the seizure in the Council, vehemently denouncing it as faithless and unwise, 11 and brought about the adverse vote of the Council. But Muraviov, the Russian Minister of Foreign Affairs at that time, who conceived the idea of seizing an ice-free seaport in East Asia, persuaded the Czar to take action contrary to the decision of the Council. In his explana- tion to Count W'itte for the apparent deviation, the Czar offered the excuse that Port Arthur and Talienwan might be seized by Great Britain, which was later discovered, however, to be unfounded. " 'You know, Sergey Yulyevich,' said the emperor to me, evidently somewhat put out, 'I have decided to occupy Port Arthur and Talienwan. Our ships with troops are already on their way there. Here is why I have taken this step. After the conference the Foreign Min- ister reported to me that according to his information British warships were cruising off the ports in ques- tion, and that if we did not occupy them the British would do so.' Muraviov's information was, of course, false, as I later found out from the British Ambassa- dor." xi THE POLICY OF RUSSIA IN CHINA 101 Thus Russia entered into the place whence she had forced Japan to recede, and thus, by this wanton seizure, she threw to the winds the Treaty of Alliance which, as we have seen, was merely used as a cloak under which to obtain the much needed railway concession and proba- bly to achieve her program of territorial expansion in North China. No sooner had Port Arthur and Talienwan been seized than another opportunity presented itself, which offered the irresistible temptation for the final consummation of the Russian design on Manchuria, and that was the Boxer Uprising in 1900. Quite in line with her traditional policy, and again taking advantage of the situation, Rus- sia occupied Manchuria. 10 Having done so, her task was to secure the recognition of the Chinese Govern- ment. The tactics employed in this move were paralleled by those of 1860, when she wrested the Amur and maritime regions from China. As she then pretended to be the friend and savior of the Manchu Dynasty, she now repeated the same strategy. Shortly after the relief of the allied legations, she proposed, as we have observed, to the Powers to withdraw their diplomatic agents and military forces from Peking to Tientsin, and there wait for negotiation, which proposal was. however, not accepted by the allies. 17 Again, during the negotiation she was in favor of referring the question of the amount of indemnity to the Hague Tribunal, and disposed to be lenient and moderate in regard to the punishment of the principal culprits. 1M Thus by posing as friend of China, as she had done so many times before, she expected that thereby she could win the cession of .Manchuria, as she had won the Amur and the maritime regions in 1.X60. To this end, while the allies were negotiating the final protocol oi peace, she entered, as we recall, into a separate con- vention with the Tartar General in Mukden. 1 '-' virtually making. Manchuria a Russian protectorate. To repeat, F 102 POLICIES OF GREAT POWERS IN CHINA frustrated by the protests of Great Britain, Japan and the United States, she entered into another convention known as the Lamdorff-Yangyu Convention,* restricting the sovereign rights of China in Manchuria and North China. In addition, Russia later demanded the conces- sion of the monopoly of the economic development of Manchuria to he granted to the Russo-Asiatic Bank. All these demands China resisted, and Great Britain, Japan and the United States entered vigorous protests.- 1 The Russian avalanche soon, however, mi I an effective check. On January 30, 1902, the Anglo-Japanese Alli- ance was concluded, aiming directly at the Russian ad- vance in Manchuria. Perceiving the peril of the oppo- sition, she at once changed her front and concluded the Treaty of March 26, 1 ( >02.-'-' promising to restore the Shanhaikwan-Newchang-Sinminting Railway, and to complete the evacuation of Manchuria in three succes- sive periods of six months each. When, as we have; known, the first period of evacuation came, she fulfilled her pledge, but this only nominally, for centrated her withdrawn troops in the other strategic parts of Manchuria where she was yet allowed to remain. When, however, the second period of evacuation was due. she openly refused to effect the withdrawal, and in addition, Qted to China, as conditions to further evacua Seven Articles,- 3 demanding, inter alia, the non- alienation of Manchuria and the closing of Manchuria against the economic enterprises of any other nation but Russia. What was worse, she concentrated her troops at Liaoyang, occupied Fenghangching and Antung, and ,-ent troops across the Yaln River into Korea, thus threatening even the safety of Korea and Japan. At this juncture, as we recall, Japan stepped into the arena and demanded, on AugUSl 12. 1903, inter alia, a mutual undertaking to respect the integrity of China and Korea, and the reciprocal recognition of Japan's pre- ponderating influence in Korea and Ri pedal in- THE POLICY OF RUSSIA IN CHINA 103 terest in Manchuria. 24 Throughout the negotiation, Rus- sia was willing to concede to Japan the recognition of her preponderance in Korea, but she insisted on Japan's recognition of Manchuria as being outside her sphere of influence, and refused to give the pledge, even to the very last moments of the negotiations, to respect the rity of China in Manchuria. This refusal on the part of Russia clearly and conclusively evidenced Rus- sia's intention to absorb or annex Manchuria. To this effect John Hay's Utter to President Roosevelt, on May 12. 1903, further bears indirect testimony: "I have intimated to Cassini that the inevitable result of the present course of :i n would 1 izure by different powers of different provinces in China, and the accomplishment of the dismemberment of the Em- He shouts in reply. 'This is already done. China is dismembered and we are entitled to our share.' " - ' The Russo-Japanese War (1904-5) that ensued resulted, it is to be remembered, in addition to the ference to Japan of the lease of Port Arthur and Talienwan, and of the southern section of the Russian- Manchurian Railway from Changchun to Port Arthur, in putting an effective check on tl e Russian advance in Manchuria. Having learned through the painful experi- ence of defeat, the police of Russia thenceforth under- went a change from an offensive and aggressive to a iatory and defensive procedure more on the rvation of what she had than on the recovery of what was ires of defense. The Amur Railway Bill was hastily passed by the Russian Duma, and the railway was constructed at great cost to the Government,— more for strategic purposes than for com- il. Thus the ( hin< n Railway was made the first line of d the Amur River the second, and the Amur Railway the third. Besides, Vladivi was developed into a first class fortress and naval sta- 104 POLICIES OF GREAT POWERS IN CHINA tion. The Silurian Railway track was doubled, thus increasing its capacity for transportation. In addition to these defensive measures, she also adopted a more conciliatory attitude in her dealings with China and Japan. In the Harbin case of 1907, although she had at first insisted on the Russian ad- ministration of the municipality in that place, she never- theless came to a compromise with China in 1909, and arranged for partnership and cooperation on a basis of equality. - i: Regarding Japan, she also entertained a more chastened spirit. She entered into the first agreement with Japan on July 30, 1907, 27 pledging to preserve the status quo of their respective special interests in China, and later on July 4, 1910, 28 promising mutual cooperation in case of foreign interference with their respective in- terests in Manchuria, and lastly, in July, 1916, forming a secret alliance with Japan. 29130 Pursuing this defensive policy, Russia soon seized another opportunity to strengthen further her own de- fense. In 1911 the Revolution had plunged China into civil turmoil. Taking advantage of the situation, she detached Outer Mongolia from China and made it a buffer state between China and Russia, — though nom- inally under the suzerainty of China. To repeat what has been said, on November 3, 1912, 31 she concluded a convention with Mongolia, pledging to assist the latter in maintaining the regime of autonomy, thus breaking away from the grip of the Peking Government, and putting a prohibition on the admission of Chinese troops and colonization of the land by the Chinese. A year later, by the convention with China, on November 5, 1913, M she exacted from China the recognition of the autonomy of Outer Mongolia and pledged not to send any troops thereto, nor to colonize the territory. By a subsequent agreement, on September 30, 1914, 33 she obligated ( >Uter Mongolia not to grant any railway con- cession in Outer Mongolia without first consulting Rus- THE POLICY OF RUSSIA IN CHINA 105 sia. Finally, to complete the entire process of making a buffer state of Outer Mongolia, and to bring about a definite understanding concerning the relationship be- tween Russia, Outer Mongolia and China, the tripartite agreement was concluded, on June 7, 191 5. 34 Russia and China recognized the autonomy of Outer Mongolia (Art. 2), while Outer Mongolia recognized the Sino- Russian Convention of November 5, 1913 (Art. 1) and also the suzerainty of China (Art. 2). Outer Mon- golia was to have no right to conclude any international treaty with foreign powers respecting political and ter- ritorial questions (Art. 3). As regards questions of a political and territorial nature in Outer Mongolia, the Chinese Government was obligated to come to an agree- ment with the Russian Government through negotiation in which the authorities of Outer Mongolia should par- ticipate (Art. 3). Thus, by these successive conven- tions, Russia made Outer Mongolia a buffer state be- tween China and herself. By prohibiting Chinese coloni- zation and military establishment in Outer Mongolia, she succeeded in holding off the contact and therefore the conflict between the Chinese and the Russians at arm's length. By requiring mutual agreement as to questions of a political and territorial nature in Outer Mongolia, she established herself as a co-overlord or joint suzerain over Outer Mongolia, and further paved the way for future expansion or annexation, the opportunity present- ing itself, as in Japan's case in 1885, when she required of China previous notice for the dispatch of troops to Korea. When, however, the Soviet Revolution of 1917 came, the Russian policy was fundamentally changed. As the Soviet rule was the antithesis of the Czar regime, so the policy of the Russian Soviet Government in China was just the opposite of the C/.ar Government. Instead of seeking territorial, or political, or economic gains, it sought justice and restitution in China. Instead of hold- 106 POLICIES OF GREAT POWERS IX CHINA hina a1 a distance, it attempted to befriend China. In the telegram of March 26, 1920, the Soviel Minister of Foreign Affairs offered to the Chinese Government** the restoration of the Chinese Eastern Railway, the can- cellation of the Boxer indemnity, the abolition of the Russian extraterritorial rights in China, and the abroga- tion of all those treaties, the object of which was to encroach upon the Chinese territorial rights." The Soviel telegram read In part as follow.-: ". . . The Soviet Government offered at that time to Government to enter into negotiations on the subject of annulling the Treaty of 1896, the Protocol of Peking, 1901, and all the agreements concluded with Japan from VX)7 to 1916. That is to say to return to the Chinese people all that has been taken from them by tin- government of the Czar, either by authority of, or through an understanding with Japan and the Allies. "The government of the Soviet returns to the Chinese people without demanding any kind of compensation the Chinese Eastern Railway as well as all the concessions, mineral, forestry, gold mines and others, which have been snatched from them by the government of the Czar, the government <>i' Kerensky and the brigands, Holtvath, SemenolT. Koltchak, the Russian ex-generals, merchants and capitalists. "The governmenl of the Soviet renounce- the con- tribution due from China for the insurrection of lioxers 00. . . . "Tin gov< nment of So\iet abolishes all special privi- . all the concessions to Russian trade-men in Chinese territory. No Russian official, priest or missionary, should dare interfere in Chinese affairs. If they commit a crime-, they ought to be judged according to local laws and local justice. . . . "Beyond these principal points, the government of Soviet is read otiate with the Chinese people rep- resented by its plenipotentiary, all other questions, and to liquidate once for all. all the acts of violence and THE POLICY OF RUSSIA IN CHINA 107 injustice which have been committed against China by the former Russian Governments in concert with Japan and the Allies." Ba This telegram China did not answer, having as yet not recognized Soviet Russia, but following this, by a Presidential Mandate of iber 23. 1920, ;t!) the Chinese Government terminated all official relations with the old regime, withholding official recognition from the Russian minister at Peking and the Russian Consuls in China, and proclaiming that China would act as tem- porary trustee of Russian interests in China, pending the establishment of a National Government in Russia. This, however, did not abrogate the Sino-Russian Treaties, nor cancel the extraterritorial rights of the Russians. 40 Tims, we can conclude, in recapitulation, that the policy of Russia up to the Russo-Japanese War, was pre- eminently one of territorial expansion under the guise of friendship and alliance and the adv; of critical opportunities, as evidenced by the session of the Amur and Maritime regions in 1858 and 1860, and the acquisi- tion of the western parts of Hi (1871-1881), and the seizure of Port Arthur and Talienwan during the gen- eral scramble of 1898. and finally the attempt to absorb Manchuria during and following the Boxer Uprising. We can also safely say that after the Russo-Japanese War, the policy of Russia in China was mainly con- ciliatory and defensive, changing, however, to agj siveness only during and following the Chinese Revo- lution, as evidenced by its creation of Outer Mongolia as a buffer state. It is to be observed, however, that when the Soviel Revolution came, the Russian policy was radically changed into that of International Broth- erhood and Soviet Propaganda. As to what the future of the Russian policy may be, it will depend largely upon the duration of the So\ iel n crime. 108 POLICIES OF GREAT POWERS IN CHINA NOTES TO CHAPTER V 1. Dillon, The Eclipse of Russia, p. 224. 2. E. J. Harrison, Peace or War East of Baikal?, p. 21. 3. Ibid., pp. 23-25. 4. Lancelot Lawton, The Empires of the Far East, Vol. II, p. 1291. 5. Ibid., Vol. II, p. 1291. 6. Morse, The International Relations of the Chinese Empire. Vol. 1. p. 477. 7. Hertslet, Vol. I, Xo. 82, p. 461 et seq. 8. Patrick Gallagher, America's Aims and Asia'-; Aspirations, p. 130; cf. Count Witte, My Dealings with the Li Hung Chang, World's Work. January, 1921. 9. Count Witte. My Dealings with Li Hung Chang. Article published in the World's Work, January, 1921, p. 302 et seq. 10. Ibid., p. 302. 11. Patrick Gallagher, op. cit., App. B., pp. 456-457; Lancelot Lawton, op. cit., Vol. II, pp. 1295-1296; Far Eastern Review, January, 1921, p. 23. 12. Lancelot Lawton, op. cit., Vol. II, p. 1296. 13. W. F. Mannix, Memoirs of Li Hung Chang, 1913, p. 118. 14. Count Witte, My Dealings with Li Hung Chang, p. 307 et seq. 15. Ibid, p. 307. 16. Morse, op. cit., Vol. Ill, p. 321. 17. Ibid.. VoL III, p. 305. 18. Ibid.. Vol. 111. p. 341 et seq. 19. Asakawa, Russo-Japanese Conflict, pp. 166-167, China, No. 2, 1904, No. 5, January 4, 1901 ; vide supra, Chapter on the Inter- national Struggle for Concessions. 20. Asakawa, op. cit., p. 174, The Times, February 28, 1901 ; China, Xo. 2. 1004. X... 6, Xo. 14. No. 25 and No. 42; 'vide supra, Chapter on the International Struggle for Concessions. 21. Vide supra, Chapter on tin- International Struggle for Con- cessions. 22. Hertslet, op. cit., No. 90, pp. 509-512. 23. Count Okuma, Fifty Years of Japan, p. 117; Japan's For- ('•.II Relations, by T. Soyishima; Asakawa, op. cit., pp. 242-244; China, Xo. _', 1904, Xo. 94. _'4. Asakawa, op. cit, pp. 303-304; vide supra, Chapter on the International Struggle for Concessions. Tor a full account of the Russo-Japanese Negotiations leading to the war, see Asa- kawa, The Russo-Japanese Conflict, pp. _">ole line partie d< 112 POLICIES OF GREAT POWERS IN CHINA In addition, Annani pledged not to enter into any treaties not in accord with the one made between France and Annam and without informing the French Govern- ment, while France remitted the balance of the war in- demnity.- Thus, by this treaty of alliance, France de- tached Annam from her traditional relation with China, and made her an independent state under the pro- tection of the French Alliance, thus virtually supplant- ing China's suzerainty. This treaty of alliance, however, was a mere prelude to the eventual establishment of the French protecto- rate. Consequently, on June 6, 1884, when the French forces had already come into conflict with the Chinese garrisons in Tonkin, France imposed upon Annam the treaty of Hue, which definitely established the French protectorate over Annam. Article One reads : "L' Annam reconnait et accepte le Protectorat de la France, la France representera 1' Annam dans toutes ses Relations Exterieures. Les Annamites a l'etranger seront places sous la protections de la France." A Resident General, representing the Government of France, was to assume the functions of the protectorate and to attend to the foreign relations of Annam with- out, however, interfering with the local administration of the provinces (Art. 5). Assistant Residents under the order of the Resident General were to be placed in Tonkin (Art. 6). 3 The colonial base having thus being created, her next step was to establish a sphere of influence, wherein she could exploit the wealth of China. It will be recalled, as a reward for her service in the tripartite intervention for the retrocession of Liaotung, she secured, on June 20, 1895, besides certain territorial advantages on the frontier of Tonkin, 4 the opening to trade ° of Lungchow, THE POLICY OF FRANCE IN CHINA 113 Mengtze, Ho-K'eou and Szemao (Art. 2 and 3), special mining privileges in Yunnan. Kwangsi, Kwangtung (Art. 5) and the right of extension of the Annam railway into China (Art. 5).° Following the general scramble for leases and concessions, she obtained the lease of Kwangchowan, the right of a railway from Tonkin to Yunnan, and the privilege of the appoint- ment of a Frenchman to head the Chinese postal serv- ice, 7 and also the concession of a railway from Kwang- chowan to Leichow or to a point in the neighborhood thereof (Art. 7). H Besides, she procured from China the declaration of non-alienation of the Island of Hainan 9 and of the territory bordering on Tonkin. 10 Later, on September 26, 1914, 11 she received the note of the Chinese Foreign Minister giving preference to French nationals in railway and mining enterprises in Kwangsi. Side by side with her policy of creating a sphere of influence in Southwestern China was her policy of working hand in hand with her ally in the North. In almost all affairs of importance, she marched shoulder to shoulder with Russia. She joined Russia in 1895 in the tripartite intervention for the retrocession of Liao- tung. She practically made the entire flotation of the Russo-French loan of 400,000,000 francs under the guarantee of the Russian Government for the relii China. During the Boxer Uprising she accepted the Russian proposal to withdraw the allied diplomatic agents and the military forces from Peking to Tientsin to wait for the negotiation of peace, which was rejected generally by the other allied powers. 11 In response to the Anglo-Japanese Alliance, she and Russia jointly made a counter-declaration on March 3, 1902, 1 ' pro- claiming that the foundation of the French Russian Policy in the Far Easl was the same as the principles embodied in the Anglo- Japanese Alliance, but reserving 114 POLICIES OF GREAT POWERS IX CHINA the right of action in "the contingency of either the ag- gressive anion of third powers or renewed disturbances in China." During the Russo-Japanese War that en- sued, though neutral, she extended her hospitality to the Russian fleet en route to < )rient. When after the war, however, Russia and Japan came to an agreement in 1907, she likewise followed and entered into an under- standing with Japan on June 10, W07 14 engaging to support "the territorial rights of the two contracting parties in the continent of Asia." In reply to the neu- tralization proposal of Knox, 18 while approving the principles underlying the plan, she declined to adhere thereto, "unless hy a common accord with the two pow- ers (Russia and Japan) most interested had been dis- posed to renounce the contract rights in Manchuria and to side with the .American suggestion." As a further evidence of the French policy of co- operation with Russia in the Far East, M. A. Gerard, the French Minister in Peking from 1894 to 1897, wrote in his "Ma Mission En Chine" the following passage regarding the instructions he received of cooperating with Russia : "Mes Instructions me preserivaient enfin, apres quelques recommendations speciales pcn Door would he maintained in the Yangtze Valley. 18 So far, the policy of ( lermany in China was more like the Russian policy than that of the Open Door. She maintained her railway guards along the Tsingtau- Tsinan Railway much the same as Russia in Manchuria. In 1900 the Kaiser made a speech to the Russian Gov- ernment that his policy in China was just like the Rus- sian policy. 18 In the ca of the Russian agression in Manchuria, while Great Britain, Japan and the United entered vigorous protests, 14 Germany remained ominously silent. As France was not expected to pro- being the ally of Russia, Germany's failure to pro- tituted a lonely exception, clearly betraying her intention and policy of silently countenancing Russian expansion in Pastern Asia. 18 When the Russo- Japanese War came, however, the policy of Germany in China underwent a radical change. Isolated during the war and con fronted by two hostile coalitions (the Dual Alliance of Prance and Russia and the Anglo-Japanese Alliance) she realized that, if in of the war, there should he any spoliation of China, she could obtain only Shantung; while the ; whom were her enemies, would gain the rest of China. This, obviously, was detrimental to her interests. In anticipation, therefore, she proposed THE POLICY OF GERMANY IN CHINA 127 to the United States Government to make a declaration for the maintenance of the integrity of China, and to counsel the Powers to retrain from any act of spoliation at the close of the war. With this proposal the United States agreed. Dating from this proposal to the United States, Ger- many committed herself thenceforth to the Open Door Doctrine. Instead of keeping aloof, she joined the Pow- ers in the Hukuang loan, 17 the currency reform and in- dustrial development loan, 1 " and the reorganization l'oan. loA Instead of aggression, she showed due respect for Chinese sovereignty. By the end of 1905, she handed her postal service to the Chinese. 1913 By the Con- vention of November 28, 1905,-° she withdrew her troops from Kiaochow and Kaomi. By the amendment of December 1, 1905. - 1 to the agreement of April 17, 1899, concerning the maritime customs office at Tsingtau, she abandoned her restrictions on the Chinese customs derogatory to Chinese sovereignty and restored the service almost to the same status as elsewhere except requiring twenty percent of the proceeds as contribu- tion to the government of Tsingtau. Further, instead of domination and exploitation, she manifested remarkable self-restraint. By the agreement of July 24, 1911,-- with the exception of "the Fangtze and Tzechwan mining areas and the mining district from Chinlingchen along the Kiaochow-Chinan Railway in a northerly direction for a distance of thirty li to Chang- tien" and some other areas, "all mining rights hitherto granted by China to the company within thirty li (15 kilometers) on both sides of the Kiaochow-Chinan Kail- road now in operation, the Tientsin-Pukow Railroad now under construction and the Kiaochow-I-Chow Rail- road recently surveyed are hereby canceled" (Art. 3), stipulating, however, thai in case foreign assistance, either in capital or enj or material, should be needed in the development of the relinquished distri< 128 POLICIES OF GREAT POWERS IN CHINA first option should be given to the Germans. Likewise, by the agreement oi December 31, 1913, 23 relating to the extension of the Tsingtau-Tsinan Railway, while she procured the two concessions, one from Kaonii to Hsuchowfu and the other from Tsinan to Shunteh, she surrendered the railway concessions, acquired under the Convention of March 6, 1898, for the lease of Kiao- chow.-' What is more, instead of being uncompromising and revengeful and relentless, as shown during the Boxer Uprising, she manifested an attitude of friendliness and helpfulness, with a view to winning the friendship and goodwill of the Chinese and to extending German com- merce and kullur in China. By the Tientsin-Pukow Railway loan of January 13, 1908,- 5A she gave the best terms for railway construction, which have since served as the model for other railway construction contracts. She inaugurated the project of systematic forestation, extending even into the hinterland of Kiaochow.- 50 She established high schools and professional schools for the spread of German kullur, to which Chinese students flocked from all parts of the country. As a result of this systematic and deliberate cultivation of Chinese friendship, her trade prospered by leaps and bounds, as evidenced by the following figures,-" which show that from 1902 to 1911 the imports increased tenfold, and the exports about twenty. Imports 1902 1 1,078,000 marks 1911 114,938,000 " Exports 1902 4,865.880 " 1911 80,295,000 " This policy of the Open Door and friendliness, however, was interrupted by the Great War. As is well known, Germany at the beginning of the war was supplanted in the East by Japan, who occupied THE POLICY OF GERMANY IN CHINA 129 the entire length of the Tsingtau-Tsinan line on Oc- tober 6, 1914, and captured Tsingtau on November 7. On August 14, 1917, China declared war on Germany, terminating all treaty relations.- 7 By the Treaty of Peace signed at Versailles, June 28, 1919 (Arts. 156, 157, 158), Germany was to renounce in favor of Japan all her rights in Shantung, including the lease of Kiao- chow, the Tsingtau-Tsinan Railway with the adjoining mines, and the submarine cables, thus losing her sphere of influence in China. She was further directed to re- turn to China the astronomical instruments which she had taken during the Boxer Uprising (Art. 131), the concessions at Tientsin and Hankow (Art. 132), to re- nounce the balance of the Boxer indemnity (Art. 128), and to withdraw from the protocol of September 7, 1901, the tariff arrangement of August 29, 1902, and the arrangements of 1905 and 1912 regarding Whampoo. After Germany's passage through the ordeal of war and the humiliation of peace, it is interesting to conjec- ture what will be her future policy with regard to China. Shorn of all rights, she returns to China without a sphere of influence, without a base of action, without a settle- ment, and without the protection of extraterritorial jurisdiction. On the other hand, she has to enter into the spheres of influence of other Powers, and compete there for her commerce and interests. Under such cir- cumstances, she cannot favor the policy of the Closed Door, not to say that of partition or control ; rather, she will favor the Open Door policy. She will desire the maintenance of the equal opportunity of trade and the preservation of China's integrity, so that her commerce may yet compete with the other Powers now holding spheres of influence. We may. therefore, venture the conclusion that Germany's attitude towards China will be the same policy of the Open hour and friend! she SO splendidly adhered to in the years immediately before the outbreak of the Great \Ya: 130 POLICIES OF GREAT POWERS IN CHINA NOTES TO CHAPTER VII I. I '.it rick Gallagher, America's Aims and Asia's Aspirations, ]). 143 ; Overlackj Foreign Financial Control in China, pp. 139- 141; von I'.ulow's statement in the Reichstag, April 27, 1898, reported in the enclosure of the letter from Sir. !■'. Lascelles to the Marquess of Salisbury— China, No. 1 (1899), Affairs of China. _'. Vim Bulow, Imperial Germany, Translation, 1916, pp. 49-50. 3. The Shantung Question, published by the Chinese National Welfare Society in America, March 1, 1920, p. 37. 4. MacMurrav, Treaties and Agreements with and Concerning China, Eiertslefs China Treaties, Vol. I, No. 59, p. 350 et seq. : The Shantung Question, op. cit, App. No. 1 to Vol. 2, pp. 47-50. 5. Overlack, op. cit., pp. 139-140, von Billow's statement in the Reichstag, April 27, 1898, reported in the enclosure of the letter from Sir F. Lascelles to the Marquess of Salisbury — China, No. 1 (1899). Affairs of China. Von Biilow's Imperial Germany. Trans., 1916, p. 117. 7. Morse, The International Relations of the Chinese Empire, Vol. 3, p. 309. 8. MacMurray, 1900/5; Asakawa, The Russo-Japanese Con- flict, pp. 160-161. 9. London Times, March 16, 1901, quoted in S. Tomimas, The Open Door Policy and the Territorial Integrity of China, p. 80 ■i.; Asakawa, op. cit., p. 103. 10A. \V. R. Thayer. Life of John Hay, Vol. 2, p. 248, letter to Henry Adams, Nov. 21, 1900; Morse, op. cit., Vol. 3, p. 328. 10B. Asakawa, op. cit.. pp. 160-161. II. Morse, op. cit., Vol. 3, p. 366; China, No. 3 (1902), No. 22, Baron Eckardstein to the Marquess of Lansdowne, pp. 6-7. 12. Ibid.. Vol. 3. p. 366; July 30-Nov. 16. 1902, China, No. 3, 1902, also No. 26, No. 31, No. 41. 13. Mud., VoL 3, p. 266. 14. Vide supra, Chapter on the International Struggle for Con- 15. MacMurray, 1916/2. MacMurray, 1898/3. The coopera- tion of her financial agents with those of Great Britain in the Anglo-German loans of March 23, 1896, and of March 1, 1898, due more to the exclusion of German interests from the Russo-Chinese Bank than to any free and voluntary desire for cooperation growing oul of similarity of policy. 16. U. S. For. ReL, 1905, p. 1. 17. MacMurray, l ( 'll/5. 1 MacMurrav, 1911/2. 19A. MacMurray, 1913/5. I'M:. Hornbeck, Contemporary Politics in the Far East, p. 297. The Shantung Question, op. cit., pp. 54-56. THE POLICY OF GERMANY IN CHINA 131 21. MacMurray, 1899/2. 11. MacMurrav, 1900/4; The Shantung Question, op. at., pp. 56-57. 23. MacMurrav, 1913/16. 24. MacMurrav, 1898/4. 25A. MacMurray, 1908/1. 25B. Hornbeck, op. cit., p. 297. 26. Gallagher, op. cit., p. 144. 27. The Shantung Question, op. cit., pp. 64-65. 28. Dr. O. Frank, Deutschland mul China vor, in und nach dem Kriege, 1915, p. 17. VIII THE POLICY OF GREAT BRITAIN IN CHINA The policy of Great Britain in China is mainly com- mercial. It aims primarily at trade predominance. Dur- ing the first period of the diplomatic history of China, she directed her policy toward the opening of China and the settlement of satisfactory diplomatic intercourse at Peking. During the second period when the other Powers were snatching one dependency after another from China, although she seized Burma and Sikkin as a counter-move to French acquisition in Burma and Tonkin, she pursued more or less a policy of laissez faire, giving the fullest measure of liberty to private initiative and refraining herself as far as possible from political or territorial en- croachment, thus cultivating the good will of the Chinese and winning trade predominance. When during the third period the international struggle for concessions came on — a struggle resulting in the establishment of spheres of influence — Britain, unable to check the general move- ment for the spoliation of China, was compelled to join in the scramble for concessions and in the demarcation of as large a sphere of influence as possible for herself. This she did by exacting from China the Declaration of Non-Alienation respecting the Yangtze Valley and by entering into agreements with other Powers, pledging herself to recognize their respective spheres of influence, — with France in 1896, 1 with Germany in 1898, 2 with Russia in 1899 3 and 1907, 4 and with Japan in 1902, 6 1905,° and 191 1. 7 Asa commercial power, she naturally favors the Open Door doctrine in China. It is to her advantage that China shall remain as wide open as possible for the trade of 132 POLICY OF GREAT BRIT ATX IN CHINA 133 the world ; on the other hand, it is to her disadvantage to have China cut up into closed spheres of influence or partitioned. For while she is not anxious to take on any more territorial responsibilities, she does desire to see her trade spread and predominate in the markets of China. When the battle of concessions commenced toward the close of the last century, threatening the very integrity of China, she was therefore most anxious to proclaim a doctrine like the Open Door, guaranteeing the equal op- portunity of trade and upholding the integrity of China. The debates in the House of Commons at that period were filled with utterances for the Open Door. Lord Charles Beresford, returning from China to Great Britain by way of the United States, preached enthusiastically the maintenance of the Open Door in China. The policy of Great Britain was at that time set forth by Sir W. V. Harcourt in his speech in Parliament on April 29, 1898 : 8 "... I think I should be accurately stating the princi- ples of policy at which the Government aimed under the following heads : they were stated by several ministers of authority, and notably by the Right Honorable Gentle- man, the Leader of the House, in the early part of the year. I shall say that these principles were to oppose, for ourselves and for others, territorial occupation, which would necessarily lead to the dismemberment of the Chinese Empire; and, secondly, that there was to be the principle of the Open Door, by which freedom of access for the commerce of Great Britain, under the Treaty of Tientsin, and other nations, should be maintained and preserved in China. Thirdly, there was to be no acknowl- edgement of claims to special spheres of influence for particular governments and states, but equal rights should be claimed and exercised everywhere ..." Anxious as she ntight be to sponsor the Open Door doctrine, she found that she herself was Stained with the 134 POLICIES OF GREAT POWERS IN CHINA spoliation of China and the establishment of the sphere of influence in the Yangtze, and could not consistently preach a doctrine which she herself had not been able emplify. She was therefore compelled, though re- luctantly, to let the United States take the honor as well as the responsibility of sponsoring and championing the doctrine in the Far Bast. Although disqualified to be the sponsor of the doctrine, she was, however, most anxious to be a sincere and earn- est upholder and supporter of it. Long before the an- nouncement of the Open Door doctrine, she had prac- ticed it. As soon as she had established herself in Hong Kong, she opened that island as a free port to the trade of the world. In 1845, when she had secured the British settlement in Shanghai, she made it an international set- tlement/' When John Hay sent his circular note of September 6, 1899, proclaiming the Open Door policy in China, Great Britain was the first to reply in favor. 10 On October 16, 1900, she entered the Anglo-German agree- ment with Germany affirming the Open Door and up- holding the integrity of China, which was sent to the several powers. Later, against the Manchurian Conven- tion of 1900-1902 and the Seven Articles of Russia in 1903, in conjunction with Japan and the United States, she entered vigorous protests. Failing in diplomatic representations, she entered into an alliance with Japan in 1902, upholding the Open Door and the integrity of China, and directed primarily at the Russian advance in North China. I lor subsequent renewal of the alliance in 1905 and 1911 all reaffirmed the principles of the Open Door doctrine. 1 - I ler recent wholehearted support of the New International Hanking Consortium, and especially her rejection of Japan's reservation regarding South Manchuria and Eastern Inner Mongolia, again evidenced her true desire and intention to follow the ( )pen Door doc triii' I ler adherence to the Open Door doctrine was, how- POLICY OF GREAT BRITAIN IN CHINA 135 ever, seriously handicapped, and in some instances, even compromised by her alliance with Japan in 1905 and 1911. In exchange for the Japanese protection of her interests in China and India, she was constrained to give to Japan the recognition of paramountcy over Korea, leading to the annexation of that unhappy land in 1910, and a free hand and special interests in South Manchuria, resulting in the closing, partial at hast, if not complete, of South Manchuria to the trade of other nations, and paving the way for the territorial expansion of Japan in that region. In the Shantung question, while sympathy might he given for the hard circumstances under which the secret pledge was wrested from (heat Britain during the critical days of her life and death struggle in Europe, she was compelled to support Japan, though much against her will, and in apparent contravention of the Open Door doctrine, and in violation of her own sense of justice and right. Mention must, however, be made that not to an unappreciable measure has the alliance exercised a restraining influence on Japan, as evidenced by the Nanking incident when, on account of the killing of some Japanese, Japan proposed to make war on China, thus taking advantage of the revolution to strangle the republic in the cradle. This was, however, nipped at the hud by the British counsel of moderation. 11 Though compromising at times and yet still upholding the Open Door doctrine as Ear as possible, the financial activity of Greal Britain in China became more and more litan and international. Having learned the les- sons of ruin petition, she was almost always in favor of eliminating competition by international coopera- tion, thus incidentally asserting the principle of equal op- portunity. She cooperated with Germany in the Tientsin- Pukow Railway, with French interests in the Pukow- Sinyang Railway, and with Germany, France and the United States in the Hukuang Railway, thus admitting 136 POLICES OF GREAT POWERS IX CHINA foreign interests into the Yangtze Valley, which was re- garded as her exclusive sphere of influence. With re- spect to administrative loans, remembering the tragic ex- perience she had in Egypt resulting in final bankruptcy and foreign control, she was determined not to favor any single nation's financing China for administrative re- organization, hut was strongly in favor of having the ad- ministrative loans shared by the powers, on the basis of equality, if possible, and financed by the hanking institu- tions supported by the governments interested. In other words, she favored the policy of the internationalization of loans, as evidenced by the following Utter of the For- eign Office to Lord Balfour of Burleigh: 18 "In regard to the first point raised in that letter, namely, the question of the advisability of internationalizing loans in China, I am to inform your Lordship that Sir E. Grey is unable to concur in the statement that it is not in the interests of Great Britain to agree to such an arrangement. On the contrary. His Majesty's Govern- ment and the other governments concerned have, from the experience of pasl years, come to the unanimous con- clusion that, both in the interests of their own financiers and investing public, and also a> a safeguard of China's credit, it is incumbent on them n> prevent, as far as lies in their power, all possibility of a return to the former dangerous policy of unprofitable international competi- tion in China which only enabled the Chinese Government to obtain money without adequate guarantee and rendered it impossible for the governments interested to exei the necessary control over the terms of any loans. There can be no doubt that the internationalization of future loans would go far to secure this desirable end." Further, for fear of extravagance and corruption on liic part of the Chinese officials, she was quite insistent on the necessary supervision over the proper expenditure of the proceeds of the loans, as evidenced by the follow- ing extracts : POLICY OF GREAT BRITAIN IN CHINA 137 "I am to add that, as a matter of principle. His Maj- esty's Government would not feel justified in ordinary circumstances in giving their support to any loans which did not, in their opinion and in the opinion of the other governments concerned, offer adequate guarantees for the proper and useful expenditure of the proceeds, and the satis factor)' security for the payment of principal and interest." M "... It was also explained to Mr. Crisp that as a matter of general principle, His Majesty's Government would never support a loan concluded without adequate guarantees for the control of the expenditure of the proceeds and without proper security . . . " 17 Thus far we have seen that the policy of Great Britain is mainly commercial and financial. Let us now turn and examine the political side of her policy. Burdened with the crushing weight of colonial responsibilities ex- tending throughout the world, she is no longer anxious for territorial gains. This principle is convincingly set forth in the following statement of Bonar Law made in the House of Commons on November 27, 1911 : liA "He (the Rt. Hon. Gentleman) pointed out quite truly that we do not desire to extend our Empire further. . . . I say without any hesitation that we do not desire acces- sions of territory, and in saying that 1 am not speaking for one small section of the house. I believe that 1 am speaking for the nation at large. We do no! <1< sire acces- sions of territory. Our responsibilities are great enough already. . . . Our one desire, our one ambition, is not to enlarge, but to build up our Empire." "The only limitation of this principle is an obvious one. There are certain places lying next to British possessions or perhaps strategically commanding important British route-." which Great Britain cannot see pass into other bands. '•''■ 138 POLICIES OF GREAT POWERS IN CHINA In spite of her disinterestedness, however, when the international struggle fur concessions commenced, she was confronted with the problem of either abstaining from the general scramble, or of joining the Powers. She could not, and probably would not, abstain from the genera] scramble, for that would give advantage to her rivals, thus upsetting the balance of power. She was, therefore, compelled to resort to the policy of participa- tion. But even in joining the scramble, she seldom took the initiative, but she always acted, as a defensive meas- ure, to compensate her own loss or to restore the over- turned balance of power. It is regrettable to mention that, by thus participating in the scramble, the leading commercial power in the Far East, as she is, disqualified her. elf from being the sponsor of the Open Door doc- trine and the moral leader among the powers in China. In this contest for concessions she directed her policy mainly against Russia and France from 1895 to 1904. Rivaling the Franco-Russian loan of 400,000,000 francs in 1S ( >5, in partnership with the German interests, she advanced the loans for the rest of the installments for the indemnity to Japan. 1 '-' Competing with the French gain in territory en the Tonkin frontier and the rail- way extension into Yunnan, she secured territorial advantages on the Burmese frontier, and the exten- sion of the Indo-Burmese line to the head of the navigable waters of the Yangtze. - ,,A Suspicious of the ulterior intention of the French fleet hovering near the mouth of the Yangtze River, 808 and fearing, in the words of Sir Claude M. MacDonald, British Min- ister in Peking at that time, "to find one morning that I.;, reason of the murder of a foreign subject or the re- fusal of some demand by a foreign power, some place on the Yangtze has been seized and was to be retained in a 99 year's lease/' 81 she quietly obtained from China, as a guarantee of her own sphere of influence, the declara- tion of non-alienation of the Yangtze Valley. 88 As a POLICY OF GREAT BRITAIN IN CHINA 139 protection against the French occupation and fortifica- tion of Kwangchow-wan, she obtained the extension of the Hong Kong territory. As a check against the Rus- sian occupation of Port Arthur which she resented most vehemently, she obtained the lease of Weihaiwei, "for so long a period as Port Arthur shall remain in the occupa- tion of Russia," -' thus evidently showing the intention of the lease.-" 1 Forestalling the Russian design as to the office of the Inspector-General of the Chinese Maritime Customs, she procured the declaration from the Chinese Government that a Britisher should be appointed, while British trade predominated.-" Likewise, in the contest for railway concessions, to hold the Russian advance at arm's length from Peking, she interposed her own in- fluence by the construction of the Peking-Newchuang line. To counterbalance the Belgian concession for the Peking-Hankow Railway, hacked by Russia and Krance, and to penalize China for breach of faith in admitting the participation of the Russo-Chinese Bank in the Peking- Hankow deal, by diplomatic pressure and the display of naval power, she obtained the concessions for the Tient- sin-Chinkiang, the Pukow-Sinyang, the Soochow*-Hang- chow-Ningpo, the Shanghai-Nanking, the Canton-Kow- loon and Peking-Newchuang Railways, totaling 2,800 miles.- 7 Finally, directed primarily against the Russian advance in Manchuria, she concluded the alliance with Japan in 1902, thus making it possible for Japan to fight Russia iii L904-5 without the participation of France. With respect to Tibet, the British policy as related to Russia wa- further illustrated. As in 1'M.H) the Dalai Lama sent a mission to the ( Var and later despatched a second mission under the headship of a Russian, Great Britain was aroused to the menace of Russia's tivacht r- ous advance on India, tin- jewel of the British p BionS. For breach of treaty obligations as stipulated in the trade regulations of L893, the expedition of Colonel YounghusLand to 'I ibet was sent in 1903, and on Septem- 140 POLICIES OF GREAT POWERS EN CHINA ber 7, 1904, the treaty with Tibet was signed. ! British consent was to be obtained before making territorial con- cessions to other foreign | Art. 9 a). No other foreign power should intervene in Tibetan affairs (Art. 9-b), or send representatives or agents into Tibet (Art. 9-c). Xo commercial concessions should be granted with- out similar and equivalent concessions being given to the British (Art. 9-d). No Tibetan revenues should be pledged to any foreign power (Art. () -e). On April 27, 1906, by the Convention with china.-'-' she promised not to annex Tibetan territory nor interfere with the adminis- tration of the country (Art. 2). while making China pledge that she would not permit intervention in Tibet by any other power (Art. 2). From \ {) \2 to 1915, however, when the British saw that, by the various conventions, Russia had established her joint suzerainty over outer Mongolia, she was thereby impelled to follow suit and demanded similar privileges regarding Tibet. On July 3, 1914,"° a tripartite agreement was reached between China, Tibet and India. Tibet was divided into Inner and Outer Tibet. It was to form a part of Chinese terri- tory and to be under Chinese suzerainty, but the autonomy of Outer Tibet was to be recognized. China and Great Britain were to abstain from interference in internal ad- ministration. China pledged not to convert Tibet into a province nor will < hiter Tibet he represented in the Chinese Parliament. China was to send no troops, no civil officers, nor colonizers to Outer Tibet. All these pro- visions tend to indicate that Great Britain would advance there in exactly the same way that Russia Wjould in Mongolia. This convention, however, was not ratified by the Chinese Government, which would not admit Chinghai or Kokonor, south of the Altun-tag Mountains, or north of the Tangla Range as part of ( hiter Tibet, Batang and Litang in Szechuan as part of Inner Tibet, and a small part of Sinkiang beyond Kuenlung Moun- tains as part of Outer Mongolia. ; POLICY OF GREAT BRITAIN" IN CHINA 141 After the Russo-Japanese War, however, when Russia had been checked, Great Britain changed the objective of her policy. A new menace had arisen against her, and that was the rising power of Germany. Formerly in the contest against Russia only her interests in the Far East were threatened, but now her very existence was menaced. The rapid naval construction and the weltpolitik of the Kaiser challenged her naval supremacy, the preservation of which was the cardinal principle of the British policy. To face this growing menace, she had not only to ex- pand her navy as far as her resources would allow her, but also to come to an amicable understanding with her old friends, and become reconciled with some of her old enemies. She therefore entered into the Hay-Paunce- fote Treaty with the United States in 1901, nullifying the Clayton-Bulwer Treaty of 1850, removing the source of friction with the United States by an amicable settle- ment of the Panama Canal question, much to the satis- faction of the United State.-, at the same time withdraw- ing her fleet from the West Indies for concentration in the North Sea, thus leaving the United States supreme in the West Indies/- In 1904 she entered into an entente with France, formerly her rival, admitting French in- terests into the Yangtze Valley and withdrawing her fleet from the .Mediterranean to the North Sea, leaving the British interests there to the protection of France. In 1905 she renewed the alliance with Japan, this time pledg- ing to help in war whenever either party should he in- voked, and at the same time withdrawing her Pacific fleet from the Pacific and Indian ( >ceans for concentration in the North Sea, and leaving British interests in china and India to the protection of Japan. In L907 she con- cluded an aj reement with her once bitteresl enemy, Rus- sia." Besides a division of sphere of influence in P and an understanding relating to Afghanistan, she a with Russia on the question of Thibet thai they would mutually respect the integrity of the same (Art. 1 ), ab- 142 POLICIES OF GREAT POWERS IN CHINA stain from all interference in internal administration (Art 2), seek no economic concessions < Art. 4), -end no representatives to Llassa (Art. .V), deal with the state exclusively through the ( government of China, its suzerain (Art. 2), and "agree that no part of the revenues of Thibet, whether in kind or in cash, shall he pledged or assigned to Great Britain or Russia or to any of their subjects" i An. 5). : '■' Comment must be made, in passing, that the policy of Great Britain in China was characterized in a marked degree by justice and fair play. A British subject occu- pies the office of Inspector-General of the Chinese mari- time customs only while her track- predominates. 35 This, of course, means that, to continue to hold the position, she must enter into commercial competition and win pre- dominance. In other words, she holds the office, as long as she remains the champion in the field of China's for- eign trade ; conversely, the moment she loses the cham- pionship, she loses therewith the post of Inspector-Gen- eral. In fact, it was specifically agreed that "if at some future time the trade of some other country at the various Chinese ports should become greater than that of Great Britain, China will then, of course, not be bound to neces- sarily employ an Englishman as Inspector-General." M As a corollary of this sportsman-like arrangement it is thought by some powers that under the most favored na- tion treatment, when Great Britain loses her trade pre- dominance, whatever power gains the commercial ascend- ency can likewise claim the post of Inspector-General. Again, in the Maekav Treaty of 1902, though the honor must also be equitably shared with the United State- and Japan which entered into similar treaties in 1903, she was the first power to concede the surrender of the extra- territorial jurisdiction upon satisfactory judicial reform on the part of China, and also the increase of the import tariff to not more than 12 1-2 per cent and the export POLICY OF GREAT BRITAIN IN CHINA 143 tariff to not more than 7 1-2 per cent in return for the abolition of likin, upon the unanimous consent of all the powers enjoying, and that may enjoy, the most favored nation treatment, and upon the obtainment of the said consent without the grant of any political concession or exclusive commercial privileges. Further, in the agreement of January. 1908, 37 Great Britain pledged to reduce the importation of opium by one-tenth every year for a period of ten years, beginning with 1908, provided the Chinese Government would re- duce the production and consumption of native opium in China in the meantime in the same ratio, and also agreed that this ten-year agreement was to last for three years, at the end of which time, if the Chinese Government should have faithfully executed its obligations, the agree- ment would be extended until the completion of the whole period of ten years, in 1917. Accordingly, at the end of the three years, when the Chinese Government was found to have faithfully done its part of the obligation, on May 8, 191 1, 38 she entered into a further agreement ing to continue the previous convention of January, 1908, and to agree "that the export of opium from India to China shall cease in less than seven years if clear proof is given of the complete absence of production of native opium in China" (Art. 2), and "that Indian opium shall nol be conveyed into any province in China which can establish by clear evidence that it has effectively suppressed the cultivation and the import of native opium" (Art. Subsequently, when the Chinese Revolution and the civil war had caused either the relaxtion of the efforts in Suppression Or the revival of the cultivation of native' opium, she generously overlooked the fault and faith- fully adhered to her previous agreements. Thus, by a repentance of heart and earnest cooperation in the sup- pression of the opium evil, she obliterated the one damag- 144 POLICIES OF GREAT POWERS IN CHINA ing blot on her fair name and removed the great cause of grudge cherished by the Chinese ever since the Opium War of 1840-42. There were, however, instances when her sense of jus- tice and fair play was carried to excess, resulting in a disregard of the popular sentiment of the Chinese, and the unwise assertion of the superiority of a ruling race. In the case of the Shanghai-Hangchow-Ningpo Railway, for instance, the people of the region traversed by the line had already collected the funds and brought the line almost to completion, when the British insisted on their rights based on the grant of 1898, and forced a loan on the Chinese Government in 1908. 30 Such being her policy, let us now speculate as to her probable future course in China. Her traditional adher- ence to the Open Door doctrine and her present participa- tion in the New International Banking Consortium indi- cate that she will return to China with a new zeal and determination to uphold the principles of the equal op- portunity of trade and the integrity of China. Her pur- suance of this policy will, however, depend upon two contingencies. The first depends upon whether the New Consortium will succeed or not. If it succeeds, it means the assurance of American leadership in the affairs of China, and consequently the maintenance of the Open Door doctrine, in which case she will be able to uphuld it, and also incidentally continue her old policy of the internationalization of loans and the proper supervision of the expenditure of the proceeds of the loans. But if the New Consortum should fail, it would mean the loss of American leadership in the Orient, and conse- quently the breakdown of the Open Door, in which case she would not be able to check the general struggle for concessions in China, but would be compelled to join in the scramble as she did in 1898, 1908 and 1913-14. 40 POLICY OF GREAT BRITAIN IN CHINA 145 The other contingency is the Anglo-Japanese Alliance now waiting for renewal. Should she renew the alliance in its old form, which is not expected, she would have to overlook Japan's attack on her interests in the Yangtze Valley in 1915, as evidenced by the Twenty-one Demands, and Japan's unfaithfulness during the war as evidenced by the press attack after the failure to impose Group V on China, and also the secret alliance with Russia of 191 6. 41 She would also have to compromise her Open Door principles, in exchange for the Japanese protection of British interests in China and India, by giving Japan a free hand in South Manchuria and Eastern Inner Mon- golia, if not in the whole of Manchuria and Mongolia in view of the temporary ebb of Russian influence in these regions, and also probably in the whole of North China because of Japan's succession to the former German rights in Shantung. She would further be obligated, un- less otherwise provided, to support Japan, as against China in the League in the Shantung question and the abrogation of the Treaties of May 25, 1915, which obli- gation would seriously disable her from a frank and im- partial judgment, when China, as is expected, might bring up these questions for reconsideration. Further, she would have to suffer loss in the favor of the nations with which Japan had causes of friction, such as the United States, China, Siberia and Australia, unless she could obtain immunity from such a liability and reserv< own freed. in of action by an exemption from the obliga- tion to assisl Japan, either in war or in diplomacy, or in both, in case of a conflict of Japan with either of these powers. On the cither hand, should she discontinue the alliance in toto, she would be confronted with Japanese resentment. This would be almost inevitable, in view of Japan's anxiety to save herself from diplomatic isolation and to forestall the eventuality of the reconsideration of the Shantung question and the cancellation of the 1915 treaties. This would surely manifest itself in hostile 146 POLICIES OF GREAT POWERS IN CHINA fomentation of rebellions in India and Egypt and other territories, if not in entering into alliance with the enemies of Great Britain. Thus Great Britain is confronted with a most delicate and serious diplomatic problem, upon the decision of which hangs the future of her policy in China. It is, however, expected that she will find a way out, by which, on the one hand she can restrain Japan from any tendency to create opposition or to foment rebellions, and yet, on the other hand, she can uphold the Open Door doctrine in China and avoid conflict, because of Japan, with the powers bordering on the Pacific*" NOTES TO CHAPTER VIII I. MacMurrav, Treaties and Agreements with and Concern- ing China, 1896/1. MacMurray, 1000/5. 3. MacMnrra'v, 1899/3. 4. MacMurrav, 1907/16. 5. MacMurrav, 1902/2. 6. MacMurray, 1905/6. 7. MacMurra'y, 1911/7. 8. The rarliamentarv I Abates, Vol. 56, Apr. 4, 1898 to Apr. 29. 1898, p. 1559 et seq. 9. Morse, The international Relations of the Chinese Empire, I. p. 348. 10. U. S. For. Rel., 1899, Lord Salisbury to Mr. Choate, same, Nov. 30, 1899, pp. 135-136. II. State Papers, Vol. 94, p. 1227, The Marquis of Salisbury to Sir C. Scott. . 2 1902. M MacMurray, 1905/6, and 1911/7. 13. Vide infra, chapters on the New International Banking Consortium. 14. R. R. Gibson, Forces Mining and Undermining China, p. 279. 15. State Papers. Vol. 106, pp. 328-330, Mar. 4, 1912, Bigned by \Y. Langley. 16. Vol. 106, p. 330. For. Off. to Lord Balfour of Burleigh, Mar. 4, 1912, signed by W. Langley. 17. Stat. Sir Edward Gre) to Sir J. Jordan, p. 432. Aug. 23, 1912 Parliamentary Debates, 5th Sen.-.. Nov. -Dec., 1911, Vol. 32, pp. 73-74. Murray, The Foreign Policy of Sir Edward Grey, 1906-1915, p. 48. POLICY OF GREAT BRITAIN IN CHINA 147 19. F. It. Huang, Public Debts in China, p. 21 et seq. 20A. Vide supra, Chapter on the International Struggle for Com Hishida, the International Position of Japan as a Great Power, p. 207; China, No. 1, 1899, pp. 344-347; M. C. Hsu, Railway Problems in China, p. 43. 21. China, No. 1, 1899, No. 20, p. 15. 22. Hishida, op. cit., p. 200; Parliamentary Papers, China, No. 2, 1898. 23. Hertslet's China Treaties, Vol. 1, No. 24, pp. 120-122; State Papers, Vol. 90, pp. 17-18. 24. Hen 25, p. 122; State Papers, Vol. 90, p. 16. 25. Balfour's instruction to Sir F. Lascelles, British Am- bassador at Berlin, April 2, 1898: "You should inform the German Government, pointing out to them that the action of Russia forces this step on us. Its sole object is to maintain the balance of power in the Gulf of Pechili, which was menaced by Russia's occupation of Port Arthur. We do not anticipate this policy will give any umbrage to German interests in Shantung, since it is not possible to make Weihaiwei a commercial port, and it would never be worth while to connect it with the peninsula by railway."— China, No. 1, 1899, No. 2, p. 2. 26. MacMurray, 1898/2. 27. M. C. Hsu, Railway Problems in China, pp. 39-43; British Blue Book, Affairs of China, No. 1, 1899, pp. 344-347, Sir Mac- Donald to Lord Charles Beresford. 28. MacMurrav, 1906/2. 29. MacMurrav. 1906/2. 30. MacMurray, 1906/2. 31. H. K. Tong, British and Chinese Government Again Con- ring Tibetan Question, Article in Millard's Review, June 7, 32. I. II. l.atane, From Isolation to Leadership, pp. 120-121. .U. MacMurrav, 1907/16. 34. Millard, (jur Eastern Question, App. X, pp. 459-463; Hertslet, Vol. 1, No. 121, pp. 620-622. 35. MacMurray, 1898/2, Feb. 13, KS98. 3d. MacMurrav, 1898/2. .U. MacMurrav, 1911/4; L\ S. For. Rel., 1908. i 38. MacMurray, 1911/4. .MacMurray, 1908/3, Mar. <<. 1908. 4d. In fact, it has I en reported that she entered into the • incut with France and Japan at the Pari irving China into three greal spheres of influence, givii mi Siberia, t" beyond Lake Baikal) all China except the n d for France am! Great Britain; t.. France, Yunnan, Kwangsi and Kweichou and Western Kwan- tuna (Indu-Chiua and Tonkin, Eastern Siarn ami certain rights in Syria), and reserving t<> hersel British sphere • (India, i. Burma, Palestine, \ tia Minoi an 1 the ( auca Western Siam, the Federated Malay States), Tibet, Szechuan, 148 POLICIES OF GREAT POWERS IN CHINA Kuantung. forming the littoral of Hong Kong, and equal com- mercial nghts in the Yangtze Valley. (T. !•'. Millard, China's I the Peace Conference, Millard's Review, Supp., July 17, 1920, p. 18). Should this report be true, then Bhe would be prepared to adopt the sphere policy, if the -New Consortium .should fail, as she had done in 1913 and 1914 after the with- drawal of the United Slates from the Sextuple Consortium. 41. Mac Murrav, 1916/9. 42. Millard's Review, May 29, 1920, pp. 629-634. "In 1920 the world seems to he called upon to choose between a liberal policy in the bar East and a Japanese policy. Again it is England that must make the choice. She will do so when she signifies or fails to signify Iter intention to abrogate or to modify the Treaty of Alliance with Japan. The United States has confidence that England will make the right choice today as she did in 1902." — Prof. C. E. Kemer. IX THE POLICY OF THE UNITED STATES IN CHINA The policy of the United States in China is character- ized by unselfishness and friendliness. Quite in vivid contrast with the other grasping powers who pounced upon China in the general scramble for leases in 1898, she kept her hands off and was able to withstand the temptation. On the contrary, she sought to uphold China's integrity and sovereignty and save her from par- tition. Throughout the negotiation for the settlement of the Boxer trouble, she opposed any proposal that would threaten to partition China and burden her with a load of indemnity that would make her the economic vassal of the Powers for years. 1 To this effect Li Hung- chang, who conducted the negotiation on behalf of the Chinese Government, testified: 2 "I tremble to think of what might have been China's fate but for the stand taken by the American Government." Subsequently, she returned part of the Boxer indemnity for the education of the young Chinese in America.'' Again, in the Cur- rency and Industrial Development Loan, 4 she undertook the contract upon the request of the ( Chinese ( rovernment, and to secure international cooperation and harmony, she shared it with the other powers and surrendered her right to an advisership in favor of the appointment of a neutral nationality. Finally, during the Great War, upon hearing civil dissension as caused by the controversy over entrance into the war on the allied side, President Wilson sent a friendly note, on June 5, 1''17, counseling the Chinese t<» compose their factional disputes and to establish a united, central and responsible government. 14LJ 150 POLICIES OF GREAT POWERS IN CHINA Thus briefly characterized, the policy of the United States in China is the Open Door Doctrine. When the international struggle for leases and concessions com- menced in L897-9, carving China into exclusive spheres of influence and thus threatening to close the various ros to the trade of the United States. John 1 lay, then Secretary of State, was confronted with a most complicated problem. He could not join in the gen- eral scramble, for that would be contrary to public opinion and to the traditional policy of non-intervention. Nor could he remain inactive and permit the doors of China to be closed, for, China being such a potentially wealthy nation, the United States could not afford to lose her share of commerce. His difficult problem and his attitude thereto were clearly shown in a contempo- rary letter: ° ". . . We are, of course, opposed to the dismember- ment of that empire, and we do not think that the public opinion of the United States woud justify this Govern- ment in taking part in the great game of spoliation now going on. At the same time we are keenly alive to the importance of safeguarding our great commercial inter- ests in that empire and our representatives there have orders to watch closely everything that may seem cal- culated to injure us. and prevent it by energetic and timely representations." Thus compelled to act so that the doors of China might remain Open for the trade of American merchants, he sent his first circular note, on September 6, 1899, to Condon, Berlin and St. Petersburg, and on Novemb to Tokio. on November 17, to Rome, and on November 21, to Paris.' Though wording his notes with some dif- ferences to suit the various chancellories, he set forth in essence the following proposal: 8 "This Government is animated by a sincere desire that the interests of our citizens might not be prejudiced POLICY OF UNITED STATES IN CHINA 151 through exclusive treatment by any of the controlling powers within their so-called 'spheres of interest' in China, and hopes also to retain there an open market for the commerce of the world, remove dangerous sources of international irritation, and hasten thereby united or concerted action of the powers at Peking in favor of the administrative reforms so urgently needed for strengthening the Imperial Government a.id maintaining the integrity of China in which the whole western world is alike concerned. It believes that such a result may be greatly assisted by a declaration by the various powers claiming 'spheres of interest' in China of their intentions as regards treatment of foreign trade therein. The pres- ent moment seems a particularly opportune one for in- forming Her Britannic Majesty's Government of the desire of the United States to see it make a formal decla- ration and to lend its support to obtaining similar declara- tions from the various powers claiming 'spheres of influence' in China, to the effect that each in its respective sphere of interest or influence — "First, will in nowise interfere with any treaty port or any vested interest within any so-called 'sphere of interest,' or leased territory it may have in China. "Second, that the Chinese treaty tariff of the time being shall apply to all merchandise landed or shipped t<> all such ports as are within said 'sphere of interest' (unless they be 'free ports'), no matter to what nationality it may belong, and that duties SO leviable shall be collected by the Chinese Government. "Third, that it will levy no higher harbor dues on Is of another nationality frequenting any port in such ' than shall be levied on vess :1s of ii^ own nationality, and no higher railroad charge- over lines, controlled or operated within its sphere OH merchandise belonging to citizens or subjects of other nationalities transported tl uch 'sphere' than shall be levied on similar merchandise belonging t<» its own nationals transferred over equal distance." To this note all the Towers addressed replied in favor, generally with the reservation that the other Powers 152 POLICIES OF GREAT POWERS IN CHINA should concur, and with the exception, however, of Rus- sia, who was significantly silent on the uniformity of harbor dues and railroad charges. On March 20, 1900, having received all the replies, John I lav informed the Powers that "the condition originally attached to its acceptance . . . that all other powers concerned should likewise accept the proposals of the United States . . . having been com- plied with, this Government will therefore consider the assent given to it by as final and defini- tive." 10 Interpreting the doctrine as formulated by John Hay, we can safely say that the first principle of the Open Door policy is the equal opportunity of trade. As postu- lated by John Hay, this equal opportunity of trade is to be obtained by the maintenance of the Chinese treaty tariff for the time being whose collection at the treaty ports is to be left in the hands of the Chinese Govern- ment, which means, of course, uniformity of tariff and the equal treatment of foreign merchants of whatever nationality with respect to importations and exportations. Further, it is to he maintained by the uniform levy of harbor dues and railroad charges, which means the equal treatment of all nations in the matter of transportation. This principle of equal opportunity of trade does not preclude the existence of spheres of influence. In fact, the sphere of influence was quite clearly implied and recognized in the correspondence of John Hay for the establishment of the Open Door Doctrine. Each govern- ment addressed was requested to make a declaration in favor of the application of the three provisions as stipu- lated by John I lay "in its respective spheres of inter* influence." 11 The firsl of the three provisions was that each government in its respective sphere would in nowise interfere with any treaty port or any vested interest within any so-called "sphere of interest" or leased ter- POLICY OF UNITED STATES IN CHINA 153 ritory it might have in China, thus definitely recognizing spheres of interest. The British reply 12 specifically stated that "Her Majesty's Government will he prepared to make a declaration in the sense desired by your Government in 1 to the leased territory of Weihaiwei and all terri- tories in China which may hereafter be acquired by Great Britain by lease or otherwise, and all spheres of interest now held or that may hereafter be held in China . . ." to which John Hay did not make any exception or objec- tion. In subsequent history, when Great Britain put her mantle of influence over Tibet in 1906 1:i and Russia over Outer Mongolia in 1913 and 191 5, 14 and when France secured the declaration from the Chinese Government for a preference in railroad and mining enterprises in Kwangsi in 1914, 15 the United States Government was not reported to have lodged any protest ; and in 1915 when Japan made Eastern Inner Mongolia her sphere of influ- ence and South Manchuria virtually her exclusive pre- serve, the United States Government, while making a general declaration reaffirming the Open Door policy and reserving the right of exception to any agreements be- tween China and Japan contrary to the principles of the Open Door or the treaty rights of the United States, did not make any specific representations of protest against the provisions regarding Eastern Inner Mongolia and South Manchuria. \\ hat John Hay opposed was, not the exigence of spheres of influence which had already existed before the enunciation of his doctrine, but rather the closing of tin- spheres t<> tin- trade of the world or the assertion of claims to exclusive rights within the spheres. The three provisions as postulated by John Hay were designed to keep the doors open in the various spheres thnui-h the recognition of vested interests ami the maintenance of the Chinese treat) tariff and the uniformity of bar- 154 POLICIES OF GREAT POWERS IN CHINA bor dues and railway charges; in other words, they were to secure the equal treatment of foreign merchants within the various spheres. In his original note to Mr. Choate, United States Ambassador at London, 1 ' 1 John Hay said: "While the Government of the- United States will in nowise commit itself to a recognition of exclusive rights of any power within or control over any portion of the Chinese empire under such agreements as have within the last year been made, it cannot conceal its apprehen- sion that under existing conditions there is a possibility, even a probability, of complications arising between the treaty powers which may imperil the rights insured to the United States under our treaties with China." Again, in his protest against the proposed convention between China and Russia respecting Manchuria, he wrote : 17 "An agreement by which China cedes to any corpora- tion or company the exclusive right and privilege of opening mines, establishing railroads, or in any other way industrially developing Manchuria, can hut he viewed with the gravest concern by the United States. It con- stitutes a monopoly, which is a distinct breach of the stipulations of treaties concluded between China and for- eign powers, and thereby seriously affects the- rights of American citizens; it restricts their rightful trade and exposes it to being discriminated against, interfered with, or otherwise jeopardized, and strongly tends toward per- manently impairing the sovereign rights of China in this part of the empire, and seriously interferes with her ability to meet her international obligations. Further- . such concessions on the part of China will un- doubtedly be followed by demands from other powers for similar and equal exclusive advantages in other parts of the Chinese Empire, and the inevitable result mu I be the complete wreck of the policy of absolute equality of treatment of all nations in regard to trade, naviga- tion and commerce within the confines of the Empire." POLICY OF UNITED STATES IN CHINA 155 Subsequently, when in 1903 Russia demanded, in her Seven Articles, as conditions for the further evacuation of Manchuria, 18 thai without the consent of Russia no new treaty port be opened or consuls admitted (Art. 3), and no foreigners, except Russians, be employed in the public service of North China, thus extending author- ity over the affairs of North China. John Hay protested against the exclusion of other foreigners from public service in North China, and as a measure of upholding the Open Door in Manchuria, demanded the opening of treaty ports in that region. 19 As a consequence, and in conjunction with the Treaty of Commerce signed on Oc- tober 8, 1913,-° Mukden and Antung in Manchuria were opened to trade (Art. 12), thus successfully asserting the Open Door doctrine and preventing Manchuria from being closed to the trade of the world. Thus the first principle of the Open Door policy, as we have seen, is the equal opportunity of trade within the various spheres of influence. Now let us consider the second principle of the doctrine, which is equally as important, if not more so: namely, the integrity of China. In the first circular note of September 6, 1899, John Hay did not make the preservation of the integrity of China the primary object of his policy. What we can gather from a close scrutiny of his correspondence was that the integrity of China was to him an implied condition of his policy, or a presumed prerequisite for the successful operation of his policy. For should China be partitioned or should tin- of influence into regions of foreign control, there would he- a eon- sequent closing oi the various regions and there would thus he no room and no necessity for the Open Door Doctrine. Quite in line with this reasoning, John May said, in his first circular note:-' "This Government . . . hopes also t « » retain there an open markel for the commerce of the world, remove 156 POLICIES OF GREAT POWERS IN CHINA dangerous sources of international irritation and hasten thereb) united and concerted action of the Powers at Peking in favor of the administrative n i urgently needed for strengthening the Imperial Government and maintaining the integrity of China. . . ." "The declaration of such principles . . . would give additional weight to the concerted representations which the treaty powers may hereafter make to His Imperial Chinese Majesty in the interest of reform in Chinese administration so essential to the consolidation and in- tegrity of the empire. . . ." M Besides, the the second provision of his proposal was "that the Chinese treaty tariff of the time being shall apply to all merchandise landed or shipped to all such ports as are within said 'sphere of interest' (unless they he 'free ports'), no matter to what nationality it may helong, that duties so leviable shall be collected by the Chinese Government." This provision of requiring the maintenance of the Chinese treaty tariff and of collection thereof by the Chinese authorities presupposes the existence of the sov- ereignty and integrity of China. During the Boxer Uprising, when China was threat- ened with the peril of dismemberment, John I lay brought to the forefront the second principle of his doctrine, the integrity of China: "The policy of the Government of the United States is to seek a solution which may bring about permanent safety and peace to China, preserve ( llinese territorial and administrative entity, protect all rights guaranteed to friendly powers by treaty and International law and safeguard for the world the principle of equal and im- partial trade with all parts of the Chinee Empire."* 8 In his reply to Great Britain concerning the Anglo- ( rerman agreement of October 16, 1900, he placed an POLICY OF UNITED STATES IN CHINA 157 emphasis on the principle of the integrity of China equal to that of equal opportunity of trade: "During the last year this Government invited the Powers interested in China to join in an expression of views and purposes in the direction of impartial trade with that country and received satisfactory assurances to that effect from all of them. When the recent troubles were at their height, this Government, on the third of July, once more made an announcement of its policy regarding impartial trade and the integrity of the Chinese Empire, and had the gratification of learning that all the Powers held similar views." 2i From this time on, the Open Door policy of the United States has been understood to consist of two leading prin- ciples : namely, the equal opportunity of trade and the integrity of China. In subsequent declarations or agree- ments respecting the policy, these two principles are always mentioned side by side. In his circular note of January 13, 1905, issued in response to the request of the then Kaiser, William II, to forestall any territorial spoliation of China in consequence of the Russo-Japanese War, John Hay said: "For its part, the United States . . . has been grati- fied at the cordial welcome accorded to its efforts to Strengthen and perpetuate the broad policy of maintaining the integrity of China and the 'Open Door' in the Orient, whereby equality of commercial opportunity and access shall be enjoyed by all nations." - : ' In the statements given to the press relating to the neutralization plan for the Manchurian railways,'-'" there was found the statement: "As is well known, the essential principles of the Hay policy of the Open Door are the preservation of the territorial and jurisdictional integrity of the Chinese 158 POLICIES OF GREAT POWERS IN CHINA Empire, and equal commercial opportunity in China for all oatioi In the Root-Takahara agreements, and recently in the United States declaration in connection with Japan's Twent) one Demands, and the Lansing-Ishii agreement, the same principles were reiterated and reaffirmed. 1 [aving thus seen the essential principles of the Open Door doctrine, let us analyze the meaning of the integrity of China. By the integrity of China may be meant terri- torial integrity, or sovereignty, or administrative integ- rity. As to the first meaning — the territorial integrity of China — there can be almost no dispute. John Hay's circular note of July 3, 1900, clearly referred to the preservation of territorial integrity : "The policy of the Government of the United States is to seek a solution which may bring about permanent safety and peace to China, preserve Chinese territorial and administrative entity. . . ." - 7 The reply to the British Government respecting the Anglo-German agreement was given in response to the request to concur in the principles of the equal oppor- tunity of trade and that "Her Britannic Majesty's Government and the Impe- rial German Government will no1 on their part make use of the present complication to obtain for themselves any territorial advantages in Chinese dominions and will di- rect their policy toward maintaining undimnished the ter- ritorial condition of the Chinese Empire." 28 In subsequent agreements or declarations when the phrase "the integrity of China" was employed, its mean- ing as to territorial integrity was never questioned. Respecting the second meaning — the sovereignty of China — there is a general agreement among the Powers POLICY OF UNITED STATES IN CHINA 159 that the integrity of China means the sovereignty of China. In the Harbin case, when Russia attempted to set up a municipal government in Chinese territory, the United States Government protested, and contended that, by the Treaty of Portsmouth, Russia had obligated her- self to observe "a scrupulous regard for the sovereignty of China," and that certain of the municipal ordinances "would be a clear infringement upon the sovereignty of China," -'■' and that "this principle, which this Government concedes to be the true one, is, in substance, that the only basis for the exercise of governmental rights on the part of the offi- cials of any country other than China within the Chinese Empire should lie in the extraterritorial rights granted by the treaties of China to the several Powers." Thus, in this case, the United States Government took the attitude that the sovereignty of China must be re- spected, and that the exercise of any jurisdictional author- ity must be based on extraterritorial grants. In the state- ment given to the press with regard to the neutralization of the Manchurian railways, the phrase "jurisdictional integrity" of China was employed side by side with terri- torial integrity : "As is well known, the essential principles of the Hay policy of the Open Door are the preservation of the territorial and jurisdictional integrity of the Chinese Em- pire, and equal commercial opportunity in China for all nations." 30 In the IVanco-Japancse agreement of 1907, the Russo- Japanese agreement of 1907, the Root-Takahira a ment of 1908, and the Lansing-Ishii agreement of 1917, the Anglo-Japanese Alliance of 1905 and 1911 w — in all agreements the expression was used, "the independ- ence and integrity of China," As regards the third meaning — the administrative in- 160 POLICIES OF GREAT TOWERS IN CHINA tegrity of China — there is no such unanimity of opinion, hut rather a division of the same. It is claimed that the Open Door principles do not apply to, nor include, the administrative integrity of China. Reference is made, as illustrations, to the Chinese Salt Administration and the .Maritime Customs Service, which are all under for- eign supervision. On the other hand, it is contended that the Open Door Doctrine applies to, and includes, the administrative integrity of China. For administra- tive integrity is a necessary element of territorial entity and sovereignty, the want of which will render the juris- dictional authority nothing more than a name. In the second circular of July 3, 1900, John Hay did mention the preservation of the administrative integrity of China as one of the objectives of his policy: "The policy of the Government of the United States is to . . . preserve Chinese territorial and administrative entity. . . ." 32 In 1913, when Wilson withdrew the support of the United States Government from the American group in the Sextuple Consortium, resulting in the withdrawal of the American hankers therefrom, he based his objection on the ground that the reorganization loan touched the administrative integrity of China. 33 "The conditions of the loan seem to us to touch very nearly the administrative independence of China itself and this administration does not feel that it ought, even by implication, to be a party to these conditions. The responsibility on its part which would he implied in re- questing the hankers to undertake the loan might con- ceivably go the length in some unhappy contingency of forcible interference in the financial, and even the politi- cal affairs of that great Oriental state, just now awaken- ing to a consciousness of its power and of its obligations to its people." POLICY OF UNITED STATES IN CHINA 161 Although this policy of non-participation was reversed later in 1916 34A and 1918,** D the reentrance of American finance into China, now in the form of the New Inter- national Banking Consortium, did not mean to infringe or destroy the administrative integrity of China, but rather to uphold and save the same from the consequences of extravagance and corruption. This interpretation of the Open Door doctrine as including the administrative integrity of China does not, however, preclude the possi- bility and probability of active intervention in the finances of China, in case of bankruptcy or insolvency. In this contingency, the supervision or control necessitated by the situation would be undertaken, not in the spirit, or with the intention, to infringe or nullify the administra- tive integrity of China, but rather to uphold and save the same with a view to restoring it eventually to the Chinese Government. Having thus seen the meaning of the Open Door doc- trine with respect to the integrity of China, let us inquire into another problem which has often been noted, and that is, Does the Open Door doctrine apply to railways in China? Is the principle of equal opportunity applica- ble in their case? In the Anglo-Japanese Alliance of 1905 and 1911 M and the Lansing-Ishii agreement of 1917, ! ' ! mention was made only for the "equal opportunity for commerce and industry in China." Railways were not mentioned, unless by a liberal construction they were included under the category of "commerce and industry." On the other hand, railways are apt to control the eco- nomic life of any territory through which they pass, and Unless the powers obtain equal share in railways, the trade of the regions are liable to be dominated by the pou< r or powers controlling the railways. Furthermore, as trade follows loans, railway loans musl be shared by all in ord< lire the equal opportunity in supplying materials and other i 3 for raihsa. 162 POLICIES OF GREAT POWERS IN CHINA In spite of these conflicting opinions, it may be con- cluded, however, that the Open Door doctrine does apply to railways in China, with the reservation or condition that vested interests are to be respected. This conclusion conforms with the original doctrine as set forth by John 1 lav and the subsequent development and application of the principles. To repeat, the first of the three provi- sions as set forth in John Hay's Circular Note of Sep- tember 6, 1899, was that each Government in its respec- tive spheres of interest or influence "will in nowise inter- fere with any treaty port or any vested interest within any so-called 'sphere of interest' or leased territory it may have in China." 3T Thus vested interests of whatever nationality and in whatever spheres of influence are to be respected. In applying this principle to railways, it cannot mean any other arrangement than that those already constructed or under construction in any spheres of interest should be accorded due recognition and re- spect. Except for this reservation, the Open Door doc- trine applies to railways just as it does to commerce and industry. In 1902, when Russia attempted to monopolize the economic development of Manchuria through the agency of a corporation, John Hay vigorously protected against the proposed convention, in which he made the specific mention of railways as being included within the scope of his objection: "Any agreement by which China cedes to any corpora- tion or company the exclusive right or privilege of open- ing mines, establishing railroads . . . can but be viewed with gravest concern by the United States.' In the proposal for the neutralization of the Manchurian railways, Knox put the emphasis on their neutralization as the most effective means of maintaining the principles of the Open Door doctrine. "First, perhaps the most effective way to preserve the undisturbed employment by China of all political rights POLICY OF UNITED STATES IN CHINA 163 in China and to promote the development of those prov- inces under a practical application of the policy of the Open Door and equal commercial opportunity would be to bring the Manchurian highways, the railroads, under an economic, scientific and impartial administration by some plan vesting in China the ownership of the railroads through funds furnished for that purpose by the inter- ested powers willing to participate. . . ." 30 Although the plan, as is well known, was defeated mainly by the opposition of Japan and Russia, it is obvious that the Open Door doctrine does apply to rail- ways. Besides, notwithstanding the failure of the neu- tralization plan, in the formation of the New International Banking Consortum, the United States Government pro- posed : "That not only future options that might be granted but concessions already held by individual banking groups Otl which substantial progress had not been made, should, as far as feasible, be pooled with the Consortium ; that working on these two principles, the operations of the Consortium would serve to prevent for the future the setting up of special spheres of influence on the conti- nent of Asia. The United States Government laid great stress on this latter point as being highly effective in doing away with international jealousies and in helping to preserve the integrity and independence of China." 4U Thus, the United States Government proposed to re- spect the vested interests of the existing railways and the railways on which substaneial progress had been made, hut at the same time to pool or internationalize all future option-, and existing concessions in railway which substantia] progress had not been made. isoning from the neutralization plan and the policy of the New Consortium with respect to railways, the conclusion can be safely reached that the < >|>in Door doctrine does apply to railways in China with the sole 164 POLICIES OF GREAT POWERS IN CHINA reservation thai vested interests of the existing railways will be accorded due respect. And derivable from the same facts, a new principle, or corollary to the principles of the Open Door doctrine, can also he obtained, and that is the internationalization of these railways. Kail- ways are usually monopolies. As such they are not supposed to be subject to competition as the other forms of economic enterprises, where competition is permissible and wholesome. When and where they are subject to competition, the inevitable outcome is either the destruc- tion of both, or all lines, or their agreement and coopera- tion, and in some cases, even combination. As the Open Door principle of equal opportunity presupposes com- petition, it meets the stone wall of this economic princi- ple governing railways, that is, they are monopolies and not open to competition. Confronted with this difficulty, the exponents of the Open Door doctrine can either refuse to apply it to railways, excluding them as being outside of the field of competition, as evidenced by the demarca- tion of the various spheres of influence for the construc- tion of railways in China, or they must resort to the only and inevitable alternative or solution, under which the Open Door policy can be safely and beneficially ap- plied, that is, the internationalization of Chinese railways. It is for this reason that the neutralization plan was pro- posed, and it is for the same reason that the New Con- sortium adopted the policy of the internationalization or the pooling of all railway options. The thesis may, therefore, be proposed that henceforth the internation- alization of railways in China, so far as the Open Door doctrine is applied to them, will become a new princi- ple, or corallory to the leading principles, of the Open Door doctrine. In addition to the internationalization of railways, another question may be raised and that is as to how the Open Door doctrine can be held to agree with a POLICY OF UNITED STATES IN CHINA 165 recognition of Japan's special interest in China as em- bodied in the Lansing-lshii agreement of November 2, 1917. That agreement provided that "The governments of the Untied States and Japan recognized that territorial propinquity creates special re- lations between countries, and consequently the govern- ment of the United States recognizes that Japan has special interests in China, particularly in the part to which her possessions are contiguous." 41 From a superficial examination of the Open Door doc- trine and the principle of special interests, the conclu- sion cannot be escaped that the recognition of such in- terests is contrary, and inconsistent, to the Open Door doctrine. For "special interests" must mean interests which are special, or, in other words, exclusive to Japan. Yet, the Open Door doctrine proclaims the gospel of equal opportunity, barring any exclusive claims. From a close scrutiny, however, of the agreement and Secretary Lansing's testimony before the Committee on Foreign Relations of the United States Senate, the im- ion of inconsistency yields to a more sympathetic conclusion that the recognition of Japan's special in- terests was not inconsistent, but rather in consonance, with the Open Door doctrine. Lansing recognized Jap- an's special interest in China as of the same character as the special interests of the United States in Mexico, or Canada, or the Latin-American Republics. I lis own testimony in the Senate clearly bears evidence to his in- tention and interpretation: "... I told him then that if it meant 'paramount interest,' I could not discuss it further; but it he meant special interesl based upon geographical position, 1 would consider the insertion of it in the note. Then it was, during that same interview, that we mentioned 'paramount interest' and he made a reference to the Monroe Doc- 166 POLICIES OF GREAT POWERS IN CHINA trine, and rather a suggestion that there should be a Monroe Doctrine for the Far East. "And I told him that there seemed to he a misconcep- tion as to the underlying principle of the Monroe Doc- trine; that it was not an assertion of primacy or 'para- mount interest' by the United States in its relations to other American Republics; that its purpose was to pre- vent foreign powers from interfering with the separate rights of any nation in this hemisphere, and that the whole aim was to preserve to each republic the power of self-development. . . ." 42 Again in his statement of November 6, 1917. in explana- tion of the agreement, Mr. Lansing stated: ' "The statements in the notes recpiire no explanation. They not only contain a re-affirmation of the 'Open Door' policy, but introduce a principle of non-interference with the sovereignty and territorial integrity of China, which, generally applied, is essential to {perpetual international peace as clearly declared by President Wilson and which is the very foundation of Pan-Americanism as inter- preted by this government." From his own testimony and statement, the conclu- sion may be drawn that in recognizing Japan's "special interests," Secretary Lansing recognized Japan's pro- fessed Monroe Doctrine in China, or at least its leading principle — Japan's right to enforce, both on herself and the other Powers, the obligation of non-interference with the sovereignty and territorial integrity of China. Re- grettable as the fact that no definition of "special in- terests" was given in the agreement may be. the inter- pretation of Mr. Lansing stamps the expression 'special interests" with the indelible meaning of non-interfer- ence with the sovereignty and territorial integrity of China. As such, and as the Open Door doctrine pro- poses to preserve the same sovereignty and territorial in- tegrity of China, the recognition of the special interests POLICY OF UNITED STATES IN CHINA 1C7 of Japan was not inconsistent but rather in harmony, with the principles of the Open Door doctrine. 44 If, however, the special interests of Japan arc inter- preted to mean -rested interests, then the ( 'pen Door doc- trine recognizes, and accords them due respect. The compromise reached at Tokio between Thomas \\ . I.a- mont and the Japanese Government respecting the Japan- ese special interests in South Manchuria and E Inner Mongolia, which were interpreted to mean . interests, goes to show that special interests in vested right.- are not inconsistent with the ( >pen Door doctrine. Having seen its meaning, let us pass on to the condi- requisite for successful application. It is not a part of international law, but a mere international agree- ment among the powers interested in China, and under- taken on the condition that the other Powers would ob- tlie same. It has therefore no other sanction for its enforcement than the moral validity of the doctrine, or the physical force that each state may chot behind it. Besides, it is an agreement among the Powers inter se to which China is not a party. "She, therefore, technically speaking, cannot be said to have gained any contractual or conventional rights from or under them." '"' It seems, therefore, that except for the fulfillment of cer- tain conditions, the application of the doctrine is likely to fail. The firsl necessary condition is the cooperation of China. Unless she obeys the doctrine, it is hopel< expeel it- successful operation. For China can grant il privileges and thus violate the principle of the equal opportunity of trade, with the consequence that the Powers thu> discriminated against will 1"' obliged io claim similar or equivalenl privileges, in which case, the United States will he helpless to check the Towers from a scramble. The protesl of Hay, against the grant to Russia, through a corporation, of the monopoly of the 168 POLICIES OF GREAT POWERS IN CHINA industrial development of Manchuria, was based specifi- cally "ii this ground. "... Furthermore, such concessions on the part of China will undoubtedly be followed by demands from other powers for similar and equal exclusive advantages in other parts of the Chinese Empire and the inevitable result must be the complete wreck of the policy of abso- lute equality of treatment of all nations in regard to trade, navigation, and commerce within the confines of the empire." 46 Again, China may voluntarily alienate, or barter away, or forfeit her territory and sovereignty, in which case, the United States will be powerless to assist in any way, much as she may wish to do so. As Professor \Y. W. Willoughby has well said: "China will, therefore, be ill-advised if she does not bear constantly in mind the fate of Korea. That country had had its sovereignty guaranteed by several of the Powers, and especially and repeatedly by Japan, and yet, when Japan exhibited to the world a document pur- porting to be a treaty signed by the government of K consenting to annexation, the other Powers, even those which, like the United States, had promised to exert good offices in case other powers should threaten it, did not feel called upon to go back to the formal instrument of annexation in order to determine the circumstances under which it had been negotiated and the signatures to it obtained." 47 Finally, China may let extravagance, corruption, civil nsioil and militarism so infest and strangle her gov- ernment as to render her bankrupt, in which cast- the United States, regretting to intervene, will be compelled, ill mn junction with the other interested Powers, to take over the finances of China and, by so doing, practically destroy her administrative integrity. In short, China POLICY OF UNITED STATES IN CHINA 169 must cooperate with the United States in the application of the Open Door doctrine by a scrupulous observance of the principles of the equal treatment of all Powers and of the preservation of her own integrity. To act otherwise means the inevitable doom of the policy. Nor must China hypnotize herself into the belief that the United States will fight for her integrity and so fail to provide her own means of national defense or to resist foreign aggression. In declaring the Open Door doctrine, the United States Government simply states its own policy or attitude and asks the other Powers interested to do likewise. But she does not pledge the enforcement thereof by her own military and naval forces. Prob- lematical as it may be as to whether the United States will ever fight for China, the conclusion may be safely ventured that, unless China fulfills the obligation due to herself, by defending her own integrity to her utmost ability, the United States will not feel called upon to undertake a task which should rest on the shoulders of the Chinese themselves. The Senate reservation to Article 10 of the Peace Treaty with Germany signed at Versailles on June 28, 1919, clearly shows that except at the dis- cretion and direction of Congress, the United States will not obligate herself to defend the integrity and independ- ence of another state. 48 Again, when Russia violated the Open Door in Manchuria and refused to fulfill her pledge of evacuation except upon the grant of seven addi- tional demands, Secretary Hay wrote : "If they choose to disavow Plancon (the Russian Charge d'Affaires at Peking) and to discontinue to vio- late tluir agreements, we shall be all right, but if the lie they told was intended to serve only a week or two, the situation will become a serious one. The Chinese as well as the Russians seem to know that the strength of our position is entirely moral; and if the Russians are con- vinced that we will not fight for Manchuria as I sup- pose we will not — and the Chinese are convinced that 170 POLICIES OF GREAT POWERS IN CHINA they have nothing but good to receive from us and noth- ing bul a beating from Russia, the open hand will not he so convincing to the poor devils of Chinks as tin- raised club. Still we must do the best we can with the means at our disposal." 60 The second condition necessary for the successful ap- plication of the Open Door policy is tin- direct participa- tion of the United States in the international affairs of China. This is necessary, because, unless the 1 States participates in the affairs and sees that the < >pen Door doctrine is observed, the other Powers will fall back into the practice of insisting on closed spheres, atul degenerate into the old international struggle for con- cessions. This was clearly shown after the withdrawal of the American Group from the Sextuple Consortium in 1913, when, in absence of a moral leader to uphold the Open Door doctrine, the Powers resorted to another struggle for concessions in China as narrated in the chap- ter on International Cooperation and Control. In addi- tion the withdrawal hindered the investment of American capital in China and thereby reduced the trade that neces- sarily follows the loans. This harmful effect was clearly voiced by the complaint of the American Association of China:" 1 "The policy of the United States Government in dis- couraging investment of American capital in Chinese rail- ways and in loans to the Republic has been detrimental to our merchants, but as the administration gains a clearer view of the situation in China and begins to recognize the things that must be done if the United States is to share in this vast trade area, there are possibilities of some modifications of this policy which is believed to have been put forth without sufficient investigation, and, at that, on sentimental grounds. This association should ery means in its power to awaken the government in Washington, through whatever means it can find, to the necessity of a more vigorous policy in China to secure POLICY OF UNITED STATES IN CHINA 171 for us and to uphold open when secured as liberal advantages for the extension of our trade as are now en- joyed by other nationalities." Furthermore, from the point of view of Chinese na- tional interests, the withdrawal of the United States left China without a disinterested friend to help her in her dealings with other Powers. This need of friendly as- sistance and mediation is set forth clearly in the case of the Hukuang Railway Loan, when the United States in- sisted on participation : M "The fact that the loan was to carry an Imperial guar- anty and be secured on the Internal revenues made it of the greatest importance that the United States should participate therein in order that this government might be in a position as an interested party to exercise an in- fluence equal to that of any of the other three Powers in any questions arising through the pledging of China's national resources, and to enable the United States, more- over, at the proper time again to support China in urgent and desirable fiscal administrative reforms, such as the abolition of likin, the revision of the customs tarill, and general fiscal and monetary rehabilitation." As American participation is so necessary, and espe- cially impelled by the consideration of equipping China for active participation in the Great War, the United States Government, in 1918, reversed its policy and mitted American capitali ts to make loans to China, backed by diplomatic support. The participation how- ever was to be qualified by certain conditions. To this effect, tin- I >epai tmenl of State -aid i "< bina declared war againsl ' Icnnany very largely because of the action of tin- United States. Therefore this government has fell a special interest in the desire of ('bina bo to equip herself a- to be of more specifi sistance in the war against the Central Pow< 172 POLICIES OF GREAT POWERS IN CHINA "Until the present time the engagements of the United States in preparing to exert effectively its strength in the European theater of war has operated to prevent spe- cific constructive steps to help China realize her desires. Qtly, however, this government felt that, because of the approach to Chinese territory of the scenes of dis- order, a special effort should be made to place proper means at the disposal of China. Consequently a number of American hankers, who had been interested in the past in making loans to China, and who had had experi- ence in the Orient, were called to Washington and asked to become interested in the matter. The bankers re- sponded very promptly and an agreement has been reached between them and the Department of State which has the following salient features: "First, the formation of a group of American bankers to make a loan or loans and to consist of representatives from different parts of the country. "Second, an assurance on the part of the bankers that they will cooperate with the government and follow the policies outlined by the Department of State. "Third, submission of the names of the banks who will compose the groups for approval by the Department of State. "Fourth, submission of the terms and conditions of any loan or loans for approval by the Department of State. "Fifth, assurances that, if the terms and conditions of the loan are accepted by this government and by the government to which the loan is made, in order to en- courage and facilitate the free intercourse between Amer- ican citizens and foreign states, which is mutually ad- vantageous, the government will be willing to aid in every way possible and to make prompt and vigorous rep- resentations and to take every possible step to insure the execution of equitable contracts made in good faith by its citizens in foreign lands. "It is hoped that the American group will be associated with bankers of Great Britain, Japan and France. Nego- tiations are now in progress between the government of the United States and those governments which it POLICY OF UNITED STATES IN CHINA 173 is hoped will result in their cooperation and in the par- ticipation by the bankers of those countries in equal parts in any loan which may be made." The third condition necessary for the successful ap- plication of the Open Door doctrine is the cooperation or the Powers interested. That this is necessary, is evi- denced by the fact that all the Powers, except Italy, addressed by Secretary Hay in his first circular note of 1899, replied favorably, but with the condition that the other Powers would make a similar declaration respecting the Open Door policy. This condition means that, unless all the other Powers observe the Open Door doctrine, any Power promising to do so, is not bound by the ob- ligation assumed. Thus, when one Power commences to seize concessions, the others do not feel obligated to restrain themselves, but, on the contrary, are compelled to do likewise. For instance, in the general scramble for concessions in 1914 after the withdrawal of the United States, France did not feel obliged to abide by her reply to the former pledging to observe the Open Door doc- trine, but felt free to secure from the Chinese Govern- ment the assurance, that in Kwangsi, preference would be given to French interests in regard to railway and mining enterprises. When Russia forced her joint suzerainty with China over Outer Mongolia in 1913, Great Britain did not feel bound by her own pledge of 1899 and 1900. On the contrary, in order to preserve the balance of power and for self-defense, she felt constrained in 1''14 to make a similar attempt on Tibet. In the absence of any means of enforcement, therefore, it is clear that any pr or measure made in behalf of the Open Door policy must receive the cooperation and support of the Powers in- ted. Otherwise it has little chance to succeed. The neutralization plan Of Secretary Knox, formulated evi- dently with statesmanlike purpose, was not materialized through the opposition of Russia and Japan. On the 174 POLICIES OF GREAT POWERS IX CHINA other hand, the currency :mtate of world politics, the lack of any of these conditions will render the application of the Open Door doctrine in China unsatisfactory, if not entirely unsuccessful. In conclusion, reference must be made to the New In- ternational Hanking Consortium. This is a living and physical personification of the Open Door doctrine. It embodies the leading principles of the policy. It aims, by an international pooling of interests, to maintain the equal opportunity of trade. It aims, moreover, to pre- serve, as Ear as feasible, the territorial sovereignty and administrative integrity of China. It proposes to inter- nationalize the Chinese railways that are to be built, which, as we have seen, has become a new principle or .1 corollary of the leading principles of the Open Door doctrine. Regarding the three conditions necessary for the successful application of the Open Door policy, it already enjoys two — the direct participation of the United States and the cooperation of the Powers in- terested. Its remaining need is the cooperation of China If, which, under favorable conditions, can be ob- tained by proper approach and fail dealing. The success, Fore, of the new Consortium spells the success of the < >pcn Door doctrine, while the failure of the new Ortium means the failure of the Open Door policy. 68 POLICY OF UNITED STATES IN CHINA 175 NOTES TO CHAPTER IX 1. Morse, Internatl. Rel. of the Chinese Emp., Vol. 3, p. 350, et seq. ; U. S. For. Rel., 1901. App., pp. So. 121. 2. W. F. Mannix, Memoirs of Li Hung Chang, p. 280. 3. U. S. For. Rel., 1908, p. 64, et seq. 4. U. S. For. ReL, 1912, p. 88 et seq.; MacMurray, 1911/2; U. S. For. Rel., 1913. p. 1924. 5. Putnam Weale, The Fight for the Republic in China, p. 345. 6. John Hay's Letter to Paul Dana, dated Mar. 16, 1899, W. R. Thaver, The Life of John Hay, Vol. 2, p. 241. 7. U. S. For. Rel., 1899, p. 128 et seq. 8. U. S. For. Rel., 1899, p. 132, Mr. Hay to Mr. Choate, Sept. 6, 1899. 9. U. S. For. Rel., 1899, pp. 141-142, Count Mouravieff to Mr. Tower, dated Dec. 18-30, 1899. 10. U. S. For. Rel., 1899, p. 142, John Hay's Instructions to Ambassadors at the Capitals of the Powers Addressed. 11. U. S. For. Rel., 1899, p. 132. 12. U. S. For. Rel., 1899, p. 136, Lord Salisbury to Mr. Choate, Nov. 30, 1899. 13. MacMurray, Treaties and Agreements With or Concerning China, 1906/2. 14. MacMurray, 1913/11, and 1915/10. 15. MacMurrav, 1895/5. 16. U. S. For. Rel., 1899, pp. 131-133, Mr. Hay to Mr. Choate, Sept. 6, 1899. 17. U. S. For. Rel., 1902, p. 26, Memorandum Respecting Manchuria, Feb. 1, 1902, inclosed in John Hay's Letter to Mr. McCormick. 18. U. S. For. Rel.. 1902, p. 57, from the Original Russian Note sent by Mr. de Plancon to Prince Ch'ing, inclosed in Mr. Conger's Letter to Mr. Hay, May 4, 1903. L9. T. S. For. ReL, 1902, p. 54, Mr. Hay to Mr. Conger, Apr. 2'x 1 20. MacMurray, 1903/5. 21. 1. S For. ReL, 1S99, p. 132, Mr. Hay to Mr. Choate, Sept 6, II 22. U. S. For. Rel., 1899, p. 141, Mr. Hay to Mr. Tower, Sept. 6, 1 23. I S. For. KM., 1901, App., Affairs in China, p. 12. 24. U s. For. ReL, 1901, App., Affairs in China, i>. 32. 25. I'. S. For. ReL, 1905, p. 1. Circular Telegram Respecting the Ten itorii I integrity of China, Fan. 13, 1905. 26. l'. S. For. ReL, 1910, pp. 243" 245, Fan. 6, 1910. 27. IT. S. For. ReL, 1901. App., Affairs in China, p. 12. For. Rel.. 1901, App., ibid. p. 32. 29. LT. S. For. ReL, 1910, pp. 203-205, the Sec*y of State to the Russian Ambassador, Apr. 9, 1908. 176 POLICIES OF GREAT POWERS IN CHINA 30. U. S. For. ReL, 1910, pp. 243-245, Statement given to 6, 1910. 31. Millard, Democracy and the Eastern Question, App. A, p. 361 et seq. 32. I'. S. For. Rel., 1901. App., Affairs in China, p. 12. 33. U. S. For. Rel., 1913. p. 170-171. Statement Issued to Press bv President Wilson, March 18, 1913. 34A. N. V. Times, \'<>v. 17, 1916. p. 17. 34B. X. V. Times. July 30. 1918. p. 13. 35. Millard, Our Eastern Question, App. L, pp. 452-456. .><>. Hearings before the Comm. on For. Rel., U. S. Sen.. 66th Cong.. First Ses., on Treaty of Peace with Germany, pp. 225-226. 37. U. S. For. Rel., 1899, pp. 129, 132. 38. U. S. For. Rel.. 1902. p. 26. 39. U. S. For. Rel.. 1910, pp. 234-235, the Sec'y of State to Ambassador Reid, Nov. 6. 1909. 40. Thos. W. Lamont, Preliminary Report on the New Con- sortium for China, pp. 5-6. 41. Hearings before the Committee on For. Rel., op. cit., Sen. Document No. 106, p. 225. 42. Hearings before the Comm. on For. Rel., ibid, p. 224. 43. Hearings, ibid., p. 226. 44. Vide infra, Part 3, The Policy of Japan in China, chaps, on the Policy of Paramount Influence, and the Policy of an Asiatic Monroe Doctrine. 45. W. VV. Willoughby, Foreign Rights and Interests in China, p. 263. 46. U. S. For. Rel., 1902, p. 26. 47. W. VV. Willoughby, op. cit., pp. 263-264. 48. Art. 10 reads: "The members of the League undertake to respect and preserve as against external aggression the ter- ritorial integrity and existing political independence of all mem- bers of the League. In case of any such aggression or in case of any threat or danger of such aggression, the Council shall advise upon the means by which this obligation shall be filled." The reservation reads: "The United States assumes no obliga- tion to preserve the territorial integrity or political independence of any other country, or to interfere with controversies between nations, whether members of the League or not, under the pro- vision of Art. 10, or to employ the military and naval forces of the United States under any article of the Treaty for any pur- pose, unless in any particular case the Congri SS, which under the Constitution has the sole power to declare war or to author- ize the employment of the military or naval forces of the United States shall by act or joint resolution so provide." 49. W. R. Thayer, The Life of J. ,1m Hay. VoL 2. p. 369. 50. Mention must, however, be made of President \V. H. Taft, who, on account of his personal knowledge of the affairs of the Far East, advocated the enforcement of the Open Door policy in China with force, if necessary. In his inaugural address of Mar. 4, 1909, he said: "In the international controversies that POLICY OF UNITED STATES IN CHINA 177 arc likely to arise in the Orient growing out of the question of the Open Door and other issues, the United States can maintain her interest intact and can secure respect for her just demands. She will not be able to do so, however, if it is understood that she never intends to back up her assertion of right and her defense of interest by anything but mere verbal protest and diplomatic notes. For these reasons the expenses of the army and navy and of coast defenses should always be considered as something which our Government must pay for, and they should not be cut off through mere consideration of economy." — Con- gressional Record, Vol. 4-1, Part 1, 61st Cong., p. 3. 51. Millard, Our Eastern Question, p. 357, The Annual Report of the American Association of China, on Dec. 29, 1914. 52. U. S. For. Rel., 1910, pp. 243-245. Statement given to Press by the Department of State-, Jan. 6, 1910. 53. N. V. Times July 30, 1918. 54. When, therefore, the violation of the Open Door doctrine was committed by Japan in 1915, by the presentation of the 21 Demands, the United States Government, because of the Great War, did not seriously take issue with the Japanese Government, but was reported to have proposed to settle the matter at the close of the Great War by a general international conference, obtain the cooperation of the Powers expressly or passively committed to the Open Door doctrine, which was indispensable for its successful application. "No protest or ag- gressive action against the Japanese acts or policy in China will be made by the United States at this time. The State Depart- ment is unwilling to begin a serious controversy in the Far East while Europe is seething with war and while this country is involved in the numerous difficulties growng out of that struggle. For this reason there will be no diplomatic protest against Japanese aggressions in China until the European War has ended and its international complications have been resolved. "The United States will content itself with securing from the Mikado's Government a full and dear statement of tin- intention of the Japanese toward China, particularly toward the ' ►pen Door policy, and of the effect of the recent demands made on China. "With this statement on the diplomatic record, the State De- partment will wait until the end of the war. Then it is planned t<> take up the question of Japanes* ons in China with all «'i the world Powers who are actually or tacitly committed to the Open Door policy. State Department officials believe that in this way an effective una in.' the Chinese situation can Ived withoul complicating the issue." -Washington Tost, Sept. 17, 1916; Patrick Gallagher, America's Aims and Asia's Aspirations, pp. 199 200. 55. It is within reason I that, in the Disarmamenl and m Conference, the Open Door Doctrine wdl !. affirmed. PART in THE POLICY OF JAPAN IN CHINA X. The Development of Japan's Policy in China. XI. Policy of Economic Exploitation. XII. Policy of Territorial Expansion. XIII. Policy of Paramount Influence. XIV. Policy of Political Control. XV. The "Asiatic Monroe Doctrine." XVI. The "Twenty-one Demands" as an Illustra- tion of Japan's Policies ix China. XVII. The Wisdom of Japan's Policy in China. X THE DEVELOPMENT OF JAPAN'S POLICY IN CHINA The development of Japan's policy in China turned on three successive wars — the Chino-Japanese War (1894-1895), The Russo-Japanese War (1904-1905) and the World War (1914-1918). At each of these succes- sive milestones, it has taken a new turn and a new de- velopment. The first stage of Japan's policy was reached in the Chino-Japanese War. It was characterized by the in- tense national desire to recover judicial and tariff au- tonomy, and to achieve the status of national equality. Thus the policy of this period, both internal and external, was directed primarily to the upbuilding of a new Japan which could stand on the footing of equality with the Western Powers. In 1897, when the goal of national equality had been reached, Count Okuma said in the House of Representatives: "The national policy, the so- called opening and development of the country, or in other words, this principle of attaining an equal foot- ing with the Powers was. 1 firmly believe, the motive that has enabled Japan to become a nation advanced in civilization and respected by the world." 1 During this period, while the primary concern of Japan was her own development, she was none the less con- cerned with the independence of Korea, and this because the independence of Korea is indispensable to her safety. Kona is so located geographically in relation to fapan that any attempt to invade the latter from the mainland must firsl Conquer Korea and make that nation a step- ping-stone to Japan's subjugation. So, to allow any for- 181 182 THE POLICY OF JAPAN IN CHINA eign Power to hold Korea therefore was, as the Japanese Statesmen put it, to allow that Power t<> hold a dagger at the lu-art of Japan. For measures of self-defense, therefore she must maintain the independence of Korea. I folding such a policy, Japan's first ohject of attack was naturally China, who claimed suzerainty over Korea. To free Korea from the control of China was therefore one of the cardinal principles of her foreign policy. As we have seen,- as early as 1876, she had concluded a treaty with Korea ; recognizing the independence of that state, thus ignoring the suzerainty of China. Again, in 1884, to settle the collision between the Chinese and the Japan- ese troops in Korea, a convention was arranged that, in case of despatching troops to Korea, previous notice in writing had to be given each to the other,* thus success- fully limiting the suzerain rights of China, and mean- while asserting Japan's joint influence over Korea. Fi- nally, in 1894, when, on account of the Tonghak Rebellion, the forces of the two states were brought face to face in Korea, and although the rebellion had already been sup- pressed by the Korean soldiers, and China had already suggested a simultaneous withdrawal. Japan nevertheless refused to retire. On the contrary she insisted on coop- erating for the reformation of the internal administration of Korea, to which China refused to accede. Conflict could have been avoided, had Japan so desired, hut she had already determined on her policy which was to ex- tinguish the suzerain claims of China, achieve the in- dependence of Korea, attain a footing of national equality with a defeated China. Thus resolved, and the incident of Kowshing having offered the pretext.' she forced the war. Having demonstrated her national prowess, she made good use of her victories to consolidate her own position of national equality. By the treaty of Shimonoseki, apart from the recognition of Korean independence, the cession JAPAN'S POLICY IN CHINA 183 of the Pescadores, Formosa and Liaotting, and the in- demnity of 200,000,000 Kuping tads, she obtained the abrogation of all previous treaties and the conclusion of new ones to be based on "the treaties, conventions and regulations now subsisting between China and European powers," ° thereby placing herself on a par with the Western Powers in relation to China. Subsequently, in pursuance of the provision, she concluded the Treaty of Commerce, signed at Peking, July 21, 1896. by which she secured extraterritorial jurisdiction 1 and the most fav- ored nation treatment. 8 Meanwhile, vis-a-vis the West- ern Powers, she concluded one treaty after the other, re- covering her judicial and tariff autonomy, until June 30, 1899, when "the operation of all the old treaties came simultaneously to an end and for the first time in his- tory, large, rich and intelligent European communities became subject to the unfettered jurisdiction of an Oriental Non-Christian Power." 9 Although the goal of national equality had been reached, a new menace, more threatening than Chinese influence in Korea, arose upon the horizon of the Japan- ese mind, and dominated the second stage of the develop- ment of Japan's policy. This new menace was the Rus- sian advance in Manchuria. In concert with France and Germany, Russia interposed the tripartite intervention against Japan's possession of Liaotung, which compelled her tn disgorge tlie territory for an additional indemnity of 30,000,000 Kuping taels. 10 This act of intervention, initiated by Russia, 11 so incensed Japan that thence- forth, she made the grim resolve to face the new menace. "It became to her as dear as daylight that tlie new position she had acquired in the Orient by her victory ov«r ( liina could be maintained, and even her independ- ence must be guarded, only by an armament powerful 184 THE POLICY OF JAPAN IN CHINA enough to give her a voice among the first class Powers of the world. If she could not retire into herself, and finally cease to exist, she must compete with the greatest nations, not only in the arts of peace, but also in those of war. Moreover, a far vaster conflict than she had over known in her history, excepting the Mongol invasion of the thirteenth century, was seen to be awaiting her . . . . The only course to save her seemed to be, now as at any other recent crisis of her life, to go forward and become equal to the new expanding situation." u Actuated by this high resolve, she bent all her energy on the day when she would come to grapple with the new menace. Working day and night in preparation for the coming crisis, Japan abandoned her old hostility toward China and espoused the Open Door policy. Responding readily to Secretary Hay's circular note of 1899, she gave her "assent to so just and fair a proposal of the United States, provided that all the other Powers concerned shall accept the same." l;; During the Boxer Uprising, her soldiers exemplified both courage and orderly conduct, and in the negotiation for settlement, she sided, mainly, with Great Britain and the United State-." As against the Russian Convention in regard to Manchuria, and the Seven Articles, joining Great Britain and the I "nited States, she entered repeated protests. 111 During the nego- tiations attending the conclusion or the Anglo-Japanese Alliance Count Hayashi, in r< isponse to Lord Lansdowne's inquiry as to Japan's policy in China, replied: "As I have before stated, we entirely agreed with the British policy in Eastern countries. '1 hat is to say. we wish to maintain the territorial integrity of China and the princi- ple of equal opportunity." M And when the Alliano concluded, the preamble read : "The governments of Great Britain and Japan, actuated solely by a desire to maintain the status quo and general JAPAN'S POLICY IN CHINA 185 peace in the extreme East, being moreover specially in- terested in maintaining the independence and territorial integrity of the Empire of China and the Empire of Korea, and in securing equal opportunities in these coun- tries for the commerce and industry of all nations, hereby agree," etc. 17 Finally, in the negotiation with Russia just prior to the declaration of war, Japan repeatedly insisted on the integrity of China in Manchuria, the observance of which Russia repeatedly refused to pledge. Thus, during the period, when she was feverishly preparing for her clash with Russia, Japan was a consistent upholder of the Open Door doctrine in China. After the victories she achieved in the Russo-Japanese War, the policy of Japan took a radical turn in China. Instead of setting her face against Russia, she set it in the direction of the mainland of Asia. In other words, she launched her policy of continental expansion. When Komura left for Portsmouth, he had already formulated the plan of a Greater Japan. "On the Asian continent he would create a Greater Japan. . . . Manchuria and the road to Europe must be won. In the Portsmouth deliberations, August 10 to September 5, 1905, Russia agreed to share with Japan all her special rights in the Chinese Empire and, accordingly turned over to her the texts of all her previous treaties with China . . . what was wanted was that which could guarantee Japan's future — a foothold on the Continent, control of high seas to Europe, preponderance in the de- velopment of Manchuria, the .subordination of China, and the friendship of Russia . . . all their ends for which the war had been fought — had been settled in Komura's mind before leaving [apan and were won at Ports- mouth." 1S Upon bis transfer from London to the Japanese For- eign Office, Hayashi, like Komura, laid down the policy, 186 THE POLICY OF JAPAN IN CHINA that was to be carried out by all diplomatic agents of Japan. This policy was a peaceful penetration of China by means of commercial and economic expansion, hacked by diplomatic pressure and armed force, with a view to eventual political control. Industrial expansion was to be assisted by political expansion, and vice versa. With- out commercial expansion, political control would be hol- low ; without political control commercial expansion would be unsafe and unstable. 10 To execute this policy of continental expansion, Japan had to make certain strategic moves. The first was the subjection and annexation of Korea. Just as any power attempting to invade Japan from the direction of the mainland must first conquer Korea, so likewise Japan must first subjugate and control Korea and make that state a first step toward the domination of Eastern Asia. After her declaration of war on Russia, she established her protectorate over Korea,* appointed advisers to con- trol finance and foreign relations,- 1 and took over the communication systems — post, telephone, telegraph — amalgamating them with her own.- 1 ' Immediately upon the conclusion of the war, she took over the foreign re- lations of Korea, as the first step towards final annexa- tion. 23 In the Anglo-Japanese Alliance, dated August 12, 1905, she obtained the recognition of her paramountcy over Korea and of her right "to take such measure of guidance, control and protection in Korea as she may deem proper and necessary" -' (Art. .^). In his letter to Sir C. Hardinge, the British Ambassador to Russia, 25 Lord Lansdowne said: "It has, however, become evi- dent that Korea, owing to its close proximity to the Japanese Empire and its inability to stand alone, must fall under the control and tutelage of Japan." In 1907 the administration of Korea was placed under the con- trol of the Japanese Resident-General.*" In 1910, the annexation pf Korea was consummated.- 7 Thus, Japan completed her first step in continental expansion. JAPAN'S POLICY IN CHINA 187 Having made Korea a stepping-stone, she was ready to pursue her policy in China. She wanted to exploit the latter's natural resources. She desired to dominate, if not actually to annex. South Manchuria and Eastern Inner Mongolia; she was anxious to displace foreign in- fluence in China by her own paramount influence ; she yearned to establish an Asiatic Monroe Doctrine, and, above all, designed to obtain the control of the Peking Government. All these things she aimed to do, but she found there was one great obstacle in her way, and that was the presence in China of the European Powers. Be- cause of the balance of power, she was not able to move in the direction she wished, without arousing the jealousy and opposition of the other Powers. She had to wait for the opportunity. But the Great War came in 1914, and the chief atten- tion of the rival Powers was transferred to the battle- fields of Europe. By Japan, this was regarded as an opportunity sent by Providence. A Black Dragon Society appeared and urged the government to solve the Chinese question at the opportune moment, 28 by the formation of a defensive alliance with China, based on a set of terms, which well reflected those of the subsequent Twenty- one Demands : "Now is the most opportune moment for Japan to quickly solve the Chinese question. Such an opportunity will not occur for hundreds of years to come. Not only is it Japan's divine duty to act now, but present conditions in China favor the execution of such a plan. We should by all means decide and act at once. If our authorities do not avail themselves of this rare opportunity, great difficulties will surely be encountered, in future in the settlement of this Chinese question. Japan will be iso- lated from the European Powers after the war. and will be regarded by them with envy and jealousy just as Ger- many is now regarded. Is it not then a vital nee. for Japan to solve at this verv moment the Chinese ques- tion?" 29 188 THE POLICY OF JAPAN IN CHINA Tapan struck while the iron was hot. She ousted Ger- many from Shantung and made herself that nation's suc- cessor, thus extending her influence over the Yellow River Basin. She then lowered the mask she had been wearing because of the presence of the other Powers in the Orient, and revealed her real intentions regarding China. She nted the Twenty-one Demands which form the best single document expo an's policy in China (this subject will be discussed in a subsequent chaj I lav- ing failed to force Group Five on the Chinese Govern- ment, she changed her tactics and resorted to indirect attack, through indiscriminate loans and the manipulation of the Pro-Japanese Anfu Club then in control of the Peking Government. This, however, also failed, because of the termination of the World War and the consequent return of the Powers, and especially because of the vic- torious arms of General Wu Pai-fu who destroyed the power of the Anfu Club and saved the Peking Govern- ment from its deadly grip. When, therefore, llara came to office in 1918, he was compelled once more to put on the mask which Okuma had discarded, and resumed the policy toward the Powers of international cooperation. During this period, Japan supplemented her policy of advance in China by various agreements with the Powers so as to avoid unnecessary conflicts. This was one of the policies laid down by Hayashi — the policy of simultaneous political and economic ion, facilitated by interna- tional agreements. 31 Discarding her old hostility, there- fore, and adopting a policy of friendliness toward Russia, she concluded the agreemenl of 1907, pledging to main- tain their respective status quo.** As a result of this understanding, she failed to protest against the Russian establishment of the municipal administration in Har- bin in 1907, which right she had denied Russia before the Russo-Japanese War. Reacting against the intrusion of the Knox neutralization plan, she entered the second JAPAN'S POLICY IN CHINA 189 agreement with Russia, on July 4. 1910, engaging to take common measure against outside interference with their interests within their respective spheres of influence. " During the War. she entered into a secret treaty of alli- ance with Russia in 1916, mutually promising armed as- sistance in case of war/' Likewise in 1907, she arranged an agreement with France, 88 Russia's ally in the Dual Al- liance, for mutual support in their respective spheres in Asia, therein - incidentally facilitating the flotation of her loans in Paris and promoting her own trade in Annam. Meanwhile, her relations with the United States be- came more and more unsatisfactory and, at times, even strained. In launching her policy in China, she realized that the power that would most likely stand in her way of achievement was the United States, who with her espousal of the Open Door doctrine, stood as a guardian over China. She took offense at the terms of the Ports- mouth Treaty, and, more so, at the Anti-Alien Land Law and the California School Incident. In concert with Russia, she rejected the neutralization plan of Secretary Knox. During the World War, resenting Wilson's friendly note of 1917 to China which it was claimed, ignored the special position of Japan in China, she des- patched the Eshii .Mission and obtained recognition from the United States Government of her special interests in China. Likewise, her relation with Great Britain became less cordial. The Anglo-Japanese Alliance of 1911 exempted the United States from the force of the Alliance — the very nation against whom she would have the Treaty direct its application M (Article 4). Article five of Gn up Five of the Twenty-one Demands asked for rail- way concessions in the Yangtze Valley which con- flicted with British int< Article 5, Group 5). 81 The general aggre jive nature of the Twenty-one Demands, especially Group I ughl forth a storm of pi in the British pn . A a reaction, especially after the 190 THE POLICY OF JAPAN IX CHINA failure <>f Group Five, the Japanese press conducted an anti-British campaign" and the Japanese entered mean- while, in 1916, into a secret alliance with Russia. Above all, the Japanese ambition of winning trade predominance in China conflicted irrcconciliahly with the British | of maintaining commercial supremacy. Summing up the development of Japan's policy in China, it may be said that, during the first stage culmi- nating in the Chino- Japanese War, this policy was di- rected primarily to the achievement of national equality and the independence of Korea; that during the second period, ending with the Russo-Japanese War, it tered on the coming struggle with Russia and the main- tenance of the Open Door Doctrine in China; hut that, with her victory over Russia, came a sharp change in her policy, and she launched upon a career of continental ex- pansion, treading down a martyred Korea and menacing the integrity of China. NOTES TO CHAPTER X 1. Alfred Stead, Japan by the Japanese, p. 219. 2. Vide supra, chapter on the Loss of Dependencies. 3. State Papers, Vol, 67. pp. 530-533. 4. State Papers, Vol 76, pp. 297-298. 5. Vide supra, chapter on the Loss of Dependencies. 6. Hertslet, Vol. 1, p. 364. Art. 6. 7. Hertslet, Vol. 1, p. 379 et seq.. Arts. 20, 21, 22. 8. Hertslet, VoL 1, p. 38L Art. 25. 9. J. 11. Longford, The Evolution of Japan, p. 81. 10. Vide supra, chapter on the [nternational Struggle for Concessions. 11. Counl Witte, Mv Dealings with the Li Hung Chang, World's Work, Jan.. 1921, p. 300 el 12. K. A-akaua, The Russo-Japanese Conflict, p. 79-80. 13. I'. S. Foreign Relations, 1899, p. 139, Viscount Aoki to Mr. Buck, Dec. 26, 1899. 14. Morse, The [nternational Relation of the Chinese Empire, Vol. 3, Chapters Hi, 11. 12. 15. Vide supra, chapter on the International Struggle for Concessions. JAPAN'S POLICY IN CHINA 191 16. A. M. Pooley, The Secret Memoirs of Tadasu Hayashi, p. 134. 17. State Papers. Vol. r '5. pp. 83-84. 18. Dr. W. E. Griffith's statement in New York Sun, May 30, 1915, quoted in Bash lord, China an Interpretation, p. 387 et seq. 19. Pooley, Japan's Foreign Policy, p. 47 et seq. 20. State Papers, Vol. 98, p. 842, Protocol of Seoul, February 23, 1904. 21. State Papers, Vol. 98, p. 843, Agreement of Aug. 22, 1904. 22. State Papers, Vol. 98, pp. 1137-1139, Agreement of April 1, 1905. 23. State Papers, Vol. 98, pp. 1139-1140. 24. State Pap 98, pp. 136-138. 25. Millard, Our Eastern Question, Appendix L, p. 452, the Marquess of Lansdowne to Sir C. Hardinge, Sept. 6, 1905. 26. State Papers, Vol. 101, p. 280, Agreement of July 24, 1907. 27. State Papers, Vol. 103, p. 992, Treaty of Annexation, Aug. 22, 1910. 28. Putnam Weale, The Fight for the Republic in China, p. 125 et seq. 29. Weale, ibid., p. 128, Memorandum of the Black Dragon Society. 30. See chapter on The Twenty-one Demands as an Illustra- tion of Japan's Policy in China. 31. Pooley, Japan's Foreign Policy, p. 47. 32. MacMurray, 1907/11. 33. MacMurray, 1910/1. 34. MacMurray, 1916/9. 35. MacMurray, 1907/7; Millard, Our Eastern Question, App. M, pp. 457-458. 36. State Papers, Vol. 104, p. 174; Millard, Our Eastern Ques- tion, p. 456. 37. The Sino-Japanese Negotiations, Chinese Official State- ment, 1915, p. 22. 38. Millard, Our Eastern Question, p. 239 et seq. 39. Ibid., p. 247 et seq. XI THE POLICY OF ECONOMIC EXPLOITATION The present policy of Japan toward China has five clearly defined objectives in view. They arc-: Economic Exploitation, Territorial Kxpansion, Paramount Influ- ence, Political Control and the adoption of an Asiatic Monroe Doctrine. Moreover, this policy turns on two fundamental prob- lem- : The first is that of Japan herself, arising out of her growing population and the limitations of territory and natural resources of the islands. This results in the adoption of the policy of territorial expansion, and the policy of economic exploitation. The other problem is that of China arising out of the international struggle for concessions and the latter's apparent inability to resist Western aggression. This predominance of West- ern influence endangers the safety of Japan. The second problem leads to the adoption of a policy of paramount influence, political control and an Asiatic Monroe Doc- trine. As already stated, the policy of economic exploitation is one of two alternative ways of meeting the population problem. As population increases, territory must be ex- panded, and the art of living raised : otherwise the stand- ard of living will be lowered. Excluding consideration of allowing the standard of living to deteriorate, increas- ing population must be met either by territorial expan- sion and economic exploitation abroad, or industrial de- velopment at home, or by both. Japan chooses to solve tin- problem by both mean-. The population in Japan proper is 57,070,936 * (on December 31, 1918), and the land area of Japan proper 192 POLICY OF ECONOMIC EXPLOITATION 193 amounts only to 148,756 square miles. 2 Dividing the land area by the population, the density of population per square mile is 384. In comparison with this density in other nations, Japan ranks next only to Belgium with 659.4 and Holland with 474.3, and rivals Great Britain with 370.8. 3 Adding to this density, the annual net in- crease is about 700,000, or 12.75 per thousand. 4 At this rate, the present population will be doubled in about half a century. Closely associated with the problem of increasing popu- lation, and in fact constituting an integral part of the same problem, is the question of food supply. It has estimated that in Japan the per capita consumption of rice in a year is one Koku ( 5.11 () 02 bushels U. S. A. ).' Calculating on this basis, and Japan's population num- bering 57,070,936, the consumption in 1918 was therefore reckoned at approximately 57,070,936 Koku. "Against this, the total yield of rice in a normal year is 52,000,000," or 5,070,936 less than the need." Balancing yearly the export of from 600,000 to 700,000 Koku for the 400,000 Japanese residing abroad with the import of 1,500,000 Koku from Korea and Formosa and a little over 1,000,- 000 from Saigon, the supply is still short by about three or four million Koku, which means that three or four million mouths would be left unfed, unless the requisite supply of rice could be procured elsewhere. 7 Confronted with the intense pressure of population against food supply, Japan is driven to become an indus- trial and commercial nation. Just as Great Britain, Bel- gium and Holland — all with growing populations and comparatively small anas -nut their population prob- lems through the development of industry and commerce, so likewise Japan bends all her energy toward a similar irse of development In her attempt to do SO, however, she finds herself detieient in coking coal, iron and steel— the essentials of modern industry. She wa able t" produce in 1918. 28,- 194 THE POLICY OF JAPAN IN CHINA 00 m. tons of coal, 8 but she was not able to secure sufficient coking coal, indispensable to the steel industry.' In accordance with the estimates of the Japanese Eco- nomic Investigation Commission, created during the Okuma Ministry, the demand for pig iron, while not ex- ng the supply in 1918, will be 743.000 tons for 1928, and the production of the same in Japan proper, in 1921 and thereafter, will be only 611,500 tons, thus giving rise to a shortage which must he fdled by the production in Korea. Manchuria and China; l0 and the demand for steel in 1918 was 1,113,000 tons, and the output in Japan proper only 765,000 tons, and in 1928 the demand will be 2,112,000 and the yield in 1921 and thereafter only 1,- 090,000 tons, 11 thus giving rise to a shortage of steel in 1918 at 348,000 tons and in 1928 at approximately 1,022,- 000 tons. Before the World War, Japan relied upon Belgium and Great Britain for her supply of steel. After the outbreak of the war, she turned to the United States. But when, in July, 1917, the United States put an embargo on steel, Japan's supply was cut off, and her ship-building indus- tries and iron- works almost came to a complete halt. "Never before did Japan realize so keenly as on that occasion the precarious nature of her industrial struc- ture, depending upon foreign countries for the supply of steel." 12 Thus handicapped by nature, and yet at the same time driven by circumstances to become an industrial and com- mercial nation, Japan devoted attention to finding a field where she might obtain the necessary elements for the stability of her economic structure. Surveying the regions of the world, she finds China, her next-door neighbor, the logical and natural field for commercial expansion. There the teeming millions offer a market for Japanese manufactured products. There unbounded natural re- sources, especially coal, iron and steel, furnish the neces- POLICY OF ECONOMIC EXPLOITATION 195 sary sinews for Japanese industries. There the compara- tive shortness of distance, the affinity of language and race, and the potential increase of Chinese prosperity — all indicate that nature has provided a special field of economic activity for the Japanese. Conceiving this to be her destiny, she sets her face like a flint toward China with the policy of economic exploitation. The first region in China to be exploited is South Manchuria. By virtue of the Treaty of Portsmouth, she obtained from Russia transfer of the lease of Port Arthur and Talien-Wan and the cession of the Chinese Eastern Railway from Changchun to Port Arthur, 13 with the adjoining mines. Possessed of these railway and mining interests, the Japanese Government organized the South Manchuria Railway Company. The capital is 200,- 000,000 Yen, one-half held by the Japanese Government, represented by the Manchurian railway and accessories and the coal mines at Fushan and Yentai, the other half offered to private investors, the Japanese Government guaranteeing a profit of six percent on the paid-up capi- tal for fifteen years. 14 Actually, however, the govern- ment owns four-fifths of the paid-up capital and appoints the president, vice-president and directors. 15 It can there- fore be said that the South Manchuria Railway Company is merely a name, and that the Japanese Government is the real factor exploiting the resources of South Man- churia. The company runs its main line from Dairen to Chang- chun, the Tort Arthur Branch Line, the Yingkow, Fustian and Yentai Branches, and the Mukden-Antung Line, mak- ''2.7 miles in all. 16 Besides the railways, it also main- tains a regular shipping service between Shanghai and Dairen, and also a South China coastwise service. It ebuilt the second quay, and constructed breakwaters, and a third quay, in the harbor of Dairen, all of which have been completed. Further, it operates electric power 196 THE POLICY OF JAPAN IN CHINA stations at Dairen, Mukden, Changchun, Antung, Fushan and Yentai, and electric tramways and gas industries at Dairen and Fushan. 17 In addition, the company manages its own hotels — all hearing the name of the "Yamato Hotel" — at Dairen, Hoshigaura (suburbs of Dairen I, Port Arthur, Mukden and Changchun. Besides these in the railway zone, it maintains, according to the report at the end of March, 1918, 18 eleven hospitals, twenty pri- mary schools, eleven Chinese common schools, thirty-two business schools, ten girls' practical schools, one medical school (at Mukden), a technical school, and a teachers' training institute at Dairen, one polytechnic laboratory, two agricultural experimental stations, thirteen farms and seventeen water works. 1 ' Furthermore, the company is engaged in the operation of the mines, which form one of its most important under- takings. The Fushan Colliery, situated about twenty- two miles east of Mukden, contains a deposit of an average of 130 feet in thickness, "runs for about twelve miles parallel to the River Hun," and yields a total out- put of 6,000 tons a day, (or 2,275,905 tons in 1918). "The quality, too, is excellent, being of strong caloric power and containing very little sulphur." 20 The Yen- tai Coal Field, northeast of Liao-yang, vields an output of 247 tons daily or (113,679 tons in 1918). " "The coal is soft and pulverizable and emits but little smoke." 22 Among the new undertakings, the iron foundry at An- sbantien yields an initial output of 150,000 tons which will be ultimately increased to 1,000,000, "the ore at \n- shantien being almost inexhaustible." ■ The glass works, the porcelain and the lire-proof tile factory have begun to send forth their new products.- 41 - 5 Besides the activities of the South Manchuria Rail- way Company, the Japanese Government has other rail- way interests in South Manchuria and even in Eastern Inner Mongolia. In accordance with the treaty of April, 1917, she completed the construction of the K inn-Chang- POLICY OF ECONOMIC EXPLOITATION 197 chun Railway < >n October 16, 1912.-" The South Man- churia Railway furnished half of the capital, repayable by the Chinese Government twenty-five years from the date of the opening. 27 In the Treaty of May 25, 1915, the revision of the Kirin-Changchuh Railway loan agree- ment was stipulated, "taking as a standard the provisions in railway loan agreements made heretofore between China and foreign financiers," (Article 7), and also en- gaging the Chinese Government to extend to this rail- way any better terms which might be granted to other railway contractors (Article 7). "The effect of this undertaking," said the Chinese official statement of 1915, "is to transfer the capital originally held by the Chinese, 11 as the full control and administration of the rail- way, to the Japanese." M By the exchange of notes on October 5, 1913,- 9 Japan obtained the railway concessions from Supingkai via Chengchiatun to Taonanfu, from Kaiyuan to I Iailungchang, and from Changchun to Tao- nanfu. Ey the preliminary agreement for loans to build four railways in Manchuria and Mongolia on September 28, 1918,™ the construction of the four railways was con- tracted, from Jehol to Taonan, from Changchun to Tao- nan, from Kirin via Hailung to Kai-Vuan, and from a point between Jehol and Taonan to some point on the sea- coast. All these railway concessions, with the -ingle ex- ception of the Taonanfu-Jehitl Railway and the railway connecting a point on the Taonanfu-Jehol Railway with a seaport, arc to be OUtside of the SCOpe of the New In- ternational Banking Consortium. 81 Aside from these, under the 'I 'erauchi Cabinet, the Kirin-1 lueining Rail- way loan was contracted in 1918, M and a loan of 30,- 000,000 Yen was made with all the forests and gold mines in Kirin and Eieilungkiang as securities. In the same year, a cone ion for continuing the Kirin-Chang- chun line to the Korean border was granted. ' More than these, the Treaty of May 2?, 1915, respect- ing South Manchuria and Eastern Inner Mongolia, eon- 198 THE POLICY OF JAPAN IN CHINA fared greater economic privileges on the Japanese in South Manchuria than ever before. The terms of the South Manchuria Railway and the Antung-Mudken rail- way are to be extended to ninety-nine years i \rticle 1). The whole of South Manchuria is to be opened to the Japanese (Article 3). Japanese subjects are to be per- mitted to lease, by negotiation, land necessary for build- ing, trade, manufacture and farming (Article 2). 35 The term "lease by negotiation" is understood "to imply a long term lease of not more than thirty years and also the possibility of its unconditional renewal." ,; Finally, the Japanese subjects are granted privileges to prospect and select mines in the following areas in South Manchuria: 37 FENGTIEN Locality District Mineral Xiu Hsin T ? ai Pen-hsi Coal Shin Shih Fu Kou . . . Pen-hsi " Sha Sung Kang Hailung " T'ieh Ch'ang Tung-hua " Nuan Ti T'ang Chin An Shan Chan Region From Liaoyang to " Pen-hsi Iron KIRIN (southern portion) Locality District Mineral Sha Sung Kang I Iolung Coal & Iron Kang Yao Chi-lin ( Kirin) . . .Coal Chia P'i Kou Hua-tien Gold Turning now from South Manchuria to Shantung, we see Japan pursuing the same policy of economic exploita- tion. As we have seen, by the Treaty of May 25, 1915, " respecting Shantung, she caused China to agree "to give full assent to all matters upon which the Japanese Gov- ernment may hereafter agree with the German Govern- ment relating to the disposition of all rights, interests and concessions which Germany, by virtue of treaties or other- POLICY OF ECONOMIC EXPLOITATION 199 wise, possesses in relation to the Province of Shantung" (Article 1), thus virtually compelling the Chinese Gov- ernment to a full assent to the contemplated succession of Japan to the German rights in Shantung. By Articles 156, 157, 158 of the Treaty of Peace with Germany signed at Versailles on June 28, 1919, she obtained the transfer by Germany of all the German rights in Shan- tung, including the lease of Kiaochow, the submarine cables from Tsingtau to Chefoo and from Tsingtau to Shanghai, the Tsingtau-Tsinan Railway and the adjoin- ing mines. Thus, she made herself the sole successor to Germany in that Province. Pursuing the policy of economic exploitation in Shan- tung, as elsewhere, the Tsingtau-Tsinan line yielded in 1917-1918 gross receipts of 8,196,146 yen as against an expenditure of 6,155,627 yen, making a total profit in that year of 1,644.519 yen. 3 " Apart from this railway in operation, Japan has obtained by the Treaty of May 25, 1915, a concession to finance the railway from Che- foo or Lungkow connected it with the Kiaochow-Tsin- anfu Railway (Article 2) ; 4U and by the Treaty of Sep- tember 28, 1918, the concessions of the Chinan-Shunteh and Kaomi-Hsuchow Railways. 41 In addition, she controls the mines in Shantung for- merly belonging to the Germans. The Chunghsiang Col- liery has an established annual output of 250,000 tons, the Hungshan mines 800,000, the Poshan mines 25" Shantung Besybau 560,000, and the Tzechuan Col- liery 1,000,000. ■'- The Fangtze Colliery is, however, not bo promising. It contains 52.X square kilometers of coal deposit, but it is estimated that it will yield only one million tons mure. 1 The Chinlingchen iron mines have a deposit of 310 square kilometers, and the quality and quantity are promising. 44 Respecting the industrial progress of rsingtau made under the Japanese Administration, the Japan Year Book says : * 8 200 THE POLICY OF JAPAN IN CHINA "In Tsmgtau alone earisl about twenty-five factories ol note backed by a capital of 50 million yen. contrasted with the 17 years of German rule, during which time Tsingtau had only one beer brewery and two egg pow- der manufacturing companies, the development made during the last few years in this direction may be said to have been marked. These new enterprises are mostly Japanese and include milling, brewery, tanning, packing, soap making, oil, match and salt manufacturing, etc. The electric works are government monopoly." \ Passing from Shantung, the next field of exploitation to be considered is the Hanyehping Company and it cessories, a company composed of the Hanyang Iron Works, the Tayeh Iron Mines and Pinghsiang Colliery, corresponding in significance and influence to the Bethle- hem Steel Corporation. The Tayeh iron field is among the richest in the world. "It consist- of a range of nine low hills, containing sixty-seven percent of iron ore. The official Japanese survey of the mine proper that the iron vein is 265 feet thick and of immeasurable length and depth, the amount of ore being estimated at 700,000,000 tons." It yields an annual output of 700,000 tons. 47 The Pinghsiang coal field in Kiangsi covers a total area of over 200 square miles, of which only twenty- one square miles are yet being worked. It has a pos- sible supply of 500,000,000 tons and an annual output of 750,000 tons. 48 Before the Chinese Revolution, Japan had contra with the company for the supply of pig iron and iron which went to the Japanese Imperial Iron Works at Wakamatsu. During the Revolution, when the Han- yehping was closed, the Japanese Imperial Iron Works at Wakamatsu had to stop and make contracts with the Tata Company at Bombay. 48 After the revolution, in 1913, Japan effected a loan of less than £2.000,000 to the Hanyehping Company through Shen Kun-pao, the largest share-holder of the Hanyehping, Yuan Shih-Kai vetoed POLICY OF ECONOMIC FAPLOITATION 201 the loan agreement as being contrary to the mining laws of 1913, but it was of no avail, as the decree was issued after the contract had been concluded. 50 The Japanese Loan was made upon the security of the property of the company, and on these conditions: First, the Hanyehping Company shad repay it in forty years by sale of fifteen million tons of iron ore and eight mil- lion tons of pig-iron in addition to the amount already contracted for. Second, the Japanese shall have pref- erence in future loans. Third, the company shall employ a Japanese "highest engineering adviser" and an "auditor adviser." Further, the title deeds of the Company shall be deposited in a safe having two keys, of which the Japanese shall hold one.' 1 By means of this loan trans- action, thirty-three percent of the entire output of iron ore and about fifty percent of the entire yield of pig-iron are at present to go to Japan annually ; and this in spite of the rise in value of these exports from two million taels in 1913 to nineteen million taels in 1918. - As this loan did not give Japan the control of the Company, a Sino-Japanese Corporation was formed, tak- ing over the interests of Shen Kun-pao ; hut the Chinese mining law of 1913, prohibiting foreigners from owning more than fifty percent of the stock of a Chinese mining company, prevented the consummation of the plan. 1 Con- sequently, Group Three of the Twenty-one Demands re- lating to the Hanyehping Company forced the Chinese Government to give assent to a joint enterprise if the Japanese and the Chinese capitalists should agree upon cooperation in future. The pledge was also secured from the Chinese Government "not to confiscate the said com- pany, no]-, without the consent of the Japanese capitalists to convert it into a state enterprise, nor came it to bor- row and use foreign capital other than Japanese ' Further, Group Hiree of die original Twent) one he tnands revealed the de igns of Japan, not only upon the Hanyehping Company, but al i die mines of the 202 THE POLICY OF JAPAN IN CHINA Central Provinces in the Yangtze Valley, — Hupeh, Hu- nan, and Kiangsi. It practically aimed at the monopoly of the minerals of these provinces. Article Two of Group Three of the original demands read: "The Chinese Government agrees that all mines in the neighborhood of those owned by the Hanyehping 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 ap- prehended, may directly or indirectly affect the interests of the said company, the consent of the said company shall first be obtained." os The language of this article was so general that it could be practically made to mean the monopoly of the mines in Hupeh, Hunan and Kiangsi, where the operations of the Hanyehping Company were carried on. The mines in the neighborhood of those owned by the Company were not to be worked by other persons outside of the com- pany, and the neighborhood was purposely left indefinite and undefined. Tims, the doors of the Central Yangtze provinces would be closed to the mining enterprises of any other party but the Hanyehping Company, of which Japan sought to make a Chino-Japanese joint concern. Again, the second part of the article requiring the con- sent of the company for any undertaking which might directly or indirectly aiTect the interests of the said Com- pany was worded so vaguely, as to be capable of being interpreted to cover all kinds of enterprises that might compete with the company or affect its interests in any way. This would mean that, throughout China or at Central China, the Hanyehping Company would en- joy the monopoly of the iron industry and exclude any competitors or conflicting interests. In short, had the original article been granted, Japan would have, through the instrument of the Hanyehping Company, practically POLICY OF ECONOMIC EXPLOITATION 203 obtained the monopoly of the mines of the Central Yang- tze Provinces and a monopoly of the iron industry in China. Turning from the Hanyehping Company, Japan has in- terests in other parts of China. In Anhui Province, the Sino-Japanesc Industrial Company owns the Taochung Iron Mines, having visible ore of 60,000,000 tons — sixty- five per cent pure. 50 Japan has concessions for large de- posits in Fukien near Amoy. 57 The Terauchi Cabinet also concluded the Communication Bank Loan, 58 and the Telegraph Loan. 5 " Japan can also tap the fabulous wealth of Shansi Province by the completion of the Tsi- nan-Shunteh line and the connection of Tsingtau-Tsinan Line with the Lung-Hai Railway. 00 In addition to the interests already acquired, Japan has made several attempts of greatest significance to exploit the riches of China. She sought to obtain the wine and tobacco monopoly, both in trade and tax collection, by the offer of a loan of 30,000,000 yen. 01 Nishihara sought to acquire the monopoly of the foreign trade of China through the organization of the Chung Hua Trading Co., against which the United States protested. M In her proposal to remit the balance of the Boxer indemnity, the Japanese Government stipulated, besides the requirement of the presence of a Japanese adviser at the conference for considering proposals to be submitted by the Chinese Government at the Peace Conference, and of the ab- stention from foreign loans other than Japanese dur- ing the war, that Japan should direct the use of the in- demnity so remitted, and control the export of China's iron, cotton and wool.' Finally, Japan made desperate efforts to control -till other in.n mines of China. The Japanese financiers, together with some ( hinese, organ- ized the Mulling Co., to develop the famous Fenghuang- shan imn mine- near Nanking, which has BOUght to obtain 20* THE POLICY OF JAPAN IX CHINA a license from the Chinese Government for the under- taking In 1918, Japan proposed a loan of 100,000,000 yen . 741. 23. Japan Year B 21, p. 743. 24. Japan Year Book, 1920-21, p. 743. 25. Hand in hand with tin- South Manchuria Railway Company there is the Manchurian Export Guild. It aims to monopolize the foreign trade of Manchuria. For a brief account see Overlack, Foreign Financial Control in China, p. 172. 26. MacMurrav, 1907/3; lapan Year Book, 1920-21, p. 743. fapan War Book, 1920-21, p. 743. 28. The Chino-Japanese Negotiations, 1915, pp. 8-9. 29. MacMurrav. 1913/9. 30. The Shantung Question, submitted by China to the Paris Peace Conference, published by the Chinese National Welfare Society <>f America. March. 1920. p. 69. 31. Lamont's Reply to Mr. Kajiwara, President of the Yoko- hama Specie Bank, Millard's Review, October 23, 1920, p. 386; Documents Concerning the New Consortium, released to press by the Department of State. March 30, 1921, Exchange of Letters between Laniont and Kajiwara, May 11, 1920. 32. MacMurray, 1918/9. 33. MacMurray, 1918/11. 34. Millard, Democracy and the Eastern Question, p. 191. 35. MacMurray, 1915/8; The Shantung Question, op. cit., p. 30 et seq. 36. MacMurray, 1915/8; The Shantung Question, op. cit., ex- change of notes n S] ling the explanation of "Lease by Nego- tiation" in South Manchuria, pp. 33-34. 37. The Shantung Question, op. cit.. p. 32; MacMurray, 1915/8. 38. MacMurray, 1915/8; the Sino-Japanese Negotiations, 1915, p. 49 et seq. 39. Japan Year Book, 1920-21. p. 746. 40. The Sino-Japanese Negotiations, 1915, p. 50. 41. The Shantung . op. cit., pp. 66-67; MacMurray, 16, 42. Po< l( . I'm' u ' Policy, p. 192. 43. \-u. Sept 19, p. 905. 44. Ibid. 45. Japan Year Book, 1920 21, p. 746. 46. l ooley, op cit, p. 161; Coleman, The Far East Unveiled, p. . l. 47. Pooley, op. cit, p. 191. 48. Pooley, ibd., p. 162. 49. Pooley, ibid., p. 1( 50. Pooley, ibid., p. 162. 51. H. K. Tong, art on Japan's Railway Program in China, Millard's Review, June 12, 1920; Coleman, op. at., p, 63 et secj. 206 THE POLICY OF JAPAN IN CHINA 52 II. K. Tong, art. on Japan's Railway Program in China, Millard's Review, June 12, 1920, p. 65. 53. Pooley, <>p. cit., pp. 162 163. 54. The Sino-Japanese Negotiations, pp. C7-68; MacMurray, 1915/8. 55. The Sino-Japanese Negotiations, 1915, p. 21. 56. Poolev, op. cit.. p. 191. 57. Millard's Review. June 23, 1917, pp. 67-69. MacMurray, l'>17/9. 59. MacMurray, 1918/7. 60. For a list of loans made by the Japanese from January 1, 1909, to October 25, 1918, sec Millard, Democracy and the Eastern Question, p. 187. 61. H. K. Tong, art. on Japan's Seeking China's Tobacco Monopoly, Millard's Review, June 8, 1918, p. 49 et seq. 62 H. K. Tong, article on America Protests Against the Chinese Trading Monopoly, Millard's Review, November 9, 1918, p. 388 et seq. 63. H. K. Tong, article on Japan's Conditions for Remitting Her Share of Boxer Indemnitv, Millard's Review, October 26, 1918, p. 303 et seq. 64. H. K. Tong, article on Japan's Newest Intrigue for Pos- session of China's Iron Mines, Millard's Review, January 18, 1919, p. 233 et seq. 65. Pooley, Japan's Foreign Policy, p. 192. XII THE POLICY OF TERRITORIAL EXPANSION As we have already indicated, the policy of territorial expansion is one of two ways for solving the population problem of Japan. Barred by the Gentlemen's Agree- ment with the United States, and by the colonies of Great Britain, Japan was forced to alleviate the congestion and consequent economic misery of surplus population, by finding an outlet on the Asiatic mainland. Confined within the narrow limits of her small islands, she was in constant fear of being some day deprived of any channels of expansion and smothered. Unless she face stagnation, congestion, and misery, she must seek some territory to which she can send her surplus sons and daughters. Searching for an outlet, she finds that her first avail- able region of colonization is her own northern Island, Hokkaido, which can hold five times as many people as its present population of 2,200,000. 1 But the Island is mountainous and its winter severe and protracted. The second available territory is Korea, which can at least support twice as many people as her present popu- lation of about 15,000,000. But Korea has a density of population of 169 per square mile and offers no great attraction for Japanese settlers. 2 The third region that Japan logically looks to for amelioration on the main- land is South Manchuria. Though as thickly populated as Korea, great natural resources and the fertility of the soil nevertheless ofTcr many attractions fur Japanese colonization. Aside from the natural attraction afforded by the country, Japan feels that she has a special claim to South 207 208 THE POLICY OF JAPAN IX CHINA Manchuria. By the Sino-Japanese War, she obtained possession of the Liaotung peninsula forming the pro- jection of the southern half of Manchuria, but because of the tripartite intervention she was constrained to dis- gorge this territory. Though deprived of the cession, she still cherishes the desire and hope of some day re- gaining it. What is more, she fought Russia and so saved South Manchuria from her clutches. She staked her whole national existence on the struggle; she spent about a billion yen and lost over one hundred thousand lives. Therefore, "Considering that every inch of South Manchurian soil was soaked with Japanese blood and that their coffers were left sadly depleted by the war, it would not have been surprising if the Japanese in the wake of the great conflict had been tempted to regard Manchuria as their own territory by right of conquest, and to adopt these discriminating measures calculated to advance their trade." 3 Again, it was said : "Manchuria is consecrated to Japan by the blood of dead Japanese soldiers." 4 Furthermore, the traditional ambition for a Greater Japan impels the government to the policy of territorial expansion in the direction of Eastern Asia. Yoshida, the great teacher of "Patriotic Schools," among whose famous disciples were ECido, Inouye and Ito, advocated the expansion of Japan in Asia by force of arms. His program included the acquisition of the Kurile Islands, Saghalien, Kamchatka, Formosa, Korea, Manchuria, and a large part of Eastern Siberia — with a view to the ex- pansion of Japan into an Eastern Asiatic power. 8 For these reasons therefore — the economic pressure of surplus population, the special claim to South Manchuria POLICY OF TERRITORIAL EXPANSION 209 and the traditional ambition of a Greater Japan — the Yamato race has set her heart on the domination, if not the annexation, of South Manchuria. Professor Tomizu, M.P., of the Tokio Imperial University, said in 1912, 7 "the present is the best possible occasion for the solution of the South Manchuria question, which Japan must settle sooner or later. She has already missed several opportunities for annexing Manchuria, and the longer the solution is postponed the more difficult it becomes." In the memorandum submitted by the Black Dragon Society advocating a defensive alliance between Japan and China, which was believed to be the fore- runner of the Twenty-one Demands, among the terms sel forth there was the provision which betrayed the intention to seize the sovereign rights of South Man- churia and Eastern Inner Mongolia: "China agrees to recognize Japan's privileged position in South Man- churia and Inner Mongolia and to cede the sovereign rights of these regions to Japan to enable her to carry out a scheme of local defense on a permanent basis." 8 Thus, bent on the control, and if possible, the posses- sion of South Manchuria and Eastern Inner Mongolia, Japan used, as the basis of her expansion, Article 6 of the Railroad Convention between Russia and (Tina of 1896, ,J which she had inherited from Russia by virtue of ssion of the Southern Portion of the Chinese East- ern Railway from Changchun to Dalny and Port Arthur, and by virtue of the confirmation of the transfer by the Chine e Governmenl by the Treaty of December 22, 1905, ] providing that Japan's rights in South Manchuria should, "as far as circumstances permit, conform to the original agreements concluded between China and Rus- si;i" ( Art iel. 2), \rtielc <> of the original granl to Russia read: "la society aura le droil absolu el exclusif de ('ad- ministration '1'- ses terrains." " By virtue of this article, although the original grant was qualified by special pro- visions for tin- prol i : i"n and preservation of tin- Chinese 210 THE POLICY OF JAPAN IN CHINA sovereignty, 11 she exercised actual sovereignty over the railway zone of 70.54 square miles. 13 She permitted no Chinese soldiers and police to enter the zone except with special permission, and on the other hand, she maintained exclusive police and military guards within the zone. 14 Thus, she divided the sovereignty of South Manchuria by means of this narrow strip of railway zone which is entirely under Japanese jurisdiction, or, to use another expression, she thus created an impcrium in imperio, which could be used for the future expansion of Japa- nese jurisdiction over South Manchuria. Further, she established Japanese settlements at most of the stations along the railway and attempted thereby to found a series of Japanese towns. — "Thus, there will be a strip of ter- ritory running through the heart of South Manchuria which to all intents and purposes will become a Japanese Colony." " More than this, she adopted the policy of settlement under the Japanese jurisdiction and sovereignty. By stretching the interpretation of the extra-territorial rights, she established police boxes, and even jails and houses of detention in connection with her consulates. She main- tained that the assumption of the police power over her own subjects was but a corollary of extra-territorial juris- diction, which, however, was not claimed by the other treaty Powers enjoying similar privileges : "In short, the establishment of stations for Japanese police officers in South Manchuria and Eastern Inner Mongolia is based on consular jurisdiction and its aim is efficiently to protect and discipline Japanese subjects, to bring about a completely satisfactory relationship between the officials and people of the two countries, and gradu- ally to develop the financial relations between Japan and China. The Chinese Government is requested speedily to the demands precisely as it has the establish- ments of consulates and consular agents in the interior POLICY OF TERRITORIAL EXPANSION 211 of South Manchuria in pursuance of the policy to main- tain the friendly relations between China and Japan." 15 And, maintaining that contention, she made repeated attempts to secure the recognition of the right to sta- tion police in South Manchuria and Eastern Inner Mon- golia. On October 18, 1916, 1S she submitted this demand: "According to the new treaty concluded last year re- specting South Manchuria and Eastern Inner Mongolia, Japanese subjects shall have the right of residence, travel and commercial and industrial trade in South Manchuria and the right to undertake agricultural enterprises and industries incidental thereto in the Eastern part of Inner Mongolia jointly with Chinese subjects. The number of Japanese subjects in South Manchuria and Eastern Inner Mongolia will, therefore, inevitably increase gradually. The Imperial Government of Japan considers it neo to station Japanese police officers in these regions for the purpose of controlling and protecting their own subjects. [t is a fact that a number of Japanese police officers have already been stationed in the interior of South Manchuria and they have been recognized by the local officials of the localities concerned since intercourse has been con- ducted between them. The Imperial Government of Japan proposes gradually to establish additional stations for Jap- anese police officers in the interior of South Manchuria and Eastern Inner Mongolia whenever and wherever necessary." Thus. Japan aimed to extend her sovereignty wh< i ubjectS should go in South Manchuria and Eastern Inner Mongolia. Following this policy to its 1 Conclusion, and especially in view of the fact that the whole of South Manchuria has been thrown open to Japanese subjects by the Treat} of May 25, I'M 5. r< in 1 .; South Manchuria and Eastern Inner Mongolia (Ar- ticle 3), she can extend her nty, wherever her subjects go. Thus, under the guise of peaceful settle- 212 THE POLICY OF JAPAN IN CHINA ment, the process is. in reality, a political invasion, paving the way for territorial absorption. Not contented with the policy of settlement under Japanese jurisdiction and sovereignty, Japan, in 1915, made the bold attempt to capture the sovereignty of South Manchuria and Eastern [nner Mongolia by means of the Twenty-One Demands. In group Two of the original demands, Article Two provided for the Japanese owner- ship of land. It read: "Japanese subjects in South Man- churia and Eastern Inner Mongolia shall have the right to lease or own land acquired either for erecting suitable buildings for trade and manufacture or for farming." 18 Land in South Manchuria and Eastern Inner Mongolia being very cheap, the grant of the privilege of owning it would give her and her subjects the opportunity to own the entire territory of these two regions by systematic purchase and manipulation of land prices through Japa- nese banks operating therein. The Chinese Official State- ment of 1915 regarding the Chino-Japanese negotiations on the Twenty-one Demands said: "Should Japanese sub- jects be granted the right of owning land, it would mean that all the landed property in the region might fall into their hands, thereby endangering China's territorial integrity." 20 Side by side with the demand for the right to own land, Japan demanded the exercise of police power in important places in China. In Group V. Article 3, of the original demands, we read : "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 thai the police departments of 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 POLICY OF TERRITORIAL EXPANSION 213 at the same time help to plan for the improvement of the Chinese Police Service." As the police power is a concrete symbol of sovereignty, this demand for the joint administration of police is tantamount to a demand for the sovereignty of China. While, however, the demand covered the whole of China, it was meant to apply particularly to South Manchuria and Eastern Inner Mongolia. The Chinese official state- ment of 1915 regarding the negotiations runs as follows: "The proposal that there should be joint administra- tion by China and Japan of the police in China was clearly an interference with the republic's domestic affair, and consequently an infringement of her sovereignty. For that reason the Chinese Government could not take the demand into consideration. But when it was ex- plained by the Japanese minister that this referred only to South Manchuria, and he suggested that his govern- ment would be satisfied if China agreed to engage Japa- nese police advisers for that territory, the Chinese Gov- ernment accepted the suggestion." - 1 Whatever the intention of this demand, had it been granted, Japan would have acquired the power of jointly administrating the police in important places of China, especially in South Manchuria and probably Eastern Inner Mongolia, which would have virtually meant the cession .(■reign rights in these regions, — which the Black Dragon Society had petitioned the Japanese Government to obtain. Coupled with the right of owning land, such an arrangement would have rendered the regions in ques- tion actual colonies of Japan. Failing in this move, Japan made of the * !hangchiatung Affair another attempt to wrest th( pity of South Manchuria and Eastern Inner Mongolia from the hands oi the Chinese Government. Barring the usual satis- faction for the ( hangchiatung Affair, she demanded the employment ot' Japanese military advisers in South Man- 214 THE rOLICY OF JAPAN IN CHINA churia. and of military instructors in the Cadet schools, and the establishment of police stations in South Man- churia and Eastern Inner Mongolia. 11 Mad these de- mands been conceded, it would have meant the Japanese control of the military development of South .Manchuria and granting of the police power over Japanese subjects in South Manchuria and Eastern Inner Mongolia. Finally, when the new Consortium was being organized in 1919-1920, Japan qualified the participation of her financial group with the reservation that South Manchuria and Eastern Inner Mongolia should be excluded from its scope. 28 * 24 Thus, by this diplomatic stroke, she at- tempted to secure the recognition of the Great Power- as to her special political status in these regions and her right to exclusive exploitation of the same. Hence, if China should in the future come under the control of the New Consortium and thus lose her independence. Japan would have saved these two regions from a similar fate, and would be free to snatch them from the grip of the Consortium and incorporate them under her own sovereignty. 38 It is, therefore, reasonable to conclude that Japan did entertain the design of controlling, if not of possessing, South Manchuria and Eastern Inner Mongolia. Im- pelled by the economic pressure of an increasing popu- lation at home, supported by the special claim growing out of the Russo-Japanese War, and inspired by the tra- ditional ambition of a Greater Japan, she has set her heart on the policy of territorial expansion in these two regions. Using Article Six of the Russo-Chinese Rail- way Convention of 1896 as a basis, she planned to extend her sovereignty over these regions, by the creation of the imperium in itnperio in the railway zone, the establish- ment of police stations, and the repeated attempts to wrest the police power from the Chinese Government.* POLICY OF TERRITORIAL EXPANSION 215 NOTES TO CHAPTER XII 1. K. K. Kawakami, Japan in World Politics, p. 58. 2. Ibid., p. 58. 3. Ibid., p. 131. 4. Patrick Gallagher, America's Aims and Asia's Aspirations, p. 407. 5. J. O. P. Bland, article on Moral Factors in Japanese Policies, Asia, March, 1921, p. 217. 6. John Spargo, Russia as an American Problem, p. 150. 7. Shin Ninon, editor, Count Okuma, April, 1912, quoted in Pooley, Ja' Policy, p. 76n. 8. Putnam Weale, The Fight for the Republic in China, pp. 130-131. [acMurray, 1896/5. Ki. MacMurray. 191)5/18. 11. The society shall have the absolute and exclusive right of administration of its territories. 12. Cf. U. S. Foreign Relations, 1910, pp. 203-205, the letter of the Secretary of State of the United States Government to the Russian Ambassador on April 9, 1908. 13. Hornbeck, Contemporary Politics in the Far East, p. 268. 14. [bid., p. 208; Millard's Review, Nov. 8, 1919, p. 399. 15. Lancelot Lawton, The Empires of the Far East, Vol. 2, p. 1167. 16. MacMurray, 1917/2; W. W. Willoughby, Foreign Rights and Interest in China, pp. 84-85; Japanese Minister's Aide Memoire, Oct. 18, 1916. 18. MacMurray, 1917/2; W. W. Willoughby, op. cit, p. 83 et seq. 19. The Sino-Japanese Negotiations, 1915, p. 20. Ibid., p. 12. 21. Ibid., pp. 9-10. 22. MacMurray, 1917/2. 23. T. \\ . Lamont, Preliminary Report on the New Consortium for China, p. 7. 24. Documents concerning tin- new consortium released to by tin- Department of State on March 30, 1921, the letter of M. Odagiri of tin- VTokahoma Sp< to Mr. T. \V. Lain. .nt of tlu- J. P. M. I 19. I "!' a complete account of the new consortium, vide infra, ■ in the .New International Banking Consortium, 26. Japan's recenl tern Siberia may or may not effect her pollCJ of territorial expansion in South Man- churia and Eastern Inner Mongolia lor an account of Japan and Siberia, see John Spargo, Ru n Problem, Chapter V, p. lw el seq. XIII THE POLICY OF PARAM< >UNT INFLUENCE In the two preceding chapters we have examined the policies of economic exploitation and territorial expan- sion, — two of Japan's solutions for her population prob- lem. We come, now, to the third policy — that of para- mount influence. This policy is actuated in the first place by Japan's desire to obtain and possess the largest Chinese sphere of influence. Being China's closest neighbor and of the same racial and linguistic family, she feels that she ought to have the largest influence. When the battle of con- cessions commenced in 1898 — which resulted in the Pow- ers demarcating their respective spheres of influence on the map of China — Japan was not yet a full-fledged Power. She had therefore to be content with the de- marcation of Fukien as her humble share. When, by dint of extraordinary exertion, and by reason of her vic- tory over Russia, she had achieved the position of a great Power, she found, to her regret, that all the re- gions in China had already been occupied as Spheres of other Powers, and sin- had again to be contented with .South Manchuria which she had won by the sword and vu Inner .Mongolia attained by cordial agreement with Russia. When, however, the World War broke out, leaving China free for her expansion, she promptly seized the opportunity and extended her sphere of influ- ence as far as China and the other Powers would allow her. This she did, partly to the end that in case of an eventual break-up or partition of China, she would be able to secure the Largest share of territory. "It was because European Powers were bent upon dividing China 216 POLICY OF PARAMOUNT INFLUENCE 217 into so many spheres of influence that Japan was obliged to step in and take such measures as might be neces- sary to safeguard her position in the Far East against any emergency that might arise from an unhappy con- dition in China." ' This policy is again a concomitant of Japan's other policies — economic exploitation and territorial expansion. Economic exploitation requires the existence of a sphere of influence, and quite logically, the fullest measure of economic exploitation requires the possession of the largest sphere of influence. In order, therefore, to carry out this policy to the fullest satisfaction, the acquisition of the largest sphere of influence is highly desirable, if not quite necessary. Likewise, territorial expansion de- mauds the existence of a sphere of influence wherein a Power entrench itself against the authority of the ter- ritorial sovereign and the intrusion of other Powers. While it is not indispensable, the possession of the largest sphere of influence will nevertheless help to consummate the annexation of the regions desired. In the case of Japan and China this policy is ani- mated by the former's desire to displace the predominat- ing Western influence by her own paramount interest. She feels chagrined over the presence of such an influ- ence in a land where, by virtue of the similarity of lan- guage .and race, she feds that she ought to have the ! share. She is also afraid that the presence of a dominating Occidental influence may imperil the inde- pendence of ( hina and so jeopardize her own existence. Therefore, to check the further extension of such an influence, she proposes to displace it with her own para- mount interest. Supporting this view is the following statement : "It must be frankly admitted that ever since China opened her doors i<> Western nations, her territory has been regarded as a happy hunting ground by com' 218 THE POLICY OF JAPAN IN CHINA rs of all, but especially of European countries. Her inefficiency, her impotency and the general disorgani- zation and corruption of her administrative system have been such as t<> invite a veritable universal scramble over concessions. . . . To tin- Japanese, it is certain that, un- less they take the necessary measures of precaution, the whole province of China will sooner or later be held in the grip of Western interests. Of course she could not, even it' .--he would, undertake to safeguard all the vast dominion of China, hut she must by all means forestall the establishment of preponderating Western influence in such sections of that domain as are contiguous or adjacent to her own territories." -"•' This policy is, moreover, motivated by Japan's consid- eration of her own special position in China. She fought war with Russia, partially because of China's incapacity to resist Russian aggression in Manchuria. By dint of supreme sacrifice, she saved Manchuria, and so rendered China a distinct and invaluable service. She also feels her exalted mission of Chinese guardianship. Ik-ing the only nation in Eastern Asia that has been able to resist successfully the Western onslaught, she feels that she has the duty of extending her protection to the other nations of Eastern Asia, particularly China. Further, her own economic, and to a certain extent, her own politi- cal existence depends upon China's prosperity and inde- pendence. Should her neighbor ever come under West- ern control, or what is worse, should she ever be par- titioned, Japan would be left alone in the world. With the Western Powers entrenched on the opposite shore of her sea, her own days of independence would be num- bered. As preserver of Manchuria and protector of China, dependent as she is upon her and inseparately interwoven as is her destiny and well-being with that of China, she is therefore impelled by a high sense of justification to put forth her claim of a special position in that country. POLICY OF PARAMOUNT INFLUENCE 219 Turning now to the ways in which this policy has hcen executed, we find that Japan first established her para- mount influence in South Manchuria. As we have seen, soon after she had obtained the transfer of the railway and mine leases, she organized the South Manchuria Rail- way Company, which is the Japanese Government all but in name and which dominates the economic life of South Manchuria. Besides this, she closed the door of South Manchuria to the railway enterprises of other nations. She vetoed the Hsinminting-Fakuman concession granted to British interests in 1907, by producing a secret agree- ment alleged to have been signed in connection with the Treaty of December 22, 1905, pledging the Chinese Government not to construct, prior to the recovery by them of the said railway (the South Manchuria Railway), any main line in the neighborhood of and parallel to that railway, or any branch line which might be prejudicial to the interest of the above men- tioned railway. 4 The great extension, however, of her sphere of influ- ence came when the World War broke out. To repeat, she first ousted Germany from Shantung and seized all German interests — leaseholds, railways, mines, cables — and this in violation of the sovereignty of China. I lav- ing accomplished this, she presented the now celebrated Twenty-one Demands, which, had they been fully granted, would have given her the largesl sphere of in- fluence or the position of paramount influence. By Group I, she demanded the assent of the Chinese Gov- ernment to any arrangement Japan Olighl make with Ger- many at the end of the war relatin nu;iii rights in Shantung (Article 1 }. ,; By Articles 156, 157. and 158 of the Treat) of Peace with Germany signed at Versailles, June 28, 1919, she was made the sole successor to all German interests and rights in Shan- tung, thus adding this Pi tvince to her sphere <»t' in- fluence. 220 THE POLICY OF JAPAN IN CHINA Nol only this, but by Group II of the original Twenty- one Demands, she demanded the right of owning land in South Manchuria and Eastern Inner Mongolia, which, coupled with the demand for the police power in "im- portant places" in China, would, in due course of time, have made South Manchuria and Eastern Inner Mon- golia Japanese territories. Again, according to the same group of demands, she attempted to put Eastern Inner Mongolia on the same status as South Manchuria, which was. however, successfully frustrated by the skill of the Chinese diplomats, who caused Japan to be content with the mere opening of some commercial ports in that region. Notwithstanding the failure of these deeper de- signs, she was nevertheless successful, by the Treaty of May 25, 1915, in tightening her control over South Man- churia and Eastern Inner Mongolia. For contracting for- eign loans for the construction of railways in South Manchuria and Eastern Inner Mongolia and for pledg- ing the taxes of these two regions as securities for loans, Japan had first to be consulted. "If foreign advisers or instructors on political, financial, military or police matters are to be employed in South Manchuria, Japa- nese may he employed first." 7 In addition, by Article 6 of Group V, Japan attempted to consolidate her position in Fukien and make the prov- ince an exclusive sphere of influence. The Article read: "If China need foreign capital to work mines, build railways and construct harbor works (including dock- yards) in the Province of Fukien, Japan shall he first consulted." 8 Had this demand been fully granted. Japan would have closed another door — and this time in the Province of Fukien. The final exchange of notes, how- ever, gave only a voluntary declaration, on the part of the Chinese Government, in response to the Japanese inquiry, that no permission to foreign nations had been given, nor had foreign loans been contemplated, "to con- struct on the coast of Fukien Province, dock-yards, coal- POLICY OF PARAMOUNT INFLUENCE 221 ing stations for military use. naval bases, or to set up other military establishments." ° Furthermore, Japan also attempted, by the original Twenty-one Demands, to extend her influence into the Yangtze Valley, thus invading the British sphere. As will be recalled, by Group III relating to the Hanyehping Company, besides the privilege of joint concern, she de- manded the monopoly of mines in the neighborhood of those owned by the company (Art. 2), which, had it been granted, would have given her the monopoly of the mining privileges of the Central Yangtze Provinces, thus excluding Great Britain, with reference to mining enter- 3, from her own sphere. 10 What is worse, by Arti- cle 5 of Group V, 11 she demanded the right of construc- ing certain railways in the Yangtze Valley. "The demand of railway concessions in the Yangtze Valley," said the Chinese Official Statement of 1915, "conflicted with the Shanghai-Hangchow-Ningpo Railway of March 6, 1908, the Nanking-( liangsha Railway agreement of March 31, 1914, and the engagement of August 24, 1914, giving preference to British firms for the projected line from Xanchang to Chaochowfu." v - Thus, had this demand been granted, Japan would have added to her sphere of influence the Southeastern Provinces of China. .Moreover, when the Russian Soviet Revolution oc- curred in 1917, resulting in the recession of Russian influence from North Manchuria and Outer Mongolia, Japan again took advantage of the situation and at- tempted to extend her influence into North Manchuria. She dispatched troops to occupy and guard the Chinese Eastern Railway, and this in spite of the fact that the protection of the railway was distinctly assigned by the allied Agreement concerning the guarding of the Chinese Eastern Railway, to the Chinese Government, which had well performed the task. 11 Simultaneously with the coup of Vladivostok, she increased the Dumber 222 THE POLICY OF JAPAN IN CHINA of her troops along the Chinese Eastern Railway. To find an excuse for their presence, she instigated bandits and gave them aid to break down Chinese authority along the railway. 11 !1 " And it was only the Inter-allied Kail- way Technical Commission that prevented Japan from openly seizing it, as she had the Tsingtau-Tsinan Rail- way. 17 " 18 It was said: "Supreme efforts are being made by China to persuade Paris, London and Washington not to dissolve the Inter- ally Railway Technical Commission in Siberia for the simple reason that China is fully convinced that Japan will seize the Chinese Eastern Railway immediately fol- lowing the abolition of the Commission. The Japanese do not intend to withdraw their troops until they have exhausted every means to get control of this railroad. It is therefore up to the Peking Government to do its utmost to preserve for China one of the most important railways within her domain. . . . Simultaneously with the coup at Vladivostok, the Japanese forces along the wdiole Chinese Eastern Railway were increased and it looked as if the operation of the line would be usurped by the Japanese authorities. The resistance of the Inter- allied Commission alone was responsible for the pre- venting of such a development. . . ." Apart from the extension of her sphere of influence, Japan also aims to win the predominance of trade. When the great war came and Knropean competitors tempo- rarily disappeared, she forged her way straight ahead until she became a formidable rival of Great P>ritain — who is also bent on trade predominance. Had it not been for her loss of China's goodwill, due to the Twenty-one Demands in 1915 and for the boycott subsequent to the Shantung Decision in 1919, she would have probably, by this time, outstripped all other commercial rivals in China. The following available statistics show that, from 1913 to 1917, she almost doubled her share in the total percentage of China's foreign trade : 10 POLICY OF PARAMOUNT INFLUENCE 223 TABLE SHOWING PERCENTAGES OF TRADE WITH CHINA, 1915 TO 1917 1913 1914 1915 1916 1917 Japan 19.7 21.1 23.4 28.3 33.4 British Empire. 48.0 49.0 47.2 40.9 39.7 Incidentally, this attempt to win trade predominance Serves as an additional impetus towards winning that coveted prize, the position of Inspector General of the Chinese Maritime Customs. Although China did not promise that whatever nation gains trade predominance wins the office in question, it is nevertheless understood that, upon the losing of trade predominance, Great Britain will automatically lose the office, and once she acquires trade predominance,- Japan may assert her claim to the office, under the "most favored nation" clause. In attempting, however, to attain this predominance, Japan has often been tempted to resort to unfair means (particularly in Southern Manchuria) in plain violation of the Open Door principle of equal opportunity of trade. A system of rebates was inaugurated by the South Man- churia Railway, of which, in the very nature of things, only the Japanese could avail themselves, and which be- cause of voluminous protests, was abolished in Septem- ber, 1909. 21 The British-American Tobacco Company built a factory in Mukden and paid the production tax as required by Chinese law, but the Japanese Govern- ment Tobacco Monopoly also built a factory ,in New- chuang and failed to pay it. The retail dealers of the British-American Tobacco Company submitted to the payment of the tax, but the agents of Japanese tobacco refused to pay the same, not infrequently backed by Japanese consuls. 2 - In the 1914 report of the American Consul-General at Mukden, 23 the following evidence of discrimination appeared: "The only bank in Mukden doing foreign business is the Yokohama Specie Bank. ... A general preference 224 THE POLICY OF JAPAN IN CHINA is given to Japanese merchants and traders. Rates for advances on cargo expected are as follow^: Japanese, 7 percent ; foreigners, 8 percent; Chinese, 10 percent. "In selling their products, the Japanese have been fa- vored by cheap home labor, government subsidies, special railway rates, preferential customs treatment and ex- emption from internal taxation. . . ." Other evidences may be offered, but suffice it to sum- marize the disabilities which other foreign merchants have experienced in Manchuria and Shantung. 24 Goods of these merchants were delayed on various pretexts, while the goods of the Japanese were promptly moved. Special favors were accorded the Japanese by the rail- way under their control, "including an obscene system of rebates." 23 Public utilities controlled by the Japanese were manipulated "to give advantages to Japanese mer- chants." Spacious Japanese ships refused to ship Ameri- can cargoes because of competing Japanese firms, and lower rates or rebates were given to Japanese shippers. 28 In this connection mention must be made of the fact that even during the allied military intervention in Si- beria, Japan availed herself of her military position to achieve commercial expansion much to the chagrin and detriment of the allied expeditionary forces. "The mili- tary trains, supposed to be used exclusively for and by the joint expedition, were very largely used to transport Japanese merchandise into Siberia. This merchandise was literally smuggled in with the connivance of the Japanese authorities. It was a common occurrence for trainloads of commercial wares from Japan to be sent from Vladivostok marked as military stores, at the time when the armies of the joint expeditionary forces were deprived of necessary supplies on account of lack of transportation." ■* Next to commercial paramountcy, Japan aims at cul- tural predominance in the regeneration of China. Hav- POLICY OF PARAMOUNT INFLUENCE 225 ing acquired Western civilization earlier than any other Asiatic nation, and claiming to be the harmonizer of the Eastern and Western civilizations, she feels called to the national mission of propagating the newly har- monized culture in the Orient, especially in China. Here is Marquis Okuma's own statement : "I have no doubt that Japan will propagate to China and other countries in the Orient whose standard of civilization is low, her new civilization, which is a prod- uct of harmonizing the Japanese and European civiliza- tions. In a sense, Japan may be said to have the mission of harmonizing Eastern and Western civilization and of propagating the new civilization. Nay, I do not hesitate to declare that this is her mission." M To this end, by Articles 2 and 7 of Group V of the Orig- inal Demands, 20 she demanded the right of owning land in the interior of China for the use of Japanese hospitals, churches and schools, and also that of missionary propa- ganda in China, both of which were not granted however. The last phase of Japan's policy of paramount influ- ence is her claim to special interests in China. The Lansing-Ishii agreement recognizes this. 30 While it is reasonably certain that Mr. Lansing did not recognize Japan's special interests in China any more- than he did the special interests of the United States in Canada or Mexico,' 11 Japan's interpretation, however, is neverthe- less different. It tends to favor the construction of a posi- tion of paramount influence. The testimony of S tary Lansing before the Senate Committee on Foreign Relations Eurn dencethal Viscount tshii attempted to put the construction of this influence on the term "special interest" dining the negotiatic "Senator Borah. He (Ishii) said that bis idea was that Japan had special interests in China which right 226 THE TOLICY OF JAPAN IN CHINA was to be recognized, and by those special interests he mean paramount control? I arv LANSING. Yes; and I told him 1 could not consider it. "Senator Brandagee. 33 Did he at any time intimate that it meant paramountcy or interest different from that of any other nation, other than from Japan's propin- quity to China? "Secretary Lansing. My only recollection as to that is that he wished to have inserted the words 'special in- terests and influence' and 1 objected seriously to the insertion of the words 'and influence,' and they were stricken out." Besides Mr. Lansing's testimony, the letter of the Rus- sian Ambassador at Tokio of that time again revealed the Japanese intention to interpret "special interest" as paramount influence. "The Japanese are manifesting more and more clearly a tendency to interpret the special position of Japan in China, inter alia, in the sense that other Powers must not undertake in China any political steps without pre- viously exchanging views with Japan on the subject — a condition that would to some extent establish a Japa- nese control over the foreign affairs of China." 34 ' 35 "To my question whether he did not fear that in the future, misunderstandings mighl arise from the different interpretations by Japan and the United States of the meaning of the terms 'special position' and 'special inter- of Japan in China, VlSCOUnl Motono replied by saying that — (a gap in the original). Nevertheli . I gain the impression from the words of the minister that he is conscious of the possibility of misunderstandings also in the future, hut is of the opinion that in such a case Japan would have better means at her disposal fur car- rying into effed her interpretation than the United States." 80 POLICY OF PARAMOUNT INFLUENCE 227 Again, commenting on the interpretation of the Lansing-Ishii agreement, a Japanese author frankly asserted that what Secretary Lansing conceded was the recognition of Japan's paramount influence in certain sections of China as long as the exercise of that influ- ence did not conflict with the principles of the Open Door doctrine. "The understanding was concluded in flexible terms permitting of various interpretations. But if we may gauge the official sentiment at Washington through the press dispatches from the capital at the time the under- standing was consummated, the American Government was prepared to go a long way towards the establish- ment of the principle that Japan was entitled to secure a paramount influence in certain sections in China, as long as she does not encroach upon the "Open Door prin- ciple." 37 Moreover. Japan's subsequent actions show her inten- tion of interpreting special interests as paramount influ- ence. She established civil administration in Shantung, where for almost three years, since her capture of Tsing- tau, she had been contented with merely maintaining military occupation. She also extended her civil regime in Manchuria. Note this testimony before the Senate Committee on Foreign Relations : 3H "Moreover, Japan went ahead and acted on her in- terpretation. From that time she assumed a position of paramountcy in relation to China. She went ahead and began the establishment of civil government over Shan- tung Province. She extended her civil government regime in .Manchuria. She began actually to acquire the p i- and the position of a sovereign in most parts of China where she had obtained a foothold by the method 1 have indicated. She went <>n. and she obtained, through that influence, a great influent Peking. . . ." 228 THE POLICY OF JAPAN IN CHINA Furthermore, in December, 1917, shortly after the Bolshevist coup d't'tal, the Japanese Government offered in a note to the Allied Powers and the United States, to intervene in Siberia, on three conditions, one of which was that the Allied nations and the United States should recognize her paramount position in China and the ex- isting Sino-Japanese treaties. 80 In the alleged secret Treaty of Alliance between Japan and Germany, pur- porting to have been negotiated at Stockholm, in Octo- ber, 1918, by the German Ambassador Lucius and Mr. Oda, the Plenipotentiary of Japan, — which was however nullified by the German Revolution, — it was provided that while Germany was to receive Japan's support in estab- lishing her paramountcy over European Russia and Western and Central Siberia, Japan was to be given assistance in establishing her paramount influence in East- ern Siberia and China. 40 NOTES TO CHAPTER XIII 1. Kawakami, Japan in World Politics, p. 129. 2, 3. Kawakami. lapan and World Peace, pp. 161-162. 4. MacMurray, 1905/18 ; W. W. Willoughby, Foreign Rights and Interests in China, p, 313. 5. 6. The Sino-Japanese Negotiations, 1915, p. 19; MacMurray, 1915/8; Sino-Japanese Negotiations, p. 4° et seq. 7. MacMurray, 1915/8; Sino-Japanese Negotiations, 1915, p. 55 ct seq. 8. The Sino-Japanese Negotiations, 1915,, p. 22. 9. Ibid., pp. 69-70. 10. V'ida supra, chapter on the Policy of Economic Ex- ploitation. 11. The Sino-Japanese Negotiations, 1915, p. 22. 12. Ibid., pp. 10-11. 13. Millard's Review, May 1, 1920, p. 445 et Beq., the resolu- tion of the inter-allied technical board. 14. IS. Millard'., Review, May 22, 1920, p. 574; this is what is charged in an official dispatch received by the Peking Govern- ment from the civil Government of Kirin: "It is an open secret that large numbers of bandit leaders have been invited to Tsingtao where they have been trained and armed for the pur- i e of molesting the inhabitants in the neighboring districts and thereby making it impossible for the Chinese to continue their POLICY OF PARAMOUNT INFLUENCE 229 peaceful vocations. According to most reliable reports, several Japanese brought with them to this province notorious robbers. . . . These ringleaders and their Japanese friends have been distributed at various points along the Chinese Eastern Railway where they intend to create trouble. ..." 16. In a further attempt to control the railway she offered the Russian committee military support i n several conditions, among which was the one that any further financial needs of the Chinese Eastern Railway were to be the first submitted to Japan — Millard, Democracy and the Eastern Question, p. 307. 17, 18. H. K. Tong, article on The Inter-Allied Watch Dog of the Chinese Eastern Railway, Millard's Review, June 26, 1920, p. 211 et seq. 19. Poolev, Japan's Foreign Policy, p. 192. 20. MacMurray, 1898/2. 21. Hornbeck, op. cit., p. 264. 22. Ibid., p. 265 et seq. 23. U. S. Commerce Reports, Feb. 20, 1915, Report of Consul General P. S. Heintzleman, Dec. 21, 1914, quoted in Hornbeck, Contemporary Politics in the Far East, p. 267. 24. Millard, Democracv and the Eastern Question, pp. 274-275. 25. Ibid., p. 275. 26. For the manipulation of Chinese currency in Manchuria, see H. K. Tong, article on Driving American and European Business out of Manchuria, Millard's Review, June 29. 1918, p. 168; Violating the "Open Door'' in Manchuria, Millard's Re- view, July 20, 1918, p. 294. 27. John Spargo, Russia as an American Problem, pp. 254-255. 28. J. O. P. Bland, article on A Goal for Japanese Ambition, Asia, February, 1921, p. 147. 29. The Sino-Japanese Negotiations, 1915, p. 22. 30. Hearings before the Senate Committee on Foreign Rela- tions, Sixty-sixth Congress, First Session, Senate Document No. 106, on the Treaty of Peace with Germany, p. 225. 31. Vide infra, chapter on the Policy of Asiatic Monroe Doc- trine. 32. Hearings, op. cit.. p. 229 et seq. 33. Ibid., p. 233, 34. 35. [bid., p. 230; Millard, Democracy and the Eastern Question, p. 14X; Letter of Russian Ambassador at Tokio, Oct 22, 1917. 36. M ilia !; The Shantung Question, op. cit, p. IS; Etrupensfcy's Third Dispatch, Nov. 1. 1917. 37. Kawakami, Japan and World Peace, p. 1 Hearings, op. crt, p. 444, the testimony of T. F. Millard. 39. [ohn Spargo, op. cit., p. 236. 40. [bid., pp. 253 254. XIV THE POLICY OF POLITICAL CONTROL As we have already seen, Japan's whole policy turns to-day on two fundamental problems — the problem of the increasing population of Japan and the question ol China, (hit of the first the policy of economic exploitation and the policy of territorial expansion developed, manifesting partly also in the policy of paramount influence. Out of the second, the Chinese question, there arose her policy of paramount influence and that of political control which constitutes the theme of our present chapter and the "Asiatic Monroe Doctrine" which will be discussed in the next chapter. Japan's policy of political control is largely an out- growth of existing conditions in China. Ever since the Chinese Revolution in 1911, the control of the Central Government has relaxed and weakened, and the provinces have practically become independent states. Armies are maintained by the various provinces, over which the Presi- dent has little control. As a result, the provinces can declare their independence, almost at will. Thus, over the issue of the constitutionality of the dissolution of the Parliament in 1917, the provinces split into North and South. Again, taxes arc, in the main, collected by the provinces, which can refuse to remit quotas as requi- sitioned. As a consequence, the provinces fail to send remittances, and the Central Government is compelled to live on loans. As it does not enjoy the confidence of the people, it is forced to resort to foreign financial aid. In doing so, it mortgages one asset after another, th> placing the country under the danger of foreclosure. Added to this is the corruption of some of the leading 230 POLICY OF POLITICAL CONTROL 231 officials who in exchange for the rich commission they can gain from the loans passing through their hands, do not hesitate to contract foreign loans, regardless of future consequences. Such a combination of situations — civil war, foreign borrowing, and official corruption — cannot but give rise to the apprehension of possible bank- ruptcy and Western control. If the conditions existing in China were free from foreign influences, Japan would probably have been less anxious. As it is, the Western Powers have made China a happy hunting ground for gaining concessions and ex- ploiting natural resources. They would not hesitate, save for the rise of Chinese nationalism, to make the country a second Africa or Egypt. And yet, in face of the for- eign menace, China remains divided, incapable of resist- ing alien aggression, and headed toward the abyss of bankruptcy and foreign control. To the mind of Japan, granting the continuance of existing conditions, and pro- vided no new factors of salvation arise, foreign control is China's well-nigh inevitable fate. As is said, "If this unhappy condition is permitted to continue much longer, the outside Powers interested in China will sooner or later combine their influence to establish international supervision over that country." 1_2 Besides, had China been located far away and had she not been of the same racial and linguistic family, Japan would not have been so much impelled to action. As it is, China is situated at the door of Japan and is of the same family in race and language. Should China ever pass under Western control, thus losing her inde- pendent existence, Japan would be left all alone in the world — to face the increasing domination of the West. What is worse. Japan's destiny and welfare are inti- mately related to those of China. Japan depends upon her for the Supply Of basic materials, particularly coal, iron and Steel, for a market for her manufactured prod- and for mutual cooperation against the \\ 232 THE POLICY OF JAPAN IN CHINA domination. Should China fall. Japan would undoubt- edly be crippled. "With the history of European diplo- macy in the Near and Far East before them, the Japa- nese cannot but shudder at the thought of the day when China shall be held fast in the grip of Western Powers." s To Japan, therefore, the Chinese question is one of life and death, and upon its proper and successful solu- tion depends her future prosperity and well-being : "For many years to come Japan's efforts will be con- centrated upon the solution of the Chinese question. Whether or not she is equal to the task, she must here make supreme efforts, for her place in world politics primarily lies in the molding of Asia's destiny. She will urred to play the leading role in the disposition of the Chinese situation, not from any motives of empire building, but from the necessity of self-preservation. Open the map of China, and mark out the territories staked out by various European Powers as their spheres of influence. Then you will begin to realize why the Japanese, deep in their heart, still cherish the fear of the Occident." * For this reason, Japan would not hesitate to take such measures as are necessary for her own self -preservation as regards China. Consequently, she endeavors to fore- stall Western control by Japanese control. \ ide from existing conditions and out of fear of the WCstern control of China, there is yet another vital reason why Japan desires to attain political control, and that is the future of China and its relation to herself. Should China be partitioned, Japan would again he iso- lated, and have to face the West alone. If she should be controlled by the Western Powers, Japan would again the economic support and political cooperation which China can give her. If China should remain weak and divided, as she now is, Japan's own welfare and safety will be jeopardized by frequent rebellions and insurrec- POLICY OF POLITICAL CONTROL 233 tions and possible foreign intervention. If, however, China should become strong. Japan has to face the alter- native of a strong and friendly China or a strong but hostile China. Frankly speaking, a strong and hostile China, possessing ten times the strength of Japan, is the last choice Japan wishes to have to make. On the other hand, a strong and friendly China would be diffi- cult to secure. Having attained her own status of inter- national equality at the expense of China's defeat, and entertaining territorial designs on South Manchuria and Eastern Inner Mongolia, she is quite aware of the pos- sible revenge that a strong China is likely to take. Apart from the possibility of revenge, the rise of a strong China, granting it to be friendly, is bound to stand in the way of Japan's territorial expansion and to over- shadow her strength and importance. It would prob- ably wrest from her the leadership of the Orient, which she would never willingly yield. While it must be stated in all fairness that there are Japanese who believe sin- cerely that a strong and friendly China is the best pro- tection Japan can have, there is an overwhelming ma- jority who hold to a contrary opinion. Prince Yanmagata once remarked : "A strong Emperor is what is needed to rejuvenate China, and to enable her to surpass Japan. Japan, therefore, does not want a strong Emperor in China. Still less does Japan want a successful republic there. Japan wants a weak and incapable China; and a weak- China under a weak Emperor, subject to Japan's influence, would be the ideal state." B '' T s h is, therefore, fair to infer that Japan does not wish to see a partition of China, nor a Western control of China, nor a strong China, nor a hostile China. What she desires is her own control of China. Thai is her ideal. By this means she can not only forestall Western control, but also safeguard her own future againsl China. With control assured, she can, as a matter of course, cany out at will tl.< of her policies in China — economic exploitation, territorial 234 THE POLICY OF JAPAN IN CHINA expansion, paramount influence and an Asiatic Monroe Doctrine. Much more than as a measure of self-defense against a rising China, Japan desires to control the former coun- try so as to use her as an instrument for what may be calkd world domination. Japan dreams of a day when she will rule the entire Orient, and be able to measure swords with the West, if not actually to dispute Western superiority and domination. While this dream is not entertained by all Japanese, it is nevertheless the ambi- tion of some of them, particularly the Jingoists. A Japanese Imperial Pronouncement written in the autumn of 1916 contains the following: "Fifty million of our race wherewith to conquer and possess the earth ! It is indeed a glorious problem ! . . . To begin with, we new have China; China is our steed! Far shall we ride upon her! Even as Rome rode Latium to conquer Italy, and Italy to conquer the Mediterranean, even as Napoleon rode Italy and the Rhenish States to conquer Germany, and Germany to conquer Europe; even as England to-day rides her colonies and her so- called "allies" to conquer her robust rival — Germany — even so shall we ride China. So become our 50,000,000 race 500,000,000 strong; so grow our paltry hundreds of millions of gold into billions ! . . . But using China a^ our steed, should our first goal be the land? India? or the Pacific, the sea that must be our very own. even as the Atlantic is now England's? The land is tempting and easy, but withal dangerous. ... It must, therefore, be the sea; but the sea means the Western Americas and all the islands between and with those must soon come Australia, India, and then the battling for the balance of world-power, for the rest of North America. Once that is ours, we own and control the whole — a domination worthy of our race !" It is, therefore, fair to conclude that certain Japanese, especially the Jingoists, entertain the dream of consoli- POLICY OF POLITICAL CONTROL 235 dating the yellow race under the banner of Dai Nippon and of disputing Western domination, at least in the Orient, through the instrumentality of a subjugated and enthralled China. With such a policy determined on, she waited for an opportunity for its execution. When the Powers were present in China, she was not able to disclose her desire. When, in consequence of the war, the Eu- ropeans retired, the opportunity came, which, as the Japanese said, would "not occur again for hundreds of years to come." At that opportune moment the Black Dragon Society appeared, urging the Government to form a defensive alliance with China, as a means to control her, and to resist the post-bellum Western aggression. It read in part: "It is a very important matter of policy whether the Japanese Government, in obedience to its divine mission, shall solve the Chinese Question in a heroic manner by making China voluntarily rely upon Japan. To force China to such a position there is nothing else for the Imperial Japanese Government to do but to take advan- tage of the present opportunity to seize the reins of po- litical and financial power and to enter by all means into a defensive alliance. . . ." X1 "From date of the signing of this Defensive Alliance, Japan and China shall work together hand in hand. Japan will assume the responsibility of safeguarding Chinese territory and maintaining the peace and order in China. These will relieve China of all future anxieties and will enable her to proceed energetically with her re- forms, and. with a sense of territorial security, she may wait for her national development and regeneration Even after the presenl European war is ever and i" ■\r<\ China will absolutely have nothing to fear in the future of having pr< - ure brought against her by tin- foreign Powers. It is only thus that permanent peace can be secured in Far East." u 236 THE POLICY OF JAPAN IN CHINA Among the terms set forth in the secret alliance are the following, which relate to the control of China. When read in the light of the subsequent Group V of the Twenty-one Demands, no impartial mind can remain un- convinced that they were the forerunners of these demands : "For the reorganization of the Chinese army China shall intrust the training and the drilling of her army to Japan. "For the unification of China's firearms and munitions of war, China shall adopt firearms of Japanese pattern and at the same time establish arsenals (with the help of Japan) in different strategic points. "With the ohject of creating and maintaining a Chinese navy, China shall intrust the training of her navy to Japan. "With the object of reorganizing her finances and im- proving the methods of taxation, China shall intrust the work to Japan, and the latter shall elect competent finan- cial experts who shall act as first-class advisers to the Chinese Government. "China shall first consult with and obtain the consent of Japan before she can enter into an agreement with another Power for making loans, the leasing of territory, or the session of the same." 13 Upon the urge of this memorandum and seizing the opportunity offered by the World War, Japan dropped the mask, disclosed her designs, and presented the Twenty-one Demands, among which was Group V. In the formal demands as presented, it will he noticed that tlir s lt .-nt terms as proposed by the memorandum of the P. lack Dragon Society have been carefully reduced to three cogent hut all-inclusive demands. The first article required that "the Chinese Central Governmenl shall em- ploy influential Japanese a.- advisers in political, financial and military affairs." 14 This would cover the control of the Chinese army and navy, finance and the foreign POLICY OF POLITICAL CONTROL 237 relations ; in short, the administration of the Peking Gov- ernment. Had this been granted, the Japanese would have dominated the Peking Government, and as the memorandum of the Black Dragon Society put it, seized "the reins of political and financial power." Although the defense might be made that the numerous Japanese advisers to be employed would not necessarily be given executive power, the danger would nevertheless be pres- ent that the employment of so many of them would mean the domination of the Peking Government by the Japanese influence, and, what is worse, could easily serve as a prelude to her eventual seizure of the reins of power. The third article of Group V demanded the joint admin- istration of police, in "important places" in China, or the employment of numerous Japanese in the police departments of these places. As the police power is a concrete symbol of sovereignty, the grant of this de- mand would be tantamount to the transfer of China's sovereignty to Japan. Although during the negotiation it was disclosed that the Japanese Government meant to apply the police power only to South Manchuria, 10 the language of the demand was nevertheless so general as to include important places in China, irrespective of their location, and extending throughout the Republic, thus giving rise to the peril of an indefinite extension of the Japanese police power throughout the length and breadth of China. Article 4 of Group V demanded that "China shall pur- chase from Japan a fixed amount of munitions of war (say fifty 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. Japa- nese technical experts are to be employed and Japanese material to be purchased." 10 It is to be observed that this demand corresponded closely to the original secret specification, as set forth by the Black Dragon Society, 238 THE POLICY OF JAPAN IN CHINA of unifying China's firearms and munitions of war ac- cording to the Japanese pattern and of establishing Sino- Japanese arsenals at different strategic points of China; and that its grant would have meant the Japanization of the Chinese army and the consequent control thereof by Japan. While this might shield China temporarily from European aggression, it would nevertheless deprive her of the means of defense against the encroachments of Japan. Thus, had all these demands been granted, the independence of China would have become a thing of the past. Significant as these demands were, Japan had, as is well known, to withdraw Group V excepting the clause respecting Fukien, largely because of the stubborn re- sistance of the whole Chinese nation and of the oppo- sition of Great Britain and the United States. In the ultimatum, however, Japan reserved the right to discuss Group V separately in subsequent negotiations. 17 Mean- while, the Japanese representative insisted "that the Chinese Government should specifically state in their reply to the ultimatum that Group V had been 'postponed for later negotiation.' " 18 It is to be observed that this reservation clearly proved that Japan did not give up the policy of political control by detaching Group V from the ultimatum, but that Japan did intend either to bring it up for future discussion or to resort to other means to attain the end, which was fully borne out by the subsequent moves of Japan. Hence the statement of the Chinese Government: ". . . Since the date of the ultimatum, Japanese policy in China appears to be ex- pressing itself in terms of specific principles worked out in these demands in Group V 'postponed for later nego- tiation.' " " Failing in this direct assault through diplomatic chan- nels, upon the change in the cabinet from Okuma to Terauchi, Japan modified the method of attack. She POLICY OF POLITICAL CONTROL 239 adopted the indirect method of loans and an alliance with the pro-Japanese clique in the Peking Government, as a pathway to the control of China. From 1915, — the year of the Twenty-one Demands, — to October 25, 1918, Japan loaned to China no less than a total of from 200,000,000 yen to 391,430,000, varying in amount, of course, accord- ing to the authenticity of the reported loans. According to the estimate of T. F. Millard, 20 while Japan has loaned to China from January 1, 1909, to the World War only 17,670,000 yen, and to the Hanyehping 32,000,000 yen, she loaned to the Chinese Government, from August, 1914, to October 25, 1918, no less than 391,450,000 yen, — almost eight times as much as the pre-war loans. De- ducting the unconfirmed and other loans susceptible of doubt, a safe and conservative estimate would be from 200,000,000 to 250,000,000 yen. In addition to the loans, Japan also tried to control the Chinese army, which was one of the primary objec- tives of Group V. Under the name of the War Par- ticipation Board, ostensibly organized for effective par- ticipation on the part of China in the European War, but in reality for strengthening the northern military party against the South, a new army of about 50,000 men was created. General Aoki and about twenty-five other gen- erals assisted in the organization of this force. General Saito of the Japanese army, a military attache of the Japanese Legation in Peking, had an office in the War Participation Board and advised on all questions. 21 Japan also supplied all the money, officers and ammuni- tions. The motive of Japan's activities in the sale of arms and other military supplies was indirectly revealed as follows : '- "In reply to my question as to the credibility of the rumors alleging that Japan ia prepared to sell to the Chinese Government a considerable quantity of arms and 240 THE POLICY OF JAPAN IN CHINA munitions, Viscount Motono (then Japanese minister of foreign affairs) confirmed them, and added that the Peking Government had promised not to use the arms against the Southerners. It was evident from the min- ister's words, however, that this promise possessed only the value of a formal justification of this sale, infringing as the latter does the principle of non-intervention in the internal Chinese feuds, proclaimed by Japan herself. . . . It is most likely that the Japanese are aiming principally at obtaining the privilege of rearming the entire Chinese army, and making China dependent in the future on Jap- anese arsenals and the supply of munitions from Japan. The arms to be supplied are estimated at 30,000,000 yen. At the same time, Japan intends establishing an arsenal in China for the manufacturing of war materials." 23 Aside from the control of her army. Japan likewise attempted to control the currency of China. In 1918, her agents proposed to reform the currency by the adop- tion of a gold standard. The plan was to issue gold notes on the reserve of 80,000,000 yen of bank notes to be bor- rowed from Japan, which, in turn, were to be secured by the gold reserve in Japan. In accordance with this plan, China was thus to have a gold standard currency with- out any gold reserve of her own, but based on Japan's gold reserve. 24 Had this scheme been adopted, her cur- rency would have been under the control of Japan. This would have especially been so should there have been a war between Japan and China, in which event Japan could cut off the support of the gold reserve and thus throw China into financial disorder. When the Great War ended and the European Powers were ready to return to China, Japan, perceiving the disapproval of the Powers as to her attempt to assume control of that country, once more put on her mask and resumed the pre-war policy of international cooperation. Hara, having succeeded to Terauchi as Prime Minister, POLICY OF POLITICAL CONTROL 241 immediately reversed the policy of irresponsible loaning and put an effective injunction on further loans to China pending the unification of the North and the South. 25 Meanwhile, at the Taris Peace Conference, the New International Banking Consortium came to birth ; and that effectively neutralized the Japanese efforts to gain the control of China. NOTES TO CHAPTER XIV 1. K. K. Kawakami, Japan and World Peace, p. 111. 2. Cf. ibid., p. 171. 3. Ibid., p. 172. 4. Kawakami, Japan in World Politics, p. 12. 5. Millard, Our Eastern Question, p. 168. 6. Cf. Millard. Democracy and tbe Eastern Question, p. 99. 7. Cf. The Remarks of Adacbi Kunnosukc, quoted in Stod- dard, Tbe Rising Tide of the Color, p. 26. 8. Cf. Millard's Review. Aug. 9, 1919, p. 388 ; H. K. Tong, How Japan's Policy Is Undermining Her Position in Cbina. Military Historian and Economist, January 17, 1916, pp. quoted in Stoddard, The Rising Tide of the Color, pp. 50-53. 10. The memorandum of the Black Dragon Society, Putnam Weak, The Fight for the Republic in China, p. 128. 11. Ibid., p. 130. 12. Ibid., pp. 131-132. 13. Ibid., p. 131. 14. The Sino- Japanese Negotiations, 1915, p. 2_\ 15. Ibid., p. 10. 16. Ibid., p. 11. 17. Ibid., p. 42. 18. The Shantung Question, presented bj China to the Paris Peace i published bj the Chinese National Welfare Society. March, 1920, p. 13. 19. sticm, p, 13. 20. For a full list of the leans made, <>r reported t" hav< made, by Japan t<> China from January 1, 1919, to October 25. 1918, see Millard, 1 >• and tin Eastern Question, pp. 187- 192. 21. Millard, Democracy and tin- Eastern Question, p. 179. The Shantung Question, op. cit, pp. 13 14, the letter of M. Krupensky, Russian Vmba ador at Tokio, dated Od 16, 1919, as published by the Russian Revolutionary Government, Nov. 11, 1917. For a full description of Japan'- activities during this 242 THE POLICY OF JAPAN IN CHINA period see chapter on the Corruption of a Nation, Millard, Democracy and the Eastern Question, p. 174 et seq. 24. Far Eastern Review, Sept, 1918, p. 382, Plans for Gold Currency in China. 25. Kawakami, Japan and the World Peace, pp. 190-191. XV THE "ASIATIC" MONROE DOCTRINE The policy of an "Asiatic" Monroe Doctrine is actu- ated by Japan's desire to preserve the territorial integrity and political independence of China. She feels that she is a close relative of China and therefore her logical and natural guardian. Casting her eyes far and wide, she finds European dominance has planted its flags over Africa and carved the Dark Continent into regions of rule and exploitation. Coining nearer home, she finds that European domination has extended over the whole of Asia with the possible exception of China and herself. Even at her own doors she finds China's independence already partially surrendered, with her immediate out- look pointing to bankruptcy and eventual foreign con- trol. Yet, once again casting her glance to the West, she sees the Latin-American Republics enjoying inde- pendence and territorial integrity unmolested and un- hampered, and that this is due to the protecting wing of the American Monroe Doctrine, which holds European aggression at arm's length. Thus, surveying the world situation, Japan reaches the conclusion that the only way to preserve China is to follow the example of America and declare a doctrine similar to the Monroe Doctrine for Eastern Asia, if not for the whole Orient. In addition, Japan feels the call of a national mission. By the RtlSSO e War, in which an Oriental state vanquished a Western Power, and a yellow people suc- ully demonstrated their skill in warfare, she unwit- tingly asserted the principle of racial equality. She there- fore feels called to champion t! of her Subjugated neighbors and to deliver the struggling peoples from the 2-13 244 THE POLICY OF JAPAN IN CHINA grip of Western domination. She consequently entertains the noble and exalted resolve to maintain the independ- ence of whatever nations in Asia that are still independ- ent, or that may achieve independence in the course of time, and to recover the lost rights of the weaker nations of Asia. ". . . What we want is simply that we become inde- pendent of the whites or free yellows of the rampancy of the whites. . . . ". . . The Asiatic Monroe Doctrine is the principle of Eastern Autonomy, that is, of Orientals dealing with Eastern questions. ". . . It is incumbent upon the Yamato race to try to recover for the weaker nations of the East their rights, which have been trampled underfoot by other powers." w Thus conceiving her mission, Japan waited for an op- portunity to proclaim her newly adopted Asiatic Monroe Doctrine. Before the Great War she dared not assert it, for fear of the relative insufficiency of her power when pitted against a combination of Western nations. With the coming of the great struggle, she seized the oppor- tunity and boldly announced her policy. In the Twenty- one Demands, she stipulated that "the Chinese Govern- ment engages not to cede or lease to a third Power any harbor or bay or island along the coast of China" (Group 4). :t This was finally changed to a voluntary pronouncement by China that "no bay, harbor, or island along the coast of China may be ceded or leased to any Power." 4 Thus, she successfully asserted the doc- trine that hereafter the coast of China would not be open to any further European aggression. Further, she pro- hibited China from employing foreign capital, or from granting permission to foreign states or intere is to work mines, build railways, and construct harbor works (in- THE "ASIATIC" MONROE DOCTRINE 245 eluding dock-yards) in the Province of Fukien (Group V, Article 6). M Thus, once more, Japan successfully asserted the principle that Japan would not permit any alien military or naval establishment in Fukien to menace her own position in Formosa. Having thus pledged China to the observance of the "Asiatic" Monroe Doctrine, she again waited for a chance to proclaim it to the Western Powers, and if possible, to secure its recognition by formal international agree- ments. The opportunity came when Mr. Wilson sent a note of friendly advice in June, 1917, counseling the Chinese people to compose their differences and to con- struct a central, responsible and united government. Japan immediately took offense at the direct presenta- tion of the note without being first consulted. She claimed that Japan enjoyed a special position in relation to China and that whatever advice was to be given her should be given through Tokio or with her concurrence or approval. Just as the United States enjoys a special position with regard to Mexico, so Japan claimed similar special interest in China. Commenting on this fact, the Yamato of Tokio said: "Moreover, America must be aware of the superior position enjoyed by America in Mexico. Yet while Japan has abstained from taking any step whatever in Mexico, in deference to America's spe- cial position there, America has interfered in China's domestic politics by ignoring Japan's position there." 7 Taking advantage of the opportunity afforded by the Wilson note and emulating the example of other Powers in sending War Missions to the United States, the Japa- nese Government ent a on to America under the leadership of Viscounl [shii. Prior to the arrival of the [shii mission, a confidential report reached the rtmenl of State, which clearly heralded the inten- tion and purpose of the mission: "Japan has no ulte- rior motives in respect to the integrity of China; that she adheres to her Open Door pledges; that nothing Mil>- 246 THE POLICY OF JAPAN IN CHINA versive of China's integrity is contemplated; that Japan's sole object is, by means entirely pacific, to bring order out of chaos in China with no special privileges in view; that Japan understands China better than any other na- tion, and owing to her geographical proximity and special political position and interests in the Far East, she should, therefore, when essential, take the leading role in dealing with China as the United States does with the nations of the Western Hemisphere." 8 Thus, the ostensible pur- pose of the mission, as it related to China, was to seek recognition from the United States of a similar position for Japan in the Orient as she, herself, enjoyed in the Western Hemisphere. After the landing of the Japanese Mission, in August, 1917, and while the negotiation was in session, Viscount Ishii openly announced the Asiatic Monroe Doctrine in a speech delivered in New York, September 29, 1917, and again amplified it in another speech made in the same city, October 1, 1917, which constituted the first official pronouncement of the Japanese "Asiatic" Monroe Doc- trine. We quote extracts from his addresses : "\\ e wish to be, and to always continue to be, the sincere friend and helper of our neighbor, for we are more interested than any one else except China in good government there, and we must at all times for self- protection prevent other nations from doing what we have no right to do. Not only will we not seek to assail the integrity or the sovereignty of China, bin we will eventu- ally be prepared to depend and maintain the same in- tegrity and independence of China against any aggressor. For we know that our own landmarks would be threat- ened by any outside invasion or interference in China." 8 "In a speech delivered on Saturday night I made par- ticular reference to the policy of Japan with regard to China. This reference took the form of a repetition of the pledge and promise that Japan would not violate the political independence or territorial integrity of China ; THE "ASIATIC" MONROE DOCTRINE 247 would at all times regard the high principle of Open Door and equal opportunity. Now I find that this utter- ance of mine is taken as the enunciation of a 'Monroe Doctrine in Asia.' I want to make it very clear to you that the application of the term 'Monroe Doctrine' to this policy and principle, voluntarily outlined and pledged by me, is inaccurate." "There is this fundamental difference between the 'Monroe Doctrine' of the United States as to Central and South America and the enunciation of Japan's atti- tude toward China. In the first place, there is on the part of the United States no engagement or promise, while in the other Japan voluntarily announces that Japan will herself engage not to violate the political or terri- torial integrity of her neighbor, and to observe the prin- ciple of the Open Door and equal opportunity, asking at the same time other nations to respect these princi- ples." 10 Thus, Viscount Ishii, as official spokesman of Japan, announced, in essence, that his country would respect the territorial integrity and political independence of China and would eventually be prepared to defend the same. He also pointed out the difference between the American Monroe Doctrine and Japan's doctrine in that the United States did not pledge abstention or protection, while Japan voluntarily engaged not to violate the sovereignty and integrity of China, while, at the same time, asking the other Powers to do likewise. While Ishii did not definitely brand the doctrine as "Asiatic" Monroe Doc- trine, the principles he enunciated were such as to con- stitute a real "Asiatic" Monroe Doctrine — that is, Japan undertook not to violate the sovereignty and integrity of China, nor permit other nations to do so. Mr. Lansing's statements further substantiate what Viscount Ishii proclaimed and declared it to be nothing 248 THE POLICY OF JAPAN IN CHINA less than the principles of an Asiatic Monroe Doctrine. In his statement to the press, he declared that the agree- ment introduced a new principle — that i-. the principle of non-intervention, which is the cardinal principle of the American Monroe Doctrine." In his statement to the Chinese Government. Mr. Lansing reiterati ! the sig- nificance of the introduction and recognition of the principle of non-interference. 1 - His testimony before the Senate Committee on Foreign Relations further strengthened the belief that the special interests of Japan which he recognized in China were not different from the special interests of the United States in Canada or Mexico. In other words, he recognized Japan's claim to an Asiatic Monroe Doctrine, if it were based on the same principle : "Senator Borah. In view of the twenty-one de- mands, what construction did you place upon the ques- tion of Japan's special interest in China? "SECRETARY Lansing. Only the special interest that comes from being contiguous to another country whose peace and prosperity wen- involved. "Senator Borah. No different special interest from that which we have in Canada? "Secretary Lansing. No. "Senator Borah. Or which we have in Mexico? "Secretary Lansing. Exactly." Lansing also testified that Viscount Ishii, in insist- ing on the inclusion of a recognition of Japan's special interests, did mention that t!;> uld Ik- a Monroe Doctrine for the Far East, in response to which Mr. Lansing explained that what special interests tin- United States had in the Latin-American Republics was not paramount influence, nor exclusive nor special privi- . but rather the preservation to these Republics of the power of self-development and immunity from out- side interference : THE "ASIATIC" MONROE DOCTRINE 249 "At another interview we discussed the phrase 'special interest,' which the Japanese Government had been very insistent upon, and which, with the explanation I have made, I was not very strongly opposed to, thinking that the reaffirmation of the < >pen Door policy was the most essential thing that we could have at this time; and we discussed the phrase which appeared in the draft note 'special interest.' and I told him then that if it meant 'paramount interest,' I could not discuss it further; but if he meant special interest based upon geographical po- sition, I would consider the insertion of it in the note. Then it was, during that same interview, that we men- tioned 'paramount interest' and he made a reference to the Monroe Doctrine, and rather a suggestion that there should be a Monroe Doctrine for the Far East. "And I told him that there seemed to be misconcep- tion as to the underlying principle of Monroe Doctrine, that it was not an assertion of primacy or paramount interest by the United States in its relation to the Ameri- can republics ; that its purpose was to prevent foreign Powers from interfereing with the separate rights of any nation in this hemisphere, and that the whole aim was to preserve to each republic the power of self- development. I said further that so far as aiding in this development the United States claimed no special privi- leges over other countries." 14 It is, therefore, clear that the special interests which Lansin uized as Japan's in China, are no more than, and not different from, the special interests of the United Stale, in the other American republics. It o plain that the essential principle that he empha- sized in the understanding was the principle of non- interference, with the territorial integrity and political independence of ( Ihina, either by Japan or other Powers — line cardinal principle which the American Monroe Doctrine. It i consequently not unsafe td con- clude that in n Japan' I interests in China, due to the geographical proximity, Secretary 250 THE POLICY OF JAPAN IN CHINA Lansing inadvertently extended his recognition to Japan's "Asiatic" Monroe Doctrine. Let us now compare and contrast Japan's "Asiatic" Monroe Doctrine with the American Monroe Doctrine and try to discover the similarities and differences of the two policies. With respect to similarities, both arc based on the principle of self-preservation. Just as the United States would not permit further extension of the European system in the Western hemisphere, for fear that such an occurrence would endanger her own peace and safety, 15 so Japan would not permit any further European aggression in China and Eastern Asia lest it should menace her own tranquillity and well-being. Again, both doctrines are founded on the fundamental principle of non-interference. While permitting the usual intercourse based on international law and even war for redress of wrong, collection of debts, vindication of jus- tice, so long as such acts do not affect territorial integrity and political independence, the United States would not allow other non-American states to interfere with the territorial integrity of sister American Republics, by con- quest, or colonization or extension of boundaries, or transfer by purchase ; nor would she allow any non- American interference with the political independence thereof by destruction of existing governments, or estab- lishment of new governments, or control of government through political and financial concessions. Likewise, Japan would, while permitting usual commercial and po- litical intercourse, put a similar injunction, as far as pos- sible, on any further European aggression in China and Eastern Asia that would interfere with the territorial integrity and political independence of the same. With respect to differences, however, there are two fundamental distinctions. In the first place, the Ameri- can Monroe Doctrine carried a corollary of non-inter- ference in the affairs of purely European or Asiatic THE "ASIATIC" MONROE DOCTRINE 251 concern. Hence the policy of no entangling alliances. In other words, as the United States would not permit non-American states to interfere with affairs of purely American concern, so the United States reciprocates the measure by abstaining from affairs of purely European or Asiatic concern. Thus the American Monroe Doc- trine is founded on the principle of the Golden Rule. This, however, does not place an absolute bar on the United States with reference to intervention in affairs of Europe or Asia. If her own interests should be involved or the cause of humanity at stake, she would not hesitate to intervene — a right sanctioned in international law. But the "Asiatic" Monroe Doctrine carries no such corollary ; at least it does not up to the present moment. Japan did not abstain from affairs of European concern. Instead of avoiding entangling alliances, she entered into an alliance with Great Britain, and another with Russia in 1916. Instead of standing aloof from affairs of European concern, she participated in the World War, not as a disinterested belligerent but as an active ally of Great Britain, ousting Germany from Shantung and guarding the transportation routes between Great Britain and India and Australia. Once more, she concluded agreements with Russia in 1907 and 1910, allowing Russia to perpetrate in Outer Mongolia and North Man- churia what she herself intended to do in Eastern Inner Mongolia and South Manchuria. In the second place, the American Monroe Doctrine prohibiting non-American states from interference in the Wotcni hemisphere applies the similar injunction on herself with equal force. That is to say, in preaching to other nations the doctrine of non-interference she prac- tices the doctrine herself and thus sets the example. Further, she docs not claim any primacy or paramount interest or special privileges. This restriction upon her- self, however, does not preclude the possibility of inter- vention, when her own interests are involved, or when 252 THE POLICY OF JAPAN IN CHINA the Monroe Doctrine is jeopardized. Thus, she tempo- rarily took over the Governments of Haiti and San Domingo, not to extinguish the political independence of these states, but rather to preserve the same, and thus to safeguard the sanctity of the Monroe Doctrine. But Japan did not place the same restriction upon her- self. Instead of observing the doctrine, she assaulted the sovereignty of China by the presentation of Group V of the Twenty-one Demands. Instead of protecting the territorial integrity of China, as Ishii pledged, she enter- tained territorial designs upon South Manchuria and Eastern Inner Mongolia, and attempted to acquire the sovereignty thereof by the demand for police power. Instead of preserving the Open Door in China for the trade of the world, she resorted to unfair means to attain commercial predominance, to the exclusion and therefore detriment of the merchants of other foreign states. Thus, she did not abstain from interference with the sovereignty and integrity of China, which she asks the other powers to do. In short, she did not practice what she preached, thus failing to set the necessary example. The conclusion can, therefore, be reached that Japan's "Asiatic" Monroe Doctrine is like the American in that it is based on the principles of self-preservation and non-interference, but unlike the American in that its promoter did not reciprocate its spirit by refraining from interference in affairs of European concern, nor set the example of applying the same restriction on herself. NOTES TO CHAPTER XV 1, 2. Japan's Mighty Mission, by Honorable Mr Iichiro Tokutonn, the chiet editor and proprietor <>f the Kokumin Shimbin, Crown Member of the House of Peers of Japan, Peking Post, Feltruary 10, 1917, Japan Chronicle, January 19, 1 { >17, quoted in T. Das, Is Japan a Menace to Asia?, Appendix, p. 121 et seq. 3. The Sino-Japai otiations, 1915, p. 21; China Year Book, 1919, p. 567. THE "ASIATIC" MONROE DOCTRINE 253 4. The Sino-Japanese Negotiations, 1915, p. 28. 5, 6. Ibid., p. 22; pp. 69-70; the China Year Book, 1919, pp. 573-574. 7. Millard, Democracy and Eastern Question, p. 119. 8. J. W. Kuks. lapan in Action, North American Review, Sept., 1919. pp. 318 319. 9. The Imperial Japan n to the United States, 1917, Carneui I I for International Peace; Current History, Vol. 7. 1917-18, p. 356; New York Times, Sept. 30, 1917. 10. The Imperial Japai on to the United States, 1917, Carnegie Endowra . pp. 103-104; Current History, Vol. VII, 1917-1 : New York Times. October _'. 1917. 11. Hearings on the Treaty of Peace with Germany signed at Versailles on June 28, 1919, before the Senate Committee on Foreign Relati' sixth Congress, First Session, Senate Document No. 100. p. 226. 12. Millard, Democracy and the Eastern Question, pp. 162-163, Paul S. Reinsh's Letter to the Chinese Government, Nov. 8, 1917. 13. Hearings, ibid., p. 147. 14. Hearings, ibid., pp. 223-224. 15. Me-sage of James Monroe, Dec. 2, 1823, American Foreign Policy, Carnegie Endowment for International Peace, the Di- vision of Intercourse and Education, Publication No. 17, pp. 5-6. XVI THE TWENTY-ONE DEMANDS AS AN EXPO- NENT OF JAPAN'S POLICIES IN CHINA So far we have considered the five policies of Japan in China — economic exploitation, territorial expansion, paramount influence, political control and the Asiatic Monroe Doctrine. We shall now examine an historic document which bears all the earmarks of these five policies and which has since become the best exponent thereof ; I mean the original Twenty-one Demands. This document was produced under conditions of world politics which rendered it the fullest and clearest revela- tion of Japan's intentions and desires in regard to China. It was presented to the Chinese Government, as we all know, on January 18, 1915, when the World War was raging in Europe. In consequence of the war, the great Powers receded from the international rivalry in China and plunged into a life-and-death grapple on the battle- fields of Europe, with practically no energy left for further aggressions or exploitation in China. The only great neutral Power as yet not involved was the United States, but she was none the less absorbed in the prog- ress of the European War and had little attention to give to affairs of the Far East. It was this crisis in the world situation, when the tide of European aggression had just ebbed, and when the United States had just relaxed in her resolution to enforce her Open Door doc- trine in China, that Japan took advantage of. When the Powers were present, or free from wars among themselves, Japan dared not disclose her designs as to China, for fear she might meet the united opposi- tion of the Powers ; and so she had to wear the mask 254 THE TWENTY-ONE DEMANDS 255 and fall in line with the Powers in their common policy of international cooperation, and he contented with her spheres of influence, limited as they might be. But when the World War came she took advantage of the unusual opportunity, or such an opportunity would "not occur for hundreds of years to come." 1 Casting aside all ordinary restraints, and counting upon success in her measure, in a mad rush to solve the Chinese Question at this juncture, she unpremeditatedJy discarded her mask and exposed her full intentions and designs re- garding China, as we shall see in the original Twenty- one Demands. Further, the original Twenty-one Demands represented the common attitude of the majority of the Japanese in regard to China. While there were some who had the moral courage and conviction to denounce them, the demands were nevertheless, on the whole, well supported by the greater part of the electorate. When the nego- tiations rspecting the Twenty-one Demands were in ses- sion, Count Okuma dissolved the Diet on an issue of army increase, and appealed to the people for a new House of Representatives that would support him. 2 In his campaign, he purposely avoided the issue of army in- crease, but founded his plea for support on the value and importance of his China policy. The returns gave him an overwhelming victory. Supporting the Govern- ment were the Doshi-kai with 150 votes, the Chusai-kai with 36 and the Independents with 62 most of whom were favorable to the Government. Opposing the Gov- ernment were the Seiyu-kai with 106 votes and the Koku- minto with 27, thus giving the Government a clear ma- jority of about fifty. And when the special session con- vened on May 27, 1915, while it was too late to pass upon the China policy, as the negotiations respecting the Twenty-one Demands had already heen concluded by the Treaties of May 25, 1915, the House nevertheless passed 256 Till: POLICY OF JAPAN IX CHINA the budget estimate for increasing the appropriations for army and navy." Thus, the policy upon which Count Okuma had insisted in December of strengthening the armed forces of the country "in order that our diplo- matic dealings may become more effective" received the legislative sanction, 4 or in other words, Count Okuma's China policy as represented by the Twenty-one Demands, or in short, the Twenty-one Demands themselves, re- ceived the support of the majority of the Japanese elec- torate. It can, therefore, be said that the Twenty-one Demands represented the common attitude of the Japa- nese people regarding China, excepting possibly a small minority.' Besides, when the failure to impose on China Group V of the Twenty-one Demands had subsequently exposed Japan to the bitter antagonism and hatred of the Chinese and the censure of the Powers, the criticism of the Japanese was directed upon the way in which the de- mands were presented and negotiations handled, rather than upon intrinsic right or wrong of the demands them- selves. It can be said that the majority of the Japanese, even after the failure of Group V, still believed that the Twenty-one Demands wire right and necessary from the point of view of the welfare of Japan, and what criticism they offered was therefore aimed at the means by which the ends were to be attained, rather than the ends themselves. As a fair illustration, let US note the statement: "Not that these demands were in principle wrong and unjustifiable, but because they were pressed upon China in utter disregard of the susceptibilities of the nation whose friendship she had been professing to value."'' And this attitude, as we have noticed, was reflected in the policy of Count Terauchi, who, succeed- ing Count Okuma, changed the tactics from a direct and open attack through diplomatic channels to a covert and indirect assault through loans, arms deal, and alli- ance with pro-Japanese officials in Peking. THE TWENTY-ONE DEMANDS 257 When we submit the original Twenty-one Demands to a close scrutiny, we find that the division into five groups was done in rough correspondence with the five policies of Japan. Whether the Japanese statesmen who drafted them originally did so consciously or unconsciously, we cannot tell, but whatever may be the original purpose of the division, the fact remains nevertheless significant that the fivefold division should coincide roughly with Japan's fivefold policy, as we shall see. The first group relating to Shantung, which extends Japanese influence into that Province, represents the pol- icy of paramount influence. The second group regarding South Manchuria and Eastern Inner Mongolia exempli- fies the policy of territorial expansion. The third group as to the Hanychping Company symbolizes the policy of economic exploitation. The fourth group dealing with the non-alienation of China's coast represents the "Asi- atic Monroe Doctrine." The fifth group represents the policy of political control. If, however, we should group the demands according to the five policies, then the conclusion is all the more evident that they embody all the five policies of Japan and therefore constitute the best exponent thereof. 7 The Policy of Economic Exploitation group II Article 4: The Chinese Government agrees to grant Japanese subjects the right of opening the mines in South Manchuria and Eastern Inner Mongolia. As regards what mines are to be Opened, they shall be decided upon jointly. GROUP III Article 1 : The two < 'ontracting Parties mutually agree that when the opportune moment arises the Hanyehping Company shall lit: made a joint concern ot the two iu- 258 THE POLICY OF JAPAN IN CHINA tions, and they further agree that without the previous consent 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 2: The Chinese Government agrees that all mines in the neighborhood of those owned by the 1 tanyeh- ping Company shall not be permitted, without the con- sent 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 understanding which, it is apprehended, may directly or indirectly affect the inter- ests of the said company, the consent of the said company shall first be obtained. The Policy of Territorial Expansion group II Article 2 : Japanese subjects 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. Article 3: Japanese subject- shall be tree to reside and trade in South Manchuria and Eastern Inner Mongolia and to engage in business and in manufacture of any kind whatsoever. group v Article 3 : Inasmuch as the Japanese Government and the Chinese Government have had many cases of dispute between Japanese and Chinese police to settle eases which caused no little misunderstanding, it is for this reason necessary that the police departments of important places (in China) shall be jointly administered by Japanese and Chinese <>r thai the police departments of these places shall employ numerous Japanese, so that they may at the same time help to plan for improvement of the Chinese Police Service. THE TWENTY-ONE DEMANDS 259 The Policy of Paramount Influence group I Article I : The Chinese Government engages to give full assent to all matters upon which the Japanese Gov- ernment may hereafter agree with the German Govern- ment relating to the disposition of all rights, interests and concessions, which Germany, by virtue of treaty or otherwise, possesses in relation to the Province of Shan- tung. Article 2: 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 party under any pretext. Article 3 : The Chinese Government consents to Japan's building a railway from Chefoo or Lungkow to join the Kiaochow-Tsinanfu Railway. Article 4 : 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 Commer- cial Ports. What places shall be opened are to be jointly decided upon in a separate agreement. GROUP II Article 1 : The two Contracting Parties mutually agree that the term of lease of Port Arthur and Dalny and the term of lease of the South Manchuria Railway and the Antung-Mukden Railway shall be extended to the period of 99 years. Article 5: The Chinese Government agrees that in re- spect of the (two) cases mentioned herein below the Japanese Government's consent shall he firsl obtained before action i^ taken : — i a ) Whenever permis ion is granted to the subject of a third rower to build a railway or to make a loan with a third Power for the purpose <>f building 260 THE POLICY OF JAPAN IN CHINA 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. Article 6: The Chinese Government agrees that if the Chinese Government employs political, financial or military advisers or instructors in South Manchuria and Eastern Inner Mongolia, the Japanese Government shall first be consulted. Article 7: 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 agree- ment. group v Article 5 : China agrees to grant to Japan the right of constructing a railway connecting Wuchang with Kiu- kiang and Xanchang. another line between Xanchang and Hangchow, and another between Nanchang and Chao- chow. Article 6: If China needs foreign capital to work mines, build railways and construct harbor works (in- cluding dock-yards) in the Province of Fukien, Japan shall be first consulted. Article 2: Japanese hospitals, churches and schools in the interior of China shall be granted the right of own- ing land. Article 7: China agrees that Japanese subjects shall have the right of missionary propaganda in China. The Policy of Political Control group v Article 1 : The Chinese Central Government shall em- ploy influential Japanese as advisers in political, financial and military affairs. THE TWENTY-ONE DEMANDS 261 Article 3: Inasmuch as the Japanese Government and the Chinese Government have had many cases of dis- pute between Japanese and Chinese police to settle cases which caused no little misunderstanding, it is for this reason necessary that the police departments of impor- tant 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 improve- ment of the Chinese Police Service. Article 4: 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 -hill he established in China a Chino-Japanese jointly worked arsenal. Japanese technical experts are to be employed and Japanese material to be purchased. The Policy of Asiatic Monroe Doctrine group IV The Chinese Government engages not to cede or lease to a third Power any harbor or bay or island along the coast of China. It may, therefore, be said that the original Twenty- one Demands constitute to-day the best one-piece historic document that embodies all the five policies of Japan in China. Produced as they were under the favorable opportunity of the World War. supported a- they were by the majority of the Japanese electorate, revealing as they did in the dearesl and fullest manner the intentions and desires of the Japanese people regarding China at that time, and divided as they were into five groups in correspondence with the five policies of Japan, wt can hence reaffirm our conclusion that they constitute to-day tin- hot exponent of Japan's policies in China. 262 THE POLICY OF JAPAN IN CHINA NOTES TO CHAPTER XVI 1. Putnam Wcale, The Fight for the Republic in China, p. 128. 2. Hornbeck, Contemporary Politics in the Far Hast. p. 176. 3. Hornbeck, Contemporary Politics in the Far Fast, pp. 176- 179. 4. Ibid., p. 179. 5. Ibid., p. 179. For instance. Prof. K. Hayashi of Kcio Uni- versity, and a member of the Diet, tendered his resignation to his party and registered his protest: "Why were such abominable demands in the first place framed by the Cabinet? ... It is absolutely an insult to our neghbor's sovereignty. Those desires, if accepted, were, that China would consent to be a protectorate of Japan." 6. Kawakami, Japan in World Politics, p. 168; Japan and World Peace, p. 167. 7. The Original Twenty-one Demands can be found in the Chino-Japanese Negotiations, 1915, pp. 19-22. XVII THE WISDOM OF JAPAN'S POLICY IN CHINA It is but fitting and proper that we should conclude this Part with a discussion of the wisdom of Japan's policy in China. As the shortest road to convince people is to appeal to their self-interest, we propose to treat the subject from the point of view of the welfare and destiny of Japan, rather than from the point of view of China's interests, or those of the Far East, or of the world. As we recall, Japan's policies in China turn on two fundamental problems, the population problem of Japan herself and the Chinese question. As we have also seen, the population problem of Japan results in the adoption of two policies towards China — those of economic ex- ploitation and territorial expansion. Regarding the policy of economic exploitation, we have no quarrel with Japan. In fact, we entertain for her the highest good-will and the expectation that she may succeed in converting her- self from an agricultural to an industrial and commercial nation. Particularly with reference to Japan's needs for iron, coal and steel, we sympathize with our neigh- bor and arc finite willing to extend our cooperation. What we desire in this matter is that Japan should try to reach her ends in fair and legitimate ways. As long as she does so, we have absolutely no grievances, but on the contrary, we wish our neighbor unprecedented success. What we do oppose is Japan's policy of territorial ex- pan-ion in South Manchuria and Eastern Inner Mon- golia which form integral part- of ( hina. She claims that inasmuch as she has preserved the integrity of 263 2(A THE POUCY OF JAPAN IX CHINA Manchuria by her sacrifice in the Russo-Japanese War, she is entitled to the territory. 1 But she should recall that she fought the war, not primarily for the preserva- tion of Manchuria, but rather for self-preservation. The indirect effect happened to be the preservation of Man- churia, but that does not entitle her to the ownership and sovereignty of South Manchuria and Eastern [nner Mongolia. The best she can ask is that she should be compensated for her sacrifice in forms of economic con- cessions in these regions, and these China has ah granted. To claim that inasmuch as she has preserved South Manchuria in a war of self-defer therefore entitled to the territory, is to claim more than justice and equity would allow her. Further, these regions, while not yet thickly popu- lated, are nevertheless quite well peopled by about 20,000.000 Chinese. 2 For Japan to expand her territorial limits so as to include this territory is to bring under her jurisdiction regions already well occupied by the Chinese. Hence any attempt on the part of Japan to annex these lands will meet the hostile opposition of the people therein and the Chinese residing in China proper. For Japan to cut these integral parts of China from the body of the Chinese nation will create a con- dition of Chinese irridenta, which will sit up eternal walls of hatred between the two peoples. I'esides, even though she might be able to absorb thi is, Japan would be confronted with the alternatives of being ousted by the united resistance of the Chinese in these regions and in China proper, or of subjugating tin- Chini China proper. As Japan is hound to attempt the subju- gation of the Chinese in China proper as a measure of self-defense, the annexation of South Manchuria and Eastern Inner Mongolia will inevitably lead to eventual struggle between the Chinese and the Japanese. Unless, therefore, the Japanese are prepared to go the length of fighting the Chinese people and making them eternal WISDOM OF JAPAN'S POLICY IN CHINA 265 enemies, her policy of territorial expansion in South Manchuria and Eastern Inner Mongolia is fraught with serious perils. Furthermore, just as Japan needs an outlet for her surplus population, so China needs an outlet for her own. If Japan's increasing population needs Manchuria for an outlet, China's 400,000,000 will likewise increase and need the same relief. If Japan's claim to Manchuria, as based on the need of an outlet for surplus popula- tion, be valid, then China's claim to the same territory, in addition to her recognized ownership and occupation thereof, is ten times better than that of Japan. Sup- porting this claim of China, it is well said by an impartial observer : 3 "Told, as we have been over and over, that Japan must have an outlet for her excess of population and that Manchuria is the natural outlet, it is well to bear in mind that China also has a crowded population and that in the new condition in which the awakening Chinese people find themselves a movemenl toward the relief of the present congested conditions is bound to manifest itself in an attempt at redistribution. This will mean pressure outward. Manchuria is a natural outlet for Kcess of China's population more truly than that of Japan; and, as far as rights to this open field art- con- cerned. China ha- the better claim. The pressure of ex- population seeking an emigration outlet will prob- able l)e greater Er< a than from japan -for there an-' 400*000,000 Chin. compared with 70,000.000 Japanese and Korean-, and the former are also no [ess adepl at 'replenishing the earth' than are the latter. ". . . To enter Manchuria the I hinese have but to step through the breach in the lm cat wall at Shanhaikwan or to sail aero>s the ninety miles of water between tin- Shan- tun- Peninsula and the Liaotung Peninsula. As many Chinese farmhand- come and go between Chili and Shan Provinces and Manchuria each year as there are Japanese in South Manchuria after ten years of occupa- tion. What people, then, would it Seem, have the h<--t 266 THE POLICY OF JAPAN IN CHINA natural right to Manchuria ; and what people, if events arc left to their natural course, will settle this great poten- tial outlet for excess population?" Moreover, Japan does not need other land, and espe- cially land well occupied by the Chinese, for purposes of finding an outlet tor her surplus population. Japan has unused land within her own confines sufficient to support the growing population of Japan for the next half century. According to the estimates of Professor F. H. King, Japan has now about 15,400 square miles of cultivable land unused and with that, when used, she can support a total population of from one hundred to one hundred and fifty million, whereas the population num- bered on December 31, 1918, only 57,070.936. 3A Pro- fessor King's testimony follows : 4 "The Island Empire of Japan stretches along the Asi- atic Coast through more than twenty-nine degrees of latitude from the southern extremity of Formosa north- ward to the middle of Saghalien, some 2,300 statute miles; or from the latitude of middle Cuba to that of north Newfoundland and Winnipeg; but the total land area is only 175,428 square miles and less than that of the three states of Wisconsin, Iowa and Minnesota. Of this total land area only 23,698 square miles are at pres- ent cultivated; 7,151 square miles in the three mainlands are weed and pasture lands. Less than fourteen per cent of the entire land area is at present under cultivation. "If all lands having a slope of less than fifteen degrees may be tilled, there yet remain in the lour main islands 15,400 square miles to bring under cultivation, which is an addition of 65.4 per cent to the land already cultivated. "The lands yet to be reclaimed are being put under cultivation rapidly, the amount improved in 1907 being 64,448 acres. If the new lands to be reclaimed can be made as productive as those now in use, there should be opportunity for an increase in population to the extent of about 35,000,000 without changing the ratio of 3.4 people to the acre of cultivated land. WISDOM OF JAPAN'S POLICY IN CHINA 267 "While the remaining lands to be reclaimed are not as inherently productive as those now in use, improvements in management will more than compensate for this, and the empire is certain to quite double its present main- tenance capacity and provide for at least a hundred mil- lion people with man)- more comforts of home and more satisfaction for the common people than they now enjoy. "Since 1S72 there has been an increase in the popula- tion of Japan amounting to an annual average of about 1.1 per cent, and if this rate is maintained the one hundred million mark would be passed in less than sixty years. It appears probable, however, that the increased acreage put under cultivation and pasturage combined will more than keep pace with the population up to their limit, while the improvements in methods and crops will readily per- mit a second like increment to her population, bringing that for the present empire up to one hundred and fifty million. Against this view, perhaps, is the fact that the rice crop of the twenty years ending in 1906 is only thirty- three per cent greater than the crop of 183b." Thus, the testimony of Professor King clearly shows that Japan has enough land available for cultivation not yet used which can yield support to at least twice as many people for the next half century. Besides, Japan holds Formosa, Korea and South Saghalien, which offer a further opportunity for an expansion of population of from 20,000,000 to 25,000,000." More than this, Japan has SO far failed to prove her capacity as a colonizing race. Despite her occupation of Formosa since 1895, and her efforts to stimulate emigration thereto, through subsidies and financial assist- ances of all sort-, only 148,831 Japanese (on December 31, 1918) have been indneed to Settle there, constituting but 4.06 per cent of the total population. 6 Similarly, in the case of Korea, in Jpite of the Eact that it is the of the British Isles, it has only about one-third of the people of Britain, 1 although it is only eleven hours' ing from Shimonoseki. In all, 332,456 Japanese' (on 268 THE POLICY OF JAPAN IX CHINA December 31, 1917) had settled there. Likewise, in the case of Manchuria, in spite of fifteen years or so of exploitation and colonization, the number of Japanese residing there is reported to he only 122,367° (June, 1918). This evident failure of Japan's attempts at colonization is due to three main reasons. The first is a climatic one. Japan is a warmer land than either Korea or Manchuria, where cold weather prevails in winter. For this reason, Japanese farmers prefer Japan to Korea or Manchuria. The second reason is the clan psychology of the Japanese. They do not like to leave their relatives and native land for life. They prefer to remain at home, if possible; and if driven to Korea or Manchuria, they will stay there only as long as is necessary to accumulate a certain amount of money, and then return to Japan. The third reason, probably the strongest, is the inability of the Japanese to compete with the Chinese. Given equal terms, the Chinese invariably excel the Japanese, both in wage- earning capacity and work. In face of this invincible economic competition. Japanese settlers have either to retire (which many of them do) or to secure Govern- mental aid or to resort to unfair mean-, which many of them not unfrequently employ to gain a livelihood. 10 In short, given equal terms, the Japanese have almost always proved to be the inferior to the Chinese in economic competition. "Amongst many things that impi ne on visiting Manchuria, after an interval of years, most significant is the evidence which confronts one on every side of the economic inferiority of the Japanese, when competing with the Chinese, either as merchants, farmers, artisans, or manual laborers. 1 he Japanese have firmly established their Imperium in Imperio throughout Southern Man- churia: . . . hut the basic factor of the situation lies ever in the Chinaman's ant-like qualities of sober thrift and ceaseless labor." n WISDOM OF JAPAN'S POLICY IN CHINA 269 It is, therefore, quite evident that however Japan may attempt to absorb Manchuria, none but the Chinese will ever really inherit the land. What is any attempt on the part of Japan to annex South Manchuria and Eastern Inner Mongolia will he fatal to herself. Not only will this create hatred between the two peoples, but will inevitably cause the downfall of Japan. She fought Russia for the integrity of China in Manchuria, and now eats her own words and desires to annex the very same territory which she did not allow Russia to take. If Russia met her defeat by the seizure and occupation of Port Arthur and Dalny after she had dispossessed Japan of the same, would Japan not meet the same fate if she should follow the path that once led Russia to defeat? Obviously, the solution of Japan's problem of excess population should not take the form of territorial expan- sion in South Manchuria and Eastern Inner Mongolia, where she is bound to meet the opposition of the Chinese. It should rather take the form of industrial and commer- cial expansion. In this regard, she should follow the beaten path of other nations who have successfully solved the same problem. Take for example Germany. Prior to 1880, before her industrial and commercial develop- ment, large numbers of Germans had to emigrate, but after industries wen- established, the population increased from about forty to approximately seventy millions, and, instead of emigration, immigration began. Belgium and I [olland,more thickly populated than Japan, do not have to resort to emigration, the increase of their population being absorbed by the growing industries. I f Japan would learn from the experiences of other nations, she would ahandon her policy of territorial expansion and devote her ener- gies to tile | olicj of industrial and commercial expansion. Conceding, for argument's sake, that Japan must have an outlet for her surplus population, for which, as we have 9hown, then yet no necessity, Japan ought 270 THE POLICY OF JAPAN IN CHINA not direct her policy of territorial expansion toward re- gions already well occupied by the Chinese or other people; rather she should seek territories unoccupied or only sparsely populated. Still better, she should purchase the land to be occupied by the Japanese, thus avoiding the seizure of any territory which she cannot occupy without a clear conscience. Finally, should she fail to find any such unoccupied or sparsely populated land for colonization, or should she fail to effect purchases, she could send her surplus population to South Manchuria and Eastern Inner Mongolia, provided they were willing to settle under the Chinese sovereignty. Passing from the population problem of Japan, we now come to the Chinese question. For reasons previously stated, she considers the Chinese question as one vitally affecting her own welfare and destiny, in consequence of which she maintains the policy of an Asiatic Monroe Doc- trine toward the Western Powers and that of political control toward China. Regarding the policy of her Asiatic Monroe Doctrine, if it were a genuine one, we would have no quarrel with Japan, but, on the contrary, we would have full respect therefor; but as regards her policy of political control, we differ and take open issue. In the first place, granting for argument's sake that the political instability of a state, as it affects the welfare and safety of a neighboring nation, justifies political con- trol, there is as yet no imminent necessity for such a step in the case of China. However dark the outlook of her political conditions may be, for Japan to assault Chinese sovereignty in 1915 by the presentation of Group V of the Twenty-one Demands is nothing less than a flagrant disregard of the sensitiveness of the Chinese. The United States acquired political control of Haiti and San Domingo, but this was done only when her Monroe Doctrine was in danger and only in order to preserve the sovereignty of these states and not to domi- WISDOM OF JAPAN'S POLICY I\ T CHINA 271 nate or subjugate them. Japan desired to play a role in China similar to that of the United States in Haiti and San Domingo, but Japan made a premature move, when there was as yet no exigency, and especially when Japan had failed to live up to a genuine Asiatic Monroe Doctrine. In the second place, frankly speaking, Japan is not qualified nor worthy to obtain political control of China. Though sin- desired political control primarily to fore- stall Western control, she nevertheless had the unworthy intention of controlling China so that she might always be able to keep her a subordinate and a tool of Japan. Thus, she desired control, not for the welfare of China, but for her own interest — not to hold it as a secred trust, but as a means of exploiting China's immense natural resources and to dominate all the races of the Orient." Again, Japan's record in Korea has been such that few fair-minded men will contend that she is qualified to extend her control any further into the mainland of Asia. Instead of treating the Koreans as equals and of the same race, as she now professes in regard to the Chinese, she treated them as inferiors — the hewers of wood and drawers of water for the Japanese. Instead of preserving the integrity and nationality of Korea, as she professes in the case of China, she aimed to absorb Korea and to exterminate Korean nationality. 11 In view of such a glaring abuse of political power over a subject people, unless she changes her Korean policy, the impartial mind cannot but declare Japan unworthy and disqualified to acquire further political control over other peopl - in Eastern Asia. Tn the third place, were Japan qualified, her policy ol political control would no doubl meet the bitter opposi- tion of the Chinese. They are determined to their independence and sovereignty, just as any people would. Nay, pacific as they are. they are ready to fight and die for their home and liberty. 272 THE POLICY OF JAPAN IN CHINA They began the Revolution of 1911, partly to overthrow the yoke of the Manchus, but largely to gain the reins ivernment so that they could save themselves from partition or control. Will a people capable of doing this be so low as not to resist foreign control, particu- larly that of Japan? The student strike and economic boycott following the Shantung decision further evi- denced the true spirit of Chinese nationalism. Can a nation that is able to rise as one man to protest against the wreckage of their heritage and injustice to their national cause be so supine as not to give a death blow to any Power that would deprive them of their inde- pendence ? It is certain that any policy on the part of Japan to control China will meet the united resistance of 400,000,000 democratic and liberty-loving Chinese. In the fourth place, Japan's policy to control China will inevitably encounter the opposition of Western Pow- ers. China is such a large and rich country and the commercial interests of the other Powers therein are so immense that the Western nations will not permit Japan to control her alone. Should there be any necessity for control, the Powers would unite and effect a scheme of international control, rather than allow Japan to control China alone. "In the long run, if China requires 'advice' or control, it must come from an international con- cert. . . ." 14 Again, the formation of the New Inter- national Banking Consortium at the close of the World War should convince the Japanese that the Western Powers would not let Japan gain a stranglehold on China's finance, but, if necessary, would internationalize the control. The failure to exempt South Manchuria and Eastern Inner Mongolia from the scope of the New Con- sortium should further convince Japanese statesmen that the Powers, by the advent of the New Consortium, are determined to forestall any attempt on the part of Japan to gain territorial expansion or political control in China. WISDOM OF JAPAN'S POLICY IN CHINA 273 Finally, were she able to overcome these obstacles and acquire control of China, it is doubtful whether Japan would be able to solve the Chinese question. Fundamen- tally, the Chinese must solve their own questions, deter- mine their own destiny, work out their own salvation. Japan may render assistance in the solution, but she can scarcely perform the task which the Chinese must do for themselves. The solution of Chinese questions does not lie in politi- cal control. It lies rather in sympathetic assistance and cooperation. It does not permit of insolent affront to the sovereignty of China. It rather calls for the pro- tection of a genuine "Asiatic" Monroe Doctrine. It does not require that Japan should be the overlord and master of China. It rather desires that Japan should be the help- meet and friend of China. Turning now from the Chinese question, we come to Japan's policy of paramount influence. As we have seen, this policy is a product partly of the population problem of Japan and partly of the Chinese question. Based on the needs of a surplus population, this policy aims to ac- quire the largest sphere of influence and trade predomi- nance. Founded on the necessity of the Chinese question, this policy proposes to secure a leading role or a special position in China. Regarding this policy we do not differ with Japan. We grant that she may gain paramount influence in China if she is capable of doing so. Our only request is that she should do so in a fair and legitimate way. First of all, she 01US1 nut achieve her paramountcv in trade by unfair means. 18 She must ii"t try to exclude :i competition b) preferential rates or other means of prejudicial discrimination. ( >n the contrary, she must maintain the principle of the equal opportunity of trade, a- required by the < >pen I k>or doctrine. Secondly, she must not attempt to achieve her para- mount influence by disregarding Chinese sovereignty. 274 THE POLICY OF JAPAN IN CHINA She should not have occupied the Tsingtau-Tsinan Rail- way lying within Chinese jurisdiction and in defiance of the repeated protests of China. She should not have established police stations in Shantung and Manchuria 16 in evident usurpation of Chinese sovereignty, nor sin mid she have stationed her troops along the Chinese Eastern Railway, which was assigned to the protection of the Chinese Government. Finally, to claim special interests in China, she must fulfill special duties toward that country. As right and duty are correlatives, Japan cannot enjoy special rights in China without fulfilling special duties. As it is, how- ever, she not only has failed to fulfill special duties aris- ing from geographical propinquity and racial kinship, but has grossly disregarded her duties and trespassed upon the rights of China. Her seizure of the German railway and mines in Shantung, her police stations, her troops along the Chinese Eastern Railway, not to men- tion Group V of the Twenty-one Demands — all testify so loud against the violation of her special obligations that she has almost forfeited any special rights that she might have acquired by reason of her sacrifices in the Russo-Japanese War, or by virtue of geographical pro- pinquity and racial kinship. If, therefore, Japan desires to claim special rights in China, she must fulfill special duties arising out of such propinquity and kinship. In other words, the similar natural advantages that give her, as claims, special rights in China impose on her corresponding special duties. Thus, provided Japan observes the principle of equal opportunity of trade and the integrity of China and fulfills the special duties re- quired by her special rights, China will have no objection to any attempt on the part of Japan to gain a position of paramount influence. Thus far, we have dealt with the errors of Japan in solving her own population problem and the Chinese WISDOM OF JAPAN'S POLICY IN CHINA 275 question, and in reaching the position of paramount influ- ence in China. We will now go deeper into these causes and probe the more fundamental wrongs. As policies are national attitudes of one state toward the other formulated usually in the best interest of each state, the more funda- mental errors of Japan's policy in China lie in the atti- tude of the Japanese, or at least of the responsible Japa- nese statesmen. In other words, the wrongs are moral. The first fundamental error is Japan's selfishness. She is intent upon the satisfaction of her own needs. In a passion of blind selfishness, she overlooks the rights of China. She needs coal, iron and steel. She feels she has a right to obtain the same from China, by fair means or foul. She needs an outlet for her surplus population ; so she demarcates South Manchuria and Eastern Inner Mongolia as her colonies, and steadily encroaches upon these regions, giving no heed to Chinese sovereign rights. When she desires to attain a paramount position in China, she does so by excluding foreign influence and by in- fringing upon China's sovereignty. As she desires, for her own welfare and dominance, to gain the political control of China, she commits open and covert assaults on China's sovereignty. She regards her own interests so much that she neglects those of China and sometimes attains her own ends at the expense of her neighbor. In other words, she does not regard the rights of China as her own, but rather as a means to her own gain and ascendency. To put it in another way, she subordinates the rights and interests of I hina to those of her own. This is not the application of the Golden Rule, but rather its subversion and violation. The second fundamental error is her attitude of con- tempt toward the Chinese. Having defeated china in 1895, she does not regard her as an equal. I laving ■ Come Russia in L905, her attitude toward (hina grows worse. In tin of some Japanese, the Chinese are 276 THE POLICY OF JAPAN IX CHINA destined to suffer the Eate of the Koreans. That is the reason why the Japanese Government has not infrequently deliberately insulted China and wantonly ohstructed the legitimate exercise of China's sovereign power. For instance, when China notified the Japanese Government of the cancellation of the war zone, 17 she resented and called this perfectly legitimate action on the part of the Chinese Government "improper, arbitrary, betraying, in fact, want of confidence in international good faith re- gardless of friendly relations," declaring also "that even if your Government actually cancels the communications concerning the creation of a war zone, the Imperial Gov- ernment will not permit the movement and actions of their troops within a necessary period to be affected or restricted by such act of cancellation." 1S Japan must realize, however, that the Chinese people, however disorganized, are man for man the equal of the Japanese, both in intellect, physical power and moral caliber, and are capable of becoming as great a nation as Japan, if not greater. In the face of much plain facts, why should Japan entertain contempt for China and thus possibly sow the seed of her own fall ? The late Bishop Bashford said: ". . . It is incredible that the Chinese people, outnumbering the Japanese sixfold, man for man equaling if not surpassing them in industry and commerce, having been stronger as a military power than fapan over twenty-nine hundred of her three thousand years of history, should reverse history and the laws of sur- vival and remain permanently weaker than Japan." 19 The third fundamental error is Japan's attitude of hopelessness in regard to China. She is so convinced of her inevitable destruction that she regards her at- tempt to gain political control of the latter as a benevolent act. She is so sure of China's incapacity to regenerate herself that, except for her intervention, she believes that China is bound to fall under the control of the Western Powers. In view of this firm conviction, she feels no WISDOM OF JAPAN'S POLICY IN CHINA 277 guilt in attempting to seize the reins of government in China. On the contrary, she feels it so imperative a remedy for China's illness that she must postpone Group V for future discussion. However correct the diagnosis of the Japanese statesmen in relation to the condition of the Peking Government, she nevertheless fails to see the source of salvation already visible in the Chinese body politic, — the rising spirit of Chinese nation- alism. Bankruptcy and downfall may threaten the Chinese Government, but the Chinese people, awakened and fully determined to preserve their own liberty, will one day turn calamities into blessings. If Japanese state-men could only see this better side of the Chinese national life, they would probably change their attitude of pessimism and antagonism to one of hopefulness and friendliness. The last, but not the least, fundamental error is the general lack of good-will on the part of Japan towards the Chinese. With the exception of a minority, there are numerous Japanese who would not desire to see a strong and united China, but would rather see China weak, divided, and, still better, controlled by Japan. Prince Yamagata said: "Japan wants a weak and inca- pable China; and a weak China under a weak emperor, sub j eel to Japan's influence, would be the ideal state."-" >unt [shii said: "Japan could not regard with equa- nimity the organization of an efficient Chinese army such as would 1m- required by her active participation in the war. nor could Japan fail to regard with uneasiness a liberation of the economic activities of tin- nation of 400,000,000 people." 85 "Japan views with great alarm the moral awakening of the four hundred million Chinese," said Baron Makino. From these utterances of the highest Japanese authorities, one cannot but con- clude, though mOSl reluctantly, that Japan entertains little gOOd-will towards China. Yet Japan must realize that the rise of ( liina a- a -leat power is inevitable. |n>t 278 THE POLICY OF JAPAN IN CHINA as the nineteenth century witnessed the rise of Germany, Italy and Japan, so the twentieth century shall witness the rise of modern China. There is no force on earth, except the Chinese themselves, that can hold hack this outcome. Will Japan stand in the way of China's prog- Such an attitude is unworthy of SO great a people as the Japanese who profess to exemplify the canons of Bushido and who have demonstrated such prowess in the Russo-Japanese War. The first step in the revision of Japan's policy is to change her entire attitude toward China. She musl do away with these fundamental errors. She must liberate herself from the bondage of selfishness and regard the rights and interests of China as sacred as her own. Into the bargain, she must discard her contempt for the Chinese and assume an attitude of due respect and cor- diality. Further, she >hould not concentrate her mental gaze on the corruption and inefficiency of the Chinese Government, so evident now, thus inducing an attitude of hopelessness regarding the future, but should rather note the promising and vigorous aspect of Chinese na- tional life — the younger generation and the awakened nationalism. Lastly, she should not desire to see China weak and divided, but she should rather cherish abound- ing good-will and become her friend and counselor in her period of reconstruction. I laving thus fundamentally changed her national atti- tude towards China, Japan should then revise her policy. She cannot apply her five policies at the same time, as she has so far attempted to do. They are irreconcilable and inconsistent with one another. She cannot adopt the policy of territorial expansion and political control, and yet at the same time expects to achieve commercial ex- pansion or to enforce the Asiatic Monroe Doctrine. Simi- larly, she cannot adopt the policy of economic exploita- tion or of commercial expansion and the "Asiatic" Mon- WISDOM OF JAPAN'S POLICY IN CHINA 279 roe Doctrine, and yet at the same time aim to seek territorial expansion and political control. She must choose the one or the other. Should she choose the policy of territorial expansion and political control, she should then abandon the policy of commercial expansion, outright, for such a policy will inevitably kill the good-will of the Chinese and hinder commercial relations. Similarly, she should honestly dis- avow the "Asiatic" Monroe Doctrine, for a policy of terri- torial expansion and political control will so violate the principle of her "Asiatic" Monroe Doctrine that it will become like sounding brass. Besides, she must be fully prepared to fight the Chinese, as the latter are deter- mined to preserve their homes and liberty. In that case, she will have to lay upon herself and her people the crushing burden of militarism, with the inevitable con- sequences of exorbitant taxation, the high cost and low standard of living, a low intellectual and moral standing, and the backwardness of industry and degeneration of race. 24 She must further be prepared to meet the united opposition of the Great Powers, particularly Great Britain and the United States, who, pledged as they are to the Open Door doctrine, will not let Japan alone to extend her territorial limits in China or gain the political con- trol there. It is practically certain that any attempt on the part of Japan to seek- territorial expansion or politi- cal control will result in tin- ruin of Japanese trade in China, the nullification of her "Asiatic" Monroe Doctrine, the bitter opposition of the Chinese, the curse of mili- tarism and the opposition and disapprobation of the Powers. 25 On the other hand, should Japan adopt the policy of commercial expansion and an "Asiatic" Monroe Doctrine, she must first abandon tin- policy of territorial expansion and political control, which, a- we have seen, are incon- sistent and irreconcilable with the policy of commercial expansion and her "Asiatic" Monroe Doctrine, llav- 280 THE POLICY OF JAPAN IN CHINA ing done so, she can then consistently seek the good- will of the Chinese by the maintenance of a genuine Mon- roe Doctrine which she proposes to employ as a means to protect the territorial integrity and political independ- ence of China. Having thus won the good-will of the Chinese, her commercial expansion and position of para- mount influence will naturally and inevitably follow. In other words, she should revert to the days preceding her victories over Russia and observe strict adherence to the principles of the Open Door, with this difference, however, that the passive pledge to respect the integrity and independence of China should be changed to a posi- tive engagement to protect the same. In this case, Japan can remain in peace with China and maintain friendship with the other Powers. Thus can she attain her destiny of becoming the leader and protector of the Far East for the next generation. A i this parting of the ways, which road will Japan take? It is fondly hoped and sincerely prayed that her sagacious statesmen will make the right choice. NOTES TO CHAPTER XVII 1. Vide supra, chapter on the Policy of Territorial Expansion. 2. Statesmen's Year Book, 1920, p. 75. 3. Hornbeck, Contemporary Politics in the Far East, p. 271. 3A. Statesmen's Year Book, 1920, on Dec. 31, 1918, p. 1018. 4. F, II. King, The Farmers <>f Forty Centuries, pp. 424--42<>. 5. Bashford, China. An Interpretation, p. 396. 6. lapan Year Book, 1920-21, p. 723, on Dec 31, 1^18. 7. Korea, 16, 619, 431, lapan Year Book, 1920-21, p. 703, Dec 31, 1917; British Isles, 45. 516. 259, Statesmen's Year Book, 1920, p. 13, census taken April 2, l'Ml. 8. lapan Year Book 1920 21, p. 703, on Dec 31, 1917. 9. Japan Year Book, 1920-21, p. 34, June. 1918, Returns by the Foreign Dept of Japan. 10. Vide supra, chapter on the Policy of Paramount Influ- ence. 11. Millard's Review, Oct. 9, 1920, p. 309, J. 0. I'. Bland, on China's New Strong Man — Chang Tso-hin, quoted from North China Daily News. WISDOM OF JAPAN'S POLICY IN CHINA 281 12. Vide supra, chapter on the Policy of Political Control. 13. For a full account of Japan in Korea, see Mackenzie, t'a Fight for Freedom. 14. Editorial, "The Nation," London, May 8, 1915, quoted in Millard. Our Eastern Question, pp. 239-241. 15. Vide supra, chapter on the Policy of Paramount Influence. 16. Editorial, Millard's Review, Feb. 1". 1921, p. 637 et scq. 17. The Shantung Question, Presented bj China to the Paris Peace Conference, published by the Chinese Natl. Welfare Soc. of America. March, 1920, App., Note of Ian. 7, 1915, p. 61. 18. Ibid., pp. 61-62, Note of Jan. 9, 1915. 19. Bashford, China and Interpretation, p. 409. 20. Millard, < >ur Eastern Question, p. 168. 21. Millard. Democracy and the Eastern Question, p. 99. 22. 23. H. K. Tong, article on How Japan's Policy Is Under- mining Her Position in China, Millard's Review, Aug. 9, 1919, p. 388. 24. Cf. Tokio Nichi Nichi. translated in Japan Weekly Chroni- cle, quoted in Millard's Review, Oct. 23, 1920, pp. 402-403. the Statement of Osaki Yukio : "The low intellectual and moral Standing of this nation and the backwardness of various indus- tries here are due to many causes. But the most important of them is the sway militarism holds over the country. . . . Mili- tarism has never long kept company with national prosperity, as conclusively proved by the history of the Tsing Dynasty of China, of Germany, Russia. Austria and Turkey. Militarism is a principle ruinous to the state." 25. While defense may be made that the United States, in of the Monroe Doctrine, extended westward in accordance with her manifest destiny and at the expense of Mexico, the vital difference must be pointed out that the United Stati tended in the direction of practically unoccupied or most sparsely populated regions, and not infrequently by way of purchases, whereas Japan aims to extend over regions well occupied and populated by the Chinese and in deliberate violation of China's sovereign rights. PART IV IMPAIRMENTS OF CHINA'S SOVEREIGNTY XVIII. Extraterritoriality and Consular Juris- diction. XIX. Concessions and Settlements. XX. Leased Territories. XXI. Spheres of Influence or Interest. XXII. The Most Favored Nation Treatment. XXIII. Tariff Autonomy. XVIII EXTRATERRITORIALITY AND CONSULAR JURISDICTION We have so far surveyed the policies of the Great Powers in China, dealt in Part II with Russia, France, Germany, Great Britain and the United States, and in Part III, exclusively with Japan. We will now proceed to consider the impairment of China's sovereignty, as represented by Extraterritoriality and Consular Jurisdic- tion, Settlements and Concessions, Leased Territories, Spheres of Influence, the Most Favored Nation Treat- ment, and Tariff Autonomy. We will begin with the first-named — Extraterritoriality and Consular Jurisdic- tion. By extraterritoriality is meant "a form of privilege or exemption consisting of a limitation of territorial sov- ereignty with regard to certain persons and certain places, which under international law enjoy the privilege of remaining outside the jurisdiction of the state in whose territory they are situated;" 1 or, in short, it is "an ex- clusive exemption from the operation of the local law." - Defined as such, it is a privilege granted in limitation of territorial sovereignty. In international law it is a funda- mental principle that the territorial sovereign exercises supreme power over all the people, natives or aliens, re- siding within the limits of his territory. With the con- cession of this privilege, however, the supreme power of the territorial sovereign is limited or unpaired to the extent that aliens enjoying this form of special privilege are exempted from the jurisdiction of his tribunals. Again, it is a privilege that confers the righl to exercise jurisdiction over the nationals in a foreign territory. 285 286 IMPAIRMENTS OF SOVEREIGNTY This right is usually exercised hy legislation through the legislative organ of the government, thus making laws to govern nationals abroad, and through the investment of authorities accruing from laws thus made in consular and diplomatic officers residing abroad, and also in the estab- lishment of consular courts and other extraterritorial courts for the administration of justice in the case of nationals. In brief, it extends jurisdiction over the realm of another state and functions with respect to ad- ministration of justice over nationals abroad on behalf of the territorial sovereign. Besides, it is a privilege granted with the consent of the territorial sovereign by way of conventions or treaties, which form the basis of the privilege and without which no foreign Power has the inherent right to enjoy the same. Considered in this light, it is, consequently, merely a delegated power from the territorial sovereign to for- eign states enjoying the privilege. As such, in accordance with the established rules of interpretation, the exercise of the delegated power must be founded on express or im- plied grant; any undelegated or unsurrendered Power is construed to remain intact with the territorial sovereign; and, in case of doubt, the uncertainty will be absolved in favor of the sovereign grantor. In other words, the rule of strict construction will apply. Further, it is a privilege granted only for so long a period as the territorial sovereign is not capable of ful- filling the duties of administering justice and affording protection to life, liberty and property in accord with modern or Western standards of civilization. This, ipso facto, means that as soon as the territorial sovereign is capable and ready to fulfill the necessary duties, the privilege should be surrendered. It is thus a temporary privilege exacted to penalize the territorial sovereign for the relative backwardness of its judicial system, and with the implied obligation to surrender the same as soon as the judicial administration of the territorial sovereign CONSULAR JURISDICTION 287 has advanced to a certain degree of proficiency. "The case of Japan," said ( tppenheim, "is an example of the readiness of the Powers to consent to the withdrawal of consular jurisdiction in such states as soon as they have reached a certain level of civilization." 3 Having stated the general principles underlying extra- territoriality, we will now briefly sketch its historical de- velopment in China. Prior to the advent of the Maritime Powers, China was accustomed to make reciprocal con- cession of extraterritorial jurisdiction to the neighboring Oriental states. That is, in extending extraterritoriality to the other Oriental states, she demanded and acquired similar reciprocal privileges. So, in the very first treaty — that of Nerchinsk with Russia in 1689, — reciprocal con- cessions of extraterritoriality were granted (Art. 2). 4 Again, in the Treaty of 1727, similar concessions of re- ciprocal extraterritoriality were provided (Art. 10), 5 which were, however, altered and amplified by the sup- plementary treaty of 1768, minutely stipulating the pro- cess of arrest and delivery of criminals." Even in the Treaty of Kouldja in 1851, which took place about a decade after the Maritime Powers had exacted the privilege of extraterritoriality from China, the arrangement was still for a reciprocal concession of extraterritoriality (Art. 7 ) .' And it was not until 1858, when Russia sought concessions similar to those accorded to the Maritime Powers under the aegis of the British and French arms, that Russia secured the same privilege of extraterritoriality as were enjoyed by the maritime pow- ers (Art. 7)." Likewise, in the Treaty of Commerce and Navigation with Japan in 1872, the privilege of extra- territoriality was not granted unilaterally, but a recipro- cal concession thereof was made (Art. 9).' Audit was not until Japan had defeated < hina in the War of 1894-5 that she obtained privileges of extraterritoriality such as were enjoyed by the Maritime Powers, in the Treaty of Shi- 288 IMPAIRMENTS OF SOVEREIGNTY monoseki in 1895, the grant of the most favored nation treatment was made (Art. 6), 10 which naturally included the privilege of extraterritoriality. In the subsequent Treaty of Commerce and Navigation in 1896 the privi- lege was specifically .stipulated (Art. 20). n Similarly in the Treaty of Amity and Commerce with Korea in 1899, despite the fact that the other Powers had prac- tically enjoyed extraterritorial privileges for about half a century, Korea was given, not the privilege of extra- territoriality as enjoyed by the other Powers, but the reciprocal concession of extraterritorial jurisdiction (Art. 5). 12 Thus the thesis can be ventured that, prior to the advent of the Maritime Powers, China was accustomed to the practice of reciprocal concessions of extraterritorial jurisdiction in her relations with neighboring Oriental states, and, as we shall see presently, that the privilege of extraterritoriality as now enjoyed by the Powers un- ilaterally was originated by the Maritime Powers. As the Maritime Powers arrived (particularly Great Britain), the history of extraterritoriality turned a new leaf. They insisted on the enjoyment of the privilege, and yet at the same time, relying upon the superiority of their own civilization, would not consider the idea of recipro- cating the same. Thus, China insisted on the assertion of territorial jurisdiction over these "barbarians," whereas the Maritime Powers resisted and claimed exemption. Relating the instances of this conflict, J. B. Moore wrote: 13 "When crimes had been committed there by foreigners other than Portuguese, the Government had never failed to assert its jurisdiction to seize the accused if accessible on land, and to demand his surrender if on board of a ship. The claim of surrender had sometimes been suc- cessfully resisted, and some times acquiesced in. In 1780, a French seaman, who killed a Portuguese seaman in one of the hongs of Canton, was delivered up to the local authority, by whom he was tried, convicted, and ex- CONSULAR JURISDICTION 289 ecuted. In 1784 the gunner of an English merchant ship, who, in firing a salute, had killed a Chinese, was given up and executed. . . . Captain Elliott, of the British navy, however, at an early stage of the controversy be- tween his Government and that of China, refused to give up some English sailors who were charged with homi- cide." Supporting this firm position, as early as 1833, a Brit- ish Court of Justice for China was proposed and passed, 14 the carrying out of which, however, was unsuccessful. Again, in 1838, the same measure was proposed in the House of Commons: 15 "with even greater power and jurisdiction." l8 This was, however, withdrawn on ac- count of strong opposition in the House. And, despite these repeated efforts, it was not until after the Opium War that England obtained the privilege. In the Treaty of Nanking in 1842, there was no spe- cific mention of the grant of extraterritoriality, but in the subsequent general regulations governing British trade at the five ports of Canton, Amoy, Foochow, Ningpo, and Shanghai, concluded on October 8, 1843, the first pro- vision of the concession of extraterritoriality appeared. 17 "Whenever a British subject has reason to complain of a Chinese, he must first proceed to the consulate and state his grievance; the consul will thereupon inquire into the merits of the case, and do his utmost to arrange it ami- cably. In like manner, if a Chinese have reason to com- plain of a British subject, he shall no less listen to his complaint, and endeavor to settle it in a friendly man- ner. If an English merchant have occasion to address the Chinese authorities, In- shall send such address through the consul, who shall see that the language is becoming; and if, otherwise, will dired it to he changed, or will re- fuse to convey th< If, unfortunately, any dis- DUtes take place of such a nature that the consul can- not arrange them amicably, thin he shall request t! sistance of a Chinese officer, that they may together ex- 290 IMPAIRMENTS OF SOVEREIGNTY amine into the merits of the case, and decide it equitably. rding punishment of English criminals, the English Government will enact the laws necessary to attain that end, and the consul will be empowered to put them in force; and regarding the punishment of Chinese criminals, these will be tried and punished by their own laws, in the way provided for by the correspondence which took place at Nanking, after the concluding of the peace" 18 (Art. 13). In the subsequent Treaty of 1858. which confirmed the Treaty of Nanking and abrogated the supplementary treaty and the general regulations of trade, the substance of which was incorporated in the treaty in question (Art. 1), the above provision was consequently likewise abro- gated, but its substance was embodied in the following Articles: 19 "Article 15. All questions in regard to rights, whether of property or person, arising between British subjects, shall be subject to the jurisdiction of the British author- ities. "Article 16. Chinese subjects who may be guilty of any criminal act toward British subjects shall be ar- rested and punished by the Chinese authorities accord- ing to the laws of China. "British subjects who may commit any crime in China shall be tried and punished by the consul, or other public functionary authorized thereto according to the laws of Great Britain. "Justice shall be equitably and impartially adminis- tered on both sides." The British having thus set the precedent, the United States obtained a similar privilege by the Treaty of Wanghia, July 3, 1X44-' (Arts. 21 and 25). Similarly, Prance obtained the same concession by the Treaty of \\ hampoa, October 24, 1844 » (Arts. 25, 17. 28). Following France came the other powers which ob- CONSULAR JURISDICTION 291 tained the privilege of extraterritoriality by their respec- tive treaty stipulations, as follows: Norway and Sweden, March 20, 1847 (Arts. 21, 25 29)22 Russia, June 13, 1858 (Art. 7). 23 Germany, September 2, 1861 (Arts. 34, 35, 38, 39). 2 Denmark, Julv 13, 1863 (Arts. 15, 16, 17) r 5 Netherlands, October 6, 1863 (Art. 6).- 6 Spain, October 10, 1864 (Arts. 12, 13, 14). 27 Belgium, November 2, 1865 (Arts. 16, 19, 20). 28 Italy, October 26, 1866 (Arts. 15, 16, I7)r° A i stria-Hungary, September 2, 1869 (Arts. 38, 39, 40). 30 Peru, June 26, 1874 (Arts. 12, 13, 14). 31 v/au October 3, 1881 (Arts. 9, 10, ll). 32 Portugal, December 1, 1887 (Arts. 47, 48, 51 ). 33 Japan, July 21. 1896 (Arts. 20, 21, 22). 34 Congo Free State, Julv 10, 1898 (Art. I). 35 Mexico, December 14, 1899 (Arts. 13, 14, 15 ). 36 Sweden, July 2, 1908 (Art. 10). 37 Chile, February 18, 1915. 38 Switzerland, June 13, 1918. 30 - 40 Passing from this brief sketch of extraterritoriality in China, we now come to the exercise of extraterritorial jurisdiction as it cxi>ts in China. Willi respect to the extent of extraterritorial jurisdiction, certain principles can be deduced from the treaty provisions stipulating the extraterritorial privilege. If the dispute is wholly of Chinese parties in which no foreigners are involved, the jurisdiction belongs exclusively t<> Chinese courts, and the ca^- should be settled according to the ( hinese law and procedure. If a controversy is between the parties of tin- -aim- treat] Po . tr enjoying the privi- ■ :traterritoriality, the jurisdiction lies exclusively with the consular and other courts established by the treaty Power in question, and the case i-- to be settled according to the law and procedure of that State. It the 292 IMPAIRMENTS OF SOVEREIGNTY case is between the nationals of two or more treaty Pow- er- enjoying the privilege of extraterritorial jurisdiction, the jurisdiction lies, not with the Chinese courts, but with the authorities of the States concerned in accordance with agreements they have made covering such cases. If the controversy is between the parties of the non- treaty Power and the treaty Power, the jurisdiction is determined by the nationality of the defendant ; if he is of the treaty Power, the jurisdiction is in the courts of the treaty Power in question ; if of the non-treaty Power, the jurisdiction is in the courts of China; if the parties are all of non-treaty Powers, the jurisdiction lies wholly in Chinese courts. If, however, a controversy is between the Chinese and the nationals of the treaty Power, the general principle governing such cases is that the juris- diction goes with the nationality of the defendant. In other words, "the plaintiff follows the defendant into the court of the latter's nation." 41 Thus it may be observed that extraterritorial juris- diction follows the person of the national. In other words, it is personal, and follows the nationals wherever they go or reside. It is not alone limited to the settlements and concessions or treaty ports, where aliens are to reside, but it extends as far, and as wide, as the nationals go. It can therefore be said that the extent of the extraterri- torial jurisdiction is only limited by the realm of the terri- torial sovereign, or to employ another expression, "it is co-extensive with the confines of the Empire." * 2 Further, extraterritorial jurisdiction exempts foreign nationals enjoying the privilege, not only from the ju- dicial process of local tribunals, but also from the liabil- ity of search. Their houses or vessels within treaty ports are immune from search by territorial authorities. Fugitives from law hiding in these houses or vessels can be extradited only "on due requisition by the Chinese authorities, addressed to the British consul." 43 In 1913, during the second revolution, the Chinese Government CONSULAR JURISDICTION 293 proposed that under warrants vised by the consul, the houses and vessels of foreigners should be subject to search, thus checking any collusion between the Chinese and foreigners, but the proposal was rejected as being contrary to treaty rights." Thi< privilege of immunity, however, is not absolute. It does not mean that the nationals can so abuse the privilege as to defy the terri- torial laws or to menace public health or public safety, in which case the territorial sovereign will have the right of reasonable restraint.'"' To these general principles governing the scope and extent of extraterritorial jurisdiction, there are three spe- cial exceptions. First, there is the special status of Ko- reans in Chientao. While they are placed on an equal footing with the Chinese, they are denied the full privi- lege of extraterritoriality, and are accorded only a limited or diminished form of extraterritorial right. Both in civil and criminal cases, they are subject to Chinese juris- diction, although the Japanese consular officers may be present and, in case of injustice, can ask for a new trial. It is only in the cases concerning the lives of persons that previous notice must be given to the Japanese offi- cer (Art. 4). 48 Second, there is the special status of the foreign na- tionals in Chinese Government service. In general, they still remain within the extraterritorial jurisdiction of their own authorities. In particular cases, however, they are exempted. In acts done in official capacity, they may not be civilly liable in consular courts; 41 and in criminal liabilities, they may plead the act oi In civil em- ployment, when they arc placed under discipline, their superiors have the authority to enforce obedience. 48 In military service, by virtue of the necessity of the situa- tion, they are supposed to have voluntarily waived their extraterritorial protection and placed themselves under the jurisdiction of the territorial Third, there is the special status of the i hinese in the 204 IMPAIRMENTS OF SOVEREIGNTY employ of foreign nationals. As a rule, they are still subject i" Chinese jurisdiction just as other Chinese citi- zens. They are, however, not to be arrested without notice to the consul of the employer. 01 Apart from these special cases, the extraterritorial jurisdiction is nevertheless subject to certain limitations. These are numerous, but it will suffice to mention the more important ones. Limitations can arise from treaty provisions. For instance, foreigners violating customs laws are subject to the confiscation of their vessels and goods. 52 Limitations can also be founded on interna- tional law. In accordance with well-established rules of interpretation, extraterritorial jurisdiction being a dele- gated power, the unsurrendered power is construed to remain intact with the territorial sovereign, and any doubt as to the grant must be absolved in favor of the territorial sovereign. Under this construction, nationals of non-treaty powers or of treaty powers enjoying no extraterritorial privileges are subject to the jurisdiction of China. Being so, they cannot claim the protection of the other treat\- powers having extraterritorial privi- leges, nor can the treaty powers claim the right of pro- tection. 53 And herein lies an important difference be- tween the practice of extraterritoriality in Turkey and other countries of the Levant, and that in China. In Turkey and other states of the Levant, the treaty Po are permitted to take under their protection, as proteges, the nationals of non-treaty Powers, but in China, this right does not exist. 84 Further, the exemption from the jurisdiction of local courts does not mean exemption from obedience to local laws and municipal ordinances. The nationals, while enjoying extraterritorial rights, are still bound to obey local ordinances for public health and ord( In addition, limitations can also arise from statutes exiling the exercise of extraterritorial jurisdiction. The CONSULAR JURISDICTION 295 extraterritorial courts, exercising the delegated power and acting under the direction of the statutes, are subject to the limitations set by legislation or treaty stipulations. Even though the act may be within the extent of the extraterritorial jurisdiction, if it is not included in the statutes, the extraterritorial jurisdiction is limited to that extent. 66 Finally, as the extraterritorial jurisdiction is personal, this fact in itself constitutes an inherent limitation. Con- sular courts have jurisdiction only over their respective nationals, and not over any other subjects. Consequently, they cannot punish Chinese plaintiffs for perjury or con- tempt of court, nor can they entertain any counter-claim or set-off, however just it may be. Having seen the scope and the limitations of extra- territorial jurisdiction, we now proceed to the extraterri- torial courts that are vested with the authority to exer- cise this jurisdiction. In general, all consuls of the treaty powers are authorized to exercise extraterritorial jurisdiction, such courts being known as consular courts. For the purposes of appeal the diplomatic offi- cials at Peking arc, in the main, empowered to exer- cise appellate jurisdiction, but in the case of Great Britain, the British Supreme Court for China was established by the Order in Council of October 24, 1904, ss and in the case of the United States, the United States Court for China was instituted by the Act of June 30, 1906. 69 bruin His Britannic Majesty's Supreme Court for China, where more than £500 are involved, further appeal may be taken to lli\ Majesty in Council, and in other cases, the Su- preme Court may give leave, as it sees fit, to appeal to the Privy Council.* From the United States Court for China, further appeal ran be taken to the United S Circuit Court of Appeals of the Ninth Judicial Circuit, and from thence to the Supreme Court of the United States. 81 296 IMPAIRMENTS OF SOVEREIGNTY The laws applied in these extraterritorial courts are the laws of the nations exercising the extraterritorial juris- diction. "So long as the laws of the two countries differ From each other there can be but one principle to guide judicial proceedings in mixed cases in China, namely, that the is tried by the official of the defendant's nationality ; the official of the plaintiff's nationality merely attending to watch the proceedings in the interest of justice. If the officer so attending be dissatisfied with the proceed- ings, it will be in his power to protest against them in detail. The law administered will be the law of the officer trying the case" (Art. 3, Sec. 2, The British Treaty of Chefoo, 1876). With respect to procedural law, there is a general agree- ment that it is the procedural law of the Powers having extraterritorial jurisdiction that is applied. With ref- erence to substantive law, however, there is a difference of opinion. Obviously, foreigners enjoying extraterri- toriality should be adjudged according to the substantive law of their own countries; and yet, as they are in duty bound to obey local laws and municipal ordinances, they must also be adjudged and punished according to the substantive law of China. On the one hand, it is there- fore maintained that 02 "while it may be admitted that justice and fair deal- ing require that foreigners offending against laws rend- ered necessary in China, as well as elsewhere, by a right regard to the safety and convenience of the communi- ties in which they reside and of the government upon whose soil they stand, should be punished for their of- 5, it appears difficult to admit the broad proposition that they arc amenable to Chinese law in the same sense as natives of China are, or in point of fact, in any sense which would allow us to assent to the Chinese proposi- tion." CONSULAR JURISDICTION 207 On the other hand, it is contended that 63 "with reference to the Treaty Powers themselves, it may be said that extraterritoriality entitles them to exercise so much authority over their nationals in China as is necessary to enforce effectively, by judicial methods, the laws declared to be in force by the Emperor of China." Despite this difference of opinion, the law of real estate as applied in the extraterritorial courts is well set- tled, "it i.> a fundamental principle of all systems of jurisprudence that rights of realty should be determined according to the lex situs." 04 It is consequently decided that the law governing real estate in China should be the local law or custom of China. In MacDonald v. Ander- son, 05 Justice Bourne, delivering the opinion of the Court, said : "I hold that the law of China ought to be applied to the facts of this case. The Court administers the law of England (1863 Order in Council, Art. 5), but what is the law of England in regard to immovable property situated within the dominions of the Emperor of China? Undoubtedly rights in respect of such property shall be governed by the lex situs, that is, by the law of China." In the Chino-Japanese Treaties of May 25, 1915, it was expressly stipulated that "mixed civil cases between Chinese and Japanese relat- ing to land shall be tried and adjudicated by delegates of both nations conjointly in accordance with Chinese law and local usage" (Art. 5). 00 Turning to the Chinese side <>f the subject, the trib- unals that have jurisdiction over mixed cases between a Chinese defendant and a foreign plaintiff have been com- monly known as "mixed courts." As in such eases the defendants are Chinese, the courts having jurisdiction 298 IMPAIRMENTS OF SOVEREIGNTY are Chinese courts, and the laws applied are Chinese laws, both substantive and procedural. A foreign as- however, as provided in the treaties, is usually permitted to attend the trial. He is usually a properly authorized official of the plaintiff's nationality. "He shall be granted all proper facilities for watching the proceedings in the interest of justice. If he so desires, he shall have the right to present, to examine, and to cross-examine wit- nesses. If he is dissatisfied with the proceedings, he shall be permitted to protest against in detail." 07 Among the so-called "mixed courts," the Shanghai In- ternational Mixed Court has developed to be a unique ex- ception. Originally it was a mixed court established in the International Settlement of Shanghai, for the trial of cases where the Chinese are defendants with the at- tendance of the foreign assessor on behalf of the for- eign plaintiff. In such cases the approval of the assessor is necessary to the judgment of the Court. 08 Later, how- ever, the jurisdiction of the Court was extended to cases where both or all of the parties are Chinese. While evi- dently it is contrary to the treaty stipulation which pro- vides that the foreign assessor can attend only when a foreigner is the plaintiff, the extension of the jurisdic- tion is nevertheless maintained on the ground that it is necessary to have foreign oversight in the case where the parties are residents of foreign settlements, and that it is essential for the enforcement of municipal ordinal Since 1911, the Shanghai International Mixed Court has assumed a new status. Because of the Revolution and the temporary collapse of Chinese authority, the court was taken over by the consular body of Shanghai, including the prisons attached thereto. 7 " Ever since the annexation, the court has remained virtually an inter- national court administered by the consular body of Shanghai. Negotiations have been carried on for its restoration, but so far no agreement has yet been reached. 71 CONSULAR JURISDICTION 299 Before passing from the system of extraterritoriality as it exists in China, we must observe some unwarranted practices committed by the Treaty Towers under the aegis of extraterritoriality and in excess of such jurisdiction, and sometimes in apparent defiance of China's sover- eignty. First, there are the foreign post-offices established in the treaty ports by the Powers. Their establishment was not sanctioned by treaty stipulations, and conse- quently it is an infringement on the sovereignty of China. "They are not established with the consent of China, but in spite of her. . . . Their establishment materially interferes with and embarrasses the development of the Chinese postal service, and is an interference with Chinese sovereignty." " 2 Besides, there are foreign wireless and telegraphic installations in China which are there in con- travention of China's sovereignty. Second, there are police boxes, or stations, established by Japan in Manchuria. "Since 1905 the Japanese Gov- ernment has established and gradually extended police agencies in Manchuria, notwithstanding the repeated pro- test of the Chinese authorities. The number of such agencies, as reported in 1917 by the local authorities of Fengtien and Kirin Provinces, has reached tv. seven." n The establishment of these police boxes, or Stations, has no legal justification. While China has ted to the maintenance of Foreign police in conces- sions and settlements either by way of treaty provisions or "land regulations," she has in no wise ever her sanction to the stationing of a police force elsewhere in t! c territory of China. ( Mi the other hand, Japan has maintained thai the establishment of police is but a corol- lary of extraterritorial jurisdiction.™ In reply to this, the Chinese Government conte that the stationing of police cannot be regarded as a corol- lary of extraterritoriality, and China has not i the legitimacy of the measure, but, on the contrary, has repeatedly lodged protests againsl it" 300 IMPAIRMENTS OF SOVEREIGNTY Third, there is the maintenance of foreign troops in China. While there are troops whose presence is -auc- tioned by treaties, such as the legation guards at Peking and the Allied guards on the Peking-Mukden Railway, whose usefulness and raison d'etre, however, has ; beyond the original purpose of their maintenance, there are, nevertheless, foreign troops stationed in China en- tirely unauthorized by law or treaty, and in violation of China's sovereignty. In Manchuria. Russia and Japan stationed railway guards on the Chinese Eastern Railway and the South Manchuria Railway, to which the Chinese Government has not given assent. 76 Since 1909, Japan has stationed troops at consulates in such places as Liutowkow in Fengtien, and Yenki in Kirin, and since 1911 Russia followed suit and put military guards at con- sulates in such places as Kirin and Yenki. 77 Upon the outbreak of the Chinese Revolution in 1911. Japan des- patched troops to Hankow, 800 miles up the Yangtze Valley and in the very heart of China, and has since constructed permanent barracks and maintained soldiers there, despite the repeated protests of the Chinese Gov- ernment. Upon the pretext of an unfortunate conflict in 1914 between the Chinese police operating against bandits at Liaoyuan on the border of Inner Mongolia, and a company of Japanese troops passing through the place, Japan despatched troops there, ami notwithstand- ing the settlement of the case to the satisfaction of Japan, she has not yet withdrawn her military Shortly after the outbreak of the World War. Japan seized the Tsingtao-Tsinan Railway, and. stationing mili- tary guards along it, compelled the Chinese troops to withdraw from its vicinity, in spite of the- repeated pro- of the Chinese Government and in gross violation of China's sovereignly. At Kashgar in Sinkiang, Russia iince 1900, maintained ISO soldiers to protect the Russian postal agency, and Great Britain has, since 1918, maintained thirty Indian soldiers in the same city. 7 ' CONSULAR JURISDICTION 301 Passing from this brief survey of the practice of extra- territoriality in China with the unwarranted practices under its aegis, we will now consider the recent changes and developments connected with extraterritorial juris- diction in China. On account of the declaration of war against Germany and Austria-Hungary in 1917, the treaties existing between the Central Powers and China have been abrogated, and with the abrogation the extra- territorial rights once enjoyed by the Germans and the Austrians have been duly extinguished. In the case of Russia, because of the Soviet revolution and the subse- quent collapse of the old regime, China has terminated all relations with that regime, by a presidential mandate of September 23, 1920, 70 withdrawing recognition from the officials of the old regime and temporarily taking over the interests of Russia pending the eventual estab- lishment of a stable government there. During this in- terim, China is to act as trustee of all Russian interests in China, and the the extraterritorial rights hitherto en- joyed by the Russians remain as before. Special courts are instituted in China for the trial of cases involving Russians, and Russian counselors are to be employed to advise on the administration of justice in accordance with Russian laws. Having completed our discussion of the history and practice of extraterritoriality and consular jurisdiction in China, we will now deal with the defects and disadvan- tages of the system with a view to its eventual aboli- tion. Let it suffice to mention the main one- only. The firsl defect is the conflict of consular duties. Vs consul, he must protect and promote the interests of lu- na- tionals. As judge in extraterritorial cases, however, lie is obliged to observe impartiality and administer jus- \"t infrequently, either because of bias or .i pre- ponderance of duties as protector of his nationals' in- terests, he fails to do justice. "Such a practice is obvi- 302 IMPAIRMENTS OF SOVEREIGNTY Olisly contrary to the modern principle of the separation of administrative and judicial functions."" Further, consuls arc frequently not well versed in law, and be- cause of this limitation in training are often unable to administer justice adequately. The second defect is the diversity of laws applied. The Chinese apply Chinese law; the British, British law; the French, French law ; the American, American law. As a consequence, while the facts may be the same, the law applied is different and hence the decision varies, giving rise to the evils of judicial uncertainty and dis- parity of judgment and punishment. 81 The third defect is the lack of control over the plaintiff and the witness. The jurisdiction being personal, the Court has control only over the defendant and the wit- ness of the defendant's nationality. If, however, the plaintiff commits perjury or contempt of court, he cannot be proceeded against. Similarly, if the witness of a na- tionality different from that of the defendant should refuse to appear, or, after appearance, should refuse to testify or commit perjury or contempt of court, the judge would be powerless in these matters. On the other hand, should the defendant have a counter-claim or set-off against the plaintiff, no matter how valid it might be, the Court would have no jurisdiction over such cases, it not being permitted to entertain any suit brought against the plaintiff who is not of his nationality. In such cases, the defendant will have to resort to the plaintiff's court for the adjudication of the counter-claim or set-off. The fourth defect is the difficulty in obtaining evidence for cases where the foreigner commits a crime in the inte- rior of China. In accordance with the treaty provision, "if he be without a passport, or if he commit any offense against the law, he shall be handed over to the nearest consul for punishment, but he must not be subjected to any ill-usage in excess of necessary restraint." 62 CONSULAR JURISDICTION 303 "This rendered into plain language means that a for- eigner who commit- a rape or murder a thousand miles from the seaboard is to be gently restrained, and remitted to a consul for trial, necessarily at a remote point, where testimony could hardly be obtained or ruled on." 88 In consequence of this arrangement a foreigner committing a crime in the interior is to -be brought to the nearest consul who may be many miles away and the difficulty connected with obtaining evidence from thousands of miles away is often tremendous. The fifth disadvantage is that, under the present sys- tem of extra-territoriality, so long as it lasts, it is prac- tically impossible for the Chinese Government to open up the whole country for foreign trade and residence. For as long as foreigners carry extra-territorial immu- nity wherever they go or reside, the Chinese Government will be hampered in administration and protection. Thus, foreign trade will be limited to the treaty ports and the ports voluntarily opened by China, and cannot therefore grow as rapidly and extensively as otherwise. Put in another way, extra-territoriality is a real hindrance to the extension of foreign trade in China. In view of these serious defects and disadvantages, the abolition of extra-territorial jurisdiction has become a growing aspiration of the Chinese Government. Sev- eral Powers, on their part, have already consented to its relinquishment pending the judicial reform to be under- taken by China. Article 12 of the Mackay Treaty of 1902 stipulated: "China having expressed a strong desire to reform her judicial system and bring it into accord with that of W rtern natioi Britain agrees to give every assist- ance to such reforms, and she will also be prepared to relinquish her extra-territorial rights when she is satis- lied that the state of < hine • laws, the arrangements for their administration, and other considerations warrant her in so doing." B8 304 IMPAIRMENTS OF SOVEREIGNTY Similar pledges are also found in Article 15 of the Sino- American Commercial Treaty of 1903, 00 and in Article 11 of the Sino-Japanese Commercial Treaty of the same year. 01 The Chinese Government on its part has taken defi- nite steps toward its eventual abolition. On the one hand, it has refused to grant the privilege to the states recently sicking treaty relations. It has been reported that Greece, Poland, Jugo-Slavia and Czecho-Slovakia were given to understand that China, in view of judicial reforms re- cently undertaken or yet in process of adoption, would not henceforth concede any extra-territorial rights. 02 On the other hand, China has manifested her desire for the abolition of extra-territoriality. At the Paris Peace Conference, the Chinese delegation submitted the request for the relinquishment of extra-territoriality and con- sular jurisdiction. The request was made that upon the fulfillment of the following two conditions which the Chinese Government pledged to fulfill by the end of 1924, the treaty powers would surrender their extra-territorial rights : "1. The proclamation of a Crin.inal, a Civil, and a Commercial Code, a Code of Civil Procedure, and a Code of Criminal Procedure. "2. The establishment of new courts in all the districts which once formed the chief districts of the old prefectural divisions, that is to say, in fact, in all the localities where foreigners reside." 03 Prior, however, to the abolition of extra-territorial jurisdiction, and to remedy some of the existing evils of the system, the Chinese delegation requested the imme- diate assent of the Powers to the two measures : "1. That every mixed case, civil or criminal, where the defendant or accused is a Chinese, be tried and adjudicated by Chinese courts without the presence CONSULAR JURISDICTION 305 or interference of any consular officer or repre- sentative in the procedure or judgment. "2. That the warrant issued or judgments delivered by Chinese courts may be executed within the con- cessions or within the precincts of any building belonging to a foreigner, without preliminary ex- amination by any consular or foreign judicial officer." 04 It is thus clear that the Chinese Government is deter- mined to abolish extra-territoriality and consular juris- diction in China, and that it is making every effort toward that end. It is also to be observed that the success of this measure will benefit not only China by restoring to her extra-territorial jurisdiction, but also the Powers by the opening of the whole of China to foreign trade and residence. NOTES TO CHAPTER XVIII 1. Fiore's International Law Codified, translated by E. M. Borchard, p. 208. 2. J. B. Moore, Internatl. Law Digest, Vol. 2, p. 593. 3. Oppenheim, Internatl. Law, 3rd ed., Vol. 1, p. 606. 4. Hertslet's China Treaties, Vol. 1, No. 76, p. 438. 5. Hertslet, ibid., No. 77, p. 445. 6. Hertslet, ibid., VoL 1, No. 7K, p. 447. 7. Hertslet, ibid., Vol 1, No. 79. p. 451. 8. II. rtslet, ibid., Vol. 1. No. 81, p. 459. 9. State Papers. Vol. 62, pp. 322-323. 10. Hertslet. op. cit.. Vol. 1, X-.. <>-', p. 365. 11. Hertslet, ibid., Vol. l. No. 64, p. 379; State Papers, Vol. 88, pp. 47X-47 1 '. Arts. 20, 21 and 22. 12. Hertslet, ibid., Vol. 1. No. 37, p. 244; State Papers, Vol. 92. p. I'M') el seq. 13. I. I'.. Moore, Internatl. law hi:'. Vol. 2. p. (.44. 14. State Papers, Vol. 20, p. ^^ ["he Status of .Minis in ( liina, p. '>5 r\ seq. 15. Journal of House of Commons, Vol. 93, p. 476; Koo, op. cit.. p. 1 12 it si .| 16. [bid., p. 112. 17. St.t, Pa] Vol. 30, p. 398 et seq.; The Shantung I tion, presented by the (him i Peace Delegation t.> tin- Paris Conference, 1919, published by tin.- Chinese Natl. Welfare 306 IMPAIRMENTS OF SOVEREIGNTY Soc, p. 92; Questions for Readjustment, submitted by Cbina to I Conference, App. 1, p. 35. 18. State Papers, Vol . ;,) . 19. Hertslet, op. cit, Vol. 1, No. 6, p 18 et seq.; State Papers, r Readjustment, submitted by Cbina to die Peace Conference, App. 1, p. 35. Also see Art 17. 20. Stan p. 791 et seq., Arts. 21 and 25; Questions for Readjustment, p. 36, App. 2. 21. Hertslet, op. cit., \ .39, p. 258 et seq.; Questions for Readjustment, p. 37. App. 3. 22. Hcrtslet, Vol. 1, No. 93, p. 527 23. Hertslet, Vol. 1, No. 81, p. 455 et seq. 24. Hertslet, Vol. 1, No. 56, p. 331 et seq. 25. Hertslet, Vol. 1, No. 38, p. 249 et seq. 26. Hertslet, Vol. 1, No. 70, p. 407 et seq. 17. Hertslet, Vol. 1, No. 91, p. 512 et seq. 28. Hertslet, Vol. 1, No. 34, p. 223 et seq. 29. Hertslet, Vol. 1, No. 60, p. 354 et seq. 30. Hertslet, Vol. 1, No. 33, p. 215 et seq. 31. Hertslet, Vol. 1, No. 71. p. 415 et seq. 32. Hertslet, Vol. 1, No. 35, p. 234 et seq. 33. Hertslet, VoL 1. X". 73, \>. 423 et seq. 34. Hertslet, Vol. 1, No. 64, p. 373 et seq. 35. Hertslet, Vol. 1, No. 36, p. 240 et seq.: Article One pro- vides that '"all privileges of person, property, and jurisdiction enjoyed by foreign nations under the Treaties concluded by Cbina shall from henceforth be granted to the Congo Free State." If the word "jurisdiction as used herein means to include extraterritorial jurisdiction, then the privilege is herewith granted ; otherwise it is not granted. 36. Hertslet, VoL 1. No. 69, p. 399. 37. MacMurray, Treaties and Agreements With or Concern- ing China, 1908/11; State Papers. Vol. 101, p. 945 et seq. 38. MacMurray, 1915/2. 39. MacMurray, 1918/8. 40. It is reported that Bolivia has recently entered into treaty relations with China. It is that Greece, Jugo- slavia, Czecho-SIovakia and Poland have made approach to the Chinese Government but have been given the understanding that China will not henceforth grant any extra-territorial jurisdiction. Sec II. K. Tong's articles, Extra-Territoriality and the New Nations, Millard's Review, Oct 25, 1919, p. 314 et se<| ., and Has Extra-Territorialitv Outlived Its Useft ^Hard's Review, Dec. 13, 1919, p. 56 et seq. 41. Koo, op. cit., p. 17'>. For a summary territorial jurisdiction, see W. W. Willoughby, Foreign Rights and Inter- in ( hina, p. 23 et sen. 42. Koo, op. cit., p. 195. 43. Hcrtslet, Vol. 1, No. 6, p. 25, British Treaty of 1858, Art. 21. 44. China, 1914, No. 1, p. 46. CONSULAR JURISDICTION 307 45. Oppcnhcim, Intcrnatl. Law, Vol. 1, 3rd Ed., p. 570. 46. MacMurray, 1909/10. 47. Tyau, Trcatv Obligations between China and Other States, p. 43. 48. The Case of Edward Page, U. S. For. Rel., 1881, p. 257; Koo, op. cit., pp. 194-195. 49. Tvan, op. cit., p. 4.i. 50. The Case of Genl. Bur Up. Cor., 1865, Vol. 2, p. 462; Tyau, op. cit, pp. 43-44; U. S. Citizens in Proposed Attack on I • Rel, 1874, p. 332, 51. The Case of Chang Chung-Hsuan and Yu Kai-Ping, U. S. For. Rel., 19(H), pp. 394-4 52. Hertslet, Vol. 1, No. 6, pp. 32-33, Art. 47, 48, 49, British Treaty of 1858. 53. "U. S. For. Rel., 1909, pp. 68-70; 1910, p. 839. 54. The Case of the New Grenada Citizen, U. S. For. Rel., 1873, Vol. 1, p. 139; the Case of Japanese Subjects during Chino- Japanese War, J. B. Morse, Intcrnatl. Law Dig., Vol. 4, pp. 601-603. 55. The Case of Japanese Hunting Regulations, U. S. For. Rel., 1874, p. 653; the Chinese Circular of 1878, the Tsungli Yamen to the Chinese Ministers Abroad, U. S. For. Rel., 1880-81, p. 178. 56. Sir John F. Davis to British Consuls in China, Xov. 22, 1844, Parliamentary Papers, 1847. XXXX, China, No. 795, p. 38; Koo, op. cit., p. 203 ; Case of Walter Jackson, U. S. For. Rel., 1874, pp. 338, 347. 57. A. M. Latter, The Government of the Foreigners in China, 19 Law Quarterly Review, 1903, pp. 316-325; Koo, op. cit., p. 211. 58. State Papers, Vol. 97, p. 150 et seq. 59. 34 .statu;, s a- Large, p. 814. 60. Cf. W. W. Willoughby, op. cit., p. 35 et seq. 61. W. W. Willoughby, ibid., p. 33 et seq. 62. Seward, American Minister at Peking, to State Depart- ment, U. S. Foreign Relations, 1880, p. 14'). 63. Koo, op. cit., p. 217. 64. W. \V. Willoughby, op. at, p. 4c 65. I . American Consular Jurisdiction in the Orient, pp. 250-J53 ; W. W. Willoughby. <>p. cit.. p. 46 et seq. 66. The Sino-Japanesi tions. 1915, p. 56. 67. Art. 4, Sino-Ameri ity, Nov. 17, 1880, Hcrt, No. 98, p. 68. Morse, Trade and Administration of China, p. 200. Morse, ibid., p. 200 1 1 70. Tin Pro< lamation of I r Body, Nov. 10, 1911, W. \V. Willoughby, op. < it., pp. mi 61. 71. II. I.. Toi article on the Shanghai Mixed Court and the Settlement ! m, Millard's Ri .. 15, 1919, p. 445. 11. Minister Conger t<> Secretary Hay, U. S. For, ReL, 1902, P J_'5 ; Tyau, op. cit., p. 53. 308 IMPAIRMENTS OF SOVEREIGNTY 73. The Shantung Question, presented hy China to the Paris Peace Conference, published hy the Chinese Xat. Welfare So- ciety, 1920, p. 74. 74. Aide M£moire, Japanese Minister to the Chinese Minister of Foreign Affairs, Oct. 18, 1916, MacMurray, 1917/2; W. W. Willoughby, op. cit., pp. 83-85. 75. MacMurray, 1917/2; \V. \V. Willoughby, op. cit, p. 86; The Shantung Question, op. cit, p. 75. 76. For a full statement of the case, see Questions for Read- justment, Submitted by China to the Peace Conference, p. 4 et seq. 77. Questions for Readjustment, ibid., p. 6. 78. For a full account of the foreign troops in China, see Questions for Readjustment, ibid., pp. 4-7. 79. Millard's Review, Oct. 9, 1920, pp. 281-282. 80. Questions for Readjustment, op. cit, p. 16. 81. De Menil Case, U. S. For. Rel., 1909, pp. 55-64; Tyau, op. cit., p. 55. 82. Hertslct, Vol. 1, No. 6, p. 22, Article 9, British Treaty of 1858. 88. Minister Read to Secretary Cass, 1859, Sen. Doc. No. 30, Vol. 10, 36th Congress, First Session, pp. 382, 384. 89. Hertslet, Vol. 1, No. 28, p. 182. 90. Hertslet, Vol. 1, No. 100, p. 575. 91. Hertslet. Vol. 1, No. 66, pp. 386-387. ( 'J. H. K. Tong's articles, Extra-territoriality and New Na- tions, Millard's Review, Oct. 25, 1919, p. 314 et seq.; Has Extra- territoriality Outlived Its Usefulness, Millard's Review, Dec. 13, 1919, p. 56 et seq. 93. Questions for Readjustment, op. cit., p. 17. 94. Ibid., p. 17. XIX CONCESSIONS AND SETTLEMENTS Passing from extra-territoriality and consular juris- diction, we now come to another form of impairment of China's sovereignty, the foreign concessions and settle- ments. As these terms are often used interchangeably, it is not safe to attempt to distinguish them, and so suffice it to state that by concessions and settlements are meant the areas reserved for foreign residence where foreign communities, either through their consuls or their municipal councils, constitute self-governing bodies politic. The origin of concessions and settlements dates back to the opening to foreign trade and residence of the five parts at Canton, Anioy, Foochow, Ningpo, and Shanghai in 1842 and to the setting aside of certain reserved areas for foreign residence and trade as provided in the Sup- plementary Treaty of 1843 (Art. 7). 1 "The Treaty of Perpetual Peace and Friendship pro- vrides for British subjects and their families residing at the cities and towns of Canton, Foochow, A.moy, Ningpo, and Shanghai, without molestation or restraint. It is accordingly determined that ground and houses, the rent or price of which is to be fairly and equitably arranged for, according to rates prevailing amongsl the people withoul exaction on either side, shall be set apart by the local officers in communication with the consul. . . ." The origin of local self governmenl dates back to the land regulations made by the treaty powers with a con- currence of the Chinese authorities. For instance, the land regulations of 1845 governing the Shanghai settle 309 310 IMPAIRMENTS OF SOVEREIGNTY ment was made with the approval of the Chinese author- ity, and gave foreign renters the power and duty "to build and repair the stone and wooden bridges, keep in order and cleanse the streets and road-, put up and light s t r e e t lamps, establish tire engines, plant trees to protect the roads, open ditches to drain olT the water, and hire watchman" (Art. 12).-' In the Land Regulations of 1866- 1869 governing the Foreign Settlements of Shanghai, north of Yangkingpang, the preamble read in part: "Whereas certain regulations . . . were settled and agreed upon by the Representatives of England, France, and the United States of America, ... in communica- tion with his Excellency Woo, the chief local authority representing the Chinese Government at Shanghai ; " - A And as concessions and settlements became recognized and established self-governing communities, treaty stipu- lations were provided. For instance. Article 1 of the protocol between China and Japan respecting Japanese settlements and other matters 3 reads : "It is agreed that settlements to be possessed exclu- sively by Japan shall be established at the towns and ports newly opened to trade. The management of roads and local police authority shall be vested solely in the Japanese consuls." There are four kinds of concessions and settlements in China. The first is the concession. It is a reserved area granted in perpetual lease by the Chinese Government to the treaty power interested for the residence and trade of its nationals and with the delegated power to admin- ister the municipal government thereof, such as the con- cessions in Hankow and Tientsin. The second kind is the settlement. It is the reserved area set aside by the Chinese Government for the residence and trade of foreigners where they are permitted to organize them- selves into a municipality for self-government, but it is CONCESSIONS AND SETTLEMENTS 311 not a lease in perpetuity to the foreign Power concerned, such as the International Settlement of Shanghai. The third kind is the settlement in the ports voluntarily opened by China. It is an area set apart for interna- tional settlement where the municipal administration is still in the hands of the Chinese authorities. The fourth kind is the settlement by sufference. It is "one within which the residents have acquired without any formal agreement on the part of the territorial sovereign, the tacit right to govern themselves as a municipality," 4 such as the settlement in Chefoo. 6 The local government in the concessions and settle- ment varies from the rule by the consul of the treaty power concerned as sole administrator to the government by a municipal council elected by the rate payers residing therein. In the Japanese, Belgian, and Italian concessions of Tientsin, the consul is the sole administrator. ' 7 " 8 In the French concession of Tientsin, the municipal control lies in a council composed of the consul as ex-officio president, and six land owners paying the highest taxes and three tenants paying the highest rents. In the British concession of Tientsin, the power is vested in the consul as de jure' and ex-ofhcio ruler, and in the munici- pal council elected by a vote of land renters. The British consul has the power of approval over all actions of the municipal council, presides over annual and special meet- ings, and lias jurisdiction in all questions of landed prop- erty and in which "a non-British European is not defendant." 10 In the International Settlement of Shanghai, the- local government is based on the land regulations of L866 1869 as last amended and passed by the I oreign Ministers in Peking, which with certain modifications constitute the ruling charter of the Shanghai International settlement. 11 The government is vested in the municipal council con- sisting of not mure than nine and no less than five coun- 312 IMPAIRMENTS OF SOVEREIGNTY cilors elected annually by a popular vote of the foreign land renters and rate payers. The electorate consists of every foreigner "having paid all taxes due, and being an owner of land of not less than 500 taels in value, whose annual payment of assessment on land, or houses, or both, exclusive of all payments in respect of licenses, shall amount to the sum of ten taels and upwards, or who shall be a householder paying on an assessed rental of not less than 500 taels per annum and upwards . . ." (Art. 19). The electorate meets at least once a year, and as often as necessary, at the notice of the consuls, to hear the reports of the past year, to consider the budget for the next year, and to authorize taxation and assess- ment (Art. 9). The municipal council is vested with the executive power of the municipality. It elects its own chairman and vice-chairman (Art. 21) and appoints committees out of its own members, "for all or any of the purposes wherein they were empowered to act" (Art. 23). The municipal council can be sued only through the "Court of Consuls" established at the be- ginning of each year bv the whole body of treaty consuls (Art. 27). The judicial power over foreigners is vested in extra- territorial consular courts, and the judicial power over the Chinese, or the mixed cases where the Chinese are defendants, is vested in the mixed courts. "No arrests can, as a general rule, be made except upon the warrant of the proper court, and in case of the mixed court countersigned by the Senior Consul. Since 1911 the execution of mixed court summons and warrants has been intrusted to the municipal police." '- The landholding in concessions and settlements, again, varies with different localities. In concessions, such as Hankow, foreigners obtain their titles to land from their consuls and must register their deeds with their own con- sulates. i:t The Chinese are not supposed to hold land, but in practice they do so under the name of foreigners. 14 CONCESSIONS AND SETTLEMENTS 313 In the international settlement of Shanghai foreigners must acquire the land from the original owner, taking from him the title deed and the tax receipts. Through their own consulates they must then apply to the Chinese land office for new title deeds. Three copies of the new title deed are required, one to be deposited with the con- sulate, one to be kept by the new owner, and one to be filed with the Chinese land office, whose seal gives the final validity. 1 " Further, they are not to acquire fee simple title deeds, but can hold land in perpetual leases. In the ports voluntarily opened by China, they must reg- ister their deeds with the Chinese authorities and are not allowed to acquire a lease for a term longer than thirty years. 18 The legal status of concessions and settlements has become quite definite and determined. Although under the municipal control of the consul or the council, the area is still considered Chinese territory, over which China's sovereignty remains unsurrendered. What for- eigners acquire thereby is the delegated power of mu- nicipal administratoin, while the reserved powers lie intact with the sovereign grantor. For example, it is stipu- lated : 1T "His Majesty the Emperor of China, being of the opinion that, in making concessions to the citizens or subjects of foreign Powers of the privilege of residing on certain tract-, (if land, or resorting to certain waters of that empire for purposes of trade, he has by no means relinquished his right of eminent domain or dominion over said land and waters, hereby agrees. ... It is further agreed that, if any right or interest in any tract of land in ( hina has been or .shall hereafter be granted by the Government of China to the United States or their citizens for purposes of trade or commerce, that grant shall in no event he construed to divest the Chinese au- thorities of their right of jurisdiction over persons and 314 IMPAIRMENTS OF SOVEREIGNTY property within the said tract of land, except so far as that right may have been expressly relinquished by treaty." Exercising the unsurrendered jurisdiction, the Chinese Government exacts an annual land tax on the concessions from the Powers; and collects land tax from foreigners holding real estate in the settlements. Again, as an ex- ercise of sovereignty, she maintains her judicial tribunals in the concessions and settlements. In the case of for- eigners, she delegated the power to the consuls by the grant of extra-territorial jurisdiction; in the case of Chinese, she establishes native courts or mixed courts for the trial of cases in which the Chinese are defendants. Again, as incident to her sovereignty, China reserves the power to declare neutrality of these concessions and set- tlements in time of war, allowing, however, the right of self-defense in case of a hostile attack. As an illustra- tion, it is provided: 18 ". . . No such concession or grant shall be construed to give to any Power or party which may be at war or hos- tile to the United States the right to attack the citizens of the United States or their property within the said land or waters, and the United States, for themselves, hereby agree to abstain from offensively attacking the citizens or subjects of any Power or party or their prop- erty with which they may be at war on any such tract of land or waters of the said empire. But nothing in this Article shall be construed to prevent the United States from resisting any attack by any hostile Tower or party upon their citizens or their property." Further, as territorial sovereign, China may take what- ever measure regarding the concessions and settlements in time of war as are necessary for her own safety. She may close the ports for military necessity, whatever may be the number of foreign settlements and concessions located therein. To deny the territorial sovereign of this CONCESSIONS AND SETTLEMENTS 315 right of self-defense is to deny her of the right of inde- pendence and self-preservation. It is to be understood, however, that as soon as the military necessity has dis- appeared, closure, or any other measure of self-defense, must be forthwith removed. Thus, in the Sino-French War of 1885, China closed Canton where there were foreign settlements or concessions, which was acquiesced in by the Powers. Subsequently, after the war, the United States, while protesting against the delayed re- moval of the obstructions, nevertheless admitted the right of China to take due measures of self-defense. "It is unquestionable that a belligerent may, during the war, place obstructions in the channel of a belligerent port, for the purpose of excluding vessels of the other belligerent which seek the port either as hostile cruisers or as blockade-runners. . . . But while such is the law, it is equally settled by law of nations that when war ceases such obstructions . . . must be removed by the territorial authorities." 10 Besides, because of the unsurrendered sovereignty, the Chinese residing in the concessions and settlements are still under obligation to render allegiance to the Chinese Government. While in a limited sense they are under the jurisdiction of the municipal council or consul, in consequence of which they are not liable to arrest by Chinese authorities except with the consent of the consul or council, it is nevertheless decided that, except in the respects wherein China has by treaty or otherwise dele- gated her power of jurisdiction to the local government, they are still under the jurisdiction of the Chinese Gov- ernment. For instance, in 1862, the Shanghai taotai attempted to levy an impost upon the Chinese in the British settlement and asked the cooperation of the British consul. The latter refused to cooperate, but the British Minister repudiated the refusal and conceded the request, saying: 316 IMPAIRMENTS OF SOVEREIGNTY "The Taotai is entitled to levy taxes as he pleases; and as long as he merely seeks to impose taxes on per- sons resident in the concession, which are paid by those in the city or suburb, I see no reason for objecting to it, at a time when it is our inter. ell as that of the Chinese that the Government shall not be deprived of its resources." This view was supported by Earl Russell, who added: "The lands situated within the limits of the British settlement are without doubt Chinese territory, and it cannot reasonably be held that the mere fact of a resi- dence within these limits exempts Chinese subjects from fulfilling their natural obligations." 20 In addition, the grant being by lease or voluntary reser- vation for the residence and trade of foreigners, there is the implied condition or obligation on the part of for- eigners to use the settlements or concessions only under the condition of quiet enjoyment. Should the foreign communities at any time prove to be inimical to the welfare and safety of the sovereign grantor, the terri- torial sovereign can abate the nuisance or impose due restraint. To deny him this right is to deprive him, not only of the right of self-defense, but also the right of a landlord or territorial sovereign and to place the interest of the concessions and settlements above the paramount well-being of the territorial sovereign. Thus, in view of the unsurrendered sovereignty, and, to some extent, jurisdiction of China over the conces- sions and settlements, the observation can be ventured that the self-governing or independent municipalities located therein possess no more power than the mere delegation of purely local, corporate, and municipal pow- ers and functions. They are to attend to police, sani- tation, roads, and other local and administrative func- tions of a municipal government. But they are not politi- CONCESSIONS AND SETTLEMENTS 317 cal bodies, nor do they act as agents of the territorial sovereign, except when the territorial sovereign wishes to make them so. In short, their powers are delegated, and hence limited, and subject to strict construction ; and are for local, corporate and municipal purposes, and not for political and governmental purposes. Supporting this view, the following instructions given by the foreign rep- resentatives at Peking, on Augut 6, 1863, to the rate payers of the Shanghai settlements clearly show the powers as well as the limitations of the municipal gov- ernment.- 1 "1. That whatever territorial authority is established shall be derived directly from the Chinese Gov- ernment, through the rate payers' ministers. "2. That such shall not extend beyond simple munici- pal matters, roads, police, and taxes for municipal objects. "3. That the Chinese not actually in foreign employ, shall be wholly under the control of Chinese offi- cers, as much as in the Chinese city. "4. That each consul shall have the government and control of his own people, as now; the municipal authority simply arresting offenders against the public peace, handing them over, and prosecuting them before their respective authorities, Chinese, and others, as the case may be. "5. Their shall In- a Chinese element in the municipal system, to whom reference shall be made, and as- sent obtained to any measure affecting the Chinese residents." Recent developments in regard to the concessions and settlements also deserve our attention. Upon tin- sever- ance of diplomatic relation with Germany on March 14, 1917, tlic Chinese Government availed itself of the oppor- tunity and tool: over the German concessions in Tientsin and Hankow. Two wee!:-, later, on March 28, 1917, the Ministry of the Interior coininunicated to the Ministry of 318 IMPAIRMENTS OF SOVEREIGNTY Foreign Affairs the rules of procedure governing the as- sumption of control of the German concessions. 22 The concessions were recognized as special areas, and Bureaux for the Provisional Administration of the Special Areas were created. A Chief of Bureau was appointed for each of the special areas on the recommendation of the Ministry of Interior, "to control police and other admin- istrative affairs therein and also to carry out police and other administrative measures" (Art. 1). The original municipal council of the area was, under the direction of Chief of the Bureau, to deal with all matters pertain- ing to self-government, but "resolutions passed at a rate payers' meeting of the municipality shall not be enforced without the approval of the chief of the Bureau" (Art. 2). Simultaneously with the declaration of war on Ger- many and Austria-Hungary on August 14, 1917. the Government Gazette (August 14, 1917) promulgated the regulations governing the Bureaux for the municipal administration of the German concessions at Tientsin and Hankow and the Austrian concessions at Tientsin. 23 The Provisional Bureaux were changed to Bureaux for the municipal administration of the special areas. Each bureau is to have a chief, who, under the supervision of the Governor of the province, attends to the police and administrative functions of the municipality. The matters relating to foreign relations, however, are to be dealt with in conjunction with the special commissioner of foreign affairs for the province (Art. 1). "Regula- tions promulgated by the chief of the Bureau must be submitted by the Governor to the Ministry of the Inte- rior for approval" (Art. 4). Thus, it is to be observed that the recovered concessions are placed under the rule of the Municipal Bureaux for the Special Areas, which in turn are under the direction of the Ministry of the Interior. Further, as China terminated all relations with the old Czar regime of Russia by the Presidential mandate CONCESSIONS AND SETTLEMENTS 319 of September 23, 1920, 2 * and as she did not extend her recognition to soviet Russia, she likewise availed herself of the opportunity and took over the Russian concessions. The Chinese commissioner for foreign affairs takes the place of the Russian consul in the municipal government, but the municipal council is to remain as before. That is, the municipal government of the Russian concessions remains as of old, with the exception that the Chinese commissioner for foreign affairs steps into the shoes of the Russian consuls. "The existing administrations," stated the Waichiaopu, "will be maintained with the mu- nicipal councils functioning as heretofore. It is not the intention of the Chinese Government to alter the status of the concessions, Chinese control amounting only to the commissioner of foreign affairs taking the place of the Russian consul (as Chairman of the Municipal Coun- cil), that is to say. the powers and privileges formerly exercised by the Russian consul will be transferred to the Commission of Foreign A Hairs. . . . The main ques- tion, that of the continued functioning of the Municipal Councils, has never been in doubt." 25 It is thus seen that the policy is to take over the control of the Russian con- cessions, only as a trustee, pending the establishment of a stable government in Russia which will be recognized by China and the other Powers. "The Government con- tinues to emphasize that there will be as little interfer- ence as possible with the present administrations of those concessions, and that it is merely .acting as a trustee on behalf of a future Russian Government recognized by China and the other Powers with which China was re- cently associated in war.' We cannol conclude this discussion without pointing out the advantages and disadvantages of the concessions and settlements with a view to their eventual restoration to China. It musl he observed that they have been in some ways beneficial tu the Chinese people. First, the}- 320 IMPAIRMENTS OF SOVEREIGNTY have supplied an example to the Chinese as to how to administer a municipal government which will promote the welfare and happiness of the inhabitants. Situated as they are at the door of the Chinese nation, they are, in many cases, real object lessons to the Chinese people in municipal administration. Second, they have been not infrequently the zones of safety for the common people suffering from internal disorders. For example, during the Taiping Rebellion, thousands of Chinese flocked to the Shanghai settlements for safety. Again, in the recent disorders during and following the Revolution of 1911, they have often served as fortresses of Chinese life, liberty and property. Despite these advantages, their existence results in serious disadvantage to the Chinese Government, and, in some ways, to the Chinese people. First, while the Chinese constitute the bulk of the inhabitants and con- tribute by far the largest share of the revenue of these municipalities, they are yet denied the right of representa- tion in the municipal council. This is generally so, with the sole exception of the Kulangsoo International Settle- ment, where the municipal council has a Chinese delegate appointed by the local Chinese authority. In the SI hai International Settlement, the Chinese composing ninety-five per cent of the residents, have no r | tion whatever in the municipal council, but are only granted the privilege of having an advisory committee elected annually by the Chinese commercial bodies.' It is not unreasonable to state that the existing situation is tantamount to taxation without representation. Second, while China has never surrendered her sov- ereignty, and has only granted or delegated the powers of municipal government for local and corporate purposes, and not for political and governmental, her sovereignty IS much impaired and infringed, u d her administration is much obstructed by the practices and claims of the con- cessions and settlements. The Chinese residing therein CONCESSIONS AND SETTLEMENTS 321 cannot be arrested except with the consent of the consul, or in the case of the Shanghai International Settlement, of the senior consul ; and in the case of Chinese connected with foreign firms, consent must be obtained of the con- sul of the Power to whose nationality the firm belongs. Chinese fugitives from justice cannot be arrested save with the concurrence of the authorities of the concessions or settlements. Chinese residents, even when no foreign interests are involved, must be tried in the mixed court. In the case of the Shanghai International Settlement, the foreign assessor not only attends the proceedings, but virtually acts as judge, trying and deciding the case. Though parts of Chinese territory, Chinese troops are not permitted to pass through these concessions or settle- ments. "This assertion of exclusive authority and the power has made each concession virtually *un petit etat dans l'etat' to the impairment of China's rights as terri- torial sovereign." 28 In view of these serious disadvantages, the Chinese Government, through its delegation at the Paris Peace Conference, declared its desire for the restoration of the foreign concessions and settlements. 20 It proposed that the powers should enter into negotiations with China for the return of these areas, and, to obviate the objections of vested interests, it further suggested that the re tion should take place "at the end of five years from the date of such arrangement." 'lie consummation of the measure, however, the Chinese Government proposed four immediate changes in order to remove certain unsatisfactory features in con- nection with the foreign concessions and settlement follows : "1. The Chinese citizens shall have the righl to own land in .all tl tlS and settlements under the same conditions as for« 322 IMPAIRMENTS OF SOVEREIGNTY 2. That Chinese citizens residing in the concessions shall have the right to vote in the election of members of the municipal councils and to be elected thereto ; 3. That warrants issued and judgments delivered by competent Chinese courts outside the concessions shall be executed in the concessions, without being subject to any revision whatsoever by the foreign authority 4. That in no foreign concessions shall a foreign as- sessor be allowed to take part in the trial or decision of cases wherein Chinese citizens alone are concerned." no It is manifest that the Chinese Government is deter- mined to recover these concessions and settlements. To this end, on the one hand, it has recovered the German and Austrian concessions, and has also temporarily taken over the control of the Russian concessions pending the coming negotiations with the recognized government of Russia. On the other hand, it has expressed its earnest desire to recover the other foreign concessions and settle- ments as manifested in the claims made public at the Paris Peace Conference, ft is hoped that the rapid progress of the Chinese Government in municipal ad- ministration will soon secure the restoration and recovery of the foreign concessions and settlements, so that this phase of the impairment of China's sovereignty may be remedied. NOTES TO CHAPTER XIX 1. State Papers, Vol. 31, p. 132 cment possible entre les deux pays" (Art. 3). The lease of Kowloon stipulates that "Within the city of Kowloon the Chinese officials now stationed there shall continue to exercise jurisdiction I mi far as may be inconsistent with the military requirement for the defense of Hongkong. Within the LEASED TERRITORIES 329 remainder of the newly leased territory Great Britain shall have sole jurisdiction." (On account of the re- sistance of the natives of Kowloon to the entrance into, and assumption of the control of, the city of Kowloon, Chinese jurisdiction was discontinued on May 16, 1899 I. 18 Finally the lease of Waihaiwai contains practically the same stipulation, respecting jurisdiction and administra- tion. In consequence of this grant of exclusive jurisdiction during the term of the lease, Chinese troops are not permitted to pass except with the consent of the lessee state. For instance, in the Russian lease of Port Arthur and Talienwan the stipulation was found (Art. 9) : "No Chinese troops of any kind whatever are to be allowed to be stationed within this boundary." Fugitives from justice have to be extradited as if from a foreign jurisdiction (Art. 6). 16 The Chinese customs are relinquished and removed to the frontiers of the leased territories. "As regards the reestablishment of Chinese customs stations which formerly existed outside the ceded terri- tory but within the 50 kilometer zone, the Imperial Ger- man Government intends to come to an agreement with the Chinese Government for the definite regulation of the customs frontier, and the mode of collecting duties" " ( Article 5). Chinese residents are placed under the protection of the foreign governments concerned and must observe the established law and order. 1 H In faet, so complete is this grant of jurisdiction that even the Foreign nationals enjoying extraterritorial rights, upon entrance into tin- leased territories, lose their extraterritorial privileges and must submit themselves t.> the jurisdiction of the lessee state. ,u This position wza 330 IMPAIRMENTS OF SOVEREIGNTY accepted by all the Powers, except Japan, who, however, after supplanting Russia in Port Arthur and Talienwan, also changed her position. Supporting this view, John Hay said : '-'" ". . . The intention and effect of China's for leases having apparently heen the relinquishment by China during the term of the leases and the conferment upon the foreign power of all jurisdiction over the territory, such relinquishment and transfer of jurisdiction was seen to involve the loss by the United States of its right to exercise extraterritorial consular jurisdiction in the terri- tories so leased, while, as you remark, as these territories have practically passed into the control of peoples whose jurisdiction and method are akin to our own, there would seem to be no substantial reason for claiming the con- tinuance of such jurisdiction during the foreign occu- pancy or tenure of the leased territory." On the other hand, notwithstanding the grant of ex- clusive jurisdiction, China's sovereignty over the leased territories during the term of the lease is in no way sur- rendered or waived. In fact, this was clearly stipulated in some leases and in the others partially recognized. "His Majesty the Emperor of China, . . . engages, while reserving to himself all rights of sovereignty in a zone of 50 kilometers (100 Chinese li) surrounding the Bay of Kiaowchow at high water, to permit the free passage of German troops within this zone at any time, . . ." 21 "This act of lease, however, in no way violates the sovereign rights of His Majesty the Emperor of China to the above-mentioned territory. In the convention for the lease of ECowloon and YYai- haiwai, however, there is no mention of the reservation of China's sovereignty, but the civil jurisdiction within LEASED TERRITORIES 331 the city of Kowloon and Waihaiwai was reserved to the Chinese authorities, "except so far as may be in- consistent with the naval and military requirements for the defense of the territory leased Again, the sovereignty of China is affirmed by the reservations regarding China's special right of naviga- tion in the leased waters. With the exception of Kiao- chow, where the Chinese ships were treated like those of other nations, the other leased waters gave them spe- cial privileges. Port Arthur, being a closed port, ad- mitted only Russian and Chinese vessels. In the waters of Mirs Bay and Deep Bay, "It is agreed that Chinese vessels of war, whether neu- tral or otherwise, shall retain the right to use these waters." The same right is reserved in the lease of Waihaiwai. In the Bay of Kwangchowwan, however, the Chinese ves- sels enjoy the privilege only on condition of neutrality : "Le mouillage en eau profonde le plus voisin de ce point d'abontissement (eaux territoriales) sere exclusive- ment reserve aux navires de querre francais et chinois, ces derniers en situation de neutralite seulement" (Art. 8). Further, the sovereignty of China is recognized by the fact that the lease, without the consent of China, is un- transferable. The lessee state possesses no righl to let, or sublet, or transfer, or alienate the lease in any form to any other foreign Power without the express con- sent of the territorial sovereign who grants it. In the Kiaochow lease, it was specifically stipulated: "Germany engages at no time to sublet the territory leased from China to another Power." ' 332 IMPAIRMENTS OF SOVEREIGNTY In the other leasts, there is no such express prohibi- tion, but the precedent set l>y the transfer of Port Arthur and Talienwan to Japan in 1905, with the consent of China, indicates conclusively that, in the absence of ex- stipulation, the consent of the territorial sovereign is essential to the validity of the transfer. Thus, in the treaty of Portsmouth, it was provided: "The Imperial Government of Russia cede to the Im- perial Government of Japan, with the consent of the Gov- ernment of China, the lease of Port Arthur, of Talien- wan, and the territories and adjacent territorial waters, "The two high contracting parties mutually engage to ohtain from the Government of China the consent men- tioned in the above stipulation." - 5 In pursuance of this stipulation, on December 22, 1905, Japan obtained the consent of China : "The Imperial Chinese Government consent to all the transfers and assignments made by Russia to Japan by Articles 5 and 6 of the Treaty of Peace above mentioned" (Art. l).-° / And the fact that the grant is personal to the grantee and made in derogation of China's sovereignty further renders the transference, without the consent of China, unthinkable and unjustifiable. . the sovereignty of China can also be pr by virtue of the implied conditions or covenants which must be included in the leases. The lessee states are to enjoy their privileges of tenancy only on good behavior and quiet enjoyment ; and should the lessee states prove themselves to be nuisances or menaces to the welfare and safety of the territorial sovereign or other mi^hbor- tates, the territorial sovereign who granted the would have the right to abate the nuisance or to eliminate LEASED TERRITORIES 333 the menace. Further, the lessee states must restore, at the expiration of the leases, the leased territories "in as good a condition, allowing for reasonable wear and tear, as when the latter first conveyed it to him;" - 7 and should the territories, on restoration, prove to be deteriorated or impaired in any way, due to the negligence of the ! states to keep them in repair, the territorial sovereign would he entitled to due compensation or indemnity. In addition, as incident to her sovereignty, China re- tains the right to declare the neutrality of the leased territory. As long as her sovereignty over the areas in question is retained, so long is she entitled to place them under the protection of her neutrality. On the other hand, in exercising the right of neutrality, she at the same time assumes the responsibility to see that strict neutrality is observed by the lessee state in the leased areas. While conceding the right of self-defense, as otherwise the lessee state would not be able to restore the leased territories, she nevertheless requires that, in time of a war between the lessee states and other states, the lessee state must observe neutrality in the leased areas and retain the territories only on condition of quiet en- joyment. Should the lessee Power make the leased area a belligerent base of action, thus menacing the rights of other belligerents and thereby violating the neutrality of rea, the territorial sovereign would be obliged to eii- Strict neutrality by either prohibiting the belligerent activities of the lessee state or by abating the nuisances and removing the sources of menace, thus fulfilling her own responsibility arising from the .status of neutrality. If, however, she should fail to do so, the other belliger- ent states interested could lodge protests and require the territorial sovereign tO restrain or remove the nuisance or menace, hut if the menace should prove to In- '"instant, Overwhelming, leaving no choice of mean-, ami no time for deliberation," '-' s then the belligerent Tower- concerned might abate the nuisance or remove the menace them- 334 IMPAIRMENTS OF SOVEREIGNTY selves. In this case the rights of the territorial sovereign remain unimpaired, and the eventual disposal of the 1 area requires the sanction of the territorial e eign. We now come to the disadvantages of the leased terri- tories with a view to their restitution to China. First, these leased territories, located as they are at stn points, weaken and hamper the national defense of China. By their continued existence, they deprive her of her best military and naval bsaes, which cannot but contribute materially to the relative military weakness of the nation. Besides, in a war between the lessee state and China, they will be used inevitably by the lessee state as a base of action against her, thus threatening the very safety and integrity of the territorial sovereign. Second, being stra- tegic points with fortifications, they are likely to become the objects of struggle in a war, wherein the lessee state is a party. Thus war is brought to Chinese territory, although she may not be a party thereto. In the Russo- Japanese War, the great battles were fought around Port Arthur, although China was technically a neutral. Fur- ther, in the event of their occupation by the other Powers in consequence of war, they would become a source of complication to China. As an outcome of the Russian defeat in the Russo-Japanese War, China had to consent to the transfer of Port Arthur and Talienwan to Japan. Recently, as a result of the capture of Kiaochow by Japan, China was again involved in a controversy with Japan, which has as yet not been settled. Hence, for the sake of self-defense and self-preserva- tion, the Chinese Government, through her delegation at the Paris Peace Conference, made known its earnest de- sire for the restitution of these leased territories. "As the prolongation of the foreign control over the leased territories constitutes a continued lordship, whose in- jurious effects tend from day to day to increase, the LEASED TERRITORIES 335 Chinese Government feel in duty bound to ask for the restitution of these territories, with the assurance that, in making this proposal, they are conscious of, and are prepared to undertake, such obligations as the relinquish- ment of control may equitably entail on them as regards the protection of the rights of property owners therein and the administration of the territories thus restored to the complete control of China." M NOTES TO CHAPTER XX 1. Hertslet's China Treaties, Vol. 1, No. 59, pp. 350-354; vide supra, chapter on The International Struggle for Con- cessions 2. Hertslet, Vol. 1, No. 88, pp. 505-508. (3a) Hertslet, No. 55, pp. 329-331 ; the Shantung Question, presented by China to the Paris Peace Conf., pub. by the Chinese Nat. Welfare Society, 1920, p. 81. 3. Hertslet, Vol. 1, No. 24, p. 120. 4. Hertslet, Vol. 1, No. 25, p. 122. 5. State Papers, Vol. 98, pp. 734-740; MacMurray, 1905/8. 5A. Hertslet, Vol. 1, No. 67, pp. 391-396. 6. MacMurray, 1915/8. 7. MacMurray, 1915/8; The Chino-Japanese Negotiations, 1915, p. 49 et seq. 8. The Chino-Japanese Negotiations, 1915, p. 53. 9. Hertslet, Vol. 1, No. 59, p. 351. 9A. Hertslet, Vol. 1, No. 88, pp. 506-507. 10. Hertslet, Vol. 1, No. 55, p. 329 et seq. 11. Hertslet, Vol. 1, No. 24, p. 120. 12. Hertslet, Vol. 1, No. 25, p. 122. 13. By the Convention of Nov. 28, 1905, Germany withdrew her troops from Kiaochow and Kaomi, The Shantung Ouestion, Aim.., No. 3 to Vol. 2, pp. 54-66. )s.\. In the additional agreement between China and Russia ling the boundaries of I '< >rt Arthur and Talienwan, May 7, 1898, the boundary of the leased territory was denned I \rt. 1 ) and the neutral zone was provided as follows: (Art. J) "To the north of tin- boundary fixed in Article l, there shall, in accord- ance with Article 5 of the Peking Treaty, be a neutral ground, the northern boundary of which shall commence on the west coasl of Liaotnng at the mouth of the Kaichow River, shall north of Yu Sfen-Ch'ang to the Ta-Yang River, and shall follow the left bank of that river to its mouth, which shall he included in the neutral territory."— Hertslet, Vol. 1, No. 89, np, 508-509. 336 IMPAIRMENTS OF SOVEREIGNTY 14. Hertslet, Vol. 1, No. 55, p. 329, Art. 2. 15. North China Herald, Apr. 24, May 22, 1899, cf. Morse, The International Relations of the Chinese Empire, Vol. 3, p. 120, 16. Hertslet, Vol. 1, No. 55, p. 330. 17. Hertslet, Vol. 1, No. 59, p. 353. IS. Hertslet, Vol. 1. No. 55, p. 330, Art. 3. 19. I. I'.. Moore, Internatl. Law Digest, Vol. 2, p. 639. 20. U. S. For. ReL, 1900, p. 3S7, ff. Sec. Hay to Amer. Min- ister at Peking. 21. Hertslet, Vol. 1, No. 59, p. 351, Art. 1, the Kiaochow Lease Convention. 22. MacM array, 1898/5, Art. 1. The Lease of Port Arthur and Talicnwan ; also see Art. 1, Kwangchowwan Lease, Hertslet, Vol. 1, No. 55, p. 329. 23. Hertslet, Vol. 1, No. 25, p. 123. On account of local resistance, however, the Chinese jurisdiction was expelled from Kowloon on Mav 16, 1899. 24. Hertslet, Vol. 1, No. 59. p. 352, Art. 5. 25. State Papers, Vol. 98, pp. 736-737, Art. 5. 26. State Papers, Vol. 98, p. 741, Treaty and Supplementary Agreement, Dec. 22, 1905. 27. Trail, Treaty Obligations between China and Other States, p. 70. 28. The Case of Caroline, Moore, op. cit., Vol. 2, p. 412. 29. Questions for Readjustment, Submitted by China to the Peace Conference, p. 21. XXI SPHERES OF INFLUENCE OR INTEREST Still another form of the impairment of China's sov- ereignty is the sphere of influence, or the sphere of inter- est. These two terms have been used interchangeably, but some distinction may be made between them. Spheres of influence generally carry a political significance, while spheres of interest usually connote preferential economic exploitation. "The technical meaning of the term sphere of interest is an area or territory within which a nation claims the primary right of exploitation of commercial and natural resources. The term sphere of influence is by some thought to refer to a certain degree of political control, however slight it may be. . . ." 1 Bearing in mind the distinction, it can be observed that the sphere of influence or interest as claimed by the Powers in China are nothing more than spheres of interest, wherein the claimant Powers maintain priority in economic exploitation, and oppose the inroads of other foreign influences. They are portions of territory "wherein a nation expressly or impliedly declares that it will permit no other nation to exert political influence, and that itself will lead in exploitation of natural re- sources." 2 It is unnecessary to narrate the origin <>f the spheres of interesl in China. In a former chapter on the Interna- tional Struggle fur Concessions, the story has been told, — how Germany firsl created her sphere of interesl in Shantung by tin- seizure "i Kiaochow and the subsequent Convention of March 6, 1898; ' how Russia foil suit and established her sphere of influence in Manchuria 337 338 IMPAIRMENTS OF SOVEREIGNTY and Liaotung by the occupation of Port Arthur and Talienwan and the Convention of March 27, 1898 ;* how France obtained her sphere of interest in Yunnan, Kuan i and Kwangtung; how Great Britain won the recognition of her sphere of interest in the Yangtze Val- ley and Tibet ; and, finally, how Japan extended her influence over Fukien. We should, however, point out the later developments which deserve attention. In consequence of the Russo- Japanese War, Japan succeeded to Russia in South Man- churia and Liaotung as her sphere of interest, while Rus- sia retained North .Manchuria as her sphere. By the agreements of 1907, 1910, and 1916, while there was no specific mention as to any division of sphere of influence, it was generally understood, at least from subsequent ac- tions, 5 that Russia regarded North Manchuria and Outer Mongolia as her sphere of interest, and Japan South Manchuria and Eastern Inner Mongolia. Again, taking advantage of the World War, Japan ousted Germany from Shantung and established herself as successor, which was confirmed by Articles 156, 157 and 158 of the Treaty of Peace with Germany signed at Versailles on June 28, 1919. Finally, in view of the temporary retreat of the Russian influence in North Manchuria and Outer Mongolia in consequence of the Soviet Revolution, Japan has made repeated endeavors to acquire this Rus- sian sphere of interest. 8 Thus, as a result of the elimination of the German and possibly the Russian sphere of influence, and the propor- tionate expansion of the Japanese sphere, it can be said that there exist in China to-day only three spheres, — the French sphere in the Three Provinces bordering on Ton- kin, the British sphere in the Yangtze Valley and Tibet, and the Japanese sphere in Fukien, Shantung, South Man- churia and Eastern Inner Mongolia, and possibly also in North Manchuria and Outer Mongolia. A report has been made, which, however, has not yet been substan- SPHERES OF INFLUENCE OR INTEREST 339 tiated, that these three Powers entered into a tripartite agreement at the Paris Peace Conference as to their re- spective spheres of influence in the v iole of Asia. Those regions which concern China are as follows : British sphere : Tibet, Szechuan, the Kwangtung region forming the littoral of Canton and equal commercial rights in the Yangtze Valley ; French sphere: Yunnan, Kwangsi, Kweichou and Western Kwangtung ; Japanese sphere: All of China, except the regions above mentioned, and Mongolia. 8A Whatever may be said as to the authenticity of the report, the fact remains that there are to-day existing in China only three spheres of interest — those of France, Great Britain and Japan, — and that Japan occupies the most important, if not the lion's share, of these spheres. Having considered the origin and the recent develop- ments, we now come to the characteristic features of the spheres of interest in China. The first feature is the strategic base, such as Kiaochow, Port Arthur. Kwang- chowwan and Waihaiwai. While appertaining mainly to the leased territories, they serve, nevertheless, as points d'appui for the entire spheres of interest which are generally adjacent thereto. That is to say. they in- come the bases of action, alike as the bases of the eco- nomic exploitation which must be carried on within the spheres and as the bases of military defense for their nation. I he second feature is the railway. In order to ex- ploit the natural resources and to dominate the economic life of the spheres, the Powers interested projected rail- ways into them. Germany constructed the Tsin Tsinan Railway, which was seized by Japan in 1914; a built the Chiro tern Railway, the southern portion of which from Changchun to Dalny and Port 340 IMPAIRMENTS OF SOVEREIGNTY Arthur was transferred to Japan in consequence of the Russo-Japanese War in 1905; France constructed the Tongkin-Yunnanfu line, and Great Britain built the Shanghai-Nanking, the Shanghai-Hangchow-Ningpo and anton-Kowloon railways. The distinction must be pointed out, however, that while the other Powers adopted a more or less exclusive policy, Great Britain has, on several occasions, shared the railway concessions in the Yangtze Valley with the other Powers, the Tientsin-Pukow Railway with Germany, the Pukow- Smyang with France, and the Hukuang with France, Germany and the United States. The third feature is the claim or right of priority or first option in loans and concessions. Expressly or tacitly, the Powers claiming spheres of influence assert their prior rights, particularly with respect to railways and mines within their respective spheres. In the Kiaochovv lease convention this was stipulated, besides the privi- lege of mining rights within ten miles of the Tsingtao- Tsinan Railway. 7 "If within the Province of Shantung any matters are undertaken for which foreign assistance, whether in per- sonnel, or in capital, or in material, is invited, China agrees that the German merchants concerned shall first be asked whether they wish to undertake the works and provide the materials. In case the German merchants do not wish to undertake the said works and provide the materials, then as a matter of fairness China will be free to make such other arrangements as suit her conven- ience." 8 This right of first option is now inherited by Japan by virtue of Article 156 of the Treaty of Peace with Ger- many of 1919, which reads : "Germany renounces in favor of Japan all rights, title and privileges, — particularly those concerning the SPHERES OF INFLUENCE OR INTEREST 341 territory of Kiaochow, railways, mines and submarine cables, — which she acquired in virtue of the Treaty con- cluded by her with China on March 6, 1898, and of all other arrangements relative to the Province of Shantung." On September 26, 1914,° France received a pledge from the Chinese Foreign Office giving preference to French nationals in railway and mining enterprises in the Prov- ince of Kwangsi. In an exchange of notes annexed to the Treaties of May 25, 1915, 10 Japan obtained first option in railway loans in South Manchuria and Eastern Inner Mongolia. In the Treaty with Outer Mongolia of Sep- tember 30, 1914, 11 Russia obligated her not to grant any railway concessions without first consulting Russia. The fourth feature leading to spheres of influence is the declaration of non-alienation. Practically in all re- gions, the Powers interested made China declare that she would not alienate in any way the regions in which they were interested. Thus, France obtained the declaration of non-alienation regarding the Island of Hainan on March 15, 1897, 12 and of the provinces bordering on Ton- kin on April 10, 1898. 13 Great Britain procured a simi- lar declaration respecting the Island of Chusan, 14 and Munglem and Kiang Hung. 1 '' She also received the same pledge regarding the Yangtze Valley: "The Vaincn have to observe that the Yangtze region is of the greatest importance as concerning the who! sition (or interests) of China, and it is out of the ques- tion that a territory (in it) should be mortgaged, I< I, or ceded to another 1 ower." " ; She obtained from Tibet through the Treaty of Septem- ber 7, L904, 11 a pledge thai British consent must first be obtained before making territorial concei sions to other foreign Powers (Art. 9a), which was subsequently rec- ognized by China in the Treaty of April 27, 1906." In the tripartite agreement he! ween Russia, China and 342 IMPAIRMENTS OF SOVEREIGNTY Outer Mongolia, the latter was to have no right to conclude any international treaty with foreign Powers respecting political and territorial questions (Art. 3), regarding which the Chinese Government should be obli- gati d to come to an agreement with the Russian Gov- ernment through negotiation in which the authorities of Outer Mongolia should participate (Art. 3), which is tantamount to, and inclusive of, the declaration of non- alienation respecting Outer Mongolia. In 1898 Japan obtained the declaration of non-alienation respecting Fukien. 10 In an exchange of notes annexed to the Treaty of May 25, 1915, respecting Shantung,- Japan was assured of the non-alienation of that Province. Among the now celebrated Twenty-one Demands, Japan demanded the non-alienation of China's coast (Group IV).- 1 This was finally changed to a voluntary pro- nouncement by China to that effect.*" The fifth and last feature which, like the previous one, is also a method of establishing or safeguarding the sphere of interest is the international agreement between the Powers interested pledging to respect the spheres per- taining to each. On January 15, 1896, Great Britain and France agreed that they would make Yunnan and Szechuan their common sphere of influence, rendering common to both Powers all privileges and advantages that China might grant to either of them (Art. 4) : "The two Governments agree that all commercial and Other privileges and advantages conceded in the two Chinese provinces of Yunnan and Szechuan either to • Britain or to France, in virtue of their respective Conventions with China of the 1st March, 1894, and the 20th of June, 1895, and all the privileges and advan- tages of any nature which may in the future be conceded in these two Chinese provinces, whether to Great Britain or France, shall, as far as rots with them, be extended and rendered common to both Powers and to their na- tionals and dependents, and they engage to use their SPHERES OF INFLUENCE OR INTEREST 343 influence and good offices with the Chinese Government for this purpose." M On September 2, 1898, Great Britain and Germany covenanted to define and respect their spheres of interest for applications for railway concessions : "1. — The British sphere of interest, viz. — the Yantze Valley, subject to the connection of the Shantung lines to the Yangtze at Chinkiang : the provinces south of the Yangtze, the Province of Shansi with connection to the Peking-Hankow line at a point south of Chengting and a connecting line to the Yangtze Valley, crossing the Hoangho Valley. "2. — ( ierman sphere of interest, viz. — the Province of Shantung and the Hoangho Valley with connection to Tientsin and Chengting, or other points of the Peking- Hankow line, in the south with connection to the Yangtze at Chinkiang or Xanking. The Hoangho Valley is un- derstood to be subject to the connecting lines in Shansi forming part of the British sphere of interest, and to the connecting line to the Yangtze Valley, also belonging to the said sphere of interest." 24 As a further recognition of the German sphere of interest, in connection with the occupation of Weihaiwei, Great Britain declared to Germany: "that in establishing herself at Weihaiwei, she has no intention of injuring or contesting tin- rights and inter- ests of Germany in the Province of Shantung, or of creating difficulties for her in the Province of Shantung. It is especially understood that England will not construct any railway communication from Weihaiwei and the district leased therewith into the interior of the Province of Shantung." M On April 28, 1899, Greal Britain and Russia eng ' to define and respect each cither's sphere of hit Russia was to have the region north of the Great Wall 344 IMPAIRMENTS OF SOVEREIGNTY as her sphere of interest, and Great Britain the Yangtze Valley : "1. Great Britain engages not to seek for her own account, or on behalf of British subjects or of others, any railway concessions to the north of the Great Wall of China, and not to obstruct, directly or indirectly, appli- cations for railway concessions in that region supported by the Russian Government. "2. Russia, on her part, engages not to seek for her own account, or on behalf of Russian subjects or of others, any railway concessions in the basin of the Yangtze, and not to obstruct, directly or indirectly, appli- cations for railway concessions in that region supported by the British Government." 20 Similarly, on June 10, 1907, Japan and France engaged to support each other "in the regions of the Chinese Em- pire adjacent to the territories where they have rights of sovereignty, protection or occupation." - 7 On July 30 of the same year, Japan and Russia covenanted "to sus- tain and defend the maintenance of the status quo," which, rendered into ordinary language, means to respect the spheres of interest pertaining to each. 28 On July 4, 1910, Japan and Russia again entered into an agreement, this time not only to maintain the status quo, but also to take common measure against external menace (Art. 3)." n Finally, on July 3, 1916, Japan and Russia entered into two covenants, an open convention and a secret treaty, the latter a secret alliance. 30 We now come to the legal status of the spheres of interest. It is to be understood that these spheres are not recognized in international law. Postulating the prin- ciple of territorial sovereignty as supreme and exclusive in each state, international law does not admit the valid- ity of spheres of interest, except by virtue of treaty stipulations and international agreements. Like extra- SPHERES OF INFLUENCE OR INTEREST 345 territorial jurisdiction, they come into existence and be- come recognized, not because of any principle of inter- national law. but rather by virtue of the consent of the territorial sovereign as provided in treaty stipulations and of the international agreements entered into by the Pow- ers between themselves. Hence, whatever rights the Powers interested have in their respective spheres are limited to the treaty stipulations. "It cannot be irrele- vant to remark that 'sphere of influence' and the theory or practice of the 'Hinterland' idea are things unknown to international law and do not as yet rest upon any recognized principles of either international or municipal law. They are new departures which certain great Euro- pean Powers have found necessary and convenient in the course of their division among themselves of great tracts of the continent of Africa and which find their sanction solely in their reciprocal stipulations." 31 Further, the declarations of non-alienation made to the various Powers concerning the different spheres do not confer any rights on the Powers concerned, save prob- ably the right to protest in case China should violate her own declaration. These declarations do not in any way earmark these spheres for the eventual control or annexation by the Powers concerned. They still remain Chinese territory, full and complete. Even should con- trol or annexation prove to be necessary, it would have to be done through treaty stipulations. Thus, these decla- rations do not detract from the territorial sovereign any iota of his prerogatives and rights, except the right of alienating the regions concerned. If they should have any effect it must hi- in relation to a third Power. They will probably preclude the other Powers from obtaining similar special positions in these spheri s. In ca a break up of China, which was imminent when the spheres were created in 1S'»S. but which has become a thing of the past since the Chinese Revolution of 1911, the Powers in whose favor the declaration of non- 346 IMPAIRMENTS OF SOVEREIGNTY alienation was made, and especially those who have fur- ther diligently safeguarded their spheres by international agreements, will have preemptions as to the respective spheres. "The assurance merely signifies that, if events should arise in the remote future which may compel him (the territorial sovereign) to choose between the claims of different states, those of the state in whose favor the declaration has been made will be respected to the exclusion of all others." 32 We cannot conclude this subject without pointing out the serious disadvantages of the spheres of interest in China with a view to their eventual renunciation or abo- lition. First, the spheres of interest constitute a serious hindrance to the economic development of China. As the Powers dominate these spheres, China cannot de- velop her natural resources, if she needs foreign capital, as freely as she pleases, but generally she must always give the first option to the Powers claiming the spheres. This virtually gives a monopoly to the foreign Powers in question, particularly with respect to foreign loans. This naturally results in restraint of trade, in interfer- ence with the natural operation of the economic law of supply and demand, and in infringement of China's lib- erty of action. What is worse, "there have been several instances of one nation or another who was unable her- self to supply the necessary capital or the proper men for a particular enterprise in a region it claims for its sphere of influence or interest and yet who refused to allow the enterprise either financed or carried out by other nations who could supply both the money and the men." 33 Second, these spheres of interest vitiate the principle of equal opportunity of trade. The Powers dominating the regions generally possess preferential or exclusive rights, which preclude the possibility of competition on an equal basis. The Powers in question often so en- SPHERES OF INFLUENCE OR INTEREST 347 trench themselves in their various spheres of interest, gathering into their hands all the basic industries and means of communication, that they become the dominant economic Power in the spheres, rendering equal oppor- tunity of trade practically non-existent. Third, and worst of all, the spheres of interest menace the well-being of the nations and hence of the world. They tend to build up in China rival economic kingdoms, competing with one another for supremacy and aggran- dizement. Thus, they not only grind down the integrity and independence of China in the mills of their economic imperialism and struggle, but induce among themselves antagonism and hatred, giving rise to international fric- tion and possibly to war. In view of these serious disadvantages, the Chinese Government, through its Peace delegation at the Paris Conference, asked for the renunciation on the part of the Powers concerned of their claims to spheres of in- terest in China and the revision of treaties in consequence of such renunciation. "The Chinese Government hope that the interested Powers will, out of their sincere regard for the sover- eign rights of China and the common interests of all nations having trade relations with her. make a declara- tion, each for itself, to the elTect that they have not any sphere of influence or interest in the Republic of China, nor intend to claim any ; and that they are prepared to undertake a revision of such treaties, agreements, notes or contracts previously concluded with her as have con- ferred, or may be construed to have conferred, on them, respectively, reserved territorial advantages or inferen- tial rights or privileges to create spheres of influence or interesl impairing tin- sovereign rights of China." ' The request failed ; but in its place a new champion has arisen thai IS liable to demolish the economic barriers erected by the institution of spheres of interest That 348 IMPAIRMENTS OF SOVEREIGNTY is the New International Banking Consortium. While paying due respect to vested interests, it proposes to pool all options of the Powers and the concessions in which no substantia] headway has as yet been made. 35 The significance of this measure cannot be overestimated. It means that the Powers joining the Corsortium surrender their prior claims or rights to first options in all the loans that come within the scope of the New Consortium and that it chooses to undertake. Thus, the New Consortium obliterates one of the leading features of the spheres of interest — the right of first option or the claim of pri- ority. This likewise indicates that while permitting the economic dykes as erected by the spheres of interest to remain intact, the New Consortium puts an injunction on any further walls of exclusion that tend to block the common interests of the Powers as well as China's eco- nomic development. Moreover, in pooling options and concessions in railways, the New Consortium tacitly and impliedly introduces the principle and practice of the internationalization of Chinese railways. When mate- rialized, this will have the salutary effect of establishing royal roads of freedom running through several spheres of interest and of promoting the untrammcled economic development of China and the general well-being of the Powers concerned. Thus, the New Consortium, incar- nating as it does the Open Door doctrine, is the antidote and demolisher of the spheres of interest. NOTES TO CHAPTER XXI 1. Reinsch, World Politics, p. 113. 2. [bid, p. 114. 3. Hertslet's china Treaties, Vol. 1, No. 59, pp. 350-354. 4. Hertslet, Vol. I, No. ! B, pp. 505 508. 5. Russia made Outer Mongolia a buffer state and herself suzerain of the same in 1913 and 1915 (MacMurray, 1913/11 and 1915/10); also sec chapter on the Policy of Russia in China. Japan's 21 Demands in 1915 covered only South SPHERES OF INFLUENCE OR INTEREST 349 Manchuria and Eastern Inner Mongolia. See chapter on The Policy of Paramount Influence and on The Twenty-one Demands as an Exponent of Japan's Policies in China. 6. Vide supra, chapter on The Policy of Paramount Influence. 6A. Millard, China's Case at the Peace Conference, Millard's Review, Supp., July 17, 1920, p. 18. 7. Hertslet, Vol. 1. No. 59, p. 353. Sec. 2, Art. 4. 8. The Shantung Question, submitted by China to the Paris Peace Conference, puhlished by the Chinese National Welfare Society of America, 1920, App. No. 1 to Vol. 2, p. 50. 9. MacMurray, 1895/5. 10. MacMurray, 1915/8. 11. MacMurray, 1914/12. 12. MacMurray, 1897/2. 13. MacMurray, 1898/6. 14. Hertslet, Vol. 1, No. 4, p. 16. Art. 3, Convention of April 4, 1846. 15. Art. 5, Convention between Great Britain and China rela- tive to Burma and China, March 1, 1894, Hertslet, Vol. 1, No. 20, p. 104; also Art. 5, Agreement between Great Britain and China modifying the Convention of March 1, 1894, relative to Burma and China, Feb. 4, 1897, Hertslet, Vol. 1, No. 22, p. 116. 16. Hertslet, Vol. 1, No. 23, p. 120, The Tsungli Yamen to Sir C. MacDonald, Feb. 11, 1898. 17. MacMurrav, 1906/2. 18. MacMurray, 1906/2. 19. MacMurrav, 1898/8. 20. MacMurray, 1915/8. 21. The Chino-Japanese Negotiations, the Official Chinese Statement, 1915, p. 21 ; China Year Book, 1919, p. 567. 22. The Chino-Japanese Negotiations, 1915, p. 28. 23. MacMurray, 1896/1; Millard, Our Eastern Question, App. V, pp. 515, 516. 24. MacMurrav, 1900/5; Millard, op. cit., App. I, p. 444. 25. Hertslet, V->1. 1, Xo. 102, p. 584, Exchange of Notes be- tween Great Britain and Germany respecting the British Occu- pation of Weihaiwei, April 20, 1898. 26. Hertslet, Vol. 1, No. 104, pp. 586-587; Russia and Great Britain, on August 31, 1907, again mutually pledged to abstain from any interference or extension of influence in Tibet. — Hertslet, Vol. 1, Xo. 121, pp. 620-622. But whin Russia moved on Outer Mongolia in 1913 and 1915, Greal Britain made the similar counter move— Vide supra, chap- ter on the Policy of Greal Britain in China. 17. MacMurray, 1907 7; Millard, op. .it., App. M.. pp. 457-458. 28. MacMurrav, 1907/11; Millard, ibid., App. I), p. 424. 29. MacMurray, l'MO/1. 30. MacMurray, 1916 9. 31. U. S. For. ReL, 1896, pp. 232, 235, Mr. Olney, Secretary of State, to Sir Julian Pauncefote, British Embassador, Fune 11, 1896; J. B. Moore, Internatl. Law Dig, Vol. 1, pp. 268 269. 350 IMPAIRMENTS OF SOVEREIGNTY M Tvau, Treaty Obligations between China and Other States, p. 90. 33. The Shantung Question, op. cit, p. 71. 34. Ibid., p. 71. 35. The United States Government proposed . . . that not only future options that might be granted but concessions held by individual banking groups in which substantial progress had not been made, should, so far as feasible, be pooled with the Consortium ; that working on these two principles, the operations of the Consortium would serve to prevent for the future the setting up of special spheres of influence in the Continent of Asia. — Thomas W. Lamont, Preliminary Report on the New Consortium for China, pp. 6-7. XXII THE MOST FAVORED NATION TREATMENT Another form of the impairment of China's sover- eignty is the operation or rather the abuse of the most favored nation clause. It was originally conceived in a spirit to preserve the equality of treatment in her rela- tions with foreign states, but in actual practice, it has become a fruitful source of embarrassment and restraint, resulting in the infringement of her sovereignty. By the most favored nation treatment is meant that whatever privileges, favors or immunities, with respect to commerce and navigation, granted to a given state, shall be granted to others also. This places the states on a footing of equality so far as the privileges, favors and immunities in matters regarding commerce and navi- gation are concerned. This further rules out any ex- clusive or discriminating rights in commerce and navi- gation that the territorial sovereign may grant. It like- wise creates a community of interest among foreign states, inasmuch as the privileges, favors or immunities, in relation to commerce and navigation, granted to one, art-, ipso facto, regarded as granted to all enjoying the most favored nation treatment. The origin of this most favored nation clause goes back to the supplementary treaty signed between Great Britain and China in Hoomun-Chae, on October 8, 1843, follow- ing the Treaty of Nanking, August 29, 1842. It was stipulated (Art. 8) : * "The Emperor of China having been graciously pleased to grant to all foreign countries whose subjects or citi- zens have hitherto traded at Canton, the privilege of re- 351 352 IMPAIRMENTS OF SOVEREIGNTY sorting for purposes of trade to the other four ports of Foochowfoo, Amoy, Ningpo and Shanghai on the same terms as the English, it is further agreed, that should the Emperor hereafter, from any cause whatever, be ed to grant additional privileges or immunities to any of the subjects or citizens of such foreign countries, the same privileges and immunities will he extended to, and enjoyed by, British subjects; but it is to be under- stood, that demands or requests are not on this plea to be unnecessarily brought forward." In the Treaty of Peace, Amity and Commerce, between the United States and China, signed at Wanghia, July 3, 1844, 2 the most favored nation treatment was found (Art. 2) : "Citizens of the United States . . . shall in no case be subject to other or higher duties than are or shall be required of the people of any other nation whatever . . . and if additional advantages or privileges of whatever description, be conceded hereafter by China to any other nation, the United States, and the citizens thereof, shall be entitled thereupon to a complete equal and impartial participation in the same." In the Treaty of Whampoa with France, October 24, 1844, 3 similar most favored nation treatment was granted (Arts. 6 and 35). Thus in practically all the subse- quent treaties of commerce, the most favored nation clause was found. Now there are several forms of the most favored nation provision in the Chinese treaties. The first is the unilateral and unqualified form. That is to say, it provides for unconditional most favored nation treatment by China without at the same time including the reciprocal engagement of the Towers in question to render the same privileges in return to China or her citizens. For in- stance : THE MOST FAVORED TREATMENT 353 "The British Government and its subjects are hereby confirmed in all privileges, immunities, and advantages conferred on them by previous treaties: and it is hereby expressly stipulated that the British Government and its subjects will be allowed free and equal participation in all privileges, immunities, and advantages that may have been, or may he hereafter, granted by His Majesty the Emperor of China to the Government or subjects of any other nation" (Art. 54).* In fact, this provision proved to be so efficacious that when Japan, having defeated China in 1895, made the Treaty of Commerce on July 21, 1896, the same provision, mutatis mutandis, was repeated (Art. 25 ). 5 Again, in the French Treaty of Tientsin, June 27, 1858, it was spe- cifically stipulated that the French, while enjoying the most favored nation treatment, were, nevertheless, not subject to obligations not expressly provided in the convention : "II est d'ailleurs entendu que toute obligation non con- signee expresscment dans la presente Convention ne saura etre imposee aux Consuls ou aux Agents Consu- laires, non plus qu'a leurs nationaux, tandis que, comme il a ete stipule, les Francais jouiront de tous les droits, privileges, immunites et garanties quelconques qui au- raient etc on qui seraient accordes par le Gouvernemenl Chinois a d'autres Puissances" (Art. 40).° The second form is the reciprocal, which means that not only China, hut also the other contracting party undertakes identical obligations. In other words, it is bilateral and reciprocal, and not unilateral. For example: "The contracting parties agree that tin- Government, publi( . and citizens of the Republic <>t Peru shall full.- and equally participate in .all privileges, rights, im- munities, jurisdiction* and advantages that may have be< a, or m reafter, granted by Mis Majesty the Em- 354 IMPAIRMENTS OF SOVEREIGNTY peror of China to the Government, public officers, citi- zens or subjects of any other nation. "In like manner, the Government, public officers, ;mr Great Britain, or Russia, or Japan, enjoys a reduction of about One-third <>f the prevailing tariff rates which is not claim- able under the most favored nation clause except upon the fulfillment of identical geographical relationships. 'I he fifth limitation is the retaliatory discrimination. A state can retaliate fur unequal and Unreasonable treat- ment, which does i)"t fall within the protection of the most favored nation clause. For instance, in response to 364 IMPAIRMENTS OF SOVEREIGNTY a protest, based on the most favored nation treatment, made by Columbia Oil March 23, 18 r >2, against the proc- lamation in pursuance of the McKinley Act of October 1. L890, authorizing the President of the United States to retaliate in tariff rates upon certain products, Mr. Blaine said: "The law cited applies the same treatment to all countries whose tariffs are found by the President to be unequal and unreasonable." 50 The sixth limitation is the bounties. By this is meant that a state can levy additional duty on goods which have received bounties at home, so as to equalize the cost of these goods. "Lord Salisbury, July 15, 1899, replied that the Russian system, under which the excise duty on sugars is repaid in case of exportations, created an 'arti- ficial stimulus,' which had the same effect as 'a bounty of a more direct character.' . . . Wherever an artificial preference was produced by the direct legislative act of a Government which was a party to the most favored nation stipulation, the other Government might 'redress the balance of trade which has thus been artificially dis- turbed.' . . ."« Again, on "November 20, 1902, Lord Lansdowne, replying to the Russian memorandum, stated that . . . the course they had taken was . . . dictated solely by a desire to secure 'equality of conditions' for those engaged in the production and refining of sugar; and as other states did not hesitate to impose high and prohibitive tariffs for the protection of their trade in their own markets, His Majesty's Government failed to see with what reason the Russian Government could 'com- plain of a measure out of favor, but of simple and ele- mentary justice to British trade.'" 52 With these limitations in mind, let us now consider the IS or excesses in the operation or application of the most favored nation clause in China. First, it is not limited to matters of commerce and navigation, but ex- ceeding its legitimate bounds, it claims to include politi- THE MOST FAVORED TREATMENT 365 cal and other privileges. For example, the first article of the Treaty of July 10, 1898, with the Congo Free State, specifically mentions that the most favored nation treat- ment is to include privileges of jurisdiction which cannot mean any other than political privileges: "All privileges of person, property, and jurisdiction en- joyed by foreign nations under the Treaties concluded by China shall from henceforth be granted to the Congo Free State." 53 As a further illustration, in demanding the right to propa- gate Buddhism in China, in 1915, Japan based her demand on the most favored nation clause, arguing that inas- much as the other Treaty Powers were given the right to propagate Christianity by the operation of the most favored nation clause, she should have a similar right to propagate Buddhism in China ; to which China replied that the scope of the most favored nation clause was limited to mere matters of commerce and navigation and did not extend to religious propagation except by specific treaty stipulations. 54 Second, it is unilateral and not reciprocal, unqualified and unconditional. As we have seen, in the treaties with Belgium, Denmark, France, the Netherlands. Russia, Norway, and Spain, the unilateral and unqualified form of the most favored nation treatment is stipulated. Thus, no matter whether China concedes favors or advanl for consideration or on condition, these rowers may claim the favors or advantages in question rind yel refuse to offer the same consideration or concession or fulfill the same condition. In consequence, these states enjoy- ing the unilateral and unqualified form of the mosl fa- d nation treatment can enjoy more privileges than the other states obligated to give i >n or to fulfill conditions, thus resulting in inequality of treatment, inter- national friction and want of reciprocity, and so defeat- 366 IMPAIRMENTS OF SOVEREIGNTY ing the very purposes for which the clause was originally invoked. Third, because of existing practices in connection with this clause, China practically cannot carry out many reforms or undertake several vital measures without the unanimous consent of the Powers enjoying the most fa- vored nation treatment. Having conceded to one Power the right to be consulted on certain matters, by the un- justifiable application of the clause, all the other Powers claim the same right. Thus, China cannot regulate or change her tariff without the unanimous consent of the Powers enjoying the most favored nation treatment; and this experience has proved to be quite impossible, or at least extremely difficult, to obtain. In view of these serious disadvantages resulting from the present operation of the most favored nation clause in China, the Chinese Government, through its Delega- tion, applied to the Paris Peace Conference for the insertion, in the preliminaries of Peace with Germany and Austria-Hungary, of a provision for the adoption of the principles of equality and reciprocity as the basis of a new treaty of commerce and for the relinquishment of the most favored nation treatment. The desired inser- tion reads : "Germany engages to adopt the principles of equality and reciprocity as the basis of a new treaty of commerce and general relations to be concluded with China and relinquish therein on her part the principle of the so- called most favored nation treatment ; and the said new treaty, when concluded, shall guide all intercourse be- tween the two countries in future." 65 It must, however, be observed that this policy of relin- quishing the most favored nation clause from the future treaties of commerce of China, as evidently adopted at the Paris Peace Conference, is difficult to carry out and probably unwise to pursue. In the first place, the Pow- ers enjoying the most favored nation treatment will not THE MOST FAVORED TREATMENT 367 be willing to relinquish the clause which is considered as the cornerstone of their commercial rights in China. In their eyes this little provision is priceless. It contains all the essentials of their commercial privileges in China. In the second place, judging solely from the point of view of China, it would not be wise to relinquish the clause totally, however obnoxious is its operation at present. For if China demands that this clause should be elimi- nated from all future treaties of commerce, to be con- sistent, she will have to relinquish the same clause or rather the same treatment which she now enjoys, or will enjoy, in other states. Hence, in following the principle of reciprocity, inasmuch as she would not give other states the most favored nation treatment, she would not receive the same treatment from other states. If she does not desire to enjoy this treatment, she may consistently ask for the relinquishment of the clause by the other states; but if she does desire to retain the same privi- lege, then such a policy of relinquishment will merely injure herself. Relinquishment being practically impossible and un- wise, the solution of this problem seems to lie in a compromise, that is, in retaining the clause and yet at the same time limiting its operation within legitimate bounds. The clause should still be retained in all China's commercial treaties that have been, or may be, concluded, thus satisfying the foreign states and at the same time preserving the most favored nation treatment for her- self. It should, however, be hedged about on all sides. It should be limited exclusively to commerce and navi- gation, and should not be permitted to extend to political and other matters. It should be bilateral and reciprocal, and not unilateral and non-compensating. It should be qualified and conditional, and not unlimited and uncon- ditional. A sample form of such a most favored nation clause, — qualified, Conditional, and reciprocal, and lim- ited to commerce and navigation, — is as follows : 368 IMPAIRMENTS OF SOVEREIGNTY "The high contracting parties agree that in all that con- cerns navigation and commerce, Favors which either has already granted or may hereafter grant to any other state shall become common to the other party who shall enjoy the same freely if the concession is freely made; or upon allowing the same compensation if the conces- sion is conditional." 60 Thus can China retain for herself the advantages of the reciprocal most favored nation treatment, and satisfy the commercial Powers that are determined to build their trade relations upon the cornerstone of the clause. Thus, above all, can she liberate herself from the bondage of the present unlimited and excessive application of the clause. NOTES TO CHAPTER XXII 1. State Papers, Vol. 31, p. 133. 2. State Papers, Vol. 32, p. 791. 3. Hertslet's China Treaties, Vol. 1, No. 39, p. 258 et seq. 4. Hertslet, Vol 1, Xo. 6, p. 34, Treaty of Tientsin, June 26, 1858. 5. Hertslet, Vol. 1, No. 64, p. 381, Art 25. 6. Hertslet, Vol. 1, No. 40, p. 284, Art. 40. 7. Hertslet, Vol. 1, No. 71, p. 419, Art. 16, Treaty with Peru, June 26, 1874. 8. MacMurray, 1918/8, Declaration attached to the Treaty of Amity, July 13, 1918, between China and Switzerland. 9. Hertslet, Vol. 1, No. 73, p. 426, Art. 10, Treaty with Por- tugal, Dec. 1, 1887. 10. Hertslet, Vol. 1, No. 48, p. 313, Art. 12, Additional Con- vention with France, June 26, 1887. 11. Hertslet, Vol. 1, No. 20, pp. 108-109, Art. 18, Convention with Great Britain respecting Burma and China, Mar. 1, 1894. 12. Hertslet, Vol. 1, No. 67, p. 397, Art. 11, Treaty with Japan of Dec. 22, 1905. 13. Hertslet, Vol. 1, No. 34, p. 233, Art. 45, Treaty of Nov. 2, 1865. 14. Hertslet, Vol. 1, No. 38, pp. 253, 257, Treaty of July 13, 1863, Arts. 23 and 54. 15. Hertslet, Vol. 1, No. 93, pp. 527-528, Art. 2, Treaty of March 20, 1847. 16. Hertslet, Vol 1, No. 39, p. 268, Treaty of Whampoa, Oct 24, 1844, Art. 35; also Art. 40, Treaty of Tientsin, June 27, 1858, THE MOST FAVORED TREATMENT 369 Hertslet, Vol. 1, Xo. 40, p. 284; also Art. 3, Treaty of April 25, 1886, Hertslet, Vol. 1, No. 47, p. 302; also Art. 7, Treaty of June 26, 1887, Hertslet, Vol. 1, No. 48, p. 313. 17. Hertslet, Vol. 1, Xo. 70, p. 414, Art. 15, Treaty of Oct. 6, 1863. 18. Hertslet, Vol. 1, Xo. 82, pp. 460-461, Art. 12, Treaty of June 13, 1858. 19A. Hertslet, Vol. 1, No. 91, p. 520, Treaty of Oct. 10, 1864, Arts. 47 and 50. It will be noticed that the reciprocity in this case was limited only to the trade with the Philippine Islands, and that as the Philippine Islands are now in the possession of the United States, this reciprocal treatment is therefore nullified. 19B. Hertslet, Vol. 1, Xo. 33, pp. 222-223, Art. 43. Treatv of Sept. 2, 1869. 20. Hertslet, Vol. 1, No. 35, pp. 236-237, Arts. 5 and 8, Treaty of Oct. 3, 1881. It will he noticed that, in the case of Brazil, the most favored nation treatment is not only reciprocal but also conditional. Art. 5. 21. Hertslet. Vol. 1, No. 36, pp. 240-241, Arts. 1 and 2, Treaty of Julv 10, 1898. 22. Hertslet, Vol. 1, No. 69, p. 402, Treaty of Dec. 14, 1899, Art. 8. 23. Hertslet, Vol. 1, Xo. 71, p. 419, Art. 16, Treaty of June 26, 1874. 24. MacMurray, 1908/11, Arts. 3 and 4. 25. MacMurray, 1918/8, Declaration attached to Treaty of June 13, 1918. It is to be noticed that the grant of most favored nation treatment is limited to the time until a treaty of establish- ment and commerce is made. 25 A. Hertslet, Vol. 1, Xo. 73, p. 426, Art. 10, Treaty of Dec. 1, 1887. 26. Hertslet, Vol. 1, No. 20, pp. 108-109, Arts. 9 and 18, Treaty of March 1, 1894, relative to Burma and China. 27. Arts. 6 and 7, Treaty of April 25, 1886, Hertslet, Vol. 1, Xo. 47, p. 303 et seq. ; Art. 7, Treaty of June 26, 1887, Hertslet, Vol. 1, Xo. 48, p. 313; modified bv Art. 4, Treaty of June 20, 1895, Hertslet, Vol. 1, Xo. 53, p. 325. 28. Hertslet, Vol. 1, No. 85, p. 492 et seq., Russian land trade regulations annexed to Treatv of Feb. 24, 1881. 29. Hertslet, Vol. 1, No. 67, p. 396, Art. 11, Treaty of D» 1905. 30. Hertslet, Vol. 1, Xo. 60, pp. 357, 360, Arts. 24 and 54. 31. Hertslet, Vol. 1, X... n, p. 34. 32. Hertslet, Vol. 1, Xo. 11, p. 62 33. Hertslet, Vol 1. No. 20, i>. 108, Art. 22. 34. State Papers, VoL 32, i». 7"1 ; also see Hertslet Vol. 1, No. ''4, pp. 545. 551 552. '■it 6, i lerl l( i. Vol. 1. No. 96, p i \it. :■>. Treaty of Nov. 17, 1880, Hertslet, Vol. 1. No 98, pp. 561 ^"2\ also Art 5 s. 1903, Hertslet, VoL 1. X... 100, p. 571 36. Vol. 1, No. 62, i.. 365. 370 [MPAIRMENTS OF SOVEREIGNTY 37. Hertslet Vol 1. No. 64, pp. 376, 381. 38. Hertslet, Vol. 1. No. 66, pp. 386-387. Art. 9. o. 56, p. 339, Art 40, Treaty of Sept 2, 1861; also Art. IS, i>. 335. 40. Hertslet Vol I, No. 57, p. 343, Art. 1. 41. I. U. Moore, International La* Digest Vol 5, pp. 270-271, Earl Granville, Sec of State for For. AtTairs, to Mr. West, British Minister, Feb. 12, 1885. Blue Book Commercial No. 4, 1885, pp. 21-22. 42. Ibid., Vol. 5, p. 273. Mr. Bavard, Sec. of State, to Mr. Hubbard, lulv 17. 1886. MS. Inst [apan 111. p. 425; cf. Whitney vs. Robertson, 1888, 124 U. S. 190. 43. Ibid., Vol. 5, p. 27*. Mr. Sherman, Sec. of State, to Mr. Buchanan, Minister to Argentine Republic, Jan. 11, 1898. 44. 122 U. S. 116. 45. 8 American Journal of International Law, editorial com- ment, 1914, p. 578; Tyau, Treaty Obligations between China and Other States, p. 198. 46. Moore, op. cit., Vol. 5, p. 272, Mr. Bavard, Sec. of State, to Mr. Miller. June 15, 18S6, 160 MS. Dom. Let. 481. 47. U. S. For. Rel., 1896, p. 429 et seq., Mr. Olney, Sec. of State, to Mr. Dun, Minister to Japan, Nov. 12. 1896; Moore, op. cit, VoL 5, p. 316. 48. Ibid., Vol. 5, p. 290, the note of German Minister to the United States State Department, dated Feb. 16, 1886, quoted in Mr. Bayard's report, Sec. of State to the President January 14, 1889, H. Ex. Doc. 74, 50th Congress, Second Session. 49. Moore, op. cit.. Vol. 5, p. 289, the opinion of Attorney General, Sept. 19, 1885, quoted in report of Mr. Bavard, Sec. of State, to the President. Jan. 14. 1889, H. Ex. Doc. 74, 50th Congress, Second Session. 50. U. S. bur. Rel., 1894, App. I. pp. 472. 473, Mr. Blaine, Sec. of State, to Mr. Hertado, Columbian Minister, May 31, 1892; Moore, op. cit., Vol. 5, p. 304. 51. Moore, op. cit.. Vol. 5, p. 307. 52. Ibid.. Vol. 5. pp. 308-309. 53. Hertslet, Vol. 1, No. 36, p. 240. 54. Tyau, op. cit., p. 198. 55. Millard's Review. Supplement, July 17. 1920, pp. 4-5, Mil- lard, China's Case at the Peace Conference. 56. S. K. Hornbeck, the mosl favored nation clause, \merican Journal of Internationa] Law. VoL 3, 1909, p. 405; also sec his three articles, pp. 396, 619, 79 XXIII TARIFF AUTONOMY We now come to another form of the impairment of China's sovereignty, and that is, servitude with respect to tariff autonomy. It is a principle in international law that every state with full sovereignty has the right to regulate its own tariff by legislation or otherwise, but in China, this prerogative of sovereignty is denied by the foreign Powers. In fact, tariff autonomy has become so much impaired that, either by virtue of express state treaty provisions or through the operation of the most favored nation clause, China can not regulate or change her tariff, made in convention with the foreign Powers, without first securing the unanimous consent of the Pow- ers concerned. And experience has demonstrated that the securing of such a unanimous vote is extremely diffi- cult, if not well-nigh impossible. The origin of Chinese servitude in tariff autonomy dates back to the Treaty of Nanking, August 29, 1842. Article X of the treaty stipulated: "lli> Majesty the Emperor of China to estab- lish at all the ports which are, by Article 11 of this treaty. to be thrown open for the resort of British merchants, a fair and regular tariff of exporl and import customs and other dues, which tariff shall be publicly notified and promulgated for general information. And the Em- peror further engages, that when British merchandise shall have once paid at any of the Said ports the I lated customs and dues, agreeable to the tariff to be iter fixed, such merchandise may be conveyed by Chinese merchant province or city in the inte- rior of the Empire of c hma, on paying a further amount 371 372 IMPAIRMENTS OF SOVEREIGNTY as transit duties, which shall not exceed per cent on the taritT value of such goods." 1 In accord with this, in the supplementary Treaty of Oc- tober 8, 1843, the tariff of import and export duties was agreed upon, averaging five per cent ad valorem except in some instances when the rate went up as high as ten per cent. 2 In the subsequent American Treaty of July 3, 1844, 8 and the French Treaty of October 24, 1844, 4 there was attached in each case a tariff of duties. In the American Treaty, it was specifically stated that the consent of the United States was required for any modification in the tariff list: "Citizens of the United States resorting to China for the purposes of commerce will pay the duties of import and export prescribed in the tariff, which is fixed by and made a part of this treaty. ... If the Chinese Gov- ernment desires to modify in any respect the said tariff, such modifications shall be made only in consultation with consuls or other functionaries thereto duly author- ized in behalf of the United States, and witli the consent thereof . . ." (Art. 2). 6 In 1858, when Great Britain and France had defeated China in the so-called Arrow War (the Second War with Great Britain), the British Treaty of Tientsin, June 26, 1858, provided for a revision of the tariff 6 which was to endure for a period of ten years, subject to a demand for revision by either party at the end of the term, 7 and for the fixation of the transit duties at the rate of two and a half per cent ad valorem. 8 In pursuance of the above provision for tariff revision, a subsequent agree- ment was made on November 8, 1858,° containing rules of trade and a tariff list. 10 In general, a 1'ixq per cent ad valorem duty both on imports as well as on exports v. a- provided "Articles not enumerated in either list (export and import), nor in the list of duty-free goods, TARIFF AUTONOMY 373 will pay an ad valorem duty of five per cent, calculated on the market value" (Rule 1). The transit duties were again fixed at one-half of the tariff duties (Rule 7). A uniform system of taxation was provided: "It is agreed that one uniform system shall be enforced at every port" (Rule 10). A duty-free list was stipulated consisting of gold and silver bullion, foreign coins, flour, and the daily necessities of foreign residents in China (Rule 2). Contraband goods comprised gunpowder, ammunition and other implements of war and salt (Rule 3). 11 Simi- larly with the French Treaty of June 27, 1858, 12 a new tariff list and commercial regulations were attached. 13 The United States drew up a separate convention at Shanghai, November 8, 1858, M with a new tariff and regulations of trade and transit. Russia simply stipu- lated that her merchants should pay the same duties as were levied on other foreign merchants. 1 ' Since 1858, despite the provision for periodic revision of tariff at the end of ten years, for one reason or an- other the privilege has not been availed of but on two occasions, — in 1902 and 1918. In the final protocol for the settlement of the Boxer Trouble, September 7, 1901, 19 the Maritime Customs, the Native Customs, and the Salt Gabelle, were made the securities of the Boxer indem- nity amounting to 450,000,000 Ilaikuan taels to be paid off in annual installments until 1940 (Art. 6), and the import tariff was to be raised to an effective five per cent ad valorem, and the ad valorem duties, as far as feasible, were to be converted into specific duties, cal- culated on the average value of merchandise at the time of landing during the three years, 1897-1899 (Art. 6). In pursuance of these provisions, the Agreement of Shanghai, August 29, 1902, was made, signed by the special commissioners of Austria Hungary, Belgium, Germany, Great Britain, Japan, Netherlands, Spain, and later by those of the I Inited States, France, and Sweden and Norway, and providing for a new tariff list. 17 The 374 IMPAIRMENTS OF SOVEREIGNTY values of the goods were revised, bill the uniform rate of five per cent ad valorem remained unmodified. Meanwhile, in the Mackay Treaty of September 5, 1902, the abolition of likin was provided, and as a com- pensation, import duties were to be raised to not more than twelve and one-half per cent and export duties to not more than seven and one-half per cent. The Pream- ble of Article VIII of that treaty reads: 18 "The Chinese Government recognizing that a system of levying Likin (Inland Transit Tax) and other duties on goods at the place of production, in transit, and at destination, impedes the free circulation of commodities and injures the interests of trade, hereby undertake to discard completely these means of raising revenue with the limitation mentioned in Section 8. "The British Government, in return, consent to allow a surtax in excess of the tariff rates for the time being in force to be imposed on foreign goods imported by British subjects and a surtax in addition to the export duty on Chinese produce destined for export abroad or coastwise. "It is clearly understood that, after Likin barriers and other stations for taxing goods in transit have been removed, no attempt shall be made to revive them in any form or under any pretext whatever ; that in no case shall the surtax on foreign imports exceed the equivalent of one and a half times the import duties leviable in terms of the Final Protocol signed by China and the Powers on the 7th day of September, 1901 ; that payment of the import duty and surtax shall secure for foreign imports, whether in the hands of Chinese or non-Chinese subjects, in original packages or otherwise, complete immunity from all Other taxation, examination or delay; that the total amount of taxation leviable on native produce by export abroad shall, under no circum- stances, exceed seven and one-half per cent ad valorem." This consent, however, for an increase of the import tariff to twelve and one-half per cent and of export duty TARIFF AUTONOMY 375 to seven and one-half per cent in recompense for the abo- lition of likin was made under the following conditions: "1. That all Powers who are now or who may here- after become entitled to most favored nation treatment in China enter into the same engagements. "2. And that their assent is neither directly or indi- rectly made dependent on the granting by China of any political concession or of any exclusive commercial con- cession. "3. Should the Powers entitled to most favored na- treatment have failed to agree to enter into the jements undertaken by Great Britain under this Article by the 1st January, 1904, then the provisions of the Articles shall only come into force when all the Powers have signed their acceptance of these engage- ments." 19 Similar consent was also granted in the American Treaty of October 8, 1903,-° and in the Japanese treaty of the same date. 21 Inasmuch, however, as the unanimous con- sent is required of the Powers that are enjoying or may enjoy the most favored nation treatment, as stipu- lated in the British conditions, the provisions have so far been non-effective. The last revision of the tariff took place in 1018. It was in connection with China's entrance into the World War in I'M 7 that the Allied Powers again consented to a revision, but this only to bring the tariff to an effective the per cent.-- They assented to "the principle of in- crease of the Maritime Customs duties to an effective rate of five per cent ad valorem, a commission including Chinese delegates to be intrusted with the modifications to be adopted in the system of customs tariffs in the interests of all the contracting parties, and the Allied Governments lending the Chinese Government their good offices in order to obtain tin- acceptance by the neutral 376 IMPAIRMENTS OF SOVEREIGNTY is of this increase in the Maritime Customs duties," at the same time demanding the promulgation by the Chinese Government of a general tariff for all countries without treaties. In pursuance of this consent, a tariff revision commission met in Shanghai in January, 1918. The hasis of revision was to be "the average of the values of imports as they appeared upon invoices during the years 1912-1916." - 3 The rates thus fixed, which became effective in August, 1919, are to last for at least two years after the end of the war, at which time another revision may be made. Estimated in accordance with the pre- vailing price of 1918, the new tariff now in force amounts only to about four per cent effective. 24 Adverting to the foreign administration of the Chinese Maritime Customs, the beginning of such supervision dated back to the time of the Taiping Rebellion, when, in September, 1853, the Chinese city of Shanghai was captured by the Taiping rebels. In consequence, the Chinese customs was closed and foreign merchants had no officials to receive customs duties. In order to meet the emergency the foreign consuls collected the duties for a while, but this soon proved to be quite irksome. On June 29, 1854, therefore, the following agreement was entered into by the Shanghai Taotai and the British, American and French consuls for the establishment of a foreign board of inspectors : "Rule 1. The chief difficulty experienced by the super- intendent of customs having consisted in the impossi- bility of obtaining Customs House officials with the necessary qualifications as to probity, vigilance, and knowledge of foreign languages, required for the en- forcement of a close observance of treaty and customs house regulations, the only adequate remedy appears to be in the introduction of a foreign element into the customs house establishment, in the persons of foreigners carefully selected and appointed by the tautai, who shall TARIFF AUTONOMY 377 apply the deficiency complained of, and give him efficient and trustworthy instruments wherewith to work."- lA Under this agreement a board of three foreign in- spectors was appointed, of which Captain Sir Thomas F. Wade was the chief executive officer. On his resigna- tion a year later, Mr. Horatio Nelson Lay was appointed. This continued until 1858, when the tarilT commission met and agreed to rules of trade of which the tenth stipulated for the appointment of a British subject as Inspector-General to assist the High Commissioner ap- pointed by the Chinese Government : 20 "The high officer appointed by the Chinese Govern- ment to superintend foreign trade will accordingly, from time to time, either himself visit, or will send a deputy to visit, the different ports. The said high officer will be at liberty, at his own choice, and independently of the suggestion or nomination of any British authority, to select any British subject he may see fit to aid him in the administration of the customs revenue ; in the prevention of smuggling; in the definition of port boun- daries; or in discharging the duties of harbor-master; also in the distribution of lights, buoys, beacons and the like, the maintenance of which shall be provided for out of the tonnage dues." Under this provision Mr. H. N. Lay was appointed Inspector-General in 1859, but he soon fell into dis- agreement with the Chinese Government over the pur- chase of a fleet of gunboats for the suppression of pii because of which he was permitted to resign in 1863. The successor of Mr. Lav was Mr. Robert Hart, who was knighted in 1882 for his distinguished in the or- ganization and administration of the Chinese Maritime Customs. He held the office until 1906, when he wa ceeded by Mr. F. A Aglen. Thus, abiding by the p of 1898 -" that a British subject should 1"- appointed Inspector-General while British trade predominates, the 378 IMPAIRMENTS OF SOVEREIGNTY Chinese Government has successively appointed the British to that important post. Turning to the tariff system and its administration, the rate of duty on imports, we find, is five per cent ad valorem calculated on the average of the prevailing prices of 1912-1916, inclusive. The rate of duty on exports still remains five per cent ad valorem as fixed in the treaties of 1858. A drawback of the duty paid can be obtained if the imported goods are reexported within three years, either to another open port or to a foreign port.- 7 Goods shipped from one open port to another are to pay five per cent on departure and two and a half per cent on arrival. 28 The frontier trade with Russia, Korea, Annam and Burma obtains a reduction usually of one-third of the usual rate at the treaty port. The foreigner further is permitted the option of paying the transit dues in the inland trade through tolls at the different stations or by a single payment at the rate of half of the tariff duties, or two and a half per cent, which will exempt his goods from all further exactions in transit. 28A There are four kinds of customs in China. The first is the Maritime Customs located at the treaty ports and under foreign supervision. The second is the frontier customs located at the boundaries between China and Russia, Korea, Annam and Burma, which are also under foreign supervision. The third is the customs in the leased territories, situated usually at the frontier between the borders of the leased territories and China. They are likewise under the control of the Inspector-General of Maritime Customs, although the commissioners in charge are usually of the nationality to whom the leased ter- ritory pertains. The fourth kind is the native customs for the collection of inland duties. They are generally under the control of the Central Government at Peking, except those located within fifty li radius of the treaty TARIFF AUTONOMY 379 ports which have been annexed since 1901 to the Mari- time Customs. 29 The Maritime Customs, despite foreign supervision, remains, nevertheless, a branch of the Chinese Govern- ment. While an autocrat in his administration, to whom the Chinese Government does not dictate nor interfere in appointments or administration, the Inspector-General is yet under the authority of the Chinese Government, and administers the service in conformity with the wishes and commands of the Peking Government. The customs receipts, while accounted for by foreign customs com- missioners, do not pass through their hands, but are paid by the importer and the exporter to the bank or deposi- tory designated by the Chinese Government. The re- ceipts, however, cannot be drawn upon by the Chinese Government until the obligations of the foreign debts for which the customs revenue has been pledged as security have been discharged. We now come to the disadvantages of the tariff sys- tem in China. In the first place, the tariff as fixed lacks the element of reciprocity. That is to say, it is a one- sided or unilateral tariff, imposing restrictions on China, but offering no concession or compensation in return. Thus, foreign importers pay only five per cent ad valorem, but Chinese importers have to pay whatever foreign states levy. In the second place, the tariff as now fixed at a uniform rate of five per cent ad valorem 18 unscientific. It docs not differentiate raw materials and manufactured goods, taxing all alike at five per cent ad valorem, which practice has long been discarded by modern states adopt- ing a scientific tariff. Further, it fails to distinguish luxuries from necessities, levying the same uniform duty of five per cent on both, which distinction all scientific tariffs make. The glaring COntraSl b etwe en I 'hinese tariff duties and those of the ( ircat Powers can be seen in the 380 IMPAIRMENTS OF SOVEREIGNTY following table of the tariff duties on tobacco and liquor vied in 1913 : 30 Tobacco Spirits L. s. d. L. s. d. AND i i) States Fb \Ni 1". Japan C HIN A 8 6 per lh. 15 2 per gal 18 9 " " and 25% 10 10 " " 1 7 2y 2 " " 2 6V 2 " " 355% 10 2 " " 5% 4/,% " " On the other hand, articles which should be imported free of duty, such as the necessities of life, pay the same uniform rate of five per cent ad valorem. The disparity is indicated in the following table of the percentage of value of articles imported free of duty into China and the other countries in 1913: 31 China 6.5% Japan 49.5% Fi \\>-i: 50.0% United States 54.5% England 907% In the third place, duties are rigid and inflexible. The rate cannot increase nor decrease as the needs of revenue require. It is constantly out of adjustment with rising prices. Its rates for imports are estimated on the basis of the average price of 1912 to 1916, inclusive, that is, five years ago, and except for a revision in the imme- diate future, in the face of the rising tide of price levels, they will soon be out of adjustment with market prices. The rates for export are still based on those fixed by the treaties of 1858, which were concluded more than half a century ago. In the fourth place, the operation of the present tariff system results in a shortage of revenue. Based on the average of the prevailing prices of 1897-8-9 until 1919, and since then, on that of the prevailing prices of 1912- TARIFF AUTONOMY 381 1916, inclusive, the revenues collected, in view of advanc- ing prices, are wholly incommensurate with the fiscal needs of the Government. The uniform rate of five per cent ad valorem being so low and unchangeable, it is no wonder that customs receipts should constitute a rela- tively small percentage of the total income of the Chinese Government. What is worse, out of the shortage of revenue, there arises another great evil, and that is the likin or the inland transit dues. Because of the dire needs of the Govern- ment, this cannot be abolished without a compensating increase in tariff which, as we have seen, cannot be ob- tained without the unanimous consent of all the Treaty Powers enjoying, or that may enjoy, the most favored nation treatment. In view of the privilege of commuta- tion granted to foreign traders who are required to pay only two and a half per cent at the Maritime Customs, Chinese merchants denied this privilege have to pay all the tolls collected at the successive likin stations varying from ten per cent within the province to some twenty per cent for transit through several provinces. Thus in commercial competition foreign merchants are favored through the likin reduction, equivalent to the difference between the two and a half per cent paid by the foreign merchants and the ten to twenty per cent, or more, paid by the Chinese. Thus, the likin system tends to destroy the Chinese inland trade and to deter the growth of Chinese industry, while it favors foreign commerce. 32 In the fifth place, the present tariff system deprives China of one of her most important attributes of sov- ereignty, the right of taxation, or, to be more accurate, the right to regulate her own tariff. As it is, China is crippled to such an extent that she cannot alter her tariff without the consent (if the Powers,- nay, what is worse, their unanimous consent. '11 . in so far as the control of the tariff is in the hands of t : a Powers, to that extent is China's sovereignty impai 382 IMPAIRMENTS OF SOVEREIGNTY In view of these serious disadvantages, the Chinese Government is determined to recover tariff autonomy at the earliest moment possible. In 1906 she established the Shui-wu-chu, or Board of Revenues, to supervise and centralize the administration of the revenue departments of the Government, including the Maritime Customs, which step, however, did not do away with the foreign supervision of the Chinese Marlime Customs. In 1908, a Customs Training College was established at Peking to prepare students for customs service when her con- trol of the customs should be recovered. Besides these preparatory measures, at the Paris Peace Conference, the Chinese Government, through its Delegation, an- nounced its claim for the restoration of her tariff autonomy. "To conform to the aim and object of the League of Nations it is urgently desired that the right of China to revise the existing tariff conventions should be recog- nized and agreed to by the friendly Powers. "The prolonged unfavorable balance of trade and the constant increase of national debt have created a serious financial and economic stress which can only be relieved by consolidating the system of taxation and encouraging the export trade, which will in turn benefit the importers by increasing the people's purchasing power. This reform has long been overdue, and in placing China's case before the Peace Conference the Chinese Government have be- hind them the voice of the whole country. It is to be hoped that the friendly Powers will restore to China the same fiscal right as is enjoyed by all independent nations so that the Chinese people may develop their natural resources, become better customers of the world's commodities, and contribute their share to the progress and civilization of mankind." :,i As a practical measure, the Chinese Government pro- posed to supersede the conventional tariff two years there- TARIFF AUTONOMY 383 after by the general tarilT now applicable to the non- treaty Powers, that is, by 1921. Prior, however, to the complete restoration, it proposed to enter into negotiation with the Powers with a view to arranging a new conven- tional tariff on the articles in which they are especially interested, and, under these conditions : "1. Any favorable treatment must be reciprocal. "2. A differential scale must be established so that luxuries should pay more and raw materials less than necessaries. "3. The basis of the new conventional rate for neces- saries must not be less than twelve and a half per cent in order to cover the loss of revenue resulting from the abolition of likin as provided for in the commercial treaties of 1902-1903. "4. At the end of a definite period to be fixed by new treaties, China must be at liberty not only to revise the basis of valuation, but also the duty rate itself. "In return for such concessions China is willing to abolish the undesirable tax of likin so that anything that tends to hinder the development of trade may be removed once for all." 34 Notwithstanding the failure of her claim, China recov- ered her tariff autonomy from Germany and Austria- Hungary. Article 128 of the Treaty of Peace with Ger- many reads : "Germany renounces in favor of China all benefits and privileges resulting from the provisions of the final Protocol signed at Peking on September 7, 1901, and from all annexes, notes and documents supplementary thereto." This includes the relinquishment of German rights in Chinese tariffs. Article 129 further Stipulal "China, however, will no longer be bound to grant to Germany the advantages or privileges which she allowed Germany under these arrangements." This i the arrangement of August 29, 1902, regarding the new Chinese Customs Tariff, thus specifically eliminating tier- many from the list of the privileged nations in the 384 IMPAIRMENTS OF SOVEREIGNTY Chinese tariff agreement. Similarly, she recovered her tariff autonomy from Austria and Hungary. 88 NOTES TO CHAPTER XXIII 1. Hertslct's China Treaties, Vol. 1, No. 1. p. 10. 2. State Papers, Vol. 31, pp. 132, 141 et seq. 3. State Papers, Vol. 32, p. 791 et seq. 4. Hcrtslct, Vol 1, No. 39, p. 258 et seq. 5. State Papers, Vol. 32, pp. 791-792. 6. Hertslet, Vol. 1, No. 6, pp. 26-27, Art. 26. 7. Ibid., Art. 27. 8. Ibid, Art. 28. 9. Hertslet, Vol. 1, No. 7, p. 35 et seq. 10. Hertslet, Vol. 1, No. 7, p. 41 et seq. 11. Hertslet, Vol. I, No. 7, pp. 36-40, 41 et seq. 12. Hertslet, Vol. 1, No. 40, pp. 269-286. 13. Hertslet, VoL 1, No. 41, p. 286, Nov. 24, 1858; State Papers, Vol. 51, pp. 654, 662. 14. Hertslet, VoL 1, No. 95, pp. 552-553. 15. Hertslet, Vol. 1, No. 81, p. 457, Art. 4, Treaty of June 13, 1858. 16. Hertslet, Vol. 1, No. 26, p. 123 et seq. 17. Hertslet, Vol. 1, No. 27, p. 148 et seq. 18. Hertslet, Vol. 1, No. 28, p. 174. 19. Hertslet, Vol. 1, No. 28, p. 180. 20. Hertslet, Vol. 1, No. 100, pp. 566, 568. Art. 4. 21. Hertslet, Vol. 1, No. 66, p. 384, Art. 1. 22. MacMurrav, 1917/7. 23. China Year Book, 1919, p. 422. 24. \V. W. Willoughby, Foreign Rights and Interests in China, p. 119. 24A. Morse, The Trade and Administration of China, p. 367. 25. Hertslet, Vol. 1, No. 7, pp. 39-40. 26. MacMurray, 1898/2. 27. Hertslet, Vol. 1, No. 6, p. 32, Art. 45, Treaty of June 26, 1858; also No. 12, p. 79, Chefoo Agreement, Sept. 13, 1876, Sec. 3, Clause 5; No. 28, p. 171, Art. 1, Treaty of Sept. 5, 1902. 28. Hertslet, Vol. 2, No. 124, p. 634, Sec. 3, Art. 1. 28A. Hertslet, Vol. 1, No. 6, pp. 27-28, Art. 28, Treaty of June 26, 1858; No. 7, p. 38, Rule 7, Agreement of Nov. 8, 1858; No. 28, p. 174 et seq., Art. 8, Treaty of Sept. 5, 1902. 29. Hertslet, Vol. 1, No. 26, p. 128, Art. 6, Final Protocol of Sept. 7, 1901. 30. The Shantung Question, presented by China to the Paris Peace Conference, published by the Chinese National Welfare Society of America, 1920, p. 87. 31. Ibid., p. 87. TARIFF AUTONOMY 385 32. Chin Chu, The Tariff Prohlem in China, pp. 86-88. 33. The Shantung Question, op. cit., pp. 88-89. 34. Ibid., p. 89. 35. Treat}' of Peace with Austria, Sup. of American Journal of Int. Law, Jan. and April, 1920; Treaty of Peace with Hun- gary, June 4, 1920, The American Journal of International Law, Jan., 1921. PART V NEW PROBLEMS ARISING SINCE THE WAR XXIV. The New International Banking Con- sortium. XXV. The New International Banking Con- sortium (Continued). XXVI. The League of Nations and China. XXVII. The Shantung Question. XXIV THE NEW INTERNATIONAL BANKING CONSORTIUM If there is any factor destined to affect the foreign re- lations of China in the next decade or so, it is the New International Banking Consortium. From a business point of view, it is nothing more than an international combine of the banking groups of the United States, Great Britain, France, and Japan, for the purpose of coopera- tive investment in China; but from the viewpoint of his- tory and the political situation in the Far East, it signifies more than mere business, and is pregnant with tremen- dous political potentialities. The new consortium is not a novel invention ; it has its predecessor. To recall what has been said, the old consortium was formed in 1908, consisting of the bankers of France, Great Britain, Germany, and the United States, which concluded the Hukuang Railway loan of May 20, 191 1. 1 The same consortium also negotiated the cur- rency and industrial development loan of April 15, 191 1. 2 Subsequently, this quadruple syndicate was expanded into a sextuple consortium, adding to its memmbership Russia and Japan, which, despite the withdrawal of the American group, concluded the Reorganization Loan of April 26, 1913. 8 With the advent of the World War. the sextuple irtium, which had been reduced to a quintuple group, d into oblivion. To be brief, the formation of the new consortium dates from L917, when a suggestion was made as to an Amer- ican I oan to < hina so that the latter could he equipped in effective participation in the- World War. In June of 1918, the Department of State called together 389 390 PR< CLEMS ARISING SINCE THE WAR a number of American bankers interested in Chinese finance. As an outcome of the conference, it was decided that in addition to the American Group of Bankers, the United States Government would request the govern- ments of Great Britain, France, and Japan, to organize their respective banking groups and participate in the new consortium, on the basis of full equality and partner- ship. Accepting the principles of the American proposal, representatives of the Allied Powers concerned met at the Paris Peace Conference on May 11 and 12, 1919, when several resolutions were passed and an agreement was reached. Upon approval of the governments con- cerned, the representatives of these banking groups met in New York City in October, 1920, and signed the agree- ment. To be more specific, the formation of the new con- sortium is a long story, and marked by several diplomatic events of great political significance. The beginning of the project goes back to the month of June, 1918, when the State Department called together the American bankers interested and experienced in Chinese finance. At the conference, the project of loaning to China and the best way of doing so were discussed. On July 8, 1918, the banking firms interested (J. P. Morgan & Co., Kuhn, Loeb & Co., The National City Bank of New York, the First National Bank, New York, the Chase National Bank, the Continental and Commercial Trust & Savings Bank of Chicago, Lee Hegginson & Co., and the Guaranty Trust Commpany of New York), informed the Department of State that in their opinion a consortium of the banking interests of the four Powers — the United States, Great Britain, France and Japan — should be formed, that one of the conditions of membership should be the relinquishment of existing or future options, and that in case of a loan issue, the Department of State should make a declaration announcing that the loan was THE NEW BANKING CONSORTIUM 391 to be made at the suggestion of the Government.* In response to this communication, the Department of State replied, on July 9, 1918, that it would comply with the wishes of the American Bankers. As a fuller statement, the Department of State gave to the press on July 29, 1918, the statement which we have quoted in the chapter on The Policy of the United States in China, setting forth the essential features of the new policy." (1) The formation of a group of American bankers. (2) The cooperation of the bankers with the Depart- ment of State, particularly with reference to policies. (3) The approval by the Department of State of the names of banks composing the group. (4) Approval of the terms and conditions of the loans by the Department of State. (5) Diplomatic support in the execution of equitable contracts. (6) The formation of the national hanking groups of Great Britain, France and Japan and their association with the American group. Meanwhile, the Department of State entered into nego- tiation with the Governments of Great Britain, France and Japan. On August 14, 1918, the British Foreign Office asked for an elucidation of the scope of the new consortium; whether the contemplated loan was to be ;i second or supplementary Reorganization Loan or an entirely different one; whether it was to include only administrative loans or also industrial and railway loans, the latter of which were excluded from the scope of the former consortium by the intergroup agreement of P September 26, 1913; whether the relinquishment of op- tions was to include only the options nn administrative loans or also on industrial in which ease the British Gov- ernment feared to concur until they should have consulted the British interests involved; and finally, whether the 392 PROBLEMS ARISING SINCE THE WAR policy of maintaining the political independence and sov- ereignty of China was to preclude any possibility of foreign supervision in collection of revenues pledged as securities and the employment of foreign advisers to supervise the introduction of reforms. Jn reply, the Department of State, on October 8, 1918, despatched a memorandum covered by a note, to the French, British and Japanese Embassies explaining that it was not the intention of the United States Government to rejoin the old consortium, but that a new one was to be organized ; that the relinquishment of options was to cover all options of whatever nature; that the loans were to include both administrative and industrial loans; and that the policy of maintaining the political integrity and sovereignty of China did not preclude the possibility of foreign super- vision in the collection of revenues pledged as securities and the employment of a foreign adviser as prescribed in the terms of the loan. 7 On March 17, 1919, the British Foreign Office ace the proposals of the United States Government for a new consortium, setting forth as their understanding that the formation of the four Tower group should not preju- dice the claims of Belgium and Russia, that financial operation not involving a Chinese Government guarantee or a public issue should remain open to all, that "the -roups will pool nil existing and future options except such concession as may be already in operation," that each national group will receive the active and exclusive diplomatic support of its government, and further adding that the contracts for the execution of the engineering or other works to he built out of the proceeds of the loan and for the supply of the necessary materials should be put up to public tender and that the loans to hi' made in the immediate future, in view of the dire need for re- construction in consequence of the World War, should be of moderate dimension-." On May 11-12, 1919, the representatives of the hank- THE NEW BANKING CONSORTIUM 393 ing groups of Great Britain, France, Japan and the United States with the sanction of their respective governments, met at the Paris Peace Conference for the purpose of organizing the new consortium. A set of resolutions was unanimously adopted and submitted to the four govern- ments concerned for approval. On May 31, 1919, the United States Government, in a note to the French, Brit- ish and Japanese Emhassies announced its acceptance and approval of the resolutions and at the same time urged the other governments to give similar confirmation, "in order that the formation of the new consortium may be completed, prior to the expiration of the old consortium agreement on June 18, next." 9 On June 7, 1919, the British Foreign Office signified its acceptance and approval of the resolutions with the exception, however, to "the statement in the preamble of the agreement that the groups are entitled to the exclu- sive support of their respective Governments," giving as its reason that the British Group "have hitherto failed to comply with the conditions on which alone His Majesty's Government are prepared to guarantee exclusive official support." 10 In view of this exception of the British For- eign Office, at the suggestion of the French Government, the formula regarding diplomatic support was slightly modified, the principal change being "in pledging each government to the support of its respective national group rather than to the consortium collectively." The modified form which was communicated, on July 3, 1918, to the French, Japanese and British Embassies, reads as fol- lows:" "" "The governments of each of the four participating groups undertake to give their complete support to their respective national groups members of the consortium in all operations undertaken pursuant to the resolutions and agreements of the 11th and 12th of May, L919, n tively, entered into by the bankers of Paris. In the event 394 PRI >BLEMS ARISING SINCE THE WAR of competition in obtaining of any specific loan contract the collective support of the diplomatic representatives in Peking of the four governments will be assured to the consortium for the purpose of obtaining such contract." On July 17, 1919, the British Foreign Office accepted the American formula. 1J ( >n June 18, 1919, Mr. Odagiri of the Yokohama Specie Bank communicated with Mr. Thomas W. Lamont of J. P. Morgan & Company, setting forth the Japanese reser- vation of Manchuria and Mongolia from the scope of the new consortium, claiming special interests therein arising from historical and geographical relations and cit- ing as a precedent the same Japanese reservation made at a meeting of the Six Power Groups held at Paris on June 18, 1912. A similar communication, mutatis mutan- dis, was dispatched to the representatives of the British and French Groups. His letter follows : "With reference to our interview in Paris, and Mr. Tatsumi's conversation with you on the 16th instant in connection with the proposed new consortium for Chinese business, for your information I would wish to communi- cate to you that we have been instructed by our principals in Japan that all the rights and options held by Japan in the regions of Manchuria and Mongolia, where Japan has special interests, should be excluded from the ar- rangements for pooling provided for in the proposed agreement. This is based on the very special relations which Japan enjoys geographically, and historically, with the regions referred to, and which have been recognized by Great Britain, the United States, Prance and Russia on many occasions. In this connection I would wish to specially draw your attention to a Note from the Secre- tary of State to the Japanese Ambassador, dated, Wash- ington, November 2nd, 1917. 'Furthermore the following matter which was dealt with under the present Group Agreement, was reserved THE NEW BANKING CONSORTIUM 395 by the Japanese Group at the time of signature of the Chinese Reorganization Loan Agreement. "On the 18th of June, 1912, at a meeting of the Six Groups held in Paris, when discussing the agreement for the Chinese Reorganization Loan about to be issued, the following declaration was made by Mr. Takeuchi on he- half of the Japanese Group and was recorded in the min- utes of the conference: "The Japanese Bank declared that it takes part in the loan on the understanding that nothing connected with the projected loan should operate to the prejudice of the special rights and interests of Japan in the regions of South Manchuria and of the Eastern portion of Inner Mongolia adjacent to South Manchuria." On June 23, 1919, Mr. Lamont acknowledged the re- ceipt of the letter, but in a firm tone rejected the reserva- tion. "Mongolia and Manchuria," he said," are import- ant parts of China, and any attempt to exclude them from the scope of the Consortium must be inadmissable." At the same time he informed the Japanese representative that he would refer the question to the Department of State, it being "beyond the immediate competence of the financial group to discuss." In refutation of the pre- cedent cited by Mr. Odagiri respecting the previous reser- :: made on June 18, 1912, he observed that the Brit- ish, German, French and American Groups bad not ac- cepted the reservation at the conference of that date. "For your information I beg to recall to you that at the same time there Was record d in the minutes of the con- ference the following declaration: 'The British, French, German and American Groups stated thai they were un- to accept or consider either of these declarations upon the ground that they were not competent to deal with political questions.' " I: attention having been called to the Japan vation, the Department of State expressed its view July 30, 1919, politely declining to entertain the special PROBLEMS ARISING SINCE THE WAR : ; m of Japan. "Reservations of regions can only impair its (the consortium's) usefulness as an instrument . and limitations on its activity can only detract from its utility as a means for promoting international cooperatiori among those most interested in China. More- over, as all the other parties in the arrangement have I to ] their rights an 1 options without other • vati >n than that contained in the terms of the agreement itself, it is only equitable that the same rule should apply to all alike." "" Meantime, on August 11, 1919, the British Foreign Of- fice called the attention of the Japanese Government to the fact that her special reservation would be contrary to the principle of the new consortium and would tend to give Japan a preferred and special status in the consor- tium. 15 In response, the Japanese Government, on August 27, 1919, accepted the resolutions adopted at the Paris Peace Conference in May, 1919, but still insisted on the- reser- vation of South Manchuria an 1 Eastern Inner Mongolia from the scope of the new consortium with this modifi- cation, however, that Manchuria and Mongolia had been changed to South Manchuria and Eastern Inner Mongolia, thus limiting the area of Japan's special interest. The note follows : 10 "The Japanese Government accept and confirm the resolution adopted at the meeting of the representatives of the hankers groups of the United State-, ( ireat Britain, France and Japan at Paris on May 11 and 12, 1919, for the purpose of organizing an international consortium for financial business in China; provided, however, that the acceptance and confirmation of the said resolution shall not be held or construed to operate to the prejudice of pedal rights and interests possessed by Japan in South Manchuria and Eastern Inner Mongolia." THE NEW BANKING CONSORTIUM 397 In response, on October 28, 1919, the Department of State declared that such a measure would revive the doctrine of the sphere of influence even in a worse form than was followed during the days when China w; the brink of disintegration, but assured the Japanese Gov- ernment that the vested interests and even the extension thereof in these regions would be excluded from the scope of the consortium. 17 Similarly, echoing the sentiment of the United States Government, the British Foreign Office, on November 20, 1919, notified the Japanese Government that her reserva- tion, based as it was on territorial claims, would be con- trary to the principle of the new consortium to a! the sphere of influence, and to open the whole of China to world commerce. Further, while assuring Japan that vested interests, including railways in South Manchuria, would be exempt from the operation of the new consor- tium, it pointed out that inasmuch as Japan had not as yet established any vested interests in Eastern Inner Mon- . though holding options therein for railways, and especially in view of the strategic location of Eastern Inner Mongolia in relation to Peking, whose southern boundaries extended and practically envelop the capital of China, the reservation of such a sphere of influence would be irreconcilable with the principle of the main- tenance of China's independence and territorial integrity. It concluded with the friendly suggestion that Japan should give prompt attention to the situation, "in view of the disastrous situation on the verge of which China appears now to find herself," hinting apparently at the ible insolvency of ( Ihina. 17 ** (ailed forth by the remonstrances of the United States and Great Britain, Japan, on March 2, 1920 — after a silence of about six mouths once more reenforced her insistence on the reservation by the argument of national defense, contending that South Manehuria and Eastern 398 PROBLEMS ARISING SINCE THE WAR Inner Mongolia, located as they are. are vital to Japan's national defense and economic existence, especially in view of the growing menace of the Russian situation in Siberia, and meanwhile offering instead a revised formula of reservation retaining to Japan the power of veto, or freedom of action, in case of loans affecting South .Man- churia and Eastern Inner Mongolia calculated to menace the economic life and national defense of Japan, and giving a list of Japanese railways in South Manchuria which are to be excluded from the control of the con- sortium. 1 '' A similar communication was handed to the J'.ritish Foreign Office on March 16, 1920. 10 Meanwhile, to disentangle the situation, at the request of the American Banking Group, and with the approval of the Department of State and of the British and French Banking groups, Mr. Lamont had sailed for the Far East and was in Japan throughout the month of March, 1920, and conducted negotiations in person with the Japanese Government. 20 While Mr. Lamont was in Japan, the Department of State, on March 16, 1920, once more uttered the remonstrance that in view of the general recognition accorded to the right of national self-preser- vation, and further of the Lansing-Ishii Agreement of September 2, 1917, there was no real necessity even for a reservation under the form of the revised formula. At the same time, it pointed out the inconsistency of includ- ing in the reserved list the projected line from Taonanfu to Jehol, and thence to the coa>t. which is not essential to the national safely or economic existence of Japan. 81 Likewise, on March 19, 1920, Earl Curzon responded to Viscount Chinda, rejecting the revised formula aa be- ing "so ambigUOUS and general in character that it might be held to indicate on the part of the Japanese Govern- ment a continued desire to exclude the cooperation of the other three banking groups for participating in the development, for China's benefit, of important parts of THE NEW BANKING CONSORTIUM 399 the Chinese Republic," and declining to believe that "it is essential for Japan alone to construct and control, for instance, the three railway lines mentioned in the third reservation lying to the west of South Manchuria Rail- way, and finally pledging the assurance that the Japan- ese Government need have no reason to apprehend that the consortium would direct any activity affecting the economic security and national defense of Japan." - lA In view of the persistent opposition of the United States and Great Britain, Japan yielded. Relying upon their assurances, she relinquished the request for the ac- ceptance of the revised formula, on condition that the other Powers should give similar assurance. Respecting the railway from Tannanfu to Jehol and thence to a sea- port, while admitting that it was projected "with the strategic object of making it a means of common de- fense on the part of China and Japan against foreign in- vasion coming from the direction of Ourga," Japan like- wise yielded and assented to the inclusion of the line or lines in Mongolia within the operation of the new con- sortium. In relinquishing the concession, however, she attached two conditions which she asked the Towers con- cerned to accept.-' 2 A similar despatch was sent to the British Foreign Office on April 14, 1 ( )20.-- A (1) In the event of the new consortium projecting in future a scheme of extending the Taonanfu-Jehol railway to the north with a view to connection with the Eastern Chinese Railway, the assent of the Japanese Government thereto must he obtained beforehand through the Japan- ese ,^ r roup, inasmuch as such an extension being tanta- mount to a renewal of the so-called Chinchou-Aigun rail- way scheme against which a protesl was lodged by Japan when the question was motioned some years ago, LS cal- culated to have a serious effect upon the South Manchuria Railway. (2) In consideration of the particular desire of Japan 400 PROBLEMS ARISING SINCE THE WAR that these two lines should he built as speedily as possible, the Japanese group, after due consultation with the other groups, may be permitted to undertake their construction single handed in the event of the other three Powers as- sociated in the new Consortium being reluctant to finance it. In that case, having regard to the fact that these rail- ways must cross the Peking-Mukden Railway at a cer- tain point, the American group will give their support to the overture which the Japanese financiers will make to their British colleagues with a view to perfecting the junction of these lines." Regarding the two conditions, Earl Curzon replied, on April 28, 1920, counseling the Japanese Foreign Office to forego the conditions and be satisfied with the general assurance as given above, for "granting to any one party to the consortium the power to veto in advance the pos- sible construction of a railway would appear to be con- trary to the principles upon which the idea of the con- sortium is based," and because the second condition would be included in the articles of the Inter-Group Agreement of May 12, 1919. At the same time he withdrew the objection of the British Government to the exclusion from the consortium of the two projected lines from Tannanfu to Changchun and from Taonanfu to Chengkiatun.-' 3 In the same way, the Department of State, on April 29, 1917 — one day after the British an- swer — replied that the first condition of retaining the veto power would be contrary to the principles of the consor- tium and the second condition "would appear to be already provided for in Article IV of the Inter-Group Agreement at Paris on May 12th, paragraph 19, of which the American Government has expressed its approval." 24 I In view of this determined resistance, on May 8, 1920, Japan yielded, this time completely. She waived the two conditions as above set forth, and consented to enter the consortium without any reservation or condition.- 5 A THE NEW BANKING CONSORTIUM 401 similar note was likewise despatched to the British For- eign Office on May 11. 1920. 2 ' On May 8, 1920. the De- partment of State expressed its gratification at the with- drawal of all conditions and reservations by Japan and its expectation — "that such practical juint endeavor is the beginning of a new era of good will and a plishment for both governments."-' 7 Similarly on May 17, 1920. the British Foreign Office expressed its gratifi- cation, and reiterated the assurance.-' On May 25, 1920, the much belated word came from the French Government pledging to observe the same general assurance as given by the American Govern- ment.*' Meanwhile. Mr. Lamont had already reached a com- promise at Tokio, which consisted of transferring to the Consortium the line from Taonanfu to Jehol and another line from any point on the Taonanfu-Jehol Railway to a seaport and of excluding the other railways as enumerated below from the scope of the consortium. On her part, Japan engaged to withdraw all reservations in toto. This compromise was embodied in an exchange of letters on May 11, 1920, as follows: 30 N. Kajiwara to T. W. Lamont. May 11, 1920. "We have now the honor to inform you that certain points in the Agreement and in the operations of the pin- posed consortium, hitherto somewhat obscure, having been chared up to the satisfaction of our Government and of ourselves, we are now able in accordance with the instructions of the Japanese ( iovernincnt to withdraw our letter dated 18th June last and announce that, con- jointly with the American. British and French Banking Groups and on like terms with them, we will accept the consortium agreement We In '4 at the same time I our hearty concurrence with the general ideas and objects of the consortium in respect to China." T. W. Lamont to X. Kajiwara. May 11, L920. 402 PROBLEMS ARISING SINCE THE WAR "We beg to acknowledge with thanks, the receipt of your communication of May 11th, 1920, informing us, in behalf of the Japanese Banking Group that, under the instructions of your Government, you have now with- drawn your letter dated June 18th, 1919, and have adopted, in association with the Banking Groups of America, Great Britain and France and on like terms with them, the agreement for the establishment of a New Consortium in respect to China. "Inasmuch as some questions have arisen during our discussions as to the status of specific railway enter- prises contemplated or actually begun in Manchuria and Mongolia, we hereby confirm that we have agreed with you as follows : "(1) That the South Manchurian Railway and its present branches, together with the mines which are sub- sidiary to the railway, do not come within the scope of the consortium ; "(2) that the projected Taonanfu-Jehol Railway and the projected railway connecting a point on the Taonan- fu-Jehol Railway with a seaport are to be included within the terms of the Consortium Agreement ; "(3) that the Kirin-Huining, the Chengchiatun-Taon- anfu, the Changchun-Taonanfu, the ECaiyuan-Kirin (via Ilailung), the Kirin-Changchun, the Sinminfu-Moukden and the Supingkai-Chengchiatun Railways are outside the scope of the joint activities of the consortium. "The foregoing letter of acknowledgment, although written in behalf of the American Banking Group, has, we are assured, the cordial approval of the British and French Banking Groups, also of the Governments of the United States, of Great Britain and of France." Having thus smoothed the way by the compromise, the representatives of the four national hanking groups met in New York City in October, 1920. At the conference, the application of the Belgian Banking Group was ac- THE NEW BANKING CONSORTIUM 403 cepted, subject to the approval of the four governments already involved. The suggestion was also favorably entertained of welcoming a Chinese National Banking Group, provided such a unit should be formed in China. It was further agreed to inquire of the Chinese Govern- ment as to the possible measures to be taken to render assistance to the currency reform of China. Respecting the German-issued bonds of the Hukuang Railway Loan of 1911, the interest charges of which the Chinese Gov- ernment had withheld, the conference resolved to ask the Chinese Government to recognize these bonds just as the other bonds of the entire issue. Particular attention was also given to the new railways, improved methods of com- munication, the purchase of materials, standardization of railway equipments, etc. On October 15, 1920, the Consortium agreement was signed, and the New Consortium was formally organized. NOTES TO CHAPTER XXIV 1. MacMurray, 1911/5. 2. MacMurray, 1911/2. 3. MacMurray, 1913/5. 4. Documents Concerning the New Consortium, released to press by the Department of State, March 30, 1921, Am. Bankers to Dept. of State, July 8, 1918. 4A. Ibid., Department's Letter of July 9, 1918, to the Bankers. 5. N. Y. Times, July 30, 1918. 6. Documents Concerning the New Consortium, British For. Office to American Embassy, London, Aug. 14, 1918. 7. [bid., Department's Note ami Memorandum to the French, British and Japanese Embassies, Oct. 8, 1918. 8. Ibid., British For. Office to American Embassy, London, March 17, I'M''. 9. Ibid., Department's Note of May 31, 1919, to the French, British and Ja] ies, 10. Ibid., British Embassy. Washington, to the Department of Stat,-, June 7. I'M'*. 11. Ibid.. Department's Note of July 3, to French, Ja; anint Sept 28, 1920. 4. Copy furnished thn of .1. P. Morgan >S. I 5. Documents, op. cit, Joint Note of American, Bnti h, French and Jaj inese 1/ iti n .it Peking to < bine e Foreign Office. Jan. 13, 1921. XXVI THE LEAGUE OF NATIONS AND CHINA Another event that has affected, or is going to affect, the foreign relations of China, is the League of Nations. In this treatise, we do not propose to deal with the or- ganization, operation, or efficacy of the League as it is, which falls beyond the scope of this work, but we do aim, rather, to treat of the effects it has upon the for- eign relations of China and of the rights and duties which she has incurred by virtue of her membership therein. Before the advent of the League, there was no guar- antee or protection for the territorial integrity and po- litical independence of any nation. To maintain its na- tional existence, every nation was obliged to depend upon its own armament or upon the help of its allies. In other words, the rights of territorial integrity and political independence were not secured by any other means than the armament of the nations themselves and the arbitrament of war. Stated in another way, the nations, for want of adequate remedy furnished by the society of nations, had no more rights of sovereignty than those which their own armament and other resources could maintain and those which the other states were willing or forced to accord to one another. For instance, after China's disastrous defeat of 1894-5 by Japan, the Powers proceeded to her and seized various strategic bases. In the eyes of the Powers, China had no more rights of sovereignty than those which her own armament and other resources could de- fend and those which the Powers accorded to her. In short, under the old regime, the sovereign rights of ter- 416 THE LEAGUE OE NATIONS AND CHINA 417 ritorial integrity and political independence were not se- cured by any international protection or guarantee, and she was therefore exposed to the ill-treatment and spoliation of the stronger Powers. Thus, the old regime was the rule of might, and not of right. The new order, however, as inaugurated by the League of Nations, furnishes what was kicking in the old regime. no matter how inadequate and how impotent it may prove to he. That is, it provides for an international guarantee or protection of the sovereign rights of ter- ritorial integrity and political independence. While for- merly there was practically no court of appeal for the vindication of national rights, now there is the League which requires the submission of all disputes among the members either to arbitration or to inquiry by the Council or the Assembly of the League. While under the old regime there was no international guarantee or protection for national rights as growing out of sov- ereignty, in the new order there are the sanctions pro- I in the League Covenant consisting of diplomatic severance, economic boycott, international force upon the recommendation of the Council, and expulsion from the League by a unanimous vote of the Council and As- sembly. Whereas in absence of a league each nation had no other alternative than either to fight or to sub- mit, in case of an ultimatum or actual invasion, as shown in the case of Japan's ultimatum of May 7, 1915, now under the protection of the League a member SO threat- ened ran appeal to the Council or Assembly, or submit to arbitration, in which cases, if the recommendation of the Council is unanimous, or if that Of the Assembly is concurred in by the representatives of the Powers on the Council and a majority of the other mem- tuding in each ease the parties to the dispute, or if the award of the arbitration is properly made, the party so threatened ran abide by the award or recom- mendation and thus win the protection of the League. 1 418 PROBLEMS ARISING SINCE THE WAR Thus, however inadequate, a remedy is provided for the rights of nations, which was non-existent under the old regime. This surely is a step forward in the po- litical evolution of mankind. With this provision of an international guarantee or protection for national rights, China's foreign relations undergo a change for hetter. Whereas formerly China could not appeal to any tribunal or constituted authority in case of the violation of her rights, but had either to submit or fight, she can now call for arbitration, or ap- peal to the Council or the Assembly for a recomm tion ; and should she choose to abide by an award or recommendation made in pursuance of the provisions of the Covenant of the League, she would obtain its protection in case of an attack. While under the old regime her rights of territorial integrity and political independence were insecure except as her own arma- ment, or jealousy among the Powers, or their friendly assistance could maintain them, her territorial info and political independence are now assured by the League, or at least supposed to be so assured. To put it concretely, under the protection of the League, the threatened partition of 1900 is not likely to come to pass again, nor the German seizure of Kiaochow, nor the Japanese ultimatum of May 7, 1915. Herein lies a great advance in the foreign relations of China as arising out of the existence of the League." Having seen the improvement in China's foreign re- lations as growing out of the existence of the I.' and her membership therein, we will ue.\' r the rights and duties she has acquired as a member of the ue. At the meeting of the Assembly, she has the right to cast one vote and to have no more than three representatives (Article- 3). At the meeting of the Council, by virtue of her recent election then has the right to cast one vote and to send one represen- THE LEAGUE OF NATIONS AND CHINA 419 tative (Article 4), although "any member of the League not represented on the Council shall be invited to send a representative to sit as a member at any meeting of the Council during the consideration of matters specially affecting the interests of that member of the League" (Article 4). As a friendly right of each member of the League, she can "bring to the attention of the Assembly or of the Council any circumstance whatever affecting international relations which threatens to disturb in- ternational peace or the good understanding between na- tions upon which peace depends" (Article NI).- U She has also the right to withdraw from the League, after two years' notice, "provided that all its international obligations and all its obligations under this Covenant shall have been fulfilled at the time of its withdrawal" (Article I) ; and to refuse to be bound by any amend- ment, in which case she ceases to be a member of the League (Article 26). What is more important, she can appeal to the Council for inquiry and recommendation, in case of any dispute, or submit to arbitration. "The Members of the League agree that if there should arise between them any dispute likely to lead to a rup- ture, they will submit the matter either to arbitration or to inquiry by the Council, and they agree in no case sort to war until three months after the award by the arbitrators or the report by tin- Council. In any case under this Article the award of the arbi- trators shall he made within a reasonable time, and the report of the Council Shall he made within six months after the submission of tin- dispute" (Article 12). In "disputes as to the interpretation of a treaty, a- to any question of international law, as to the existent any fact which if established should constitute a breach of any international obligation, Or as to the extent and 420 PROBLEMS ARISING SINCE THE WAR nature of the reparation to be made for any such breach" (Article 13), which are declared to be generally appropriate for submission to arbitration, she can, with the consent of the other party or parties to the dispute, submit the matter to arbitration, and if she abides by the award, gains the protection of the League (Article 13). In disputes likely to lead to a rupture, and which are not submitted to arbitration, she can submit the mat- ter to the Council by giving notice to the Secretary General. "If a report by the Council' is unanimously agreed to by the members thereof other than the Repre- sentatives of the one or more of the parties to dispute, the Members of the League agree that they will not go to war with any party to the dispute, which complies with the recommendations of the report." This means that in case of a unanimous report by the Council ex- cepting the parties to the dispute, she gains the protec- tion of the League by compliance with the report or recommendation. If, however, the Council fails to render a unanimous report, then she can adopt what measures she pleases "for the maintenance of right and justice," which is tantamount to saying that she can make war, if she deems it tit and desirable. On the other hand, she can ask the Council to refer the matter to the Assembly if she does so within fourteen days after the submission of the dispute, in which case a report of all "the representatives of the Members of the League rep- resented on the Council and of a majority of the other members of the League, exclusive in each case of the representatives of the parties to the dispute, shall have the same force as a report by the Council concurred in by all the members thereof other than the representa- tives of one or more of the parties to the dispute" (Article 15). Finally, and what is equally as important as the right of appeal, she has the right of territorial integrity and political independence as guaranteed by Article 10: THE LEAGUE OF NATIONS AND CHINA 421 "The Members of the League undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all Mem- bers of the League. In case of any such aggression or in case of any threat or danger of such aggression the Council shall advise upon the means by which this obli- gation shall be fulfilled." As Wilson remarked, this is the heart of the Cove- nant. "Article 10 seems to me to constitute the very backbone of the whole Covenant. Without it the League would be hardly more than an influential debat- ing society." 3 On the other hand, since rights and duties are cor- relatives, in acquiring these rights, she also incurs cor- responding duties. By subscribing to the Preamble of the League which runs : "in order to promote international cooperation and to achieve international peace and security by the accept- ance of obligations not to resort to war, by the prescrip- tion of open, just and honorable relations between na- tions, by the firm establishment of the understand- ings of international law as the actual rule of conduct among governments, and by the maintenance of justice and a scrupulous respect for all treaty obligations in the dealings of organized peoples with one another, the High Contracting Parties agreed to this Covenant of the League of Nations." she places herself under obligation to observe, as far as feasible, the four ideals or methods of promoting inter- national cooperation and peace, namely: 1. By the acceptance of obligations not to resort to war ; 2. By the prescription of open, just and honorable relations ; 422 PROBLEMS ARISING SINCE THE WAR 3. By the firm establishment of the understandings of international law as the actual rule of conduct among Governments, and 4. By the- maintenance of justice and a scrupulous respect for all treaty obligations in the dealin organized peoples with one another. She also obligates herself to perform the necessary duties connected with the humanitarian tasks connected with tabor legislation, colonial administration, traffic in women, children, opium and other dangerous drugs, free- dom of communication and equitable treatment in inter- national commerce, prevention of disease, and Red Cross. 3A She further engages to bear the expenses of the Sec- retariat "in accordance with the apportionment of the expenses of the International Bureau of the Universal Postal Union" (Art. 6), which may include the ex- penses of any bureau or commission placed under the direction of the League (Art. 24). Without the con- currence of the Council, she is also not to exceed the limit of armament as recommended by the Council after she has adopted the recommendation. She is to inter- change full and frank information as to the scale of her armaments, her military, naval, and air programs and the condition of such of her industries as are adapt- able to war-like purposes (Art. 8). Should she be- come a mandatory for any colony she "shall render to the Council an annual report in reference to the terri- tory committed to its charge" (Art. 22), besides ob- serving the requirements as set forth in the mandate Respecting treaties, she must register every treaty or international engagement with the secretariat, and cause it io he published by the League as soon as possible, no treaty or international engagement being binding until so registered (Art. 18). '1 his means that she cannot enter into any secret treaties or alliances, hut must pre- THE LEAGUE OF NATIONS AND CHINA 423 scribe "open, just and honorable relations between na- tions." She further pledges not to conclude any treaty or agreement inconsistent with the terms of the League Covenant, and in case she has assumed obligations in- consistent therewith, she will take steps to obtain the necessary release therefrom. Article 20 reads : ''The Members of the League severally agree that this Covenant is accepted as abrogating all obligations or un- derstandings inter se which are inconsistent with the terms thereof, and solemnly undertake that they will not hereafter enter into any engagements inconsistent with the terms thereof. In case any Member of the League shall, before becoming a Member of the League, have undertaken any obligations inconsistent with the terms of this Covenant, it shall be the duty of such Member to take immediate steps to procure its release from such obligations." Thus, by assuming this obligation, she recognizes the supremacy of the League Covenant, which is to govern all past, existing, and future treaties and international engagements. In regard to the sanctions as provided in the Cove- nant, China obligates herself to participate in and con- tribute her share in the enforcement and application of these sanctions. She is to resort to diplomatic severance and economic boycott against the covenant-breaking state. She is to contribute her quota of the interna- tional force recommended by tin- Council. Sin- is t<» render mutual assistance in economic an allow • of troops to tin- cooperating i Article 16 dealing with the sanctions.)! the League read-: "Should any Member "i tin- League resort to war in disregard of its covenants under Articles XII. XIII or 424 PR( >BLEMS ARISING SINCE THE WAR XV, it shall ipso facto be deemed to have committed an act of war against all other members of the League, which hereby undertake immediately to subject it to the severance 01 all trade or financial relations, the prohibi- tion of all intercourse between their nationals and the nationals of the covenant-breaking State, and the pre- vention of all financial, commercial, or personal inter- • between the nationals of the covenant-breaking State-; and the nationals of any other State, whether a Member of the League or not. "It shall be the duty of the Council in such case to recommend to the several Governments concerned what effective military or naval force the Members of the League shall severally contribute to the armed forces to be used to protect the covenants of the League. "The members of the League agreed, further, that they will mutually support one another in the financial and economic measures which are taken under this Ar- ticle, in order to minimize the loss and inconvenience resulting from the above measures, and that they will mutually support one another in resisting any special measures aimed at one of their number by the covenant- breaking State, and that they will take the necessary steps to afford passage through their territory to the forces of any of the Members of the League which are cooperating to protect the covenants of the League. "Any Member of the League which has violated any covenant of the I .caguc may be declared to be no longer a Member of the League by a vote of the Council con- curred in by the representatives of all other Members." While China enjoys these rights and duties acquired through her membership in the League, her territorial integrity and political independence are, by no means, under an absolute, or even effective, guarantee of the League. In accordance with Wilson's interpretation, Article 10 entails no other than moral obligations on the part of the member states. Whatever the recommenda- tion of the Council may lie, the state concerned can still decide its own course of action. "The council of the THE LEAGUE OF NATIONS AND CHINA 425 League can only 'advise upon' the means by which the obligations of that great article are to be given effect to. Unless the United States is a party to the policy or action in question, her own affirmative vote in the Council is necessary before any advice can be given, . . . The United States will, indeed, undertake under Article 10 to respect and preserve against external aggression the territorial integrity and existing political independence of all members of the League, and that engagement con- stitutes a very grave and solemn moral obligation. But it is a moral, not a legal, obligation, and leaves our con- gress absolutely free to put its own interpretation upon it in all cases that call for action. It is binding in con- science only, not in law." 4 Hence, whatever protection or guarantee of territorial integrity and political independence China may obtain from the League must necessarily proceed out of the willing cooperation and good will of its Members. Meanwhile, she must be prepared to resist sudden inva- sions, as shown in the recent Russian invasion of Urga, the League having no instrument ready for action in such an emergency. She must also be prepared for war, in case the recommendation of the Council is not unan- imous, or in case the report of the assembly is not concurred in by the representatives of all the members of the League represented on the Council and a majority of the other members exclusive in each case of the rep- resentatives of the party or parties to the dispute, tor, in such cases, the League does not forbid war. but simply delays war for the duration of the time covering the consideration by the Council or Assembly within six months and three months after the delivery of the re- port or recommendation. It will, therefore, be a mistake on the part of China to di card her armament or even to neglecl it. trusting in the efficacy of the ue. It should rather be her duty to he fully pre- pared for war, just ;i> if there wnv im League in exist- 426 PRI IBLEMS ARISING SINCE THE WAR ence, bending, however, her efforts henceforth to inter- national peace and devoting her military and naval forces to the maintenance of the principles of the League. NOTES TO CHAPTER XXVI 1. For the Covenant of the League of Nations, see Hearings before the Committee on Foreign Relations, the United States Senate, Sixty-sixth Congress, Firsl Session, Senate Document No. 1f 1919, both China and Japan contended for the former German rights in Shantung. On April 30, 191'', the Council of Three rendered the decision in favor of Japan, which was in- corporated in Articles 156, 157, 158, of the Treaty of Peace with Germain-, signed at Versailles nn |uii' 28, 1919. 430 PROBLEMS ARISING SINCE THE WAR The question, as stated above, turns on these issues: 1. Whether Japan has the right ( 1 > To attack the leased territory of Kiaochow; (2) To land her troops at Lungkow and then inarch through Chinese territory; and (3) To sei/e the Kiaochow-Chinan Railway and the adjoining mines. 2. Whether China's Declaration of War abrogates all treaties, conventions and agreements with Germany and China thus recovers the German concessions in Shantung. 3. Whether Japan's possession of German rights in Shantung is validated by (1) The Treaty of May 25, 1915, and (2) The Agreement of September 24, 1918. As to whether Japan had the right to attack the leased territory of Kiaochow, there seems to be an honest dif- ference of opinion. On the one hand, China claims that, inasmuch as she reserved her sovereignty over the leased territory in Article 1 of the Lease Convention, 6 she can assert the neutrality of the leased territory in time of a war in which the lessee state is involved. In other words, arising from the reservation of sovereignty, she (hems the leased territory as neutral, and not subject to the hostile operation of belligerents. Further, even in case an attack should have become necessary to abate a nuisance or to remove a menace, she contends that her previous consent should have been obtained before the attack could be legitimate. On the other hand, Japan claims that, basing her ac- tion on the precedent of Tort Arthur and Talienwan, which leased territories she took from Russia in the war of 1904-5, the leased territories are not neutral, but sub- ject to the hostile operations of belligerents. The grant of the right of fortification, she contends, and the sur- render of the right of administration, during the term THE SHANTUNG QUESTION 431 of the lease, all indicate that these territories are proper objects of attack. She further maintains that, granted she had no right to attack the territory, she had notified the Chinese Government before the attack, and that the Chinese Government did not make any strenuous objec- tion, nor lodge any protest, but, on the contrary, requested participation in the attack, which, though rejected, could be taken as tantamount to tacit consent. 7 As to whether Japan had the right to land at Lungkow and march through the Chinese territory, it is quite safe to say that Japan had no such right, but, on the con- trary, exceeded the limit of her rights and violated the neutrality of China. China having declared her neu- trality by the Presidential Mandate of August 6, 1914, 8 Japan was under obligation to respect her neutrality. She had no more right to move her troops and supplies through the neutral territory of China than Germany had, in 1914, to cross the neutral territory of Belgium in order to attack France. "It is a principle of the law of nations that no belligerent can rightfully make use of the terri- tory of a neutral state for belligerent purposes, without the consent of the neutral Government." ° It has been contended by Japan that military necessity justified the violation, inasmuch as she could attack KiaocliMW more easily from the rear than from the front or side. This argument, however, does not seem to stand the test of analysis. In the first place, there was no military necessity calling for such a violation of China's neutrality. Japan could have attacked Tsingtao just as well by landing within the leased territory of Kiaochow as by way of Lungkow, if not better. This -was borne out by the action of the British, who, in due respect of China's neutrality, landed at Laoshan on September 23, and because of tin - distance from Laoshan to Tsingtao being less than from Lungkow to Tsingtao and fewer natural obstacles in tin- way, tiny reached the M-ene of action in time to participate in the first encounter with 432 PROBLEMS ARISING SINCE THE WAR the Germans. 10 This action on the part of the British clearly proved that there was no such military necessity, and this alone, in glaring contrast with Japan's action, is sufficient to establish the guilt of Japan. Granting for argument's sake that there was the mili- tary necessity, this still did not justify Japan's violation of China's neutrality. Germany pleaded the guilt of her own violation of Belgian neutrality on the ground of military necessity. But the world did not condone Ger- many's crime on that account. If the violation of Bel- gian neutrality is unjustifiable, as the verdict of man- kind and the late World War have held it to be so, Japan's violation of China's neutrality by landing in Lungkow is equally unjustifiable, even more so, because of the ab- sence of any ground of military necessity. Perhaps it may be argued that China's proclamation of the war zone, on the day of Japan's landing at Lung- kow, seemed to give her implied consent and hence justi- fied Japan's action. It must be understood, however, that in proclaiming the war zone, China did not thereby condone Japan's action, but rather aimed simply to pro- tect herself from any consequences resulting from the actions of belligerents within her territory, so that she could be free from any charges of negligence as a neutral. In fact, in the difficult and embarrassing situa- tion, the proclamation of a war zone was probably the only course of action for her to pursue. For China to resist Japan at Lungkow, in the face of force majeure, would have meant war, which would be contrary to the spirit of the law of neutrality. On the other hand, for China to remain silent would have been equally inexpedient, since Germany could then have claimed damage for injuries due to negli- gence on the part of China to preserve her neutrality. Confronted with such a dilemma, China was therefore constrained to proclaim the war zone, not to extenuate Japan but rather to protect her own position of neu- THE SHANTUNG QUESTION 433 trality. It is therefore plain that, notwithstanding the proclamation of the war zone, Japan's landing at Lung- kow remains a gross violation of China's neutrality. Respecting Japan's right to seize the Kiaochow-Chinari Railway and the adjoining mines, it is again evident that Japan had no such right. On the contrary, she did so in violation of China's neutrality. The railway and mines in question were situated within Chinese terri- tory, outside the leased territory of Kiaochow. and hence were under the protection of the Chinese authorities. No matter whether they were the public or private property of Germans, the fact that they lay within the Chinese territory was sufficient to clothe them with the protec- tion of China's neutrality, and to exempt them from seizure by any belligerent whatsoever. In fact, Japan perpetrated the seizure in spite of the repeated protests of the Chinese Government and thus knowingly violated China's neutrality. As the war zone delimited belligerent activities to the east of Weihsien or within one hundred miles west of Tsingtao, and as, on September 26, the Japanese troops proceeded to Weih- sien and occupied the railway station, the Chinese Gov- ernment protested on the next day, that is, September 27, 1914, as follows: "On the 7th of September a dispatch received from your Government stated that your Government under- stood, with some difficulty, what our Government meant in that declaration. This .Ministry (the Chinese Foreign Office) further declared that the railroad from Weihsien to Chilian should be under Chinese protection, and through Your Excellency we requested your Government to issue an order prohibiting your troops from advancing to Weihsien, or any place wesl of Weihsien. But now the troops of your Government have forced their way into Weihsien and taken possession of the railway. Con- sidering that the railway belongs to a Sino ( ierman corporation, thai all the railway stations have also been under Chinese protection, and in none of them has there 434 PROBLEMS ARISING SINCE THE WAR ever been any German troop, and that V. is in urely neutral territory, the acts committed by the troops of your country are manifestly contrary to the declaration and in violation of China's neutrality." u Following this protest, on thi ' iy, September 28, 1914, the Japanese Minister at Peking called at the Chinese Ministry of Foreign Affairs, and. to the surprise and indignation of the Chinese Government, informed the latter that, because of military necessity, the Jap troops would mov- rd from Weihsien and occupy the whole line. In consequence of this, on September 30, 1914, the Chinese Government again protested: "It is a settled principle that even the public property of a belligerent while on a neutral territory, cannot be attacked, or taken possession of by the other billigerent, much more so in the present case when the property in question is jointly owned by Chinese and German capi- tis. ... It has been a long while since the troops of your country have begun to attack Tsihgtao, and the German troops in Tsingtao have I rendered helpless, and entirely and long ago cut off from the com- munication through the Kiaochow Railway. Not only our Government will never allow the Germans to make use of the line, it is actually beyond their power to make if it. Therefore the contemplated action of your country is decidedly not a case of military neces In response to these repeated protests, the Japanese Government replied on October 2, 1914. that the Ger- man Kiaochow-Chinan Railway was of the same nature and character as the leased territory and that the pur- pose of Japan's attack was not only to eliminate the German base of Kiaochow, but to gain the control and administration of the railway in question. Reiterating the argument of military necessity, it contended that, lying at the rear of the leased territory, the control of the railway was essential to the safety of Japan in Kiaochow : THE SHANTUNG QUESTION 435 "Regarding the Shantung Railway, ... it is of the same character as the leased territory. This fact is be- yond dispute, in view of its origin, the special charter given by the German Government and the way in which the company draws its funds. . . . "Moreover, a railway from its very nature positively cannot he treated one part separately from the other. Although one part of this German-owned railway is situated west of Weihsien, it cannot be held as having changed its character on the ground that a part remains in neutral territory. Besides, the aim of the Imperial Government is not only to overthrow the base possessed by the enemy, but also to cause the control and admin- istration of this indivisible railway to fall into our posses- sion. "Although the Chinese Government holds that under the present condition the Shantung Railway cannot be utilized by the German troops in view of its severance with Chilian, yet from the attacking troops' point of view, the railway being immediately behind Tsingtao, and in view of the present situation, it is a serious danger to the military operation to leave a railway by the enemy perfectly free." 13 It can be seen, from these extracts from the official correspondence, that what China strove for was the preservation of her neutrality, and that what Japan aimed at was not only the leased territory of Kiaochow, but also the Kiaochow-Chinan Railway with the adjoining mines, although they lay within Chinese neutral terri- tory. Such faets cannot but compel a reasonable and impartial mind to declare that Japan, in gaining the control of the Kiaochow-Chinan Railway and the adjoin- ing mines, violated the neutrality of China. This conclusion is all the more convincing and ines- capable when the nil the inviolability of neutral territory, as summarized by John Bassett Moore, arc taken into consideration: M 436 PROBLEMS ARISING SINCK Till-; WAR ". . . It appears ( 1 ) that the commission of hostility against another on neutral territory is a violation of the law of nations; (2) that such violation involves an of- fense to the neutral nation, and that reparation from the offending belligerent is due to that nation alone; (3) that, if property was captured, it is the duty of the offending belligerent to restore it on the demand of the neutral; (4) that nations have, by numerous treaties, pledged themselves as neutrals and to use 'all the means in their power' to protect or effect the restitution of prop- erty in such cases; but (5) that the manner in which this obligation must be discharged was not ascertained by any express rule or by any general understanding." Applying these rules to Japan's seizure of the German Kiaochow-Chinan Railway and the adjoining mines lying within the Chinese neutral territory outside the leased area, it is clear that she violated China's neutrality and that, in consequence, she is under obligation, upon the demand of China, to restore the same. We now come to consider whether China's declaration of war abrogates all the treaties of whatever nature, thus legalizing China's recovery of Germany's former conces- sions in Shantung. The writers on international law are not agreed as to whether war abrogates all treaties. Vat- tel maintains that war abrogates all treaties which pre- suppose the continuance of peace, except those made in anticipation of rupture. 1 ' Like Vattel, Kent contends that, "as a general rule, the obligations of treaties are dissipated by hostility, and are extinguished and gone forever, unless revived by a subsequent treaty. But if a treaty contain any stipulations which contemplate a state of future war, and make provisions for such an exigency, they preserve their force and obligation when the rupture takes place." l8 On the other hand, Fiore says: "The extinction of all treaties and conventions concluded between the belligerent states cannot be deemed THE SHANTUNG QUESTION' 437 an immediate effect of war, but only the termination of those which, by their nature and object, are necessarily inconsistent with a state of war." 17 Another reasonable doctrine is that of Calvo, which states: 1 * "The solution of these questions depends natu- rally upon the particular character of the engagements contracted. Thus all are agreed in admitting the rup- ture of conventional ties concluded expressly with a view to a state of peace, whose special object it is to promote relations of harmony between nation and nation, such as treaties of amity, of alliance, and other acts of the same nature having a political character. As to customs and postal arrangements, conventions of navigation and com- merce, and agreements relative to private interests, they are generally considered as suspended till the cessation of hostilities. By necessary consequence, it is a principle that every stipulation written with reference to war, as well as all clauses described as perpetual (qualifiees de perpetuelles) preserve in spite of the outbreak of hos- tilities their obligatory force so long as the belligerents have not, by common accord, annulled them or replaced them with others." John Bassett Moore presented his own conclusion on the subject as follows: "It is evident that . . . there was a recognition of the principle, which is now received as fundamental, that the question whether the stipulations of a treaty are annulled by war depends Upon their in- trinsic character. If they relate to a right which the outbreak of war does not annul, the treaty itself re- mains unannuled." 10 Taking as our criterion the conclusion arrived at by Moore that the question as to whether the stipula- tions of a treaty are annulled by war, depends upon their intrinsic character, it is evident that the treaties in ques- tion are of an intrinsic character which the war should nullify. The German lease convention of March 6, 1898, was extorted from I hina by the threat of the mailed fiat. 438 PROBLEMS ARISING SINCE THE WAR It further alienated from China her jurisdiction over the 1 territory for ninety-nine years. In the event of war, the continuance of an alien jurisdiction on the soil of China would he inimical to her safety, and it is but natural, therefore, that she should avail herself of the opportunity of war to remove that source of danger and recover the delegated, or rather wrested, rights of sov- ereignty. Further, the lease convention granted to Ger- many the right of fortification, which meant that Ger- many, in time of war, could use the leased territory as a basis of action against China. It is plain, therefore, that such a treaty should not be allowed to persist in time of war, but should be abrogated upon the declara- tion of the same. As to the Tsingtao-Chinan Railway and the adjoining mines, while the agreements thereon were not intrinsically of a character incompatible with the status of war, their public character and strategic and political relations to the safety of China, warranted their being taken into custody by the terriorial sovereign during the period of war, and pending the final settle- ment by peace negotiation. It can, therefore, be fairly concluded that, inasmuch as the declaration of war on the part of China had abro- gated the lease convention of March 6, 1898, all the Ger- man rights in Shantung arising thereform should have reverted to China automatically, and that Japan's pos- session of them from thai moment was in defiance and contravention of China's rights. It can also be affirmed that the Kiaochow-Tsingtao Railway and the adjoining mines should have come into the custody and possession of China upon her declaration of war, and that Japan's control and possession of the same was not only con- summated in violation of China's neutrality, but also retained in defiance and contravention of China's rights. We now come to the third issue — that of whether Japan's possession of the German rights in Shantung THE SHANTUNG QUESTION 439 is validated by the Treaty of May 25, 1915, and the Agreement of September 24, 1918. As regards the con- sent which japan exacted from China by virtue of Ar- ticle 1 of the Treaty of May 25, 1915, respecting Shan- tung, 20 it must be observed that the assent, as provided therein, conceding for argument's sake its validity, which is contested, is not applicable to the final settlement at the Paris Peace Conference. For the negotiation was not between Germany and Japan as stipulated in the provision, but between the Allied and associated Powers on the one hand and Germany on the other. Hence, inasmuch as Japan was "debarred from negotiating sepa- rately with Germany in respect to the latter's system in Shantung owing to the decision of the Conference to deal with German territories and concessions without consulting Germany," it is evident that Japan did not comply with the provision of coming to an agreement with Germany regarding the free disposal of Kiaochow and that "the article in question should be deemed in- operative." 21 Granting, however, for argument's sake, that the set- tlement as reached at the Paris Peace Conference came within the scope of the provision, it is to be claimed that the consent was not given of China's free will, but rather was exacted under the duress of the ultimatum of May 7, 1915, and the demonstration of naval and military forces accompanying it. While international law n validity of treaties imposed, even under coercion, by victorious states upon the vanquished, it is, not within reason to believe that interna- tional law recognizes the validity of treaties imposed by one friendly nation upon another, while in the relation of peace and amity, it is tine that "coercion, while in- validating a contract produced by it, does not invalidate a treaty so produced. Thus there can he no question of the binding force of the treaty which followed the French-German War which led to the dethronement of 440 PROBLEMS ARISING SINCE THE WAR Napoleon I IT, though its terms were assented to under ion. The same may be said of the consent of France in the settlement enforced by the allies after Waterloo, and so of the treaty by which Mexico ceded California and the adjacent territory to the United States." 22 It is, nevertheless, to he noted that what is recognized by international law is the validity of treaties made in con- sequence of war though imposed necessarily by the victor on the vanquished under duress, and that it is not con- ceivable that international law, postulating as it does the fundamental principles of territorial sovereignty and the equality and independence of states, will countenance and give validity to an agreement or treaty, the consent to which was exacted from a friendly nation in time of peace, and this in consequence of the violation of the latter's neutrality. Fiore says, while admitting the valid- ity of treaties imposed by victorious states upon the defeated in consequence of war: "Treaties concluded between states must he freely assented to. Assent is not valid if given by mistake, extorted by violence or ob- tained by fraud." 23 The official statement given out by the Chinese Gov- ernment regarding the Chino-Japancse negotiations of 1915, clearly proves that China's consent relating to the disposal of the German rights in Shantung was not freely and fully given, but was exacted under the duress of the ultimatum of May 7. 1915. The statement records that on February 2, 1915, at the first conference, while she consented in principle to Article 1 relating to the dii un- tenant to the Shantung Railway which were already oper- ated by the Germans, their plan of operation shall be fixed in accordance with the Chinese Alining Laws." The fourth proposal offered to renunciate the prefer- ential rights with regard to foreign assistance in persons, capital and material, as stipulated in the Sino-Gennan Treaty of March 6, 1S { >8. This would eliminate the wall of preferential claims and thus open Shantung to the enterprise of all foreigners, indicating the desire of the Japanese to maintain equality of commercial opportuni- ties. To this favorable proposal China was not opposed, and hence she made no reply thereto. Upon a closer examination, however, this apparent renunciation is tan- tamount to a surrender of something which Japan has not acquired. Maintaining as we do that the Kiaochow Convention of March 6, 1898, which embodied the THE SHANTUNG QUESTION 461 preferential clause, was abrogated by China's declaration of war against Germany, it is but plain that the German rights of preference were nullified upon the declaration of hostility. While Japan might claim that the treaty of peace with Germany, June 28, 1919, awarded her the German rights in Shantung, it is to be maintained that China did not sign that treaty and thus refused to recog- nize the validity of the award. While voluntary renun- ciation on the part of Japan might be commendable, her proposal did not harmonize with the fundamental con- viction and principle of the Chinese. In the fifth proposal, the extensions of the Kiaochow- Tsinanfu Railway, as provided in the agreement of Sep- tember 24, 1918, respecting the construction of the Tsinan-Shunteh and Kaomi-Shuchou railways, and the options for the construction of the Yentai-Weihsien Rail- way as stipulated in the treaty of May 25, 1915, respect- ing Shantung, were to be thrown open for the common activity of the international financial consortium. Inas- much as the exchange of letters between Thomas W. Lamont and N. Kajiwara on May 11, 1920, and the Japanese entrance into the New International Ranking Consortium placed these railway concessions within the scope of the New Consortium, this proposal was deemed as a mere statement of a situation already in existence. The reply was therefore made : "With reference to the construction of the extension of the Shantung Railway, thai is, the Tsinan Shunteh and Kiaochow-I louchou lines. China will, as a matter of course, negotiate with international financial bodi< Bui as the Chefoo-Weihsien Railway concession wa acted under duress by the treaty of May 25, 1915, which should he either abrogated or revised, the suggestion thereaboul was deemed to be "entirely a different • and could not "be discussed in the same category." 462 PROBLEMS ARISING SINCE THE WAR The sixth proposal tendered to make the status of the customs house at Tsingtao as forming an integral part of the general customs system of China clearer than un- der the German regime. Inasmuch as the full control of the customs house at Tsingtao was considered as a natural consequence of the restoration of Kiaochow Leased Ter- ritory, China contended that the status of the Tsingtao Customs House should be the same as that of any other Chinese customs house. "When the leased territory is restored, the customs house thereat should be placed under the complete con- trol and management of the Chinese Government and should not be different from the other customs houses in its system of administration." In the seventh proposal, public property used for ad- ministrative purposes within the leased territory of Kiao- chow was tendered to be transferred to China, but as to the maintenance and operation of public works and establishments, special arrangement was to be made be- tween the Japanese and Chinese governments. This pro- posal volunteered the transfer of public property used for administrative purposes, but still insisted on previous negotiation or special arrangement for the disposal of public works and establishments, which constituted one of the four conditions attached to the Japanese pledge of restoration of Kiaochow as embodied in the exchange of notes, May 25, 1915. Inasmuch as all public proper- ties, either for administrative purposes or otherwise, should be returned with the restoration of the leased territory without special arrangements, the proposal was therefore rejected: "I he extent of public properties is too wide to be limited only to that portion used for administrative pur- poses. If it is the sincere wish of Japan to return all the public properties to China, she ought to hand over completely the various kinds of official, semi-official, mu- THE SHANTUNG QUESTION 463 nicipal and other public properties and enterprises to China to be distributed according to their nature and kind, to the administrations of the central and local authorities, to the municipal council and to the Chinese customs, etc., as the case may be. Regarding this there is no necessity for any special arrangement." The eighth item proposed the appointment of repre- sentative commissioners by the Chinese and Japanese governments to arrange detailed plans "for carrying into effect the terms of settlement above indicated and for the purpose of adjusting other matters not embodied therein." To this suggestion China made no reply. The ninth and last term of settlement tendered the withdrawal of Japanese troops along the Kiaochow- Tsinanfu Railway upon the organization by China of a police force to take over the protection of the line. This offer was, however, accompanied by the reserva- tion that the question of the organization of a special police guarding the railway should be reserved for fu- ture consideration between Japan and China. This exception signified that Japan still held on to the claim of establishing a police force trained and controlled by the Japanese, as stipulated in Article 4 of the Agree- ment of September 24, 1918, respecting the control of the Kiaochow-Tsinanfu Railway. As this proposal was tantamount to the original claim of a police force trained and controlled by the Japanese, and as the agreement in question of September 24, 1918, was considered invalid or voidable, and since the presence of Japanese troops infringes her sovereignty. I hina could not but decline the offer : "The question of the withdrawal of Japanese troops of Shantung Province bears no connection with the restoration of the Kiaochow Leased Territory and the Chinese Government has urged repeatedly fof its actual 464 PROBLEMS ARISING SINCE THE WAR execution. It is only proper that the entire Japanese Army of Occupation should now he immediately evacu- ated. As to the policing of the Kiaochow-Tsinan Kail- way, t'hina will immediately send a suitable force of Chinese railway police to take over the duties." From the ahove terms of settlement as offered by Japan, it can be seen that what Japan tendered to sur- render was not hers by right, hut rather what she should have given up. Inasmuch as the Kiaochow Leased Con- vention of March 6, 1898, is regarded as abrogated with the declaration of war, the Kiaochow Leasehold and the German preferential rights have therewith been nulli- fied. As the exchange of letters between Thomas \V. Lamont and N. Kajiwara on May 11, 1920, placed the extensions of the Shantung Railway within the scope of the New International Banking Consortium, the rail- ways in question should have become open to the com- mon activities of the New Consortium. The only term of settlement that might be commended and regarded with favor is the offer to surrender the claim to an exclusive Japanese settlement or an international con- cession, hut this is offset by a requirement to recognize all vested interests and rights acquired during the Japa- nese military occupation, legitimate or illegitimate. On the other hand, it is also plain that Japan did not propose to surrender any vital interests, or to meet any fundamental objections of the Chinese. She still insisted on the joint enterprise of the Kiaochow-Tsinanfu Railway, future negotiation regarding the organization of the railway police, special arrangement for the disposal of public works and establishments, clearer definition of the status of the customs house at Tsingtao, and the rec- ognition of vested interests acquired by foreigners legiti- tnately or otherwise. In short, Japan still aims to achieve economic domination in Shantung. She made no con- fession of her mistake or crime in landing her troops THE SHANTUNG QUESTION 465 at Lungkow and then inarching through the Chinese territory and seizing the Kiaochow-Tsinanfu Railway and the adjoining mines, and thus failed to recognize and respect the fundamental principle of the sovereignty of China. She still ignored the basic contention of the Chinese that China's declaration of war abrogated all treaties, conventions and agreements with Germany, in- clusive of the Kiaochovv Leasehold, and that China thus recovered to herself all the former German concessions. She further failed to concede that her possession of Ger- man rights in Shantung was validated, neither by the treaty of May 25, 1915. which was concluded under duress, nor by the Agreement of September 24, 1918, respecting the control of the Kiaochow-Tsinanfu Kail- way, which was entered upon for illegal consideration, nor by the Treaty of Peace with Germany, June 28, 1919, to which China was not a contracting party. The Chinese Government therefore prefaced the reply with a declaration of disappointment over the terms of settlement and the failure of Japan to meet the funda- mental contentions and objections of the Chinese. "With reference to the important Shantung Question which is now pending between China and Japan, China has indeed been most desirous of any early settlement for the restitution of her sovereign rights and territory. The reason why China has not until now hern able to com- mence negotiations with Japan is because of the fad that the basis upon which Japan claims to negotiate are all of a nature either highly objectionable to the Chinese Governmenl and the Chinese people, or such to which they have never given their recognition. Furthermore, in regard to the Shantung Question, although Japan has mad'- many vague declarations She has in fact had no plan which is fundamentally acceptable. Therefore, the case has been pending for many years much to the unex- pectation of ( hina. ( to September 7 Japan ubmitted certain proposals for the readjustment of the Shantung •on in the form of a memorandum together with 466 PROBLEMS ARISING SINCE THE WAR a verbal statement by the Japanese Minister to the effect that in view of the great principle of Sino-Japanese friendship Japan has decided upon this fair and just plan as her final concession, etc. After careful con- sideration the Chinese Government feels that much in Japan's new proposals is still incompatible with the repeated declarations of the Chinese Government, with the hopes and expectations of the entire Chinese people, and with the principles laid down in treaties between China and the foreign Powers. If these proposals are to be considered the final concession on the part of Japan, they surely fall short to prove the sincerity of Japan's desire to settle the question." Consequent to the rejection of the terms of settlement, and anxious to reach a solution of the Shantung Ques- tion at an early date, the Chinese Government made the reservation at the conclusion of the reply "of seeking a solution of the question whenever a suitable occasion tits itself," apparently giving the hint that, with a concurrence of the Powers interested, the Shantung Question might be made a subject for discussion among the Powers. NOTES TO CHAPTER XXVII 1. Millard, Our Eastern Question, p. 91. 2. The Chino- Japanese Negotiations, the Chinese Official Statement, 1915, p. 19. 3. Ibid., p. 53. 4. MacMurray, Treaties and Agreements with and Concerning China. 1917/7. 5. Questions for Readjustment, submitted by China to the Paris Peace Conference, 1919, p. 82. 6. Hertslet's China Treaties, Vol. 1, No. 59, p. 351 ; also see chapter on Leased Territories. 7. Cf. The Shantung Question, p. 40. 8. MacMurray, 1917/7. 9. Cushing, Att. Gen., 1855, 7 op. 367, cited in J. B. Moore, Vol. 7. p. 1 10. The Shantung Question, submitted by China to the Paris Peace Conference, published by the Chinese National Wel- fare Society, March, 1920, p. 40. THE SHANTUNG QUESTION 467 11. Note from the Ministry of Foreign Affairs to the Japanese Minister at Peking protesting against violation of neu- trality, Sept. 27, 1914, The Shantung Question, op. cit., p. 58. 12.' Ministry of Foreign Affairs to Japanese Minister at Peking, Sept. '30, 1914, The Shantung Question, op. cit.. p. 59. 13. Japanese Minister at Peking to the Chinese Ministry of Foreign Affairs, Oct. 2, 1914, The Shantung Question, ibid., pp. 59-60. 14. f. B. Moore, International Law Digest, Vol. 7, p. 1101. 15. Ibid., Vol. 5, p. 384. 16. Kent, Comm. I, 176, cited in J. B. Moore, Vol. 5, p. 385n. 17. Fiore's Internatl. Law Codified, translated by E. M. Borchard, p. 538. 18. Calvo, Droit Int. (4th Ed.), IV, 65, Sec. 1931, cited in J. B. Moore, Vol. 5, p. 385. 19. J. B. Moore, Columbia Law Review, Apr., 1901, Vol. 1, No. 4, pp. 209-223, pp. 217-218; J. B. Moore, Int'natl. Law Dig., Vol. 5, p. 383. 20. The Chino-Japanese Negotiations, op. cit., p. 49, Art. 1, Treaty of 1915 respecting Shantung. 21. The Shantung Question, pp. 17-18. 22. J. B. Moore, op. cit., Vol. 5, p. 183. 23. Fiore's Int'natl. Law Codified, op. cit., p. 332. 24. The Chino-Japanese Negotiations, op. cit., pp. 4-5. 24A. Ibid., p. 35. 25. Ibid., pp. 40-41. 26. Cf. Hearings before the Committee on For. Rel., U. S. Sen., 66th Cong., 1st Sess., Sen. Document No. 106, on Treaty of Peace with Germany signed at Versailles on June 28, 1919, pp. 561-562, testimony of Mr. Ferguson. 27. The Shantung Question, pp. 67-68. 28. J. B. Moore, op. cit., Vol. 5, p. 183. 29. The Shantung Question, p. 42. 30. Ibid., p. 42. 31. Cf. Statements by the Chinese Peace Delegation, May 3, 1919, Millard's Review, Supp., July 17. 1920, p. 10. 32. Cf. Hearings, op. cit., pp. 444-445, Mr. T. F. Millard's testimony. 33. For the text of the agreement, see The Shantung Ques- tion, op. cit., pp. 66-70. 34. This declaration was officially presented to, and taken cognizance of, by the Allied and associated Governments — the statement by the Chinese Peace Delegation, Maj 3, I'd 1 ', Mil- lard's Review, Supp., July 17, 1920, p 10, 35. Statement by the Chinese Peace Delegation, ibid. 36. It should be further observed thai inasmuch as the Kiao- chow lease convention stipulated that Germany should engage n.it to Miblet the leasehold to any other slate, the Shantung decision violated the sanctity of this treaty obligation. 37. For the seeret agreements, see Millard's Review, Supp., July 17, 1920, pp. 1-3. 468 PROBLEMS ARISING SINCE THE WAR 38. Hearings, op. cit, pp. 622-623, the testimony of Professor E. T. Williams. 39. Cf. Hearings, Conference at White House, Aug. 19, 1919, pp. S3! 532. 40. Hearings, Senate Doc. No. 106, op. cit., p. 182. 41. X. Y. limes, Aug. 7, 1919; Millard's Review, Supp., July 17, 1920, p. 16; also see Chas. B. Elliott, The Shantung Ques- tion, American Journal of Internatl. Law, Vol. 13, 1919, p. 728. 42. The Shantung Question, pp. 50-54. 43-44. [bid., pp. 54-56; Sen. Hearings, Sen. Doc. No. 106, op. cit., p. 561, the testimony of Mr. Ferguson. 45. Copy furnished by the Chicago Daily Xcws, dispatch by the Associated Press. ( 1 ) The leasehold of Kiaochow and the rights originally granted to Germany with regard to the fifty kilometer zone around the Kiaochow Bay shall be restored to China. (2) The Japanese Government will abandon plans for the establishment of a Japanese exclusive settlement of an open international settlement in Tsingtao : Provided that China engages to open of its own accord the entire leased territory of Kiaochow as a port of trade and to permit the nationals of all foreign countries freely to reside and to carry on commerce, industry, agriculture or any other lawful pursuits within such territory, and that she further undertakes to respect the vested rights of all foreigners. China shall likewise carry out forth- with the opening of suitable cities and towns within the province of Shantung for residence and trade of the nationals of all for- eign countries. Regulations for the opening of places under the foregoing clauses shall be determined by the Chinese Gov- ernment upon consultation with the powers interested. (3) The Kiaochow-Tsinanfu Railway and all mines appur- tenant thereto shall be worked as a joint Sino-Japanese enter- prise. (4) Japan will renounce all preferential rights with regard to foreign assistance in persons, capital and material, stipulated in the Sino-C rman Treaty of March 6, 1898. (5) Rights relating to the extensions of the Kiaochow- Tsinanfu Railway, as well as options for the construction of the Ventai-Weihsien Railway, will be thrown open for the common activity of the international financial consortium in China. (6) The status of the customs house at Tsingtao as forming an integral part of the general customs system of China shall be made clearer than under the German regime. ( 7 1 Public property used for administrative purposes within the leased territory of Kiaochow will, in general, be trans- ferred to China ; it being understood that the maintenance and operation of public works and establishments shall be arranged een the Japanese and Chinese Governments (8) With a view to arranging detailed plans for carrying into effect the terms of settlement above indicated ami for the pur- pose of adjusting other matters not embodied therein, the Jap- THE SHANTUNG QUESTION' 469 anese and Chinese Governments shall appoint their representative commissioners as soon as possible. (9) The Japanese Government have on more than one occasion declared willingness to proceed to the recall of Japanese troops now stationed along the Kiaochow-Tsinanfu Railway upon organization by China of a police force to assume protection of the railway. As soon as the Chinese Government shall have organized such a police force and notified the Japanese Govern- ment to that effect, Japanese troops will be ordered to hand over to the Chinese police the charge of the railway protection, and thereupon immediately to withdraw. It is, however, to be under- Stood that the question of the organization of a special police guarding the Kiaochow-Tsinanfu Railway shall be reserved for future consideration between Japan and China. 46. Copy furnished by the Chinese Legation, Washington, D. C. With reference to the important Shantung Question which is now pending between China and Japan, China has indeed been most desirous of an early settlement for the restitu- tion of her sovereign rights and territory. The reason why China has not until now been able to commence negotiations witli Japan is because of the fact that the basis upon which Japan claims to negotiate are all of a nature either highly objectionable to the Chinese Government and the Chinese people, or such to which they have never given their recognition. Fur- thermore, in regard to the Shantung Question, although Japan has made many vague declarations she has in fact had no plan which is fundamentally acceptable. Therefore the case has been pending for many years much to the uncxpectation of China. On September 7 Japan submitted certain proposals for the readjustment of the Shantung Question in the form of a memorandum together with a verbal statement by the Jap Minister to the effect that in view of the great principle of Sino- Japanese friendship Japan has decided upon this fair and just plan as her final concession, etc. After careful consideration the Chinese Government feels that much in Japan's new pro- is still incompatible with the repeated declarations of the Chinese Government, with the hopes and expe< tations of the entire Chinese people, and with the principles laid down in treaties between China and the Foreign Powers. It these pro- posals are to be considered the final concession on the part of Japan, they surely fall short to prove the sincerity of Japan's desire to settle the question. For instance: (1) The lea e of Kiaochow expired immediately on China's declaration of war against Germany. Now that Japan is only in military occupation of the leased territory the latter should he wholly returned to China without conditions. There | an be DO n of any leasehold. (2) As to the opening of Kiaochow Bay as a commercial port for the convenience of trade and residence of the nationals of all friendly powers. China has already on previous occasions communicated her intentions to do 10 to thi and there 470 PROBLEMS ARISING SINCE THE WAR can be no I for the establishment of any purely foreign settlement again. Agricultural pursuits concern the fundamental means of existence of the people of a country; and according to the usual practice of all countries, no foreigners are per- mitted to in them. The vested rights of foreigners obtained through lawful processes under the German regime shall of coins, be respected but those obtained by force and compulsion during the period of Japanese military occupation and against law and treaties can in no wise be recognized. And again, although this same article in advocating the opening of cities and towns of Shantung as commercial ports agrees with China's intention and desire of developing commerce, the open- ing of such places should nevertheless be left to China's own judgment and selection in accordance with circumstances. As to the regulations governing the opening of such places, China will undoubtedly bear in mind the object of affording facilities to international trade and formulate them according to established precedents of self-opened ports and sees, therefore, no necessity in this matter for any previous negotiations. (3) The joint operation of the Shantung Railway, that is, the Kiaochow-Tsinan Line, by China and Japan is objected to by the entire Chinese people. It is because in all countries there ought to be a unified system for railways, and joint operation destroys unity of railway management and impairs the rights of sovereignty; and. in view of the evils of the previous cases of joint operation and the impossibility of correcting them, China can now no longer recognize it as a matter of principle. The whole line of the Shantung Railway, together with the right of control and management thereof should be completely handed over to China: and after a just valuation of its capital and properties one-half of the whole value of the line not returned shall he purchased back by China within a fixed period. As to the mines appurtenant to the Shantung Railway which were already operated by the Germans, their plan of operation shall be fixed in accordance with the Chinese Mining Laws. (5) With reference to the construction of the extension of the Shantung Railway, that is, the Tsinan-Shunteh and Kiaochow- rlsuchow Lines, China will, as a matter of course, negotiate with international financial bodies. As to the Chefoo-Weihsien Rail- wax, it is entirely a different case, and cannot be discussed in the same category. (6) The Customs House at Tsintau was formerly situated in a leased territory, and the system of administration differed slightly from others. When the leased territory is restored, the Customs House thereat should be placed under the complete con- trol and management of the Chinese Government and should not be different from the other Customs Houses in its system of administration. (7) The extent of public properties is too wide to be limited only to that portion used for administrative purposes. The meaning of the statement in the Japanese memorandum that such THE SHANTUNG QUESTION 471 property will in principle be transferred to China, etc., rather lacks clearness. If it is the sincere wish of Japan to return all the public properties to China, she ought to hand over com- pletely the various kinds of official, semi-official, municipal and other public properties and enterprises to China to be distributed, according to their nature and kind, to the admin- istrations of the central and local authorities, to the municipal council and to the Chinese Customs, etc., as the case may be. Regarding this there is no necessity for any special arrangement, and (9) The question of the withdrawal of Japanese troops from the Province of Shantung bears no connection with the restora- tion of the Kiaochow Leased Territory and the Chinese Gov- ernment has repeatedly urged for its actual execution. It is only proper that the entire Japanese Army of Occupation should now be immediately evacuated. As to the policing of the Kiao- chow-Tsinan Railway, China, will immediately send a suitable force of Chinese Railway Police to take over the duties. The foregoing statement gives only the main points which are unsat- isfactory and concerning which the Chinese Government feels it absolutely necessary to make a clear declaration. Further, in view of the marked difference of opinion between the two countries, and apprehending that the case might long remain unsettled, China reserves to herself the freedom of seeking a solution of the question whenever a suitable occasion presents itself. PART VI A FOREIGN POLICY FOR CHINA XXVIII. Policy of Preservation. XXIX. Policy of Recovery. XXX. Policy of the Golden Rule. XXXI. Policy of World Welfare. XXXII. A Policy Toward Japan in Particular. XXVIII THE POLICY OF PRESERVATION We have studied the diplomatic history of China, the policies of the Great Powers, especially of Japan, the im- pairments of China's sovereignty, and the questions aris- ing since the World War. Using these facts and princi- ples as a basis, we are now ready to offer suggestions for the construction of a foreign policy for China, applicable to the present international situation. The first policy we would advocate for her is the policy of preservation. In view of her history, the policies of the Great Powers, particularly Japan, and the new situa- tion which has arisen since the Great War, and especially in view of the rich and enormous natural resources which always tempt Foreign Powers, there is no policy which should claim the attention of the Chinese so much as that of preservation. Ever since the opening of China, the struggle has been between the Great Powers, with their aggressive designs and endeavors for exploitation and spoliation on the one hand and China, striving to preserve her territory and sovereignty, on the other. Shorn of all hut a few dependencies, and her weakness exposed by her defeat by Japan in 1894-5, the Great Powers there- after entered into a general scramble for leases and con- »ns, which threatened the very integrity of China. This was not cheeked until the Mind uprising of the ers, the inauguration of the Open Door Doctrine by the United Slate-, and the advent of the Chinese devo- lution of I'M 1. Thereafter, the source of d ingei chat Instead of international rivalry, the Powers pursued a policy of international cooperation and control, and the 475 476 A FOREIGN POLICY FOR CHINA only Power that seemed to have inherited the evil prac- tices of the others was Japan. With her policy of terri- torial expansion in the direction of South Manchuria and Eastern Inner Mongolia, and with her design of political control, she stood as the foe of China's territorial in- tegrity and political independence. With the advent of the New International Banking Consortium, however, which, as we have seen, is an incarnation of the Open Door Doctrine, Japan's policies of territorial expansion and political control are checked. The advent of the New Consortium, however, opens a new source of dan- ger to China's national life, for in case of her default, China will be liable to foreclosure and control by the Consortium. The first measure to be advocated in this policy is that China should become strong — that is, she should have a strong army and navy and a strong, united Government. As one studies the foreign relations of China, one cannot but be impressed with the fact that, underlying all her troubles, and what made foreign aggression possible, is her weakness. Leases and concessions would not have been wrested from China except for her inability to re- sist spoliation. The Twenty-one Demands would not have been presented save for her relative helplessness. While this does not exonerate the Powers that committed the aggressions, it should, nevertheless, point the moral that the weakness of China not infrequently furnished the temptation, and made possible the aggrandizement. The sovereignty of a state cannot be effectively pre- served, except by the possession of an efficient army and navy and a strong, united government. Look at the nations that have preserved their sovereignty intact and unchallenged. They are the states that possess a strong army and navy and a strong united government. Japan, in particular, furnishes the best illustration. Prior to her victory over China, she was subject to foreign aggression POLICY OF PRESERVATION 477 as much as China, but subsequent to the Chino-Japanese War, and especially after the Russo-Japanese War, when she had demonstrated her prowess and ability, her sov- ereignty remained intact and immune from all external aggressions ; what is more, she recovered her lost, or delegated rights of sovereignty. For sovereignty presupposes competency. Just as a child or an invalid does not enjoy full sovereignty but is more or less subject to the control of the mature or strong, so, likewise, a state failing to possess power or to be com- petent to assume the tasks of a territorial sovereign does not enjoy full sovereignty but is liable to be subject to the control of the strong state or states. While it is true that the League of Nations guarantees the territorial in- tegrity and political independence of each constituent state, which undoubtedly enhances the security of each state, it must, nevertheless, be remembered that the effi- cacy of the League, as it now exists, is yet to be proved, and that, in the near future, the preservation of the sov- ereignty of each state, it seems, will still necessitate the possession of adequate physical power and of a compe- tent, responsible government. Further, the protection of rights requires the possession of adequate remedies. In other words, if there is no remedy, there is practically no right ; or, to put it in another way, right exists only so long as remedy exists. Prior to the advent of the League of Nations, there was no remedy for the protection of the rights of a nation other than her own armament and the assistance of her allies. It was for this lack of adequate remedies that the nations were driven to enter into the armament race and to stabilize the balance of power by counter-balancing al- liances. It is also for want of adequate remedies that the titanic struggle of the World War came i" pass. With the inauguration, however, of the League of Nations, which provides certain remedies for the protection of the rights of nations, thereby securing, or at least aiming to 478 A FOREIGN POLICY FOR CHINA secure, the rights of each member state, in so far as the remedies prove to be adequate, the rights of each state will undoubtedly be better protected and secured than before the formation of the League. But, despite great improvement, the rights of each nation arc likely to be better and more adequately protected and secured by the possession of a strong army and navy and a stable united government, which can command respect and redress wrong, rather than by calling upon the slow-moving and cumbersome machinery of the League. The second measure to be advocated respecting the policy of preservation has to do with foreign loans. The source of danger since the Chinese revolution of 1911 has changed from territorial partition to international control. Prior to the Chinese Revolution, the Powers struggled for concessions and would not have hesitated to dismember China, if possible and beneficial. Since, how- ever, the Chinese Revolution, which symbolizes the rise of Chinese nationalism and hence the national determina- tion of the Chinese people to preserve their heritage and liberty, the foreign Powers have seen fit to change their policy from international rivalry among themselves and territorial partition of China to one of international co- operation and control, 1 which was interrupted only by the Great War and which Japan endeavored to forestall by the imposition or acquisition of Japanese control, and which is, however, revived and resumed by the New Consortium representing the combined policy of the Powers. Hence the source of danger hereafter will lie, not in encroachments upon China's territorial integrity, except possibly from the direction of Japan, but rather in the loss or forfeiture of political independence through the abuse of foreign loans. For, in case of default or bankruptcy, the lending Powers would foreclose and con- trol China's finances, which means the passing of the POLICY OF PRESERVATION 479 political independence of the Chinese. This danger is all the more ominous when account is taken of the New Consortium. While professing high and noble motives in regard to its activities in China, and embodying as it does the principles of the Open Door Doc- trine, it might be compelled, in case of default or bank- ruptcy, which is not improbable nor impossible under the existing conditions in China, to demand the control of China's finances, though much to the regret and disap- pointment of the authors of the New Consortium. To forestall this impending danger, a definite policy relative to foreign loans or rather to the entire situation as created by the post bellum developments, should be formulated. To begin with, the commissions allowed to the Chinese officials handling foreign loans must hence- forth be abolished and strictly forbidden. As long as officials are under the most alluring temptation of acquir- ing a fortune through a loan transaction by virtue of the commission permitted by the government, so long will officials vie with one another to gain the opportunities of contracting foreign loans, regardless of consequences. Apart from this, foreign loans should henceforth be used strictly for constructive or productive purposes, which, under normal conditions, insure the return of interest and profit and the repayment of the capital, rather than for administrative or consumptive purposes, which yield no return but which, on the contrary, necessitate the pay- ment of the loan through taxes or other loans. Besides, there should be a proper system of accounting and audit- ing for receipts and expenditures of the loans as well as the revenues. As long as the expenditures and re- ceipts arc not accounted for, nor attested by properly ac- credited vouchers, so long will the income of the Cov- ernmenl be exposed to the dangers of extravagance and corruption. Regarding the railway loans to be advanced by the New Consortium, which has, as one of itS policies, the inter- 480 A FOREIGN POLICY FOR CHINA nationalization of Chinese railways, the international finance of Chinese railways should be permitted, being beneficial to China and conducive to the maintenance of the Open Door Doctrine. The international administra- tion and control of Chinese railways, however, should not be countenanced any further than is absolutely necei since it involves foreign domination of China's industry and commerce, and will also affect her political and stra- tegic security. While foreign technical experts and ad- ministrative assistants might be employed, executive con- trol of railways should not pass into the hands of an international board of control, but should always be in the hands of the Chinese. Further, to increase revenue and to insure sound- ness of national credit, the system of taxation must be reformed and rehabilitated. As it is a fundamental principle of public finance that taxation is the founda- tion of public borrowing, the lack or inadequacy of which will cause the lowering or breakdown of public credit, so the contraction of foreign loans must be accompanied by the reform and rehabilitation of taxation, failing which serious mishap will inevitably follow, if not actual bank- ruptcy. Moreover, the finances must be subject to the popular control through the agency of Parliament. As long as the finances are not supervised by Parliament, but are in the hands of the bureaucratic clique, so long will they be infested with the evils of abuse, extravagance and cor- ruption, which might lead to foreign control. Hence, to forestall the danger, popular control of China's finance is the only remedy. Finally, the system of taxation and the command of the army, now decentralized and controlled by the mili- tary governors, should be centralized and controlled by the national government, with a view to the eventual abo- lition of the Tuchun system and the unification of the country. POLICY OF PRESERVATION 481 The third measure relating to the policy of preser- vation has to do with China's dependencies. Having already lost the Loochiu [slands, the Pescadores, Annam, Burma, the western part of Hi. Form sa and Korea, she must now preserve her remaining dependencies — Man- churia, Mongolia, Sinkiang and Tibet. Not only for the sake of prestige and honor must she retain the control of these dependencies, but also because of the protective value of these outlying regions, which shelter her from foreign aggressions. To preserve these, and learning from past experience, she must first afford them effec- tive protection. As long as these territories are not adequately protected but are exposed to the aggression and conquest of foreign Powers, so long are they liable to be taken away from China. The Loochiu Islands, it should be remembered, were conquered by Prince Kat- suma, of Japan, in 1609, which established her claim to the suzerainty thereof, and they were accorded Japanese protection in 1871, when, because of the murder of some Loochiu shipwrecked sailors on the coast of Formosa by the native inhabitants, Japan successfully asserted her claims. Hi was occupied by the Russian troops in 1871, and the whole of the territory would have been lost had it not been for the victorious diplomacy of Marquis Tseng and the martial zeal of General Tso Tsung-tang. An- nam was subjugated by France and Spain in 1862, the share of France being Saigon, three provinces of Cochin- China and the Island of Pulo Condor. Burma was van- quished by Great Britain, and, in 1S<>2, Lower Burma was seized. Thus faliing to afford the necessary protection which should be the task of the territorial suzerain, China eventually lost these dependencies. Furthermore, she musl exercise effective and complete control of the foreign relations of these dependencies or territories. As long as they arc permitted t<» niter into direct foreign relations, they will be subject to th< ive designs of foreign Powers. To reiterate what 482 A FOREIGN POLICY FOR CHINA has been said, Annam was alienated from China by the Treaty of Alliance of March 15, 1874. by which Prance recognized the complete independence of Annam and pledged herself to protect the integrity of same, tlm planting the suzerainty of China, and also by the Treaty of August 25, 1883, whereby France established her pro- tectorate. Korea was likewise alienated from China by the Treaty of February 26, 1876, wherein Japan recog- nized the full independence of Korea, thus ignoring the suzerainty of China. Mongolia was permitted to enter into the Treaty with Russia of November 3, 1912, 2 wherein Russia pledged herself to uphold the regime of Mongol- ian autonomy and at the same time put an injunction on the admission of Chinese troops and the colonization of the land by the Chinese, which was recognized by China in the Convention of November 5, 1913. 3 Outer Mon- golia was allowed to enter into the Treaty with Russia on September 30, 1914, 4 obligating herself not to grant any railway concession without the consent of Russia. The tripartite agreement was finally permitted to be entered on June 7, 1915, 4A between Outer Mongolia, Russia and China, which, while prohibiting Outer Mongolia from concluding any international treaty regarding political and territorial questions, nevertheless required China to come to an understanding with Russia on questions of a political and territorial nature, thus allowing Russia to become the co-suzerain of Outer Mongolia. Again, Tibet was permitted to enter into treaty relations with Great Britain on September 7, 1904, s and Outer Tibet would have experienced the fate of Outer Mongolia by the tri- partite agreement of July 3, 1914," had the agreement bet n ratified by China. Therefore, for the preservation of the remaining dependencies, in addition to affording ef- fective protection, China must control the foreign rela- tions thereof, or still better, the territories should not be permitted to enter into any foreign relations except through the Foreign Office of the Chinese Government. POLICY OF PRESERVATION 483 The fourth and last measure in connection with the policy of preservation has respect to alliances. As alli- ances can make and unmake nations, serious attention should be given to this subject. Vet. as the world situa- tion is always changing, no definite conclusion can be safely ventured. Accordingly, we shall only state some general principles governing the matter which can guide the action of Chinese statesmen under varying conditions. First, in choosing allies, just as in selecting friends or partners, the first principle is to see the character and policy of the state or states in question. If the state or states under consideration should prove to have har- bored territorial designs or political ambitions in China, then, no matter how attractive the proposition might be, such alliances should not be concluded. The secret Li- LabonofF Alliance of 1896 should give us the requisite warning. Li I lung-Chang, for fear of Japan, accepted the proffer of alliance from Russia, and yet, under the cloak of this alliance, Russia soon disclosed her territorial designs. 0A Again, the alliance between France and An- nam in 1874, and that between Japan and Korea in 1894, preceding the final establishment of the protectorate or annexation, indicates how strong Powers with territorial designs and political ambitions often employ the subtile means of alliance as a way to gain political control or territorial expansion. Second, in considering alliances, China should not be tempted to enter into the entanglement of the European balance of power. To keep away from such entangle- ment-, Washington advised the United States to stand aloof, and Monroe proclaimed the celebrated doctrine which has since borne his name. China likewise .should not permit herself to be dragged into these entanglements through the conclusion of such alliances, lest, whenever then- should be an outbreak of war, resulting from changes in the balance of power, China should be com- pelled to fighl on one side or the other. Rather, she 484 A FOREIGN POLICY FOR CHINA should keep herself aloof from such entanglements and be the protector of the Far East and a peacemaker of the world. This abstention is rendered all the more impera- tive, should China aspire to maintain an Asiatic Monroe Doctrine or the Doctrine of the Middle Kingdom in East- ern Asia, which we shall discuss later. The successful maintenance of such a doctrine will require that, except when her own interests or those of humanity are jeopar- dized, China should abstain from any intervention in the affairs of Europe, just as she desires European Powers to keep away from intervention in the affairs of the Far East. 7 NOTES TO CHAPTER XXVIII 1. For reasons of this change, vide supra, chapter on the International Cooperation and Control. 2. MacMurrav, Treaties and Agreements with and Concerning China. 1912/12. i. MacMurrav, 1913/11. 4. MacMurray, 1914/12. 4A. MacMurrav. 1915/10. 5. MacMurrav, 1906/2. 6. MacMurray, 1906/2. 6A. Vide supra, chapter on The Policy of Russia in China. 7. Vide infra, chapter on The Policy of World Welfare. XXIX THE POLICY OF RECOVERY The second policy for China is the policy of recovery. Inasmuch as China's sovereignty has been so much im- paired by the presence of extraterritoriality and con- sular jurisdiction, concessions and settlements, leased territories, spheres of interest or influence, the most favored nation treatment as practiced in China, and tariff autonomy as restricted by conventions, the logical policy, next to the policy of preservation, is the policy of recovery, that is, the recover)' of rights denied her or wrested from her, to the end that her sovereignty may be made full and complete. This policy is indispensable. As long as this regime of servitude lasts, so long will China be regarded, not as an equal, but rather as an inferior, and this will ever remain a source of shame and humiliation. This regime also restricts the full exercise of China's sovereignty and hence obstructs her fullest development. Further, it is the duty of every state to keep its sovereignty full and intact, except in so far as it has voluntarily given its assent to certain limitations. Therefore, China nuts lenin duty to herself to recover these rights. To this policy China seems to have lately committed itself. At the Paris Peace Conference of 1919, through tin- Chinese Peace Delegation, she announced her claims for the recovery of impaired rights due to her sov- ereignty. With respect to extraterritoriality ami con- sular jurisdiction, she asked that all tin- treaty powers would engage to relinquish their extraterritoriality and consular jurisdiction by the end of 1924. With resped to foreign troops and police, she requested 485 486 A FOREIGN POLICY FOR CHINA "that all foreign troops and foreign police agencies now present on Chinese territory without legal justification be immediately withdrawn; Arts. VII and IX of the Protocol of September 7, 1901/ be declared cancelled; and that the legation guards and foreign troops, sta- tioned by virtue of these provisions, be completely with- drawn within the period of one year from the date when a declaration to this effect is made by the Peace Con- ference." 2 With reference to foreign postoffices and agencies for wireless and telegraphic communication, she asked "that all foreign postoffices be withdrawn from China on or before January 1, 1921; that no foreign wireless or telegraphic installations be set up on Chinese terri- tory without the express permission of the Chinese Gov- ernment ; and that all such installations as may have already been set up on Chinese territory shall be handed over forthwith to the Chinese Government upon due compensation being given." 3 Relating to concessions and the settlements she re- quested that they be restored to her by the end of 1924. 4 Respecting leased territories, she submitted the request that they be restored to her upon her undertaking the obligation of the protection of property-owners therein and the administration of the territories restored. 5 As regards spheres of influence or interest, she re- quested that the various powers interested would each for itself make a declaration disclaiming any spheres of influence or interest in China and consent to a revision of the agreements, or notes, or treaties that have con- ferred, or may be construed to have conferred territorial advantages or preferential rights." As to tariff autonomy, China made the request that at the end of a definite period she should exercise full and complete autonomy in tariff regulation, but during POLICY OF RECOVERY 487 the period of transition or probation, she should be per- mitted to enter into conventions with the treaty powers, so that the tariff conventions should be reciprocal in treatment, and differential in regard to luxuries and necessaries. She also asked that the rates for neces- saries should not be less than 12 1-2 per cent, and that "pending the conclusion of such conventions, the present tariff shall be superseded by the end of 1921 by the gen- eral tariff which is applied to the trade of non-treaty powers." ' Relative to the most favored nation treat- ment, while there was no mention made thereof in the published claims of China, it was reported that China put in a provision for insertion in the Preliminaries of Peace that Germany would engage, as a basis of the new treaty of commerce and general relations, "to re- linquish therein on her part the principle of the so- called most favored nation treatment." 8 Besides these claims, which were unsuccessful, the Chinese Government, through its Peace Delegation, sub- mitted provisions for insertion in the Preliminaries of Peace with Germany, most of which tend to illustrate the policy of recovery, and a summary of which fol- lows : 9 "I. Termination of treaties between China and ( iermany by war and the opening of Tsingtao to foreign trade and residence. "II. New treaty of commerce and general relations to be based upon the principles <>f equality and reciprocity, with (iermany relinquishing that of most favored nation treatment. "III. Withdrawal from Germany of Protocol df September 7. L901. "IV. Cession of German public property in Chinese territory. "V. Compensation for losses of Chinese Govern- meiit and nationals. "VI. Reservation of right of claiming war indemnity. 488 A FOREIGN POLICY FOR CHINA "VII. Reimbursement of expenses for internment and maintenance of prisoners of war. "VIII. Restitution of astronomical instruments and other works of art. "IX. Engagement to ratify International Opium Convention of January 23, 1912." 10 Similar articles, with slight changes, were also sub- mitted for insertion in the Treaty of Peace with Austria. Of all these provisions, only three were incorporated, with some modifications, in the Treaty of Peace with Germany, namely, those relating to the withdrawal from the Protocol of September 7, 1901, the cession of Ger- man public property in Chinese territory, and the resti- tution of astronomical instruments and other works of art. The entire list of articles relating to China appears however as follows : "Germany renounces in favor of China all benefits and privileges resulting from the provisions of the final protocol signed at Peking on September 7, 1901, and from all annexes, notes, and documents supplementary thereto. She likewise renounces in favor of China any claim to indemnities accruing thereunder subsequent to March 14, 1917 (Art. 128). "From the coming into force of the present treaty the high contracting parties shall apply, in so far as con- cerns them respectively ; "1. The Arrangement of August 29. 1902, regarding the New Chinese Customs Tariff ; "2. The Arrangement of September 27, 1905, regard- ing Whangpoo, and the provisional supplementary Arrangement of September 24, 1912. "China, however, will no longer be bound to grant to Germany the advantages or privileges which she allowed Germany under these arrangements (Art. 129). "Subject to the provisions of Section VIII of this Part, 11 Germany cedes to China all the buildings, wharves and pontoons, barracks, forts, arms and muni- POLICY OF RECOVERY 489 tions of war, vessels of all kinds, wireless telegraphy installations and other public property belonging to the German Government, which are situated or may be in the German concessions at Tientsin and Hankow or elsewhere in Chinese territory. "It is understood, however, that premises used as diplomatic or consular residences or offices are not in- cluded in the above cession, and, furthermore, that no steps shall be taken by the Chinese Government to dis- pose of the German public and private property situated within the so-called Legation Quarter at Peking with- out the consent of the Diplomatic Representatives of the Powers which, on the coming into force of the present treaty, remain Parties to the Final Protocol of Septem- ber 7, 1901 (Art. 130). "Germany undertakes to restore to China within twelve months from the coming into force of the present treaty all the astronomical instruments which her troops in 1900-1901 carried away from China, and to defray all expenses which may be incurred in effecting such restoration, including the expenses of dismounting, pack- ing, transporting, insurance and installation (Art. 131). "Germany agrees to the abrogation of the leases from the Chinese Government under which the German con- cessions at Hankow and Tientsin are now held. "China, restored to the full exercise of her sovereign rights in the above areas, declares her intention of open- ing them to international residence and trade. She fur- ther declares that the abrogation of the leases under which these concessions are now held shall nol affect the property rights of national's of Allied and Associate Pow- ers who are holders of lots in these concessions. (Art. 132). "Germany waives all claims againsl the Chinese Gov- ernment or against any Allied or Associated govern- ment arising out of the internment of German nationals in China and their repatriation. She equally renounces all claims arising oul of the capture and condemnation of German -hips in China, or the liquidation, sequestra- tion or control of German properties, rights- and inter- ests in that country since August 14, T'17. This pro- 490 A FOREIGN POLICY FOR CHINA vision, however, shall not affect the rights of the parties interested in the proceeds of any such liquidation, which shall he governed by the provisions of Part X (eco- nomic clauses) of the present Treaty (Art. 133). "Germany renounces in favor of the Government of His Britannic Majesty the German state property in the British concession at Shamen at Canton. She renounces in favor of the French and Chinese governments con- jointly the property of the German school situated in the French concession at Shanghai" (Art. 134)." Similar articles, mutatis mutandis, and except the one relating to the restitution of astronomical instruments and other works of art, appeared in the Treaty of Peace with Austria and Hungary." In addition to these, upon the declaration of war on the Central Powers, China abrogated all her treaties with them. As a result, she extinguished the extrater- ritorial rights of German and Austrian subjects in China. She also took over the German concessions at Tientsin and Hankow, and the Austrian concession at Tientsin, and administered the municipalities therein through the Bureaux for the Municipal Administration of the Special Areas. In addition, taking advantage of the collapse of the old Czaristic regime in Russia, she terminated all relations with the old regime by a Presidential Mandate of September 23, 1920, withdrawing recognition from the officials of the old regime and temporarily taking over the interests of Russia, pending the eventual estab- lishment of a stable government there. She also as- sumed the protection of the Chinese Eastern Railway belonging to Russia, and, to some extent, regained a par- tial control of the line. From the above account, it is obvious that China is undertaking the policy of recovery. As, however, an irresponsible pursuance of this policy may lead to fric- tion and even conflict, since the Powers hitherto enjoy- POLICY OF RECOVERY 491 ing special rights are generally reluctant to surrender the same, it is essential that we should state certain defi- nite principles based on justice and righteousness, which should govern the execution of this policy. First, to re- cover vested interests, due compensation must be paid. As an illustration, if China desires to recover certain railway concessions in which foreign capitalists have in- vested, she should refund the capital. This principle seems to have been followed by the Chinese Government, when it asked for the recovery of agencies for wireless and telegraphic communications in exchange for due compensation. 13 Second, what is vital should be recovered as soon as possible. For instance, the leased territories, being all strategic bases and indispensable to national defense, should be recovered at the earliest possible moment. Pending their recovery, these leased territories should be neutralized by an international agreement, so that China may not be unnecessarily involved in a war in which a lessee state is a party, in order that she may better safe- guard her own neutrality, and that the experience of Kiaochow or Shantung may not be repeated. Con- versely, what is not vital to us, and especially what is vital to the concessionnaire state, should be treated with due caution and consideration. In such cases, while no encouragement should be given for retention, due con- sideration of the vital interests of the party concerned should govern our procedure, to the end that harmony and friendship may not be marred. Third, and lastly, for whatever rights she see! recover, China should viand prepared to assume the cor- responding duties. Rights and duties being correlatives, she should alv,;i\ be ready to fulfill the duties for the rights to be recovered. For example, to recovei traterritoriality and consular jurisdiction, she should be prepared to fulfill the duty of efficient and modern judi- cial administration. To recover concessions and Settle- 492 A FOREIGN POLICY FOR CHINA ments, she should be ready to assume the responsibilities of modern municipal administration. To regain leased territories, she should stand ready to preserve and pro- these strategic bases; that is to say, she must under- take the obligation of maintaining a strong army and navy. NOTES TO CHAPTER XXIX 1. Hertslet's China Treaties, Vol. 1, No. 26, pp. 128-129. 2. The Shantung Question, submitted by China to the Paris Peace Conference, 1919, published by the Chinese National Wel- fare Society in America, March, 1920, p. 90; cf. Questions for Readjustment, submitted to the Paris Peace Conference, 1919, by the Chinese Government, p. 31. 3. Ibid, p. 90. 4. Ibid., p. 91. 5. Ibid., p. 91. 6. Ibid., p. 90. 7. Ibid., p. 91. 8. Millard's Review, Supp., July 17, 1920, Millard, China's Case at the Peace Conference, p. 5; vide supra, chapter on The Most Favored Nation Treatment. 9. Millard's Review, Supp., July 17, 1920, ibid., p. 4, Millard, China's Case at the Peace Conference. 10. For a full statement of these provisions for insertion, see Millard's Review, Supp., July 17, 1920, ibid., pp. 4-5. 11. Articles 156, 157, 158, Relating to Shantung, which awarded the former German rights in Shantung to Japan. 12. Supp. of American Journal of Internatl. Law, Jan. and Apr.. 1020, Treaty of Peace with Austria, Sept. 10, 1919; The American Journal of International Law, Jan., 1921, Treaty of Peace with Hungary, June 4, l ( '_'o. 13. The Sliantung Question, op. cit., p. 90. XXX THE POLICY OF THE GOLDEN RULE The third policy for China should be the policy of the Golden Rule. By this we mean a policy of applying to the international relations of China the tested rule of mankind — "Do unto others as you would have others do unto you," or, to use a simpler expression, "Love thy neighbor as thyself." It is often questioned whether the Golden Rule, ap- plicable to private relations, can be applied to interna- tional relations. It is claimed that inasmuch as nations are not exactly like the individual, the Golden Rule is not admissible or applicable in international relations. History, however, does not support this contention. On the contrary, it serves to prove the applicability of the Golden Rule in these relations. In 1871 Germany hu- miliated France. She took Alsace-Lorraine, saddled a crushing burden of indemnity upon her, and caused her to sign a treaty of humiliation in the Hall of Mirrors at Versailles. She did not treat France as herself, nor do unto France as she would have France do to her. In 1919, as measure for measure, France recovered Alsace- Lorraine, and in conjunction with her Allies, caused I rer- many to sign a treaty of humiliation in the same Hall Of Mirrors at Versailles, where Germany had humiliated France forty-eighl years before. 1 To-day, France is endeavoring to impose on Germany a crushing load of indemnity as Germany had done in 1871. As Germany had dealt with France, so France deals with Germany. On the other hand, Lafayette came over and fought for the independence of the United States. He treated this country as his own, or did what he would have 493 494 A FOREIGN POLICY FOR CHINA this country do to France. In return, in less than a century and a half, when French liberty was imperiled, the United States came to the rescue, and when General Pershing landed at France, he placed at the feet of the statue of Lafayette a wreath bearing the laconic tribute, "Lafayette, we are here." Thus, as Lafayette had dealt with this nation, so the American people dealt with France. Again, in the history of China, there are two nations whose relations with China further illustrate the appli- cability of the Golden Rule in international relations. Japan sought to extend her territorial limits in the di- rection of Manchuria and Mongolia, and to gain the political control of China. She violated, as we recall, the neutrality of China in her seizure of German rights in Shantung, and subsequently deprived China at the Paris Peace Conference of the legitimate fruits of China's entrance into the war. She would not wish China to expand territorially at her expense, nor to seek the po- litical control of the Tokio Government ; nor would she wish to see China violate her neutrality or sovereignty or deprive her of the legitimate fruits of war; and yet she did all these things to China. She did not regard the territorial integrity and the political independence of China as sacred as her own. She did not respect the rights and welfare of China as her own. In short, she did not treat China as herself. As a consequence, her trade in China met a serious setback in the Chinese boycott. Her prestige and popularity, won through the Russo-Japanese War, are practically wiped out. She failed to apply the Golden Rule, and she therefore lost the friendship of China. In striking contrast with Japan is the record of the United States. She sent missionaries to promote the welfare of the Chinese. She refrained from the struggle for leases and concessions, while the other Powers made China a happy hunting ground. On the contrary, when POLICY OF THE GOLDEN RULE 495 China was on the brink of partition, she came with the Open Door Doctrine, whicli contributed much toward saving China from dismemberment. In justice and gen- erosity, she remitted the uncovered balance of the Boxer indemnity, thus affording means to Chinese youths for education in America. As a result, she has won the gratitude and good-will of the Chinese. She enjoys the enviable honor of being considered China's best friend. Inasmuch as she has respected and exerted her efforts to maintain the territorial integrity and political inde- pendence of China, inasmuch as she has made possible the education of Chinese youths within her borders, who are bound to influence, if not control, the future destiny of China, she has, in these respects, truly regarded China as herself, or done what she would have had China do to her, had she been in her place. She has followed the Golden Rule and so she has won the friendship and good-will of the Chinese. From these historic instances, it may be seen that the Golden Rule applies to relations between nations as it does between individuals. As one nation deals with another, so shall she be dealt with. If she does not regard other nations as herself, or do what she would have others not do to her, she will likewise be retributed. The nation that follows the Golden Rule will win the friend- ship of other nations. She that fails to do so shall lose the same. This being so, it is but fitting and proper that China should adopt the policy of the Golden Rule* Through- out China's diplomatic history, the Powers, on the whole, have failed to apply the Golden Rule, but, on the con- trary, have treated her with arrogance, Belfishnesa and aggressiveness. While it is but natural for her to react with .similar violations of the Golden Rule, it is, never- theless, the part of wisdom and righteousness tn abandon any measure of revenge or retaliation, and to return the failures of foreign Powers with the application of the 496 A FOREIGN POLICY FOR CHINA Golden Rule. This not only returns good for evil, but also prevents any further degeneration of international morality. Further, the Golden Rule is the fundamental moral law governing the relations between individuals as well as nations. It underlies the entire system of inter- national law. Hence, the pursuance of this policy will bring China in harmony with this fundamental moral law, with the consequences of peace and concord. What is more, the Golden Rule is the way to win friendship. Any individual or nation applying it will gain the friend- ship of the persons or nations to whom the Rule is applied. If China applies this rule in her international relations, she will win the friendship of all nations. In applying this Golden Rule, there are two princi- ples which must be distinctly observed. The first is that of equality. The Golden Rule presupposes the equal- ity of the parties concerned. Henceforth in all dealings China should make this principle of equality the basis of international relations. This principle appears all the more imperative when we trace the history of China in this respect. After the opening of China and before her defeat at the hands of Great Britain and France in 1857-60, she was proud and did not regard Western Pow- ers as equals. After defeat, however, she was chastened and recognized her equality with the other states. This attitude prevailed throughout the period of the loss of dependencies, until the Chino-Japanese War, when her weakness was exposed through the victorious arms of Japan. From that time onward China dropped below the level of equality and occupied the position of an international inferior. This remained so until the Chinese Revolution of 1911, when she manifested to the world the strength of her newly awakened nationalism, which slightly improved her international status, but it was not until her entrance into the war and her admira- ble record at the Paris Peace Conference that her inter- POLICY OF THE GOLDEN RULE 497 national position rose again to the level of equality. Vis-a-vis the Central Powers, the old treaties having been abrogated, she now stands as an equal. Likewise, with all the non-treaty States, she maintains a similar position of equality. In fact, she has persistently insisted on the principle of equality as being a requisite basis of any treaty to be entered into with the non-treaty States. To this effect the Presidential Mandate of April 28, 1919, reads : 2 "Hereafter, all non-treaty countries wishing to enter into treaty relations with China should do so on the basis of equality." It is only in her relations with the other treaty Powers having their treaties still in force that China is still under the servitude of the old regime. It is here also that China should apply the principle of equality and endeavor, as far as feasible, to have those old treaties revised and new ones concluded based on the principle of equality. A second principle of the Golden Rule is that of reci- procity. This is the essence or keynote of the Golden Rule. Any observance of the Golden Rule demands the observance of the principle of reciprocity. This is made all the more imperative when we realize that throughout China's diplomatic history there is a significant absence of this principle in many important instances. The treaty Powers can impose any tariff they please on Chinese ex- ports and imports, and yet China cannot levy any tariff as she pleases, but must act in accordance with the tariff conventions fixed by the treaty Powers. Foreign Powers can lease China's strategic bases ami fortify them for the strengthening of their positions in the Far East : yet China cannot acquire similar strategic points on the ter- ritories of these Tower-. The nationals of the treaty Powers can enjoy extraterritorial rights in China, that is to say, they arc clothed with the privilege of exemption 498 A FOREIGN POLICY FOR CHINA from the operation of local courts; yet Chinese citizens cannot enjoy such privileges, but must submit to the jurisdiction of foreign lands where they go. Foreign Powers can carve out spheres of interest in China and claim the privilege of exclusive exploitation within their respective spheres; yet China cannot delimit similar spheres of interest and make the same claims of pri- ority in other lands. In short, many of the important arrangements in the treaties of China are wholly unilat- eral : they apply to China only, but not to foreign Powers as well. Such a situation should be remedied hereafter by a strict insistence upon the application of the principle of reciprocity. That is to say, whatever applies to China should be applied to the foreign Powers as well, unless other forms of compensation or return can be substituted. In other words, whatever arrangements may be entered into hereafter should be applied to both or all contracting parties, and so become bilateral or reciprocal. The Chinese Government seems lately to have adopted the principles of equality and reciprocity as the basis of the treaty relations that are to be entered into hereafter, either with non-treaty states or otherwise. In the provi- sions submitted by the Chinese Peace Delegation at Paris for insertion in the preliminaries of peace with Germany, it was stipulated that "German engages to adopt the principles of equality and reciprocity as the basis of a new treaty of commerce and general relations to be concluded with China. . . ." 8 Although this stipulation for insertion was not incorpo- rated in the Treaty of Peace with Germany, it indicates that in any treaty of commerce and general relations which China enters into with Germany or any other states in the future, will be based on the principles of equality and reciprocity. POLICY OF THE GOLDEN RULE 499 NOTES TO CHAPTER XXX 1. New York Times, Tunc 29, 1919, p. 1 ; New York Times, June 30, 3:1. 2. Copy furnished by the Department of State, Washington, D. C. ; and also by the Chinese Foreign Office, Peking (Chinese text). 3. T. F. Millard, China's Case at the Peace Conference, Mil- lard's Review, Supp., July 17, 1920, pp. 4-5. XXXI THE POLICY OF WORLD WELFARE The fourth policy for China should be the policy of world welfare. By this we mean that China should adopt a policy that will promote, and contribute to, the wel- fare of the world. It is not sufficient for China to pre- serve herself, or to recover her impaired rights, or to follow the Golden Rule ; she should also become one of the leaders of the world and devote herself to the serv- ice and welfare of humanity. The first task in connection with the policy of world welfare is the maintenance of the peace of the Far East and the preservation and protection of neighboring states with respect to their territorial integrity and political inde- pendence, — Korea, Philippine Islands, Siam, Burma, India and the Southern Pacific Islands. With those ter- ritories already under the control of other Powers, we shall not interfere. With those territories, however, which are yet independent, or which are to achieve their independence in future, we should stand as protector and elder brother. Call this what you will, — the "Asiatic" Monroe Doctrine, or the doctrine of the Middle King- dom, — it is the duty of China to care for the integrity and security of these smaller neighbors. This task should be assumed by China, because these smaller neighbors are necessary buttresses of China's safety. Any interference with their territorial integrity or political independence affects vitally and keenly the safety and welfare of China. It was the annexation of Korea that made possible Japan's continental expansion, her fall having exposed China to the menace of Japan. 500 POLICY OF WORLD WELFARE 501 Hence the independence of Korea is indispensable to the safety of China as well as of Japan. Likewise, it was the seizure of Annam and Tonkin that exposed China's southwestern frontier to the aggressive designs of France. Therefore, for the sake of self-preservation, if not for any other reason, China should assume the responsi- bility of the protection and preservation of these smaller neighbors. Again, this task must be undertaken by China, because a strong and independent China is indispensable to the political independence and territorial integrity of her smaller neighbors. Just as her own safety depends upon the security of these neighbors, so theirs depends upon the security of China. For China occupies the center of political gravity in the Far East, and the other surround- ing states need the stabilizing influence of a strong, stable, independent and protective China. Should she fall, it would undoubtedly disturb the equilibrium and probably entail the fall of her neighbors. Hence she owes a duty to these neighbors to become, and remain, strong and independent in order to fulfill the obligation of stabiliz- ing the political equilibrium of the Far East and of afford- ing necessary assistance and protection to her smaller neighbors. Moreover, China is the mother of Far Eastern civili- zation. She developed her own indigenous civilization and then spread it northward to Mongolia, eastward to Korea and Japan and Formosa, southward to Annam, Tonkin, Cochin-China, Siam and Burma, and westward to Tibet and Sinkiang. There is, therefore, a community of interest or a family of States in the Far East, which is distinct from those in other pruts of the world. In tliis Far-Easteni family, China being the mother of their civilization and the center of political gravity, should undertake the solemn obligation to preserve and proteel the integrity and liberty of the members of this -teat family. 502 A FOREIGN POLICY FOR CHINA Next to the maintenance of the "Asiatic" Monroe Doctrine, or the Doctrine of the Middle Kingdom, China's task in respect to the policy of world welfare is to pro- mote world peace. The Chinese, as a race, are destined to fulfill the mission of promoting world peace. Rea- sonable, peace-loving, devoid of racial prejudice, regard- ing "all men within the four seas as brothers," they are peculiarly fitted for the unique destiny of promoting world peace. And to fulfill this mission and destiny, she must strive to maintain the reign of justice and righteousness among the nations. For no peace can en- dure that is not founded on justice and righteousness. In other words, to maintain world peace, it is necessary first to maintain the reign of international justice and righteousness, which is the foundation of peace. And to do so, the most effective way is to maintain the sanctity of the principles of international law. If all nations would observe these principles, there would be no injus- tice and unrighteousness, and hence, no war. China en- tered the World War on the ostensible ground of main- taining the sanctity of international law, and this policy, so nobly inaugurated, should remain a cardinal prin- ciple of her foreign policy. To this effect China's decla- ration of war on German and Austria-Hungary, August 14, 1917, reads in part: * "What we have desired is peace; what we have re- spected is international law; what we have to protect are the lives and property of our own people. As we orig- inally had no oilier grave causes of enmity against Ger- many, if the German Government had manifested repent- ance for the deplorable consequences resulting from its method of warfare, it might have been expected to modify this policy in view of the common indignation of the whole world. That was what we have eagerly desired, and it was the reason why we have felt reluctant to treat Germany as a common enemy. Nevertheless, during the five months following the severance of diplomatic rela- POLICY OF WORLD WELFARE 503 tions, the submarine attacks have continued exactly as before. It is not Germany alone, but Austria-Hungary as well, which has adopted and pursued this policy with- out abatement. Not only has international law been thereby violated, but also our people are suffering injuries and losses. The most sincere hope on our part of bring- ing about a better state is now shattered." Apart from maintaining the sanctity of international law, to uphold the reign of justice and righteousness and thus to promote world peace, China should actively par- ticipate in all the activities and functions of the League of Nations. No matter whether the League, as it now stands, will work well or not, it is her duty as well as her privilege to share in all the obligations of the League, and if its present organization proves inadequate and defective, she should suggest amendments for its im- provement. With the establishment of the Permanent Court of International Justice, she should exemplify her spirit of reasonableness and fairness by submitting as many cases of dispute as are feasible and proper, to the end that nations may more and more resort to the court of justice rather than to the arbitrament of the sword. Whenever and wherever the sanctions of the League should be employed to compel the obedience of the re- calcitrant, China should, as far as possible and appro- priate, share therein. 2 In addition to the promotion of world peace, sin- should strive to contribute to the world civilization. As she IS so richly endowed with natural resources, she sin mid de- velop and use them for satisfying the needs, not only of her <>\\n people, but also of other peoples through com- merce and exchange. As she is credited with the inven- tion of printing, the compass, gunpowder, etc., so, when she has mastered the Western sciences, she should make other discoveries and inventions, and thus contribute to 504- A FOREIGN POLICY FOR CHINA the progress, comfort and happiness of mankind. As she has developed and trained the intellect of her people through competitive examinations for civil service, so should she apply Chinese scholarship to the study of mod- ern sciences and arts, to the end that she may not be merely a nation receiving learning from others, but also one radiating light and truth. Inasmuch as her people, as a race, are noted for the excellence of their domestic virtues, such as filial piety, respect for age, courtesy, moral earnestness, etc., she should spread the influence of these virtues as far as they are needed. Finally, in pursuing this policy of world welfare China should not entertain a spirit of world domination, but should humble herself and take the lowly path of serv- ice. She should not commit the same error that Germany did in attempting to seek world domination, which only plunged Germany into the depths of humiliation. She should rather aim to impart as much benefit to the world as possible in the way of service. For the day will come when it is not the nation that dominates others that shall be great, but the nation that can render to mankind the greatest service. NOTES TO CHAPTER XXXI 1. The Shantung Question, submitted by China to the Paris Peace Conference, 1919. published by the Chinese National Wel- fare Society in America. March, 1920, China's Declaration of War against the Central Powers, pp. 64-65. 2. Having now been honored with a seat at the Supreme Council, China should demonstrate her spirit of conciliation and exercise her talent of peace-making. — Regarding China's election to the Supreme Council of the League, see New York Times, Dec. 16, 1920, 1 : 2. XXXII A POLICY TOWARD JAPAN IN PARTICULAR We have so far outlined the principles of China's for- eign policy toward the Powers in general, — preservation, recovery, the Golden Rule, and world welfare. As Japan occupies a special position in the foreign relations of China, we shall now endeavor to formulate a policy applicable to Japan. To begin with, all of the foregoing principles are applicable to Japan. With respect to preservation, China should resist any territorial aggression or political de- signs of Japan. With reference to recovery, China should regain all the rights of sovereignty now being held by Japan. As regards the Golden Rule, China should treat Japan as herself, or do unto her neighbor as she would have Japan do to her. Relating to world welfare, China should maintain a strong and stable government so that Japan may find collateral protection therefrom, and should cooperate with Japan in maintaining an Asiatic Monroe Doctrine, or the Doctrine of the Middle Kingdom, But the application of these four principles is not suffi- cient. Inasmuch as Japan maintains five policies, China should be prepared to meet them one by one. With re- spect to Japan's policy of economic exploitation, China should cooperate with her in so far as her needs are real. The solution of Japan's problem of population lying in industrialization and commercial expansion, China should attempt to facilitate this transformation of Japan ^ far as possible. As Japan's need of raw* materials, coking coal, iron and steel, is genuine, and especially as China herself is bountifully endowed therewith, she should be generous and sympathetic and supply Japan with what 505 506 A FOREIGN POLICY FOR CHINA she truly needs. At the same time, however, China should not permit Japan to monopolize her iron mines or any important industry. She should not permit Japan to carry on economic exploitation in China for the sole benefit of herself and to the exclusion or injury of China and other Powers. With regard to Japan's policy of territorial extension in the direction of Manchuria and Mongolia, China can- not but resist it. For the conquest and annexation of Manchuria and Mongolia will inevitably lead Japan to attempt China's subjugation. Manchuria and Mongolia are the historic roads of invasion into China. Any nation controlling or possessing these two regions has in her hand the key to the conquest of China. Hence the pres- ervation of Manchuria and Mongolia must be secured at any cost. Yet, inasmuch as Japan has rendered a service, as a by-product of the Russo-Japanese War, in preserv- ing Manchuria from the grasp of Russia, she should be permitted to retain whatever economic privileges she now holds in Manchuria and to carry on any economic activi- ties therein that are not inconsistent with the sovereignty of China and welfare of the Chinese. Further, her people should be permitted to settle in Manchuria, provided they do so under Chinese jurisdiction, which, of course, means that China should not close the door of Man- churia to Japanese immigration. With reference to Japan's policy of paramount influ- ence, it is not necessary for China to resist it. Still, it is essential that China should hold Japan to the rules of fair play. She should require Japan to observe the principle of equal opportunity of trade, to respect China's sovereignty, and to fulfill the special duties inherent in the special rights, if any, as claimed by Japan. The ob- servance by Japan of these principles of fair-play will obviate any danger arising from this policy. Incidentally, as a matter of reciprocity, China can claim similar special interests or rights in Japan, and establish corresponding A POLICY TOWARD JAPAN 507 positions of paramount influence, provided she observes the same rules. As regards Japan's policy of political control, there is no alternative, consistent with honor, open to China than to resist such a policy. Not only has Japan's record in Korea been such as to send terror and warning into the heart of every Chinese, but the success of Japan in carry- ing out this policy will mean the passing of Chinese inde- pendence, which ought never to be tolerated. On the other hand, however, it is essential that China should remove the primary cause of this policy of Japan, that is, the inefficiency and, to some extent, the corruption of the Chinese Government and the seemingly impending peril of the international control of China's finance, by the inauguration of a strong and efficient government, free and immune from any foreign control. As to Japan's policy of an Asiatic Monroe Doctrine, it is essential for China to maintain an attitude of judi- cious discernment. As it stands, the doctrine may be regarded as hollow and ineffective. It is, therefore, un- necessary for China to be concerned about it. If, how- ever, Japan means to establish a genuine Asiatic Monroe Doctrine, the same as that maintained by the United States for the Western Hemisphere, it is but fitting and proper that China should extend her cooperation and jointly institute the doctrine of Pan-Asiaism in the Orient — especially in view of the fact that China herself should maintain such a doctrine in the Far East. ides meeting these five policies of Japan. China should adopl a fundamental attitude of reconciliation and friendliness. China and Japan are so closely interwoven in interest and destiny that China cannot injure Japan without injuring herself, and vice versa, and that China cannot have an unfriendly and antagonistic Japan at her side without weakening her own position in the world, and vice v< ■•: a. Furth( r, in her attempt to solve her own population problem and the Chinese Question, Japan was 508 A FOREIGN POLICY FOR CHINA wrong in ways, but not necessarily wrong in ends or motives. She desires to preserve, and not to destroy, China. Moreover, should she change her policy, she would possess the possibility of becoming a potential friend, if not the best friend, of China. With the aban- donment of the policy of territorial expansion and po- litical control, and with a firm determination to bend her efforts toward commercial expansion and the maintenance of a true Asiatic Monroe Doctrine, she would be a most valuable friend of China. For while no other nation would fight merely for the welfare and existence of China, Japan's safety and destiny being so inseparably related to China's, she is ready to make common cause with China in any struggle for the preservation of race and for the maintenance of justice and righteousness. Hence it is but a part of statesmanship, as well as of right and justice, that China should entertain a conciliatory and friendly attitude toward Japan, and that, as soon as the present differences should have been amicably settled, China should enter into a genuine relation of cordial friendship with Japan. DATE DUE CATLONO 3*7 DS740 b3^ 1921 . Mingchien Joshua, 1894- rhe forei ,n relations of China: UC SOUTHERN REGIONAL LIBRARY FACILITY ii iiiii A A 001 424 650 • V Of CA RIVERSDE L 3 1210 02001 7479