THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES DEMOCRACY AND THE EASTERN QUESTION DEMOCRACY AND THE EASTERN QUESTION THE PROBLEM OF THE FAR EAST AS DEMON- STRATED BY THE GREAT WAR, AND ITS RE- LATION TO THE UNITED STATES OF AMERICA BY THOMAS F. MILLARD Author of "OuR EASTERN QUESTION," "THE NEW FAB EAST," "AMERICA AND THE FAR EASTERN QUESTION," etc. NEW YORK THE CENTURY CO. 1919 3 be- . Copyright, 1919, by THE CENTUBY Co. Published, May, 1919 OS CONTENTS CHAPTER PAGE I THE ISSUE 3 The problem as posed in the East The issue the same as in Europe Militarism reisus democracy Hopes of the democratic peoples of Asia Causes of war in the far East Dr. Charles Eliot's report Dan- gerous tendencies Protagonists of the new order Viscount Grey on a league of nations Relation of the Eastern question to a league The opposing theory Marquis Okuma on diplomacy Craft and secrecy its requisites Okuma and Bernhardi Japan and the question of alli- ances Japan and the spoils of war Dr. Nitobe's opinions The Anglo- Japanese Alliance Its relation to a league of nations Proposed by Germany Reasons for the alliance analyzed -Alliances and the causes o f war The war cloud in the far East Need for measures to prevent war The problem and the United States Essence of the problem. II THE REAL CHARACTER OP JAPAN 16 Creation of modern Japan Myth and fable The parallel -with mod- ern Germany The cult of emperor divinity Invention of a new religion Japan's historical background Bushido a recent fabrication Divine origin of the Japanese nation The military autocracy A replica of Prussianism Why Japan has mystified the West Japanese language a screen Evolution of Japanese view of the West Foreign patronage now resented Exclusion of "dangerous thoughts" from Japan American Constitution in that category A striking incident Dilemma of Chris- tianity in Japan Trying to reconcile it with emperor divinity Japan's constitutional forms Throne not responsible to people All rights rest in throne Japan and democracy Liberal ideas not tolerated A theo- cratic state The Government and industry Japan's efficiency State of administration in Japan Government of Japan's dependencies For- mosa and Korea A Korean appeal Status of foreigners in Japan The so-called liberal elements Downfall of the bureaucracy predicted Japan's foreign propaganda Some illustrations Japan after the war Attitude toward league of nations Question of armaments Time re- quired for reform. III JAPAN'S POLICY IN THE GREAT WAR 48 A devious course A policy of opportunism How it was circum- scribed Japan's rating of other nations "Powers" and lesser nations America not a "power" Why Japan entered the war Not so obli- gated by Anglo-Japanese Alliance No quarrel with or hostility to Germany Japan's forehandedness in declaring war Her motives an- alyzed Periods of Japan's war policy Its various motivations -Gov- erned by expediency and opportunity Lessons of the war Making Japan's army and navy obsolete How foreigners in the East view Japan Destruction of former international standards The anti-British agi- tation in Japan Control of publicity by the Government Secret diplo- macy in wartime The secret treaty with Russia Putting pressure on her allies Using the German entente possibility Oblique methods The veto of events Entrance of America in the war The Russian rev- olution A German Russo-Japanese entente Count Terauchi's views - Baron Goto's opinions Pro-German sentiment in Japan Japan's posi- tion at the peace conference What she really wants Fear of political and moral isolation The question of Kiao-chou. vi CONTENTS CHAPTEB IV CHINA AND THE WAR 84 Sentiments of Chinese about the war Apprehension of Japan Ef- forts to preserve China's neutrality and territorial integrity The first proposal Outline of the situation China's rights ana wishes disre- garded Japan's ultimatum to Germany China's sovereignty ignored Great Britain's attitude Position of the United States Japan's over- running of Shantung The next move Japan's twenty one demands Her oblique course The "Agreement" forced upon China China's pro- test Statement by the United States Dilemma of the Chinese Govern- mentChina's first offer to join the Allies Its discouraging reception China's second offer to join the Allies Conditions of this offer Plan, blocked by Japan Irritation of Japanese press Japan's attitude de- fined. V CHINA AND THE WAR (Continued) 102 China's position in 1916 Chinese sentiment about the war No tan- gible reason to fear Germany Real fear of Japan Suspicion of the Allies The United States takes a hand Influence of America at Peking Invitation to China to sever relations with Germany Diplomatic situation caused by this proposal How the powers stood The atti- tude of Japan Sounded by Russia Some secret correspondence What Japan wanted British and French influence Japan's oblique course China's internal situation The United States advises China Questions raised by this action Irritation of Japan Misrepresenting the issue Japan-American relations Meaning of Root-Takahira agree- ment Japan's anti-American propaganda in China Some examples The analogy of Korea The Chinese point of view Shifting of Japanese attitude Advantages to China in declaring war Effort to detach China from America China declares war Her action analyzed New turn to events. VI CHINA AND THE WAR (Continued) 136 Shift of Japan's diplomatic strategy Efforts to establish special po- sition in respect to China Analysis of the paramountcy and special position doctrine Purpose of the Ishii mission to America China dis- turbed by factional strife^ The abortive monarchy revival Return to power of Tuan Chi jui Financed by Japan The loan question Obsta- cles to American loans The banking group method Dangers of the old system Japan's violation of the group agreement China's desire to participate in the war Effort to obtain funds from America Opposi- tion of Japan to China's participation Reasons for this opposition Japan rerun* the Western powers A delicate question Japan s plan to control China's military organization Some confidential despatches The Lansing-Ishii Agreement What it meant Motives of the parties to it Was Japan flirting with Germany? Text of the agreement. VII CHINA AND THE WAR (Concluded) .... 154 The Lansing-Ishii Agreement Its premature publication by Japan Uneasiness caused by it My letter to Mr. Lansing Dangers of the in- cident Might alienate both China and Japan Had China been traded off? Was the agreement a bribe to Japan? Need to counteract first impressions Japan violates the "gentlemen's agreement" Agreement given publicity at Peking Reason's for Japan's procedure -A difference of translations What does "special interests" mean? The American version China repudiates the agreement Cryptic character of the in- strument Its effects in the far East Japanese propaganda and the agreement Criticisms of a Chinese The doctrine of territorial pro- pinquity Its dangers What was the American Government's object! Further analysis of the agreement Its legal aspects Which is the correct interpretation ? American interpretation probably the best International psychology of the agreement Possible motives of the United States Putting world pressure on. Japan Japan's opportunity. CONTENTS vii CHAPTEB PAOB VIII THE CORRUPTION OP A NATION 174 Increase of Japan's influence in China The revised Japanese policy Its motives and methods China's wish to participate in the war How it was defeated American loan refused Effects of this refusal Cor- ruption of Chinese officials Getting control of the Government The War Participation Board The military agreement Advent of Nishi- hara The orgy of loans Japan's two-faced policy Attitude of other powers The rake's progress Sowing seeds of internal dissension Japan in Shantung Establishment of civil administration there Pro- tests of the Chinese inhabitants The question analysed Japan's objects revealed Forced sale of Chinese lands Fraudulent seizure of mines Survey of Japanese "penetration" of Tsinan-fu Brothels and drug shops Where the money came from Refastening the opium trade on China Japan's illicit trade in morphia How the trade is conducted Explana- tions of the Japanese Government Exploiting the Chinese bandits. IX CHINA AND ECONOMIC IMPERIALISM 221 Definition of economic imperialism Its relation to international af- fairs Its working method War-causing elements of the system Its application to China Beginning of foreign trade with China Develop- ment of strategical phases The "sphere of influence" idea Dangerous phases Prevision of John Hay The Hay Doctrine Its outward ac- ceptance by the powers Private agreements based on the "sphere" thesis Recrudescence of the "sphere of influence" practice Due to Japan's policy War provided Japan's opportunity Japan's fear of American influence A flank movement The Shibusawa plan The "co- operation" idea Its real purpose exposed How it was contrary to traditional American policy How it was invidious to China China's situation Dangers inherent with the cooperation plan. X CHINA AND ECONOMIC IMPERIALISM (Concluded) . 238 Blindness of Americans to certain conditions Applying lessons of the Great War Relation of militarism to economic imperialism Some as- pects of American trade in China Effects of the "hyphen" in foreign trade ^Fallacy of the Shibusawa plan A remarkable letter Why Amer- icans in China are anti-Japan Japan and China contrasted First and later impressions Coordination of Japanese political and commercial methods A strong arraignment of Japan Her recent course in China indicted How the Chinese are impressed Seeming inconsistency of Allied professions and policy Implication of America's weakness Japan's anti-Allied propaganda The coming reaction Japan's unpopu- larity with the Chinese How it may affect post-war business Japan's capital in China is force The moral issue Effects of the cooperation idea on American trade in China Its military aspect. XI THE OPEN-DOOR POLICY 256 Definition of the open door Talk with Viscount Motono China, Japan and America Monroe Doctrine and Hay Doctrine compared Their principles identical The Japanese Monroe Doctrine for China False analogies Causes for failure of the Hay Doctrine Nullified by private agreements Japan and the open door Manchuria a test casa Japan's discriminations there Spy and police systems Making it' unpleasant for other foreigners Influence over Chinese officials Reac- tions from the Lansing-Ishii agreement Japanese interpretation ac- cepted Special antagonism to Americans Incidents showing Japanese contempt for Europeans Case of British woman missionary Japan exercising sovereign authority Summary of methods handicapping American trade in Manchuria and Shantung The mail and shipping matters Views of American organizations. viii CONTENTS CHAPTEK PAG1 XII THE SIBERIAN QUESTION 283 Siberia and the Eastern question Their close relation Developments after Russia's collapse Japan and intervention The attitude of Rus- sians The propaganda for intervention Japan's sounding of the Allies Attitude of France Great Britain's attitude Japan and Germany Danger of a combination The interests of China The menace to China Japan's proposal to intervene exclusively Motives of Great Britain and France Effort to obtain America's assent A flood of propaganda America's interest analyzed Importance of protecting democratic peoples Territorial proximity The old diplomacy at work Suspicion of Japan Rejection of the one nation plan Change of Japan's attitude Conversion from asset to liability. XIII THE SIBERIAN QUESTION (Concluded) . . . 297 Effects of the Russian Revolution Its extension to the East The position of Siberia How it differed from Russia in Europe China's close relation to the question The Chinese Eastern Railway Disorders in Manchuria Political elements analyzed Different motives Japan's selfish policy The German influence Various Russian factions Col- lapse of Russian authority in Manchuria China forced to act Japan's fear of America A secret diplomatic note Japan, Russia, and Ger- many Japan seeking for advantage Proposals to Russian groups Backing different factions Secret anti American propaganda Some examples of this The American intervention plan Japan and the Chinese Eastern Railway Obstruction of the Allies Rushing Japanese troops into Manchuria Usurpation of China's prerogatives The Man- chuli incident Attitude of Japanese toward other allies Incident at Changchun The armistice and after. XIV THE SOLUTION 325 Effects in China of the collapse of Germany The internal situation Composition of the Government Japan forcing her schemes The armistice Weakening of Japanese influence at Peking Some causes of this Injection of American ideals President Wilson's prin- ciples Their application to China Work of American propaganda Japan's plan to represent China at the peace conference The scheme blocked Uneasiness of Chinese The Southern point of view Further effort by Japan to intimidate China Effort to prevent the publication of secret treaties Outcome of that matter Further advice of the Al- lied powers to China Trying to end the civil strife The conference at Shanghai What shall be done for China ? The case of China sum- marized Responsibility of America The problem analyzed Question of extra territoriality A plan for its gradual abolition This plan con- sidered The railway question The question of loans and finance New declaration of the American Government Will China take the cure? China's appeal to civilization. APPENDICES A The Hay Doctrine Notes and Treaties Between the Powers Affirming the Commercial Principle of the "Open Door" and Declaring Their Intention to Respect the Independence and Territorial In- tegrity of China, and Separate Agreements Among the Powers Concerning, and Defining Their Respective "Spheres of Interest" and "Special Positions" in China 361 CONTENTS ix PAGE B Japan's Diplomatic Demands on China in 1905, with the Original Secret Twenty-One Articles, the Eleven Articles Presented to the Powers Incor- rectly Representing 1 Japan's Demands, the Re- vised Demands, the Chinese Government's Official Statement of the Negotiations, and the Agreement and Notes Which China Was Compelled to Sign . 373 C Text of the Military Agreement 421 D Memorial of the " Black Dragon " (Japanese) Society Concerning Japan's Policy in China .... 426 E Extracts from "A Memorial for the Advancement of German Interests in China Issued by the Ger- man Association of Shanghai 432 P Collection of Laws and Regulations of the Russian Government Published by the Ruling Senate. . 441 FOREWORD This work is not presented as a non-partizan or an impartial discussion of the subject. It could not be that, for it embodies the deep convictions formed and accumulated in the course of years of close contact with the matters at issue, and the opin- ions which, I hope, shine through the presentation of the mate- rial were born in the process of "living with" the problem. Few foreigners that is, few Westerners could live in the far East during the last twenty years and still be impartial on the questions included in the position of China and her contacts with Japan. Some of the facts and much of the criticism presented in the following pages were suppressed or repressed during the Great War for reasons at times connected with the war politics of nations, and at times because of legal restraints upon their publication. That time of restricted publicity has passed with the need, or the fancied need for it, and foreign residents of China and Japan now feel that the truth, and nothing less than the whole truth, about these matters should be known to Western peoples. The design of this work, therefore, is to present the case as it appears to an overwhelming majority of foreign residents of the East. I have not encumbered the book by giving much of the contrary side of events and of the contrary arguments. As in the case of Germany and the re- sponsibility of the German military party for the Great War, the evidence is decisively preponderating, although in this case Japan, like Germany, can put in a more or less plausible de- fense. I leave that defense to the extensive Japanese propa- ganda in America and elsewhere. I have, whenever it served the subject and argument, chosen FOREWORD to include comments of my own that were published previously rather than to state the same matters again in slightly different language; and I also have preferred, when that has been ger- mane, to quote from other writers, from official reports and documents, and from the columns of newspapers, rather than to give my own views of the topics under discussion. In choosing the newspapers to quote I have whenever possible given preference to those of British nationality, because the British press in the far East scarcely can be accused of being incurably anti- Japan or of being under the influence of ' ' Ger- man propaganda." About Japanese affairs I have quoted from the two leading foreign papers published there the "Japan Advertiser," an American owned and edited paper, and the "Japan Chronicle," recognized as the principal Brit- ish organ. The ' ' Japan Chronicle ' ' especially, because of the long residence there of its editor and publisher, is recognized as carrying almost an authoritative weight ; and it, moreover, is pertinent that it is published under the severe regulations of the Japanese Government press censorship. The sources usually are given in conjunction with the quo- tations except in case of private reports and secret documents, when I have withheld names of the authors and where I ob- tained them. They are in all cases, however, authentic. I should like to recommend to those who may desire additional light on this subject the several books of the well-known Eng- lish writer, Lenox Simpson ("Putnam-Weale"), and the works of Professor Hornbeck, as giving recent accounts and criticisms of value. THOMAS F. MILLARD New York, March 20, 1919. DEMOCRACY AND THE EASTERN QUESTION DEMOCRACY AND THE EASTERN QUESTION CHAPTER I THE ISSUE The problem as posed in the East The issue the same as in Europe Militarism versus democracy Hopes of the democratic peoples of Asia Causes of war in the far East Dr. Charles Eliot's report Dan- gerous tendencies Protagonists of the new order Viscount Grey on a league of nations Relation of the Eastern question to a league The opposing theory Marquis Okuma on diplomacy Craft and secrecy its requisites Okuma and Bernhardi Japan and the question of alli- ances Japan and the spoils of war Dr. Nitobe's opinions The Anglo- Japanese Alliance Its relation to a league of nations Proposed by Germany Reasons for the alliance analyzed Alliances and the causes of war The war cloud in the far East Need for measures to prevent war The problem and the United States Essence of the problem, THE problem of the Great "War and its aftermath as posed in the far East is identical in principle with the same problem elsewhere in the world. In Europe the issue is seen distinctly as a conflict of opposing theories of international polity, termed concisely militarism and de- mocracy. In Europe Germany is taken as the apotheosis of auto- cratic militarism, and contrasted with her, with a feeling of being marked for her impending assault or aggression, were nations that were weaker in the sense of being less ready and efficient for war because they are more democratic. In the far East Japan stands for autocracy and militarism, and China has the position of the weak and apprehensive democ- 3 racy. As the issue of militarism in Europe is not confined to Europe and cannot be confined there, but embraces the whole of civilization, so is the issue as posed in the far East equally embracing. This issue of militarism versus democracy in recent times has been so extensively analyzed and commented on that all intelligent persons have some understanding of it and of its terminology. The discussion has resolved itself into terms and phrases standing for the opposing theories. Certain things are associated with certain other things, certain con- ditions are accompanied by certain other conditions, certain causes lead to certain effects. It is understood that the auto- cratic forms of government and militarism conform with and are indispensable to each other. Predatory imperialism also is indissolubly connected with autocracy and militarism. We have become familiar with the euphemisms which imperial- istic diplomacy has coined to describe its processes: "special position," "peaceful penetration," "paramount interests," "strategical requirements," "spheres of influence," "defen- sive frontiers," "buffer states," "strategical railways," "secret diplomacy," "economic nationalism," all these are from the lexicon of predatory imperialism, and have covered the earth. Opposed to the policies which these phrases express, a new lot of phrases have been coined: "rights of weaker nations," "self-determination of peoples," "autonomy of races," "open diplomacy. ' ' All of the old-school methods of world politics, and the practical applications of them, have been worked in the far East until the democratic and weaker nations there are sick nigh unto death of them, until the democratic peoples of the Asiatic world, comprising nearly half of the earth's popu- lation, are now listening with strained and painful expec- tation to the voices of the new day as expressed in the new slogans. Although the principles and the general conditions of THE ISSUE 5 the issue of militarism versus democracy in the far East are the same as to type as the issue in "Western countries, I shall, in trying to demonstrate Oriental aspects of the ques- tion, confine the discussion largely to utterances and ex- amples originating or applying specially to the East. Just before the outbreak of the Great War, Dr. Charles W. Eliot, president emeritus of Harvard University, made a visit to the far East to investigate and to report on conditions there as they effect peace and war. Dr. Eliot made an exhaustive report, from which I will quote : THE CAUSES OF WAR HAVE CHANGED Advocacy of these slow-acting means of preventing wars in the East implies that within the superintended areas the probable causes of international war have changed within fifty years. Dynastic and religious wars, and wars in support of despotic government are no longer probable; and racial antipathies are held in check by the superintending European powers in all the countries to which that superintendence extends. Thus, the Pax Britannica has practically put an end to the racial and religious warfare which from time to time dislocated the Asiatic countries over which British influence now extends. Small outbreaks of racial antipathy or religious fanaticism occur locally; but these are insignificant exceptions to the prevail- ing tranquillity. The fighting Great Britain has done to establish and maintain this Dieting influence has been fighting on a small scale compared with that which went on among European nations during the nineteenth century, or among Oriental peoples in many earlier centuries, and the Pax Britannica has therefore been a great contribution to the peace of the world. It is not only in the East that the probable causes of international war have lately changed. All over the world, it is reasonable to suppose that wars for dynastic motives will occur no more, and that religious motives for warfare will hereafter be incidental or secondary instead of primary. It is also reasonable to believe that wars in support of absolute monarchs and despotic govern- ment will henceforth be unknown, so general is the worldwide movement towards constitutional government and free institutions a movement from fifty to three hundred and fifty years old among the different nations of the West, but comparatively recent in the East. 6 DEMOCRACY AND THE EASTERN QUESTION THE FUTURE CAUSES OP WAR What, then, will be the probable causes of international war in the future? The causes of war in the future are likely to be national dis- trusts, dislikes, and apprehensions, which have been nursed in igno- rance, and fed on rumors, suspicions, and conjectures propagated by unscrupulous newsmongers, until suddenly developed by some un- toward event into active hatred, or widespread alarm which easily passes into panic. While the Eastern peoples far and near will have some causes of their own for war, because in some instances neither their geographical limits nor their governmental institutions are as yet settled, among the Western peoples the most probable future causes of war, in addition to national antipathies, will be clashing commercial or industrial interests, contests for new markets and fresh opportunities for profitable investments of capital, and possibly, extensive migrations of laborers. All modern governments, in which life, liberty, and property are secured by public law, desire to extend the commerce and trade of their people, to develop their home industries by procuring markets for their products in foreign lands, to obtain in comparatively unoccupied or undevel- oped parts of the earth opportunities for the profitable employ- ment of their accumulated capital, and to gain room for a possible surplus of population in the future. Eastern and Western peoples alike feel the desire for a large, strong governmental unit, too for- midable to be attacked from without, too cohesive to be disintegrated from within. Both East and West exhibit the modern irrepressible objection to alien rule, especially when such rule, like that of the Manchus or the Turks, produces poverty and desolation, denies liberty, and prevents progress. Several Western nations which have the saving, or accumulating habit, are eager to make loans to remote and comparatively poor nations which are in great need of money to pay for costly public works of transportation, conservancy, public health, and public se- curity. In making such loans the bankers of each Western nation expect the support and protection of their own government. As security for such loans the borrowing government, national, pro- vincial or municipal, pledges some of its resources; and if the ex- pected interest or dividend is not paid, the lender forecloses. Hence serious international complications. In this lending business the Western powers come into competition with each other, and stimu- lated by mutuai jealousies, engage in aggressive operations against the Oriental peoples, who have been as a rule helpless in their hands, until Japan adopted and improved on the Western military organi- THE ISSUE 7 zation and methods of fighting, and succeeded for a short time in borrowing the money needed to pay the heavy costs of a modern warfare. Dr. Eliot 's conclusions, which since then have received much confirmation from events of the Great War, were that among the principal causes for wars thereafter in the far East would be, (a) frictions among Oriental nations due to clashes of interest and ambitions, and possible aggressions one upon another, and (b) antagonisms developing from commercial and financial competitions there of foreign nations. The principal protagonists of the new order for world poli- tics have been President Wilson, Viscount Grey, Lord Bryce, William H. Taft, and a few statesmen in Europe. Those men all speak out of ample experience in political finesse and ad- ministration. Certainly no higher authority on modern di- plomacy and international policy lives than Lord Grey. In his noteworthy brochure on the proposed league of nations as a substitute for former methods of handling international af- fairs he wrote [the italics are mine] : The second condition essential to the foundation of the League of Nations is that the Governments and peoples of the States willing to found it understand clearly that it will impose some limitations upon the national action of each, and may entail some inconvenient obli- gations. Smaller and weaker nations will have rights that must be respected and upheld by the league. Stronger nations must forego the right to make their interests prevail against the weaker by force, and all States must forego the right in any dispute to resort to force before other methods of settlement by conference, conciliation, or if need be arbitration, have been tried. This is the limitation. The obligation is that if any nation will not observe this limitation upon its national actions, if it breaks the agreement which is the basis of the league, rejects all peaceful methods of settlement and resorts to force against another nation, they must one and all use their combined force against it. The economic pressure that such a league could use would in itself be very powerful, and the action of some of the smaller States com- posing the league could not perhaps go beyond the economic pres- sure, but those States that have the power must be ready to use all 8 DEMOCRACY AND THE EASTERN QUESTION the force, economic, military, or naval, they possess. It must be clearly understood and accepted that deflection from or violation of the agreement by one or more States does not absolve all or any of the others from the obligation to enforce the agreement. Anything less than this is of no value. It is not my purpose to bring a discussion of the league of nations into the scope of this work except to show how the conditions which it aims to eradicate are bound up as im- portantly in the far Eastern question as they are in the situa- tion of Europe. There is general agreement in the democratic countries that something must be devised that will be a great improvement over the old-school diplomacy to prevent or to deter ambitious and predatory nations from disturbing con- tinually the peace of the world; and it will be of little use to invent and organize a plan to do this if there is no ade- quate comprehension of the work which it has to do. A solution of the Eastern question is a part, and a very im- portant part, of the work a league or its substitute has be- fore it. It is an open secret that some eminent statesmen in Europe and a few in America are not favorably disposed to the idea of a league of nations. Mr. Arthur Balfour, Lord Lans- downe, Georges Clemenceau, Baron Sonnino, are some states- men who have revealed that they have slight faith in the ability of such a league to function in place of the former system of alliances between powers. In the East, also, there are dissenters, especially in Japan, from the league idea. It is interesting to note the views of Marquis Okuma. the "Sage of Japan," who was Japanese prime minister when the Great War started and for two years afterwards, who was responsi- ble for Japan's war policy in its inception, and since the death of Marquis Yamagata is Senior Elder Statesman. Marquis Okuma left office in 1916, but he speaks with as much authority as any Japanese living. He occasionally warns and admon- ishes his countrymen about questions of domestic and world politics, and recently he made some oracular comments on THE ISSUE 9 diplomacy. On his views the "Japan Chronicle" of May 9, 1918, said editorially: Marquis Okuma has a remarkable faculty of being all things to all men. He is President of the Japan Peace Society, and has ex- pounded with fluency the benefits of arbitration and the necessity of the limitation of armaments in the case of all countries save Japan. On the other hand, he can contribute to a militarist organ like the "Kokumin" an article which is the negation of all that he has ad- vanced when habited as an apostle of peace. He is jingo and pacifist by turns. To a deputation of American publicists he will orate on the bonds uniting Japan and America and condemn the journalism which sows discord, while in the columns of his magazine he will write of America and American policy in the most provoca- tive manner. But the veteran statesman always appears more natural in the guise of jingo than in that of pacifist, as might be expected from the author of the Twenty-one Demands on China. In view of that episode some of the observations which he makes in the article ap- pearing in the "Kokumin" (translated in yesterday's issue) are jf much interest. "International relations," he says, "are quite unlike the relations subsisting between individuals. Morality and sincerity do not govern a country's diplomacy, which is guided by selfishness, pure and simple. It is considered the secret of diplomacy to fore- stall rivals by every crafty means available." Finally, he lays iown the proposition that a nation must possess both wealth and military force to make its authority felt. It will be noted that there is a great similarity in the point of view of Bernhardi and Okuma. "Might," says the former, "is at once the supreme right, and the dispute as to what is right is settled by the arbitrament of war." Again, "A most difficult problem is raised by the question how far, for political objects moral in them- selves, means may be employed which must be regarded as reprehen- sible in the life of the individual." Or still again, "The relations between two States must often be termed a latent war, which is provisionally being waged in peaceful rivalry. Such a position jus- tifies the employment of hostile methods, cunning, and deception,' just as war itself does, since in such a case both parties are deter- mined to employ them." It cannot be said, therefore, that the veteran statesman has justi- fied the policy which he expounds in the "Kokumin" by the results accomplished, and we are glad to find a Japanese journal like the 10 DEMOCRACY AND THE EASTERN QUESTION "Asahi" condemning on moral grounds his advocacy of national egoism. Marquis Okuma's disparagement of the unruilitary Allies and appreciation of the military Teuton may therefore be discounted. The end is not yet. The trend of Japanese intellectual reactions from the war is displayed more fully in later chapters of this work, but as showing how some Japanese thinkers are trying to adapt the national point of view to the lessons of the war may be taken the opinions of Dr. Inazo Nitobe, who has taken occa- sion to warn his countrymen that too frank a spirit of acqui- sition and seliishness may react on Japan. Dr. Nitobe, it may be recalled, is well known as the inventor, or the pro- tagonist and interpreter, of "Bushido." He is a professor at the Imperial University at Tokio and formerly w r as a student at Johns Hopkins University. I again quote the "Japan Chronicle," of July 11, 1918: Reprimands like that which Dr. Nitobe has recently administered to his countrymen are rather rare in Japan, where national self- satisfaction is generally very much in evidence. Nothing is more common in Japanese writings on the war than to dwell upon the im- mense sacrifices which Japan has made, and to hint at the rewards that she therefore has a right to expect. Dr. Nitobe compares Japan's gains with the other Allies' losses, and predicts that there will be a bad reaction of feeling when, on the settlement, Japan's share in the spoils of war is found to be very small. In making these criticisms Dr. Nitobe goes much further than would be becom- ing in a foreign critic. Some time ago, when the "Chronicle" sug- gested that the furnishing of supplies for handsome payment hardly came within the definition of self-sacrifice, a Japanese publicist re- plied that such a remark was more outrageous than anathema. Tlio critic would probably have had an apoplexy if the "Chronicle" had gone only half as far as Dr. Nitobe. It is quite natural, of course, that native criticism should be more patiently borne than foreign. Dr. Nitobe, even for a purveyor of home truths, is almost unduly severe. We have frequently pointed out in these columns that to Japan the war is not the same thing that it is to France and Eng- land, or even to America. The mischief that Dr. Nitobe foresees arises from the adulation of Japan and all her works in which Mr, THE ISSUE 11 Balfour takes such a leading part, and which creates a false impres- sion among the Japanese of the part that this country plays in the war and leads in the direction of the disappointment predicted. Dr. Nitobe takes it for granted that at the peace conference some- thing approximating to the settlement talked of among the Allies since the beginning of the war will be effected, and that everything will be settled on a general consideration of the public good, while if any compensation, territorial or monetary, can be secured from the aggressors, it will be divided among the Allies according to their sufferings, sacrifices, and needs. Together with this is blended an idea of the resumption of the old relations between Japan and the powers, which means that the powers will "advise" Japan not to make too great a profit at the expense of her weaker neighbours. How far such relations will be resumed remains to be seen. Japan will be, by that time, in a position, commercially and finan- cially, much more comparable with that of the powers, but will be incalculably behind them in the matter of armaments, which give special point to advice. Dr. Nitobe takes a much higher view of international politics than Marquis Okuma. The late Premier was instrumental in bringing Japan into the war, and conceived that as soon as Japan's power in the far East was demonstrated, and the value of her allegiance established, the European Powers would consider it best to refrain from protest whatever Japan might do in China. In his very first essay, however, be overreached himself, and discovered that, preoccupied as the powers were with their more im- mediate affairs, they were not resigned to the prospect of standing by while Japan made China a tributary State. Dr. Nitobe remembers that it was nothing but the diplomatic protests which prevented the Twenty-one Demands from complete enforcement, and as a political idealist he feels the discredit accruing from this situation far more than he would ever exult in an increase of political domination over neighbouring countries. Dr. Nitobe goes to the trouble of confuting the Japanese idea that a war "to make the world safe for democracy" is not a desir- able one. It is not probable that any Japanese ever seriously be- lieved that the objects of the war are inimical to the polity of Japan, though some may have made this an excuse for their perverse pas- sion for depreciating the Allies. The common idea of those who profess such concern for Japan's peculiar system is that, bound up with the devotion of all Japanese to the Imperial House, is the preservation of the privileges of the persons who happen now to be in advantageous positions. Their narrowness of view is the natural 12 DEMOCRACY AND THE EASTERN QUESTION complement of the sort of patriotism which looks only to spoils in a war which is, to a degree uncommon in international struggles, a moral issue. In the far East the question of the basis for international politics after the war inevitably, at some point of a discus- sion, comes to the Anglo-Japanese Alliance. This alliance, except the secret treaty made between Japan and imperial Russia during the war, is the only offensive and defensive alliance between powers having the far East as their special field. Later in this work I mention the disposition of the Japanese at one stage of the war to throw the alliance with Great Britain overboard; but that sentiment was frankly based on calculated self-interest. It is interesting, therefore, to obtain a glimpse of Japanese conception of the alliance in juxtaposition with the idea of a league of nations. Discus- sions of the alliance in Japan, and especially suggestions and proposals that it be abrogated, naturally received the close attention of British who live there, and the "Japan Chron- icle/' the leading British organ in Japan, makes this com- ment editorially in its issue of January 28, 1919: In the article on alliances which Dr. Sawayanagi, the well-known educationist and for a time Vice-Minister of Education, has con- tributed to the "Taiyo," he puts his finger on one of the root causes of the war which has destroyed the flower of European youth and threatened the fabric of civilisation itself. As will have been seen by the translation of the article appearing in Sunday's issue, Dr. Sawayanagi raises the question whether the time has not come for the abrogation of the Anglo- Japanese Alliance. Hitherto this sug- gestion has been made by Japanese who regarded the revision of the Anglo-Japanese Alliance in 1911, removing all danger of Britain being compelled by the terms of the compact to participate in war against America, as destroying the value of the agreement, which, with Russia no longer a foe to be feared, simply acted as a check on Japan's diplomatic activity in the far East without conferring any proportionate advantage. Dr. Sawayanagi takes up a different attitude. He points out that Russia is now in such a disorganised state that her assumption of an aggressive policy in the East has removed the raison d'etre of the THE ISSUE 13 Alliance, but his chief reason for suggesting its termination is that it is clearly out of harmony with the League of Nations which it is assumed the Peace Conference will in some form or other bring into being. There is ample justification for the view taken by Dr. Sawa- yanagi. President Wilson holds very strongly not only that a League of Nations should be open to all and common to all, but that a partial League of States, such as the present Allies, might be used for selfish purposes, and would destroy the very objects for which the League of Nations was framed. Indeed it was one of the President's five conditions of a satisfactory peace that "no special interest of any nation can be made the basis of any settlement which is not con- sistent with the common interest of all." This evidently rules out alliances for special objects between two or more nations, as such a policy would tend to set up groups within the League, creating all the old animosities and constituting a serious danger to the peace of the world. The Anglo-Japanese Alliance must go with the other compacts, as being against the general interest. It has been asserted that the conversion of the Anglo-Japanese agreement of 1902 into an offen- sive and defensive alliance in 1905 maintained peace, but it may with equal truth be contended that the Alliance narrowly escaped plung- ing Europe prematurely into the war of mutual destruction that actually began ten years later. For the Alliance came about not so much from a desire to maintain peace in the far East as because of hostility to Russia, which was then pursuing an aggressive policy in Central Asia and the far East, and the more definite character given the agreement in 1905 was clearly with the object of preventing France from going to the assistance of her Russian ally. There were occasions during the progress of Rodjestvenskj^'s squadron to- wards the far East when the relations between Japan and France were strained almost to the breaking point, owing to the aid given the Russian squadron in French ports. Had the two powers come into armed conflict all Europe would have been ablaze. Britain would have come in on the side of Japan against France and Russia, and, despite the Kaiser's letters to the Tsar during the crisis, it is not impossible that when the rupture came Germany would have found her interest in siding with Britain rather than with her traditional enemies on the east and west. Looking back upon the history of the last forty years with the experience of the last five years as a guide, it becomes clearly evi- dent that it was the groups of alliances which kept Europe in a perpetual ferment during that time, and altogether, with what Bright called the "bloody fetish" of the balance of power, encouraged all 14 DEMOCRACY AND THE EASTERN QUESTION the nations in that mad race of armaments which in due course ended in an explosion. It is curious that an agreement between Britain and Japan was first mooted by the German charge d'affaires in London, Baron von Eckardstein, who suggested a triple alliance between Japan, Great Britain, and Germany respecting affairs in the far East. Count Hayashi, then Japanese Minister in London, took up the suggestion warmly, obtained the approval of his Government and approached Lord Landsdowne, the British Foreign Secretary. Sir Claude Mac- Donald, British Minister to Japan, who was in London at the time, strongly supported an Anglo- Japanese Alliance, and, prompted by Hayashi, brought pressure to bear on the British Foreign Office by expressing a fear that Japan might make an alliance with Russia. Lord Lansdowne, who at first was not very sympathetic, finally ap- proved. The German participation was dropped, and an alliance between Britain and Japan negotiated. This was in February, 1902. Prince Ito, then on his way to endeavor to negotiate an arrangement with Russia of differences with Japan, was thrown over by Kasu- migaseki, and the result a couple of years later was the Russo- Japanese War. The next departure from the British Liberal policy of being friendly with all nations but allied with none was in concluding an entente with France in 1904, which probably had the effect of pre- venting France joining Russia against Japan, and thus extending the war to Europe, though it was evidently regarded as necessary to convert the Anglo-Japanese Alliance in the following year into a positive instrument of offence and defence. But the catastrophe was only postponed, not averted. The existence of the two groups of alliances, avowedly framed to ensure peace, made war inevitable. So much is evident to-day. It rests with the Peace Conference to devise another method. The old system has failed utterly and disastrously. In a common agreement between all States to ensure peace there may be security for the future. But such an arrangement must rigidly exclude all public or secret agreements of allinnce, the effect of which would be to divide the nations into two or more hostile groups. Students of politics and conditions in the far East, and foreigners who live there, almost without exception feel that unless that part of the world is somehow relieved from the THE ISSUE 15 pressure of the imperial ambitions of Japan, another war, which beyond doubt will involve several of the western powers, including America, is inevitable. They see the issue distinctly, in both its moral and political aspects, as much a Western question as it is an Eastern one, and with scarcely any important exceptions they feel that the old system can- not be so revised and readjusted that it can assure peace in the East any more than it did or can secure peace in Europe. It will be futile to patch up a peace in Europe while leaving free to run their course in the far East all the old war- breeding elements. The outcome will be the same there as it was in Europe. For America all the applications of the war in Europe can also be taken with regard to a war in the far East arising from the issues that are now drawn there. The analogy between the previous policy of the United States to- ward Europe and its alliances, its ententes, and its wars, and a similar policy toward the East, is exact. Just as the great war has demonstrated the fallacy of the isolation of America from the scope of such disputes and the futility of treating our contacts with these questions on a detached basis of "good feeling" and good wishes for all the nations so in- volved, and of "leaving Europe to settle its own quarrels," so Americans should realize that the Eastern question will not settle itself, and that it is a part of the business of the United States, for its own security if for no other motive, to help settle it rightly. The Eastern question can be expressed in two words, Japan and China. It is only by understanding the true characters of both those nations and the problem of their relation to each other that the modern issue of the far East can be com- prehended. CHAPTER II THE REAL CHARACTER OP JAPAN Creation of modern Japan Myth and fable The parallel with mod- ern Germany The cult of emperor divinity Invention of a new religion Japan's historical background Bushido a recent fabrication Divine origin of the Japanese nation The military autocracy A replica of Prussianism Why Japan has mystified the West Japanese language a screen Evolution of Japanese view of the West Foreign patronage now resented Exclusion of "dangerous thoughts" from Japan American Constitution in that category A striking incident Dilemma of Chris- tianity in Japan Trying to reconcile it with emperor divinity Japan's constitutional forms Throne not responsible to people All rights rest in throne Japan and democracy Liberal ideas not tolerated A theo- cratic state The Government and industry Japan's efficiency State of administration in Japan Government of Japan's dependencies For- mosa and Korea A Korean appeal Status of foreigners in Japan The so-called liberal elements Downfall of the bureaucracy predicted Japan's foreign propaganda Some illustrations Japan after the war Attitude toward league of nations Question of armaments Time re- quired for reform. THE Japanese Empire in its present national form is dated by most historians and commentators from 1867, when the "restoration" occurred. It is in- teresting and, as will be shown later, also very significant that the so-called restoration of Germany usually is taken from 1866, when that nation conclusively proved its military superiority over Austria, a victory that was a forerunner of the war of 1870 and the creation of the modern German Empire. In estimating the character of modern Japan, it is neces- sary to review that nation's previous history only with regard to the origin and development of national institutions and characteristics that influence the nation in these times. An- cient Japan is no more an issue in world politics to-day than 10 THE REAL CHARACTER OF JAPAN 17 is ancient Germany or ancient Rome or Greece. The histories of Rome and Greece abound in matters that now are ad- mitted to be purely mythological, and people now would not take them seriously in considering political tendencies of the Italy and Greece of to-day. Yet a vast amount of the mythology of ancient Japan, without western peoples being aware of it, has been woven into western popular conceptions of modern Japan, and its legends have obscured the real Japan from any exact comprehension by westerners. In America we measure Europe with a fair degree of accuracy because we have the same historical and ethnological origins, and can use our own standards of measurement in our com- parisons ; but a great majority of Americans, and Europeans, too, have been measuring Japan by the almost mythological standards that Japan has set up for herself. There is, however, little about modern Japan that is difficult of comprehension, and nothing at all that is mysterious. Japan is a nation whose history for several centuries is an open record, though not a plainly visible record. One reason why it is not better known in the West is because of the difficulties of the Japanese language, which are a severe ob- struction to foreign penetration of Japanese literature and current thought; another reason is that Japan adroitly set out to write her own history for westerners to believe, and the West has, with an astounding complacency, taken Japan's own estimate of herself. The West, in effect, has given Japan a blank draft on its credulity, and allowed the Japanese to fill it out for themselves. Japanese propaganda has done that. Born almost exactly at the same time with modern Ger- many, modern Japan, in adapting herself to western civili- zation, has conformed almost exactly to the German political system, the German thesis of statecraft, the German military organization, the German conception of the great game of welt-politik, and the German methods of playing that game. Intelligent Japanese do not dispute this, although for the last few years it is not a fact which the Japanese Govern- ment has desired to spread in some countries. A majority of Japanese military leaders were educated in Germany, the Japanese Army is organized after the German model and conception of discipline, and a majority of Japanese modern medical practitioners, and many leaders in the educational and scientific life of Japan, were educated in Germany. But it has not been those origins and associations that made the Japanese admirers and imitators of Germany. It has been Germany's military successes and rapid rise as a power that induced the Japanese to believe in the superiority of the German system and the German efficiency as a means of national expansion. There were, of course, similarities in German and Japanese institutions that strengthened those other attractions. For instance, the dogma of the divine right of emperors which was dramatically revived in Europe by the kaiser was paralleled by the cult of emperor divinity in Japan. Their growth and development were contempor- aneous. Some commentators have attributed the conception of Japanese statesmen of the imperial divinity idea as a means to consolidate the rule of the political oligarchy that accom- plished the restoration and rode into power with it to a study of the development of the same idea in Germany. That, however, is difficult to prove, because the idea sprang and developed in the two nations nearly at the same time. A very good account, and a reliable one. of this phase of modern Japan is given by a recognized authority on Japan, Basil Hall Chamberlain, for many years professor of Japanese and philology at the Imperial University in Tokio, and the author of many well-known books about Japan. In a little-known brochure of his, "The Invention of a New Religion, f? pub- lished in 1912, Professor Chamberlain wrote [my italics] : The first glimmer of genuine Japanese history dates from the fifth century after Christ, and even the accounts of -what happened in the sixth century must be received with caution. Japanese scholars know this as well as we do; it is one of the certain results of investigation. But the Japanese bureaucracy does not desire to have the light let THE REAL CHARACTER OF JAPAN 19 in on this inconvenient circumstance. While granting a dispensa- tion re the national mythology, properly so called, it exacts belief in every iota of the national historic legends. Woe to the native pro- fessor who strays from the path of orthodoxy. His wife and chil- dren will starve. From the late Pnnce Ito's grossly misleading "Commentary on the Japanese Constitution" down to school com- pendiums, the absurd dates are everywhere insisted upon. This despite the fact that the mythology and the so-called early history are recorded in the same works, and are characterized by the like miraculous impossibilities; that the chronology is palpably fraudu- lent; that the speeches put into the mouths of the ancient mikados are centos culled from the Chinese classics; that their names are in some cases derived from Chinese sources; and that the earliest Japa- nese historical narratives, the earliest known social usages, and even the centralized Imperial form of Government itself are all stained through and through with a Chinese dye, so much so that, it is no longer possible to determine what percentage of the old native thought may still linger on in fragments here and there. In the face of all this, moral ideals which were of common knowl- edge derived from the teaching of the Chinese sages, are now arbi- trarily referred to the "Imperial Ancestors." Such, in particular, are loyalty and filial piety the two virtues in which, in the far- Eastern world, all the others rest. It is furthermore officially taught that, from the earliest ages, perfect concord has always subsisted in Japan between beneficent sovereigns on the one hand, and a grate- fully loyal people on the other. Never, it is alleged, has Japan been soiled by the disobedient and rebellious acts committed in other countries; while at the same time the Japanese nation, sharing to some extent in the supernatural virtues of its rulers, has been dis- tinguished by a high-minded chivalry called Busliido, unknown in inferior lands. Such is the fabric of ideas which the official class is busy building up by every means in its power, including the punishment of those who presume to stickle for historic truth. The sober fact is that no nation probably has ever treated its sov- ereigns more cavalierly than the Japanese have done, from the be- ginning of authentic history down to within the memory of living men. Emperors have been deposed; Emperors have been assas- sinated ; for centuries every succession to the throne was the signal for intrigues and sanguinary broils. Emperors have been exiled; some have been murdered in exile. From the remote island to which he had been relegated one managed to escape, hidden under a load 20 DEMOCRACY AND THE EASTERN QUESTION of dried fish. In the fourteenth century things came to such a pass that two rival Imperial lines defied each other for the space of fifty- eight years the so-called Northern and Southern Courts; and it was the Northern Court, branded later by historians as usurping and illegitimate, that ultimately won the day, and handed on the Impe- rial regalia to its successors. After that, as indeed long before that, for long centuries the government was in the hands of Mayors of the Palace, who substituted one infant sovereign for another, gen- erally forcing each to abdicate as soon as he approached man's estate. At one period, these Mayors of the Palace left the Descend- ent of the Sun in such distress that His Imperial Majesty and the Imperial Princes were obliged to gain a livelihood by selling their autographs. . . . Even in the present reign the most glorious in Japanese history there have been two rebellions, during one of which a rival Emperor was set up in one part of the country, and a republic proclaimed in another. As for Bushido, so modern a thing it is that neither Kaempfer, Siebold, Satow, nor Rein all men knowing their Japan by heart ever once allude to it in their voluminous writings. The cause of their silence is not far to seek: Bushido was unknown until a decade ago. The very word appears in no dictionary, native or for- eign, before the year 1900. Bushido, as an institution or a code of rules, has never existed. The accounts given of it have been fabri- cated out of the whole cloth, chiefly for foreign consumption. Thus, within a space of a short lifetime, the new Japanese re- ligion of loyalty and patriotism has emerged into the light of day. The new Japanese religion consists, in its present early stage, of worship of the sacrosanct Imperial Person and of His Divine Ancestors, of implicit obedience to Him as head of the army (a position, by the way, opposed to all former Japanese ideas) ; furthermore, of a corresponding belief that Japan is as far su- perior to the common ruck of nations as the Mikado is divinely superior to the common ruck of Kings and Emperors. Do not the early history-books record the fact that Japan was created first, while all other countries resulted merely from the drops that fell from the creator's spear when he had finished his main work ! Thus does it come about that the neo-Japanese myths concern- ing dates, and Emperors, and heroes, and astonishing national vir- tues already begin to find their way into popular English text- books, current literature, and even grave books of reference. The Japanese governing class has willed it so, and in such matters the Japanese governing class can enforce its will abroad as well as at home. The statement may sound paradoxical. Study the question carefully and you will find that it is simply true. To quote but one official utterance out of hundreds, Baron Oura, minister of agriculture and commerce, wrote this in February of last year [1911] : "That the majesty of our Imperial House towers high above everything to be found in the world, and that it is as durable as heaven and earth, is too well known to need dwelling on here. . . . If it is considered that our country needs a religious faith, then, I say, let it be converted to a belief in the religion of patriotism and loyalty, the religion of Imperialism in other words, to Emperor- worship. The new religion, in its present stage, still lacks one important item a sacred book. Certain indications show that this lacuna will be filled by the elevation of the more important Imperial re- scripts to that rank, accompanied doubtless by an authoritative commentary, as their style is too abstruse to be understood of the people. ... In fact, a volume on the whole duty of Japanese man, with selected Imperial poems as texts, has already appeared. One might have imagined that Japan's new religionists would have experienced some difficulty in persuading foreign nations to accept the truth of their dogmas. Things have fallen out other- wise. Europe and America evince a singular taste for the mar- vellous, and find a zest in self-depreciation. As giving a Japanese view of this aspect of modern Japan, I shall quote from ''The Political Development of Japan," by George Etsujiro TJyehara, D. Sc., published in 1910. It can be noticed that Professor Uyehara adheres to the fiction that something is known about Japanese history in remote ages, for he speaks of matters supposed to have happened twenty-five centuries ago. As Professor Chamberlain remarks, no Japanese would dare to contradict or discredit any of the national historical myths. Professor Uyehara says: 22 DEMOCRACY AND THE EASTERN QUESTION The Divine Eight of the Emperor, however absurd it may seem to the theorists of individualistic idealism, still holds a predomi- nant place in the minds of the Japanese; and its political value seems to be as important to the Japanese nation as the religious value of miracles and mythological and allegorical stories is to certain religions. Therefore, to understand practical politics in Japan, we must make a careful examination of the effects of Mi- kadoism upon the Japanese body politic. The Divine Kight of the Emperor is the fundamental principle on which the Japanese polity was first established and on which it still rests. The first national organization known in the history of Japan was religio-political in its character. The common wor- ship of the Sun-goddess, with the Emperor as the high priest, was one of the chief functions of the government. In fact, the term matsurigoto, meaning worship, is etymologically in pure Japanese identical with that of government. In speaking of Shinto, the old State religion of Japan, Dr. Aston says: "Secular and sacred are much less differentiated in Shinto than in more highly developed religions. The Mikado was at once the sovereign and the high priest." Thus the original, the fundamental political idea of the Japanese seems to confirm the theory which Professor Burgess pronounces universal: "The unbiased political historian will not dispute the proposition that the earliest forms of the State were theocratic but he will teach that the State was brought through the earlier and most difficult period of its development by the power of religion. . . . This is entirely comprehensible from the stand- point of a correct political philosophy. The first and most funda- mental psychological principle concerned in the development of the State is that of Piety, i.e. reverence and obedience. Unless the character of the mass of the population be moulded by this prin- ciple, the reign of the law cannot be attained." However, many Western nations have long since abandoned the theocratic form of State. There remains here and there only its shadow ; already, even before the time of Plato, various forms of State seem to have existed. It is most singular that Japan has firmly and religiously adhered to her old traditional polity and made no single departure from it in the twenty-five centuries of her existence, during which she has passed through many vicissi- tudes, political, social, and economic. Many changes have taken place from time to time in the form and mechanism of her govern- ment, but its fundamental polity, a unique fact in political history, has never been altered, shaken, or transformed. It appeals, there- fore, most intensely to the Japanese people, no matter how primi- THE REAL CHARACTER OF JAPAN 23 tive and childlike its origin, and is engraven on their hearts and minds, and engenders their deepest admiration, reverence, and affection. That the Mikado reigns and governs the country absolutely, by a Right inherited from His Divine Ancestors, is the unconscious belief or the instinctive feeling of the Japanese people. Indeed, it may be said to be their religion religon in the sense of the "inner voice" as defined by Matthew Arnold. The military autocracy, a replica of Prussianism, that has governed Japan since the restoration exercises its power in a large measure by standing behind the person of the emperor and using the throne as a symbol. Japan really has in this period been governed by an oligarchy of very limited numbers. Its core is the Genro, a small group of Elder Statesmen, in- cluding only half a dozen or so men. Political parties and groups in the Diet are composed of followers of this or that member of the Genro. There are by-currents of political thought and influence, gathered in the survival of the ancient clans, in the military class, and nowadays in the new plutoc- racy; but all of those are controlled by the oligarchy, which clusters closely about the throne and prevents any undesirable influence from reaching it. Created after the restoration as a symbol through which the aristocratic autocracy could govern more easily, and as focusing a national sentiment, the throne and its divine attributes have in time taken on an actual power from the acceptance by the people of its divine status. Thus in late years the throne at times has threatened to overcast the oligarchy, and it is conceivable that if ever a man of real ability should become emperor, he might take power from the hands of the oligarchy and wield it himself. Even now to some extent the throne is becoming a sort of Frankenstein of the oligarchy, and the emperor cannot always be controlled abso- lutely as the inner governing circle wish. The system works smoothly as a rule, especially with a people densely ignorant in the mass, as long as the throne remains complacently a puppet for a highly intelligent ruling class; and it has ad- 24 DEMOCRACY AND THE EASTERN QUESTION vantages, as Germany had, over nations democratically and therefore more loosely governed. A difference in the develop- ment of the imperial divine right theory in Germany and in Japan was that in Japan it was not the presumption of an emperor, but was the invention of subjects as a device to govern a superstitious people; while in Germany it was a clever, but erotic and intensely egotistical, emperor who re- vived it, and it was taken complacently by the military autoc- racy because it suited their ends. It is a curious reflection that western peoples, who found in the kaiser's divine pre- tensions only a matter for scorn and ridicule, have taken the similar pretension of the mikado, if not seriously, at least without ridicule or resentment. The reason is to be found in the fact that the western popular conception of Japan has been tinged with romanticism, as a sort of play-nation, not to be judged seriously or by critical standards. In his work, quoted in this chapter, Professor Chamberlain states that a principal reason why Japan had succeeded in understanding the West well, while remaining a mystery to the West, is the difference in languages. Western languages are simply composed from an alphabet of twenty-six letters, while Japanese is an idiograph language which very few foreigners ever master. Undoubtedly, the Japanese language has been one of the best screens which that country produces, and one which has been of singular service to the world politics of the nation. In the course of its development modern Japan has under- gone an evolution in its comprehension of the West. Japan began to understand the West long before the West began to understand Japan, because the Japanese were keen, almost desperately keen, about understanding the West, while the West was only a little interested about Japan, as one is in- terested in any curio. Japan has not until recently pre- sented itself to the West as a serious and important problem which relates directly to the security of the West, while from the time of real impact of the West upon Japan, a period 25 usually dated from Commodore Perry's visit, Japan has known that the West stood for and contained the knowledge which Japan must acquire if she were to rise to first rank among nations. But as time passed, and the Japanese began to think them- selves proficient in western knowledge and science, and especially after they had demonstrated, at least to their own satisfaction, a superiority over even western powers in west- ern military tactics, they took on another attitude toward western institutions. Having for so long assured others of the divine origin of their country and its preeminent attri- butes, the Japanese began to believe all the things of them- selves that their propaganda had somehow induced westerners to believe of them. This developed in them an internal conceit and arrogance, which rarely, except with the vulgar classes, showed through the natural outward tact and polite demeanor of the people, but which nevertheless ran strongly in Japanese thought and character. The Japanese developed self-confidence and, after that, self-sufficiency. This caused them to resent any attitude of patronage and condescension in foreigners, whether this was merely the provincial conceit of the ordinary tourist or patronizing of a more subtle char- acter. In this more subtle class of foreign patronage can be placed such well-meant works as missionary and educational efforts. Only recentty the Japanese regarded foreign religious mis- sions with tolerance, if a little contemptuously, and they took much in the same manner as they were bestowed such benefactions as schools and hospitals. It is different now. A nation, or a people, which arrogates to itself the first place on earth by reason of its divine origin and associations, and which considers itself an equal or the superior even in material and military power of any nations except a few, rejects in- stinctively a patronage which, on its face, assumes, firstly, that Japan herself cannot afford to pay for such institutions ; secondly, that she is benighted and needs such foreign en- 26 DEMOCRACY AND THE EASTERN QUESTION lightenment ; thirdly, that without foreign aid she could not attain it ; and, fourthly, that it implies the superiority of the "West. Japan went to school to the West and absorbed its knowledge with avidity. But the Japanese now feel, rightly or wrongly, that they have been graduated. Foreign churches and religious missions for foreigners in Japan, foreign hos- pitals for foreigners in Japan, foreign schools for foreigners in Japan, do not offend the Japanese as yet ; but foreign religious missions for Japanese, foreign schools and hospitals for Japanese, irritate the rapidly swelling pride and conceit of the Japanese. I have heard of a recent instance of how an American physican in Japan journeyed about the United States soliciting subscriptions to build and equip a medical school and hospital in Japan. He raised a good deal of money, and when he returned to Japan he discovered an almost im- perceptible coolness toward his project by the Japanese. On investigating, he learnt that the Japanese did not feel that they were in need of foreign charity of this kind. So far tact and certain exigencies of world politics have repressed this disposition of the Japanese, but it is beginning to be shown plainly in many instances. A very interesting demonstration of this new spirit, and one also which has a decided political significance in con- junction with issues of the Great War, is the so-called Hepburn incident which occurred in 1918. I quote the "Japan Adver- tiser": SHALL AMERICAN DEMOCRACY BE ALLOWED A CHANCE IN JAPAN"? MINISTER OF EDUCATION SAYS "No!" IN OPPOSING ESTABLISH- MENT OP NEW CHAIR IN IMPERIAL UNIVERSITY The attentive eyes of a couple of hundred professors and lec- turers as well as 4,000 students of the Imperial University of Tokyo, who are always claiming the freedom of learning without the intervention of conservative bureaucrats, are now concentrated upon the peculiar development of affairs as regards the official sanction for the professorial chair on America and American Affairs, which THE REAL CHARACTER OF JAPAN 27 is to be established in the College of Law by the donation of yen 60,000 from Mr. Alonzo Barton Hepburn, well known New York banker and millionaire. The situation is complicated, but the fact itself is that Mr. Ryo- hei Okada, Minister of Education, has vt-u u his objection to the establishment of the new chair in Japan's leading educational in- stitution on the ground that the American teaching of democracy will be harmful to Japan's national politics. He is hesitating to give the official sanction for the chair, which must come in the form of an Imperial Ordinance, according to the official regulations of the university. During the latter part of last year Mr. Hepburn's donation was reported. Baron Shibusawa, who was first consulted by the New York banker upon the problem, was pleased with the latter's idea to promote Japanese-American friendship by establishing a course in the university on American affairs and sounded the university officials regarding the question. Apparently, there was practically no objection on the part of the university, and, in consequence, the negotiations were smoothly carried out. Baron Megata, who was then in America as the head of Japan's financial commission, discussed the matter with Mr. Hepburn many times and the plan was satisfactorily concluded at the end of last year between the American financier and the Imperial University of Tokyo. Accordingly, the American course, consisting of three lectures, "American Independence" by Dr. Nitobe, "The American Consti- tution" by Professor Minobe and "American Diplomacy" by Pro- fessor Yoshino, was inaugurated at the beginning of the year. A grand ceremony for the opening of the new course was held, with President Baron Yamakawa's speech of congratulation, followed by a talk by Professor Hijikata, the Dean of the Law College. As the course was quite new to the students, and as the lecturers were all the best and most popular speakers, the course soon became a center of interest. On every Saturday afternoon, when the lec- tures were given, the large auditorium was crowded by several hun- dred young students, consisting not only of those entered in the College of Law but hundreds of others who were studying litera- ture, medicine, science, engineering and even agriculture. At the same time a plan was made by the faculty to select a candidate to fill the chair in the future. He was to be one who specialized in the course, some young, energetic and intelligent graduate of the college. It is said that if the selec- tion was settled, the new professor was to be sent to America 28 DEMOCRACY AND THE EASTERN QUESTION at once. Furthermore, it was promised by the university authori- ties that the new professor might spend one-third of every year in America, even after he began regular service. The original plan was on an even larger scale. It was proposed that the new pro- fessor should also serve as an university extension lecturer, travel- ing all around the Empire to give lectures on America and Ameri- can affairs to public audiences in various cities and towns. Turning to the trouble now in consideration, it is worth recalling the Impenal Ordinance on the Imperial University, which was originally issued in 1886 and revised in 1890 and 1893. Article 1 of the Ordinance says: "It is the purpose of the Im- perial University to teach and investigate such arts and sciences as those demanded by the state." Article 18 says: "The variety and number of the professorial chairs is to be decided by the Imperial Ordinance, which is to be issued for special necessity." The principles expressed in these two articles are declared to be the fundamental ideas which explain the nature of the present con- troversy. In an interpretation by the Minister of Education, ac- cording to a university professor, the new course on America not only fails to fill the requirement of "such arts and sciences as those demanded by the state," but is rather harmful to the welfare of the state. As the establishment of any new professorial chair is to be decided by Imperial Ordinance, in accordance with Article 18, Mr. Okada, the Minister for Education, holds practically the full power for sanctioning the new American chair. Japanese officialdom does not invite the introduction of demo- cratic propaganda into Japan, and fears even to hear the word "democracy," just as the Japanese people a hundred years ago shuddered before the word "Christianity," a professor at the Im- perial University said to an "Advertiser" reporter yesterday. Be- sides the government officials, several university professors, though they represent the minority, hold the similar views toward the men- tion of American democracy. C \e professor declared yesterday that Professor Shinkichi Uyesugi, who holds the chair for Japaneese Constitutional Law in the university, was disgusted by the faculty's decision to establish the new American course and approached Premier Count Terauchi a couple of months ago, asking the Pre- mier to intervene. There have been whispers, of course, to the effect that the Min- ister of Education is not solely responsible for the desire to ban the American course of study; that there may be others behind the curtain. But the question still remains, and it is one which has THE REAL CHARACTER OF JAPAN 29 deeply stirred Japanese educational circles. Shall the rising gen- eration of Japan be permitted to receive the democratic ideas of America or shall the doors be slammed in the face of "dangerous thoughts"? And the "Japan Chronicle" commented on the matter editorially, on May 16, 1918, as follows : Some time ago, Mr. Hepburn, the nephew of a well-known mis- sionary, offered a large sum of money for the establishment of a Chair of American History at the Tokio Imperial University. The generous donor had a sentimental attachment to Japan, and he desired, as is evident from the nature of the gift, to promote a better understanding between the two countries, conceiving pos- sibly that Japan, about whose feet still cling the rags of the feudal system, might profit by a better knowledge of the struggles of a country which had begun the creation of constitutional govern- ment from the beginning not built upon old foundations and might therefore be expected to have useful knowledge to impart. When the news was first received of this benefaction it was stated in the Japanese newspapers that the new Chair was to be for the study of the American Constitution, and jocular remarks were made about it being tantamount to an importation of "dangerous thoughts." It was not supposed that there could be any serious obstacle to the execution of the American donor's wishes, but when the benefaction was next heard of the American Constitution had been modified to American History, and whereas it might have been expected that the offer would be accepted with alacrity, months go by, and still official permission is not given for the creation of the new Chair. On top of this comes the announcement by Mr. Okada, the Minister for Education, that a Chair of Shinto is to be estab- lished at the Imperial University at Tokio, and to this one of the Professors of the University added that it had been considered wise to establish this new Chair before the advent of the American foundation. In other words, American history is of the nature of "dangerous thoughts," but since the poison cannot very well be avoided, it is wise to take the antidote first. Comment made by way of a joke turns out to be the very serious conclusion of the highest authorities in the country. It is one of those cases where it is almost impossible to effect in imagination a transposition, so as to see how a situation will ap- pear to other people. If one of Japan's war millionaires wished to endow a chair of Japanese history or even of Shinto at Harvard, 30 DEMOCRACY AND THE EASTERN QUESTION what would be the effect? It is possible that the Harvard authori- ties would reply that though they felt very grateful they had no expectation of a large number of students attending the lectures and therefore suggested that the millionaire reconsider his offer. Or they might accept it with alacrity. The one thing that is most unimaginable is that the American Government would hasten to present the University first with a Chair of Republicanism or of Episcopal Methodism. Or if such an offer were made to Oxford, it would never enter the head of Mr. Lloyd George that the Em- pire's safety or the country's morals demanded the prior establish- ment of a Chair of Druidism. It is quite easy to fancy Mr. G. B. Shaw founding a Cambridge Chair of Dangerous Thoughts, and easier to imagine its being accepted than to conceive of its rejection. One of the effects of Japan entering into relations with foreign countries has been the growth of an official obscurantism about those matters which are supposed to affect the honour of the nation and of the Imperial House. Under the Shogunate little enough respect was shown to the Sovereign; but during a half-century in which the West has learnt to criticise and question all things. Japan has gone so far as dismissing professors for doubting historical dates. So far as modern history is concerned, the searchlight of criticism is free to search out its details, but when it goes back be- yond documented times it becomes too sacred for critical research. The object of the men who desire to organise Japanese opinion and belief according to sealed pattern is solely the honour and glory of Japan, but their method is the outcome of a strange lack of faith in the abilities and genius of the Japanese people. Does Mr. Okada really believe that the forces which move Japan are different from those which govern the rest of humanity? And has he so little imagination as to be unable to draw a conclusion from the fact that the countries where thought is most free are those which have made, the most progress? Beliefs, like knowledge, progress, and when they are not allowed to progress they die; yet it would be very surprising to hear that the new Chair of Shinto was intended to encourage a spirit of free inquiry, research, and generalisation from the ancient history of Japan, for that is the very last thing that the official classes understand by the study of Shinto. It is curious that the Japanese, who are so solicitous regarding what other nations think of them, do not reflect on the influence on their international relations of the cult of an exclusive nation- ality. THE REAL CHARACTER OF JAPAN 31 Many intimations of late have also given notice that the Japanese Government is growing resentful of the Christian missionary propaganda and proselyting in Japan, although this matter carries with the handling of it, and especially with any attempt to curb or to expel it, a most delicate ques- tion, one so full of irritations of western sentiments and moral beliefs that the Japanese Government is, and well may be, reluctant to raise the issue. That Christian tenets and propaganda are directly opposed to the concept of emperor divinity and worship is quite apparent to most minds; but, oddly, there is an effort in Japan to reconcile the two. Out of many instances that I have heard of, I quote the italics are mine again from Professor Chamberlain's brochure, ''The Invention of a New Religion ' ' : The Rev. Dr. Ebina, one of the leading lights of the Protestant partorate in Japan, plunges more deeply still into this doctrine, according to which, as already noted, the whole Japanese nation is, in a manner, apotheosised. Says he: "Though the encouragement of ancestor worship cannot be re- garded as part of the essential teaching of Christianity, it [Chris- tianity] is not opposed to the notion that, when the Japanese Em- pire was founded, its early rulers were in communication with the Great Spirit that rules the universe. Christians, according to this theory, without doing violence to their creed, may acknowledge that the Japanese nation is of divine origin. It is only when we realize that the Imperial Ancestors were in close communion with God, that we understand how sacred is the country in which we live. (Dr. Ebina ends by recommending the Imperial Rescript on edu- cation as a text for Christian sermons). In truth the Christian movement in Japan is confronted with a serious dilemma a dilemma that is leading its foreign- protagonists in Japan into some queer elisions of Christian teaching and dogma in their effort to retain their hold on Japanese converts, and at the same time to make it possible for those converts still to be orthodox subjects of the mikado. It further is interesting to recall that of Japan's fulsome adulators none have been more energetic in singing her praises 32 DEMOCRACY AND THE EASTERN QUESTION unstinted, in condoning her delinquencies, and in defending her foreign policy, than some prominent Christian mission- aries. The missionaries who live and work in Korea, Formosa, and China, however, have a different tale to tell, although the conditions under which they have to work requires them often to suppress their criticisms. In previous books I have written fully about Japanese politi- cal institutions the constitution, the ballot suffrage, the par- liament, and the various machinery of Government and will review those matters but briefly here. One point might be noted, that the constitution of Japan did not spring from the people, but is held to be the gift of the emperor to the people, thus preserving the throne as the origin even of popular rights and liberty and the fountain of all authority. In his "The Political Development of Japan," Professor Uyehara wrote, "Old Japan never had a Magna Charta, nor a Bill of Rights, nor any political manifesto involving abstract princi- ples of justice, equality, liberty, and the rights of men." The constitution derives its authority not from the people, but from the throne. The throne is not in any sense held to be responsible to the cabinet or to the Diet, or to the people for its administrative acts. The Diet is responsible solely to the throne, not to the people. The Cabinet is responsible to the throne, not to the Diet. Regarding the constitution Professor Uyehara wrote : The doctrine of sovereignty is embodied in the major premises of the present Constitution of Japan. The logical severity and rigidity of its structure, perhaps, surpass that of the present Con- stitution of France, though the fundamental doctrines embodied in these two documents are as diametrically opposed to each other as the Poles. The main thesis of the Japanese Constitution is the sovereignty of the Emperor, whereas that of the French Constitu- tion is the doctrine of vox populi vox dei. Article IV. of the Constitution of Japan states that "the Em- peror is the head of the Empire, combining in Himself all the Powers of the State." THE REAL CHARACTER OF JAPAN 33 In one of his articles from Japan to the "Daily Mail" of London, written in 1918, Bernard Falk criticized the ten- dency of foreigners to over-praise Japan, and the "Japan Chronicle" thus commented: It will be noted that Mr. Falk is not quite so strongly impressed by Japanese enthusiasm for the war and her determination to make the world safe for democracy as some observers viewing things from England or America. Viscount Ishii, who does talk English fluently, would perhaps have convinced the correspondent of the "Daily Mail" that things in Japan are not what they seem. "It is waste of time and it is folly," says Mr. Falk, "to talk to Japan of democracy or in terms of high-flown idealism. The average Japanese does not comprehend the meaning of democracy." This will come as a shock to readers of Viscount Ishii's speeches [in America] and of the eulogistic references to Japan of Mr. Balfour and Lord Robert Cecil. Mr. Falk has something to say on this head also. In com- menting on the news sent out to Japan by wire he says: "It may be sincerely hoped that the continual outpouring of sickly and flattering patronage which has characterised British references to Japan will cease. Sensible men in Japan are not moved by it and others jump to wrong conclusions, exaggerate its importance, and become violently chauvinistic always a danger in a country which is essentially nationalistic." The Japanese have reached a point when they are some- what irritated even by the flattery of foreign statesmen and politicians, for when this flattery is obviously overdone, it is taken as a reflection on the good sense of the Japanese, or as satire. This applies only to the educated class of the Japanese, who compose the Government, the university pro- fessors, the other professions, and the upper business elements. The Japanese masses are unaware of any satire in foreign flattery, for they have been told, and believe readily, that such modern scientific utilities as electricity, telephones, wireless telegraph, and machinery, are the inventions of the Japanese. Does not this credulity coincide with the belief that Japan is of divine origin and the foremost nation on earth, which is the foundation of Japanese patriotism? 34 DEMOCRACY AND THE EASTERN QUESTION A great deal has been said, and much more probably will be said in favor of allowing Japan a kind of paternal position in respect to China and other backward states, so called, in the far East. Aside from the moral and institutional character- istics of the Japanese nation as they relate to this suggestion, especially vis-a-vis a genuinely democratic country like China, there is the question of Japan's competency to fulfil such a mandate from civilization on the basis of efficiency. Japan's economic and industrial efficiency is closely connected with the Government. Dr. Uyehara writes [my italics] : Under such circumstances the Japanese people had been accus- tomed to place implicit trust in their government. Their economic conditions were never so distressing as to make them declare that "the government is of the people, by the people, and for the peo- ple." It was understood by them that the government, being an authority above, should take the initiative in all important matters of State and lead the people, and the people should follow in strict obedience. This idea is still consciously or unconsciously dominant in the minds of the Japanese masses. Hence the Japanese as a nation are like a well-disciplined army, but as individuals are little better than disbanded soldiers. This is, perhaps, the strongest and the weakest point of the Japanese nation. The excessive dependence of the people on the government, or the omnipotence of the government itself (Seifumanno-Shugi), as Mr. Shimada calls this peculiar mental habit of the people, has certain advantages and disadvantages in the development of the country. That Japan has never experienced a violent constitutional revo- lution in her history is, no doubt, largely due to this peculiar mental habit of her people. A close observer would, perhaps, be more struck by the socialistic tendency of the Japanese State than by its military and political achievements. Indeed, this most monarchical State is found to be most socialistic. In Japan, State initiative and supervision in in- dustrial matters is very strong, in spite of the fact that the Govern- ment /. % , no discount, secured by $1,500,000 shares of bank stock and $4,000,000 Treasury bonds, Japan obtain- ing privilege of appointing adviser to Bank and option on future loans. 22. Jan. 30, Bank of Chosen to Fengtien Province for 1917 relief of Chinese banks in Mukden, half payable in one year, half in three 2,000,000 Interest 6^ % , issue price 95. No. 23. Feb. 1917 24. Feb. 1917 25. Aug. 1917 26. Aug. 1917 27. Oct. 1917 28. Oct. 1918 29. Nov. 1917 30. Jan. 1918 THE COKRUPTION OF A NATION 7, Yokohama Specie Bank, second loan to Ministry of Communications for construc- tion of Supinkai-Chenehiatung Railway For 1 year at 7 % , secured by revenues of road. Japanese Syndicate to Kwangtung Pro- vincial Government, 1,300,000 for advance to Provincial Government and 1,700,000 for construction of Canton cement factory, en- tire loan secured on revenues and property of cement factory and customs lands at Tashatou, and guaranteed by Provincial Government Japanese Syndicate to Bank of China, for redemption of bank notes, secured by $15,- 000,000 Bank of China notes (repaid) For 6 months at 7%. 28, Yokohama Specie Bank, advance on Sec- ond Reorganization Loan for reimburse- ment of advances made by Bank of China to Central Government Repayable out of Second reorganization loan if made, otherwise to be repaid in cash in one year. Interest 7 % discount 1 % . Secured by surplus salt revenues. 17, Sino-Japanese Industrial Co. and 10 Jap- anese Banks to Central Government for relief of Chihli flood sufferers One year at 7 % , secured by revenues of three native customs houses, including Dolnor. Loan on Kirin-Changchun Railway by South Manchuria Railway Company For 30 years at 5 % , issue price 91.50, secured by revenues and property of road. Grand Canal Loan (part of Siems-Carey loan) of total $6,000,000 gold. Americans take $3,500,000 and Japanese $2,000,000 equivalent to Yokohama Specie Bank's share of Group Bank advance for Flood Relief; Security Salt $100,000, say 189 Yen 2,600,000 3,000,000 5,000,000 10,000,000 5,000,000 6,500,000 5,000,000 2,00,000 190 DEMOCRACY AND THE EASTERN QUESTION No. Yen 31. Jan. Mitsui Bussan Kaisha to Central Govern- 1918 ment on Bureau of Engraving & Printing 2,000,000 For three years 8 % , issue price 98. Agree- ment provides that all material shall be bought from M. B. K., if prices are not higher than competitors'. 32. Jan. Supplement loan for Kirin-Changchun Rail- 1918 way 630,000 33. Jan. Mitsui Bussan Kaisha to Tsao Kun, Tuchun 1918 of Chihli, for military purposes, secured by Chinese shares in Lanchow Coal Company, which forms part of Kailan Mining Ad- ministration 1,000,000 34. Jan. 6, Yokohama Specie Bank second advance on 1918 second reorganization loan, repayable out of reorganization loan, if made, otherwise a one year Japanese loan, Int. 7%. Secured by surplus salt revenues 10,000,000 35. Jan. Japanese syndicate, for use of Hunan Pro- 1918 vincial Government. Said to be secured by right to cooperation in working iron mines at Taipingshan, Anhui, and antimony mines at Shuikoushan, Hunan, for 5 years at 7 % , issue price 94 (see loan of May 1, 1915, No. 18) -> 2,500,000 36. Jan. Loan to province of Fukien, for general pur- 1918 poses 1,000,000 Secured by sundry taxes. (Unconfirmed, but from good authority). 37. Jan. Mitsui Bussan Kaisha to Chihli province for 1918 purchase of cotton yarns for Chihli spin- ners, repayment guaranteed by Ministry of Finance 1,000,000 38. Jan. 20, Tai-hei Kumei syndicate to Central Gov- 1918 ernment for purchase of arms interest 7 % , issue price 95, additional commission of 5 % for unspecified purpose 14,000,000 39. Jan. 20, Second Loan to Bank of Communications 20,000,000 1918 Three years at 7% % , secured by $25,000,000 in Treasury bonds, money advanced by Bank of Chosen, Bank of Taiwan, Indus- trial Bank of Japan. THE CORRUPTION OF A NATION 191 i No. Yen 40. 1918 Chosen Group of Banks to Telegraph Admin- istration, for extension of land lines, in- terest 7 1 /2 % , discount 1% % , secured by all telegraph property not previously pledged 20,000,000 41. 1918 Wireless loan, amount not known but prob- ably Yen 3,000,000 for construction of wireless stations, materials to be purchased from Mitsui Bussan Kaisha 3,000,000 42. June To Ministry of Communications, for continu- 1918 ance of Kirin-Changchun line to Korean border 20,000,000 For 40 years at 5%. 43. June Bank of Chosen to Fengtien Province for 1918 Redemption of small coin notes, one half to be repaid in two years, one half in three, Int. 6 1 /^ % , issue price 95, secured by stock in Penhsihsu collieries owned by Fengtien Province 3,000,000 44. 1918 Yokohama Specie Bank to Province of Hu- peh, Security provincial revenues. (Un- confirmed, but from official sources.) 1,000,000 45. 1918 Okura Group to Province of Shensi 1,000,000 Secured by Provincial revenues. (Uncon- firmed, but from official sources.) 46. 1918 Okura Group to Central Government for mili- tary advance against Canton. Security, mines of Canton province 2,000,000 (Unconfirmed, but reported from well-in- formed source.) 47. July 3, Industrial Bank of Japan and Chosen 1918 Group of Banks 30,000,000 Security, all forests of Kirin and Heilung- kiang; interest 7%%; 5 years 48. July 5, Second Reorganization Loan, Third Ad- 1918 vance. Terms as in Nos. 26 and 34 10,000,000 49. 1918 To Yunnan Government. Security Govern- ment revenues from Ko Chiu Tin Mines 3,000,000 50. 1918 The Industrial Bank of Japan to the Ministry of War. Terms not stated. Security, treasury notes. Interest 6 % 4,000,000 51. 1918 Industrial Bank of Japan to the Central Gov- 192 DEMOCRACY AND THE EASTERN QUESTION No. Yen eminent. Terms not stated. Security, wine and tobacco taxes. Interest 7 c/ 2,000,000 52. 1918 To Central Government, advance loan for the construction of four railways in Manchuria, total cost estimated at Yen 150,000,000. Terms not stated 20,000,000 53. 1918 To the Central Government, advance loan for the construction of the Tsinan-fu and Ka- omi railways. Total cost estimated at Yen 70,000,000. Terms not stated 20,000,000 54. 1918 To Central Government. Loan for admin- istrative purposes and to reconstruct the iron industries of China. Security, mon- opoly of iron and other mines in Yangtze provinces. Terms not stated 100,000,000 55. 1918 To the Ministry of War. Loan for military purposes. Security said to be Chinese Government arsenals and docks 47,000,000 Total: Yen 441,100.000 Pre-War, including Han Yeh Peh 49,670,000 Since August, 1914 391,430,000 Only a complete investigation by an international financial commission will establish the number and character of Japa- nese loans made in China during the years 1917 and 1918, and it may never be possible to establish positively the amount of payments made on the loans negotiated or how the money was disposed of. The reasons why the other powers in the Allied group stood aside and tolerated Japan' financial escapades in China during this time were twofold. One reason was because of the gen- eral war situation, which made it inexpedient to irritate Japan. That reason probably accounts for the failure of the western Allied powers to protest strongly and officially at Japan's course. But why did not those of the Allies (Amer- ica and Great Britain) who were financially able to advance funds to China take that method of preventing what was happening ? I can give no conclusive answer to this question. THE CORRUPTION OF A NATION 193 t It may be that Great Britain could not act because of private agreements with Japan. The United States had no private agreements, at least, one presumes that yet it took no steps to aid China financially, although repeatedly requested and urged to do so. Failure of America and Great Britain to act, perhaps, was due only to lack of a definite policy. The truth seems to be that America and Great Britain were try- ing to play the game in China legitimately. Owing to China's internal division, there was a probability that funds advanced to the Government would be used to suppress the southern faction by force, and be frittered away uselessly. (This is what was done with proceeeds from most of the Japanese loans.) The powers therefore may have agreed not to make financial advances to China unless assured exactly how the money would be spent. In short, a ' ' starve-the-civil- war-out" policy was followed. Officially, the Japanese Gov- ernment agreed to act with the other powers; and this ex- plains why, during the period of the Nishihara operations, the Japanese legation at Peking always professed ignorance of and disassociation from his schemes. By the time the Japanese duplicity was fully revealed, the war had taken a decisive turn favorable to the Allies. The Nishihara opera- tions then were blamed by the Japanese press on the Terauchi Government, and a new ministry was formed at Tokio which disclaimed responsibility for what had been done. After the Hara ministry had taken office, the Japanese Government outwardly reversed its loan policy in China and Siberia, and through the Foreign Office it issued two state- ments, as follows (The "Japan Advertiser," December, 1918) : "Mischievous reports of Japanese activities in China, more par- ticularly with regard to the granting of loans, have for some time past been in circulation and have imputed to the Japanese Govern- ment intentions which are entirely foreign to them. For obvious reasons, the Japanese Government cannot undertake to discourage 194 DEMOCRACY AND THE EASTERN QUESTION financial and economic enterprises of their nationals in China, so long as those enterprises are the natural and legitimate outgrowth of special relations between the two neighbouring and friendly nations. Nor is the Japanese Government at all receding from its readiness to render needed financial assistance to China, consistently with the terms of all the declarations and engagements to which it is a party, should the general security and welfare of China call for such assist- ance. "At the same time, it fully realizes that loans supplied to China, under the existing conditions of domestic strife in that country, are liable to create misunderstandings on the part of either of the con- tending factions, and to interfere with the re-establishment of peace and unity in China, so essential to her own interests as well as to the interests of foreign powers. "Accordingly, the Japanese Government has decided to withhold such financial assistance to China, as is likely, in its opinion, to add to the complications of her internal situation, believing that this policy will be cordially participated in by all the powers interested in China." The second statement was issued in Japanese only, of which the following is a translation: "In view of the fact that the investment of Japanese capital in China and Siberia affect to a great extent the diplomatic and finan- cial policy of the state, the Japanese Government has determined to establish definite principles regarding the investment of Japanese capital in those regions which are to be strictly enforced here- after : "1. Whenever any Japanese capitalist opens negotiations with a government, central or local, in China or Siberia, regarding loans which are to be utilized for political purposes, he is requested to consult with the Foreign Office, Japanese Embassies or Legations, or with the Japanese Consulates. When consulted, the Foreign Office will at once refer the matter to the Department of Finance or other governmental offices concerned and will give necessary instruc- tions to the capitalist concerned. "2. If any capitalist opens negotiations without awaiting govern- mental instructions or acts against them, the Japanese Government may refrain from giving any necessary protection for the capital thus invested. "3. In accordance with the nature of the loans, the Foreign Office may arrange for the convenience of the capitalists to the effect that they will be able to consult directly with the Department of Finance er any other offices concerned." THE CORRUPTION OP A NATION 195 Foreign opinion of the Japanese loan policy in China is very well expressed in an editorial of the ' ' Japan Chronicle, ' ' on August 8, 1918: The political situation in China grows more and more compli- cated and the economic situation less and less secure, so that foreign observers who were wont to hold rather optimistic opinions as to the future are now inclined to abandon them and regard China or rather those who have the nominal control of the country as engaged in a national rake's progress, the end of which will be the bankruptcy and dissolution of the rake and the handing over of his property to others. Is this consummation to be wished? Ap- parently there is some difference of view on this point, for while there are some who desire that China should pull herself up and try to establish some sort of order in her economics and finances, there are others who seem to be doing their best to accelerate China's pace along the road to ruin. China may be said to be running a race with the war to see which can finish first. If the war were to end to-morrow there might be some chance of saving China; if the war continues for a period to be reckoned in years, then China seems to be doomed. At the peace conference she will appear with a few draggled plumes representing all that is left of her former fine feathers, and the victorious powers will shrug their shoulders and protest that if China cannot rule her own country and people there is nothing to be done. China may be quite certain that another war is not going to be fought on her behalf and that those who have acquired part or all of her property have only to sit tight and smile blandly to secure themselves in their own. The war may be one that is being fought in preservation of the right of national self-determination, but the weak nation planted by the side of the strong one will be in much the same position after as before the war. Germany's blundering policy has shown which is the wrong road to follow, but there are others less antagonistic and equally effectual. Before the weak nation can be at rest in spite of a strong neighbour a change of heart must obtain, and war hardly seems the best way to bring this about. A peace by exhaus- tion is another matter altogether. Japan has plunged deeply into Chinese economics since the war started and the pace is now growing fast and furious. Loan fol- lows loan with almost indecent haste and provided sufficient security is forthcoming almost any sort of guarantee seems to be accepted. Local loans, national loans, private loans all seems fish that comes into the net of the Japanese capitalist. The fortunes of the mor- 196 DEMOCRACY AND THE EASTERN QUESTION row do not trouble him. Probably he bases his optimism on the belief that even if all law and order were dissolved in China, if government were overthrown and his guarantees so much waste paper, still the strong arm of his country would uphold him. It would not be the first time that warships had been used to collect foreign loans, and if the hard cash and interest were not forth- coming, the security would always remain to fall back upon. It might even be better to have the security than the amount of the original loan itself. Japan is not altogether to be blamed if she regards the present opportunity to invest money in China as the chance of her life. After all, she did not invent this process of peaceful penetration. She has had many opportunities of watching it at work all over the world, and for years she fretted at her own poverty when she saw other nations placing their savings in China's lap. She even made endeavours to take part in the game by herself appearing as a borrower in order to be one of China's creditors. Now that the war has changed her condition, her eagerness to be- come a bona-fide creditor of China has been given full play per- haps too much play, for it cannot be denied that her policy shows a certain amount of rouglmess about the edges, a want of savoir faire which has jarred upon her friends and set their teeth on edge, so that they too have felt called upon to utter sharp remarks. After all, these things require to be done with a certain amount of polite- ness. To snatch a man's purse in the street is mere vulgar robbery. The contents may be caused to change hands without a cry of "stop thief" being raised. It is on these grounds that even moderate British papers in China have lately seen fit to criticise Japan's policy, even in face of the fact that Japan is one of the Allies in the great war, the winning of which is of primary importance if we are not all to be plunged into an era of barbarism. Such criticism is really most serious, the more especially as no man can tell when the war will finish, when Germany will undergo that disintegration which now seems the most probable end to the war. Such disintegration will come suddenly when it does come, and if it finds Japan still engaged in financing China by methods which the best authorities regard as not in the interests of that country, the criticism may be turned into action. A financial polity based upon the somewhat sinister per- sonality of Mr. Nishihara hardly seems one that the powers can support as in the best interests of China. The Japanese loan policy was not confined to the Chinese Government (Peking) recognized by the Allied nations, and THE CORRUPTION OF A NATION 197 the territories and officials under its authority. It was active in a minor way also in the southern provinces that were in revolt against the Peking Government, and loans were made not to the so-called Southern Government at Canton, but to some Tuchuns and lesser local officials in the Southern prov- inces. Of course this process amounted to aiding and fo- menting rebellion against the recognized Government of China, which was an ally of Japan in the war. It is expected, when the differences between the Northern and Southern Chi- nese political factions are compromised, if this happens, that many Japanese loans and concessions given during the civil disorder will be disclosed, as was the case after the revolution of 1911 and the rebellion of 1913. While the corruption policy by means of loans and bribery was being used to extend Japanese influence and control over all of China's territory that was not included in Japan's spheres of occupation, Japan was proceeding with a high hand in those spheres. Manchuria provides probably the most complete example of this process of administrative penetra- tion, but in some respects Shantung Province gives even a better illustration of what Japan's peaceful penetration and her "enlightened administration" of non- Japanese regions means. Shantung provides almost a complete exposition of the Japanese system as it works in Korea, Formosa, and China, although in Formosa and Korea there are no interna- tional complications to restrain the system. For the first three years of her occupation of Shantung Province Japan moved with a certain caution, but by the autumn of 1917 it evidently was felt at Tokio that it was safe to extend the measures for putting Japan in complete control there. Japanese occupation and gradual usurpation of admin- istrative functions had been excused on the ground of mil- itary necessity and that they were temporary. Now Japan began to substitute Japanese civil administration for military occupation. The process is very well described in a memorial 198 DEMOCRACY AND THE EASTERN QUESTION of the Shantung People's Association, published November 9,1917: 1. After the occupation of the German leased territory of Tsing- tau by the Japanese in the winter of 1914, they at once established the so-called railway zone along the Tsinan-Kiaochou line which was not in existence during the last seventeen years when the Germans were in Shantung. On account of the establishment of this zone with or without the concurrence of the Peking govern- ment, Japanese subjects have seized all mining areas, in addition to those already granted to the Germans, by the so-called Sino- Japanese cooperation. When once any Chinese comes into an agree- ment with the Japanese, he cannot free himself because there is usually the clause that "in future loans or other requirements in which foreign assistance is needed, that Chinese must first approach the Japanese" that is to say, the Japanese enjoy preferential rights anywhere and everywhere they go, either in their dealings with the Chinese government or people. The Hanyehping Corpora- tion and the Bank of Communications were lost to China on account of this clause. 2. After their occupation of Tsingtau, the Japanese then seized the Tsinan-Kiaochou railway and then pushed their influence to the capital of Shantung. In the districts along the Tsinan-Kiao- chou line, the Japanese selected wealthy natives to act as elders for them in every village and these men are held responsible for any loss of rails or sleepers. The Japanese usually take away the headmen as a penalty without the knowledge of the local Chinese officials simply because they say that there are rails or sleepers missing in certain villages, and all protests or requests from the Chinese civil Governor at Tsinan or district magistrates are ignored by the arrogant and haughty Japanese. After a trial at Tsingtau by the Japanese Court, the headmen are usually fined many times the worth of the rails, etc., said to have been lost or stolen by the natives. 3. Now after three years of their occupation of Tsingtau, the Japanese have established civil offices at Tsinan, Fangtzu and Changfang, along the Tsinan-Kiaochou line, under the excuse that they are only intended for the control of Japanese in Chinese ter- ritory, despite the fact that there are Japanese Consulates which enjoy the right of extraterritoriality. If the Chinese Government will allow this to pass unnoticed without protest, the crafty Japanese will surely extend this system finally to all parts of China. The so- called Lansing-Ishii agreement will not bind the Japanese and will THE COREUPTION OF A NATION 199 merely encourage them to utilize the words "special interests" to encroach upon Chinese sovereign rights, as it is exceedingly hard to give a proper explanation to the words "special interests." 4. In reply to the petition of the Shantung People's Association General Chang Huai-tze, Tuchun and civil governor of Shantung, says that Baron Hayasbi, Japanese minister to China, does not re- gard the establishment of this sort of civil office in Chinese territory as necessary or lawful, while the Chinese minister at Tokio, Mr. Chang Chung-hsiang, has reported to the Wai Chiao-pu that he has been informed by a delegate from the Japanese Foreign Office that the matter is under the careful consideration of the Japanese Government and that it is not true that the Japanese Government has refused to withdraw same. As Japanese official statements are generally unreliable, it is our duty as representatives of the thirty millions of the Shantung people to stay in the Capital and wait for a definite result. Getting no satisfaction from the Peking Government in response to their memorials, the inhabitants of Shantung started a popular agitation against the recognition of the Japanese civil administrations in the province. On Novem- ber 22, 1917, Wang Chao-chuan, a member of the Shan- tung Provincial Assembly, delivered an address before the Shantung guild at Peking, in which he said: I desire to give you a short report of what I have seen and experienced in my native land. Since the taking over of the Tsinan- Kiaochou railway from the Germans by Japan, the activities of the Japanese have been strongly felt by us. The Japanese, now desire to make our province their colony, and the means employed by them to achieve their ends are far from being honest. Besides taking over all mines operated by the Germans, they have now started the operation of mines in more than ten other places where no sanction has been obtained from the Chinese government. They engage Chinese to apply for license to work on the mines, and when" any investigation is instituted by local officials they would produce counterfeit deeds and contracts to prove that the property had been transferred to them by some Chinese whose whereabouts could not be found. Now they have gone a step further, and are usurping our civil rights. In the villages within the railway zone, the Japanese have made elders responsible for the protection of certain sections of the road; and sometimes the Japanese railway policemen come to these villages to make investigations. When they find coal or iron in any house, they arrest the owner and inflict large fines on the ground that he has offered refuge to bad characters and "tufei." The district magistrates are helpless in the face of such outrages. We cannot help shedding tears as we witness the oppression of poor and innocent inhabitants along the railway zone. With the introduction of Japanese Civil Offices into these places, the condi- tion of the people will become even more deplorable. On November 30, 1917, a people's conference was held at Tsinan-fu, the capital of Shantung Province, and delegates were appointed to proceed to Peking and protest to the Government. AVang No and Wang Chia-su accepted the office, and on their arrival at Peking they presented a petition, in part as follows : Some time ago the Japanese authorities established in Tsingtau the Office of Civil Administration, and now they have established branches of this office in Fangtzu, Tsinan and other places. When the Provincial Assembly, Educational Association and other local authorities telegraphed to the central government requesting that protests be lodged with the Japanese Legation at Peking, we de- cided to await the result; but we have now reached the limit of our patience and endurance, and if no measures be immediately taken to prevent such gross violation of our sovereign rights, the final de- struction or dismemberment of the country will soon take place. In May, 1915, when a Sino-Japanese Treaty was signed in connec- tion with the affairs of Shantung (21 demands and supplementary), it was provided that China should in future acknowledge the transfer of privileges and concessions in Shantung which might be made by Germany to Japan. Thus Japan can only enjoy the concessions after the war when they are arranged between them (Japan and Germany). Besides enjoying all privileges and concessions formerly granted to Germany by China, Japan has now attempted to usurp our civil rights by establishing civil offices in our territory. In Article 4 of Chapter 2 of the Lease of Kiaochou-wan, it is provided that German merchants are allowed to work or to co- operate with Chinese merchants in working coal mines which are situated within a distance of 30 li from the railway zone. During the period of German occupation, no attempt whatever was made to interfere with the civil administration of this country even within the districts marked as "railway zone." But the Japanese have THE CORRUPTION OF A NATION 201 now established civil administration offices in Tsinan and Fang- tzu, despite our protests. The German authorities at Tsingtau have hitherto done their best to respect our civil rights, and they did not interfere with our police administration. They recalled the troops at Kaomi and Kiaochou, who were sent there to protect the railway, and allowed us to exercise police authority in the railway zone. But the Jap- anese have refused to recall their gendarmes under the pretext that their country is still in a state of war with Germany. They have consuls in our country, and indeed there is not the least neces- sity for them to establish civil offices to interfere with our admin- istration. It is evident that by their aggressive actions the Japanese are only enforcing their policy as implied in the new Japanese-Amer- ican Alliance [Lansing-Ishii agreement]. Other foreign governments were not oblivious to what was happening in Shantung, and Japan's moves were closely ob- served. I quote from a report of an official of the American Government who investigated conditions in Shantung, dated November 30, 1917 : ... I have the honor to report that this action has aroused great opposition on the part of the Chinese in the province of Shantung and elsewhere. I learn that the Chinese Government in October presented a formal protest against not only the Civil Administration itself, but also against the stationing of troops and the extension of Japanese administrative functions outside the leased territory. The Chinese plainly fear that the comparatively trivial military operations against the Germans are to make the basis of Japanese permanent domination of Shantung, and they are bitterly opposing every manifestation of what they feel are hostile and sinister usurpations of their fundamental rights. The Japanese, on the other hand, starting with the assumption that the Shantung Railway, as well as the leased territory, are conquered areas, assert that it is both their right and their duty to provide for the peace and prosperity of this region, and that the new Department of Civil Administration and its branches out- side the leased territory have been created with only that laudable object in view. The report cited in detail various matters in connection with the Chinese agitation against the extension of Japanese 202 DEMOCRACY AND THE EASTERN QUESTION administration, and quoted from numerous Chinese memorials and protests. The report also cited the Japanese moves to counteract this Chinese popular indignation. One method was for the Japanese press in Japan, China and America to accuse German propaganda of having instigated the agitation among the Chinese. Of that the report remarks that "there is no tangible evidence that German propaganda or influence played any serious part in the matter. On the other hand, the Japanese and Germans seem very friendly." Efforts were made to placate Chinese opinion by "pretending to withdraw somewhat." The Japanese consul-general made a special trip to the tomb of Confucius and laid wreaths on it. The Japanese military governor of Tsingtau made a trip along the railway and to Tsinan-fu, accompanied by Dr. M. Akiyama, the Japanese civil administrator who had been ap- pointed. The latter was very coolly received by the Chinese. At an after-dinner speech, on November 15, the Japanese commanding general (governor) said, as quoted in the "Shantung Jih Pao," that the Chinese should not permit themselves any suspicion about the establishment of civil administration, as it was an established international cus- tom to create such forms of government in conquered and colonized areas. The newspaper stated that these remarks displeased the Chinese guests so much that they remained silent, and soon afterward left the dinner. In trying to placate the Chinese population, foreign ag- gressors in China always have the weapon of commercial boy- cott to fear the Japanese officials indirectly made use here again of the "white peril" argument. This report says: "In connection with this visit, of General Hongo, a Japanese press organ (Seitou Shimpo, Tsingtau) stated that a Chinese mili- tary officer, in toasting the Japanese general at a dinner, remarked that it was necessary for Japan and China to combine to resist the advance of the white races in the East after the war. In replying, General Hongo tactfully avoided the comparison, and said that the establishment of civil administration was a step toward closer rela- tions between Japan and China," THE CORRUPTION OF A NATION 203 The railway and harbor administration at Tsingtau were placed under the Japanese civil administration, thus indicat- ing a purpose to make Japanese occupation permanent. The report makes an analysis of Chinese opposition to extension of Japanese administration. It gives the number of Japa- nese in Shantung (official census) at more than 20,000, of whom about 6,000 are outside the leased territory and the railway zone. (Chinese assert that there are more than 15,000 Japanese in Shantung outside of Tsingtau and exclusive of the troops and gendarmes.) The report quotes parts of an article by Professor J. Shiga, a Japanese, published on March 1, 1917, in the "Santo Koron, " the principal Japanese organ printed at Tsinan-f u, as follows : I ascribed [in a previous article] the strength of Germany to (1) a high degree of Imperialism (from which their stamina and momentum come), (2) scientific brains (which bring about a sys- tematic development of the country), (3) body to overcome the odd* of environment (requisite to thrive in work abroad). For your information the following parallel facts are cited: Germany Japan Area: 87,500 square miles. Japan proper: 75,000 sq. m. Population: 67,000,000. Korea: 35,000 sq. m. Ratio of increase: 1.5. Population: 67,000,000. Ratio of increase: 1.5. Past and present : Past and present : German people 2000 years Japan 2600 years old, changed old, united 50 years ago by the herself 50 years ago by the vir- wise policy of the old Emperor, tue of the late Emperor. She fought thrice with foreign Fought with foreign countries countries and won thrice to the thrice and won thrice to th glory of the nation. glory of the nation. Future : Future : India, Australia, Canada and If one possesses even the South Africa all belong to crust of bread of the world, well Qreat Britain, which helps her- and good. Far from crust, our 204 DEMOCRACY AND THE EASTERN QUESTION self to the main portion of the new gains in the war are a dust bread of the world. of dust (Marianne, Caroline and Germany's portion is nothing Marshall islands are what we but its crust or its dust. How picked up). How should Japan should Germany provide for her- provide for herself in the fu- self in the future? (Words of turet Treitschke, the cause of the present war.) Such briefly is the condition in which we are. We Japanese should bear in mind the fact that we must not lose an inch of what we have acquired on the continent. We never can tell how the polit- ical clouds of Europe may shift even for the next moment. Re- member, Tsingtau is the landing place to the continent, which we have newly acquired with sacrifice. All the Japanese in Shantung, particularly at this juncture, should rouse themselves once, nay, one hundred times, to brace up our authorities and watch over the steps they take. With Japanese organs and Japanese leaders publishing such views in the capital of a Chinese province, there is little to wonder at that Chinese were uneasy. The report considers the technical status of Japan's position in Shantung. Chi- nese had raised the question of the leased territory, of which the report says : ' ' Without going into the dispute regarding China's declaration and attempt at abolition of the 'War Zone,' the above considerations [terms of the original Kiao- chou convention] would seem to support the contention that only Kiaochou leased territory and the 50 kilos zone may rightfully be regarded as 'occupied territory,' Japanese con- tentions with regard to the railway notwithstanding." In regard to the establishment of Japanese civil administration outside the leased territory, the report says: The establishment of Civil Administration outside of the Leased Territory is therefore quite a different question. The establishment of such offices at Fangtze and Tsinanfu was undoubtedly the inten- tion of the Japanese Government. Simultaneously with the publi- cation of the Imperial Ordinance and the local Military Ordinance referred to in the first paragraph of this report, Military Notifica- tion No. 93, of October 1, 1917, was issued by the commanding gen- THE CORRUPTION OF A NATION 205 eral in Tsingtau. This notification gave the jurisdictional areas of the local Administrations at Tsingtau Litsum (10 miles from Tsing- tau, within the Leased Territory). Military Ordinance No. 21 also made its appearance, promulgating the scheme of organization of the local administration. (Copies herewith.) The location of the first railway local administration office at Fangtze was probably determined by the presence there of the new barracks already re- ferred to. During the course of the Chinese opposition to the Civil Admin- istration this office was informally informed by an official of the Administration that the necessity for the offices outside the Leased Territory arose from the presence along the railway of great num- bers of Japanese residents. The annexed census shows that almost 6000 Japanese reside in the designated area. But even granting these facts, it is logical to inquire by what right they are there! When foreign right of residence in the interior of China is so care- fully circumscribed by treaty, to the Chinese it must appear that Japan is proceeding on the assumption that the rights of residence granted to Japanese subjects in South Manchuria by Article 3 of the treaty of May 25, 1915, have been extended to Shantung, an assumption that is, so far as this office is informed, contrary to fact. But even granting, again, that this great body of Japanese are residing in the interior in conformity with treaty stipulations, they are nevertheless amenable to their consular authorities, and the creation of other Japanese governmental agencies would appear to be clearly ultra vires. Before it was announced that Japan would establish civil administrations in Shantung outside of the former German leased territory, the Japanese military government at Tsing- tau had taken steps to establish an extensive Japanese-owned land area there by the forcible purchase of lands from Chinese owners. The area and the manner of acquiring it are de- scribed in an official report of the agent of a foreign govern- ment, dated May, 1918, as follows: This land includes the shore of Kiaochou Bay, extending from the Great Harbor northward along the railway for several miles, 'and from the Bay right across the peninsula on which Tsingtau is situated. Not only will every possible land approach to Tsingtau in the future, therefore, be Japanese-owned property, but every vestige of waterfront anywhere near the railway will be theirs as 206 DEMOCRACY AND THE EASTERN QUESTION well. The area affected is roughly twelve square miles in area, and this Consulate has no doubt but that it will ultimately be extended to Litsun, eight miles from Tsingtau, in order to include the source of the city's water supply. It is the opinion of this Office, respectfully offered, that the Jap- anese army of occupation is far over-stepping the privileges allowed such organizations by the rules of war, and is arrogating to itself the civil rights secured to the former German lessees through con- ventional agreement. Chinese owners of this land were not allowed the option of selling or retaining their property, but were compelled to sell by pressure of the Japanese military authorities acting under martial law. Yet Dr. M. Akiyama, the newly appointed Japa- nese civil administrator in Shantung, in a speech made at Tsingtau on October 11, 1917, said: "Twenty years ago Ger- many treacherously occupied Tsingtau, and not only estab- lished a far Eastern naval base here, but also made it a com- mercial center vis-a-vis China." Thus an official of the Japa- nese Government denounced the method by which Germany acquired the leasehold of Kiaochou, yet Japan rests her claim to a position there on the validity of Germany's status. The statement was made in an address explaining Japan's (official) position in Shantung, and was read from a manuscript. Dr. Akiyama is supposed to be an authority on international law. In a petition presented to the cabinet at Peking on January 4, 1918, by representatives of the Shantung Provincial As- sembly, this paragraph occurs: 1. Not only within the once German leased territory of Tsingtau, but also at Poshan and some other districts, the Japanese have seized all mining properties by peaceful or forceful means. Japanese outlaws went so far as to tie up the hands and feet of those owners of mining hills who refused to sell their properties and beat them fiercely. In one case, oil was poured on the man's clothes in order to frighten him to accept the demands of the Japanese, and sign a lease to his property. Thus after the solution of the question con- cerning the illegal establishment of Japanese sub-civil administra- THE CORRUPTION OF A NATION 207 tions in Shantung, the mining question will be the most difficult one for the government to settle with Japan. In the autumn of 1918 a survey of results of the Japanese activities in Tsiuan-fu, the capital of Shantung, was made by an American educator (Upton Close), who summarized what he learned in an article published in "Millard's Review" of January 18, 1919. I will include here portions of that article : Japanese political influence in Tsinan and Shantung has its hub in the Provincial Waichiaopu, and its Foreign Commissioner, Tang Ko-san. This man, schooled in Japan, married to a Japanese wife, and indebted for his entire political career to Japanese influence and aid, has been reduced to a condition of absolute subservience and helpless vassalage to his patrons. His administration is inefficient, pusillanimous, and accused of nepotism by his fellow officials, espe- cially on the score of his giving too many positions to his relatives the cardinal sin of Chinese officialdom. It is evident that he could not retain his position a day without his powerful Japanese backing. With these men in their control, Japanese have a strangle hold on the political life of the Shantung capital. It is now publicly announced that Commissioner Tang is an aspirant for the governor- ship of the province, and Japanese interests, including their local daily vernacular paper, are supporting him with might and main. Twice Chinese merchants have endeavored to combine for a boycott of Japanese goods; once, upon the occasion of the establishment of the Japanese Civil Government Department their meeting was broken up and the Chamber of Commerce sealed by order of General Ma; once, in September, 1916, their plans were brought abruptly to an end by the despatch of a letter by courier direct to the president of the Chamber of Commerce while sitting in discussion of the question, from the Japanese Consulate, giving that body, as I am informed, fifteen minutes to change the subject, under threat of forcible dispersion. Let us turn to the actual Japanese occupation of and enterprise in the city, which, however, as we shall see further, can hardly be called commercial. I was going to use the word "penetration" rather than "occupation," but it is too much an accomplished fact for that expression. The first three years of the war, the Japanese popula^ tion segregated itself near the railway station under their administra- 208 DEMOCRACY AND THE EASTERN QUESTION tion, and in residences and buildings taken away from the Germans. The past year, however, their policy has been to decentralize over the entire settlement, and even into the principal sections of the old walled city. It is evident that when they get ready to map out their "settlement" here, as in Tsingtao, they will rebuild the "whole thing." Besides the large number of Chinese firms financed by Jap- anese money, there are, situated on every length-wise and cross street of the settlement and in three principal sections of the city under the direct operation of Japanese, 194 enterprises classified as follows: (This list is not guaranteed against omissions or mistakes, but was compiled with great care for accuracy and thoroughness.) SUMMARY Drug Shops 63 Houses of Prostitution 22 Notions (Miscellaneous small goods) 38 Hotels and Inns 13 Banks Actual Banking Business 3 "Banks" 3 Hospitals 3 "Yang Hang," etc 3 Railroad offices, aside from station 2 Barracks and Gendarme Station 3 Schools 3 Residences 26 Flour Mill Dessicated Egg Factory Cinema Theater Postal and Telegraph Office Railway Station Wireless Station Railway Coal Syndicate Consulate Total, Japanese Enterprises 194 Without Residences 168 Percentage of total without residences: Drug Shops and Houses of Prostitution 50 % Percentage of Small, Miscellaneous Shops and Enterprises 32% Percentage of Military, Government and Rail- way 7 % Percentage of Actual Commercial Enterprises 8 % Remaining Percentage 3% THE CORRUPTION OF A NATION 209 It should be noticed what a small percentage of the whole can be classed as actual commercial enterprises of any standing. The overwhelming percentage of Japanese enterprises in Tsinan are the small drug shops, miscellaneous and notion shops, and "touching-up stations'' as their Japanese designation might be translated the houses of prostitution. Not discussing the latter, which need no explanation to those familiar with Nipponese cus- tom, it is evident that, with the hundreds of Chinese shops selling Japanese patent-medicines, notions and small goods, there is no market in a city the size of Tsinan to support 107 Japanese shops, in many cases with apparently several families dependent on them, also handling these lines of small goods. It is charged by Chinese that Japanese "business" here is not commercial. A percentage is engaged in morphia and other lucrative traffic, as I shall show. But there remains nevertheless a large percentage which it is certain are not dealing in these illegitimate lines, which, however, are just as certainly not dependent on their turn-over of merchandise for support. One may enter these shops and ask for a common article in their line, and find that the shopkeeper does not know whether he has it in stock or not, and does not care whether he makes a sale or not. He does not appear in the least offended or disheart- ened when the prospective customer turns away without purchasing. In some of the drug shops the bottles are covered with dust, and apparently are never disturbed. Some proprietors of these shops are evidently of the lower class and very poor; others appear very comfortably situated, and many have a decided military bearing. The inference is that these people are an artificial population sup- ported or subsidized by their government to give it prestige, hold, and a right to participate in affairs. Or, it may be that they are a small army of emergency which their government finds most convenient to quarter in this way. The recent purchasers of the large number of German residences likely come in this same class, as there are no commercial establishments here sufficient to support men of the station in society who would seek such residences. We have now to consider the morphia trade which, although not confined exclusively to Japanese, is inseparable from their pene- tration and occupation. It may well be questioned what reasons for official Japan allowing its nationals to institute this traffic are suffi- ciently weighty to justify their running the gauntlet of the public opinion of the world. The writer would suggest the following three reasons: 1. The profit which, in the absence of real commercial enterprise, 210 DEMOCRACY AND THE EASTERN QUESTION finances "peaceful penetration." It is a matter of public knowledge in Tsingtao that the profit from the drug traffic has supplied the funds for the campaign of wholesale buying of everything purchas- able, the immense building program, and the support of the artificial population. 2. The poisoning and weakening of the Chinese nation from its official classes down, making it an easy prey to the aggressor. 3. The unbreakable hold gained on the official class through the narcotic, who become bound by a slavery stronger than steel fetters to their Japanese drug-providers, and can be swayed or induced to give up secrets. These fetters are fastened by two locks, first, the habit-slavery of the narcotic itself; second, the fear of the poor user of scandal and loss of his position and all that he has should he break with those providing him or displease their friends or officials. Many concrete examples could be given. The writer has reliable evidence that two of the large Japanese commercial firms have in the past imported through Tsingtao and delivered shipments of arms, consisting principally of small arms, to individuals connected with the Chinese military. It appears that small shops cannot deal in this trade, as they would be more acces- sible to surveillance by the Chinese authorities, and could not com- mand the confidence of the individual for whom they were purchasing to the extent of inducing him to put down the cash at time of order, which is always demanded. The goods are ordered from and paid for at these companies, and later delivered direct from Taing- tao in some secret way to the purchaser. The Chinese Police Headquarters when referred to on this sub- ject stated that it finds itself unable to take a census of the Jap- anese population, and is forced to content itself with what statistics are sent to it by the Japanese Consulate here, which in November, 1917, reported 200 males and 150 females, totalling 450, and has made no report since. The most conservative estimate would place this figure as a tithe of the present Japanese population. There is, in addition, a continual floating population passing in and out of the Republic through Tsinan and Tsingtao, which reaches at times at least as high as two thousand. The above is a brief, but comprehensive, summary of the enter- prises which the activities of the Japanese officials and nationals have been directed to building up during their unparalleled oppor- tunity of the past four years. They have had absolutely a free hand. What they have done must be taken to represent what they aimed to accomplish. THE CORRUPTION OF A NATION 211 China's long struggle against the opium traffic and habit is familiar to the world. When the Great "War began the traffic was on its last legs apparently. The Chinese Govern- ment and the Chinese people were in a way to accomplish what had seemed to be impossible, and completely to stamp out the cultivation, trade in, and use of the drug in the whole of China. All the principal powers, including Japan, were nominally cooperating with China in this effort, and had made agreements accordingly. Then the war came, disturbed and unsettled the administration of China, and let down all bars to Japanese "penetration." How Japanese, with the connivance and often with the actual help of the Japanese Government, took advantage of these circumstances to intro- duce and fasten another drug habit on the Chinese, constitutes as black an action as has been charged to any nation in recent times. Recently the "North-China Daily News," of Shang- hai, the oldest and leading British organ published in China, threw off the restraint upon criticism of Japan which the war had enforced upon British publications and gave an expose of the Japanese morphia traffic in China. A report and an- alysis of this traffic revealed that for the last two years it has been one of the most profitable items of Japan's foreign trade; the profits from it in 1913 were $8,400,000, and they have increased enormously during the war. Extracts from the report of the correspondent of the "North-China Daily News," published in December, 1918, follow: It is a larger trade now than it was in 1913. Morphia, however, can no longer be purchased in Europe. The seat of industry has been transferred to Japan and morphia is now manufactured by the Japanese themselves. Although Japan is a signatory to the Agreement which forbids the import into China of morphia or of any appliances used in its manufacture or in its use, the traffic, inasmuch as it has the financial support of the Bank of Japan, is carried on with the direct approval and encouragement of the Japanese government. In no other country in the world has there ever been known such a wholesale contraband traffic. Literally tens 212 DEMOCRACY AND THE EASTERN QUESTION of millions of yen are transferred annually from China to Japan for the pajTnent of Japanese morphia. The chief agency in the distribution of morphia in China is the Japanese postoffice. Morphia is imported by parcels post. No in- spection of parcels in the Japanese postoffices in China is permitted to the China Customs Service. The Service is only allowed to know what are the alleged contents of the postal packages as stated in the Japanese invoices, and yet morphia enters China by this channel by the ton. A conservative estimate would place the amount of morphia imported by the Japanese into China in the course of this year as high as 18 tons and there is evidence that the amount is steadily increasing. Wherever Japanese are predominant there the trade nourishes. Through Tairen morphia circulates throughout Manchuria and the provinces adjoining; through Tsingtao morphia is showered over Shantung province, Anhui and Kiangsu; while from Formosa, so favored by geographical propinquity, morphia is earned along with opium and other contraband by motor-driven "fishing" boats to some point on the mainland, from which it is distributed throughout the province of Fukien and the north of Kwangtung. Everywhere it is sold by Japanese under exterritorial protection. How efficient is that protection may be gauged by the fact that no Japanese has ever yet been punished for dealing in contraband in China. When Chinese police raid the morphia shops along the Tsinanfu railway in Shantung, as they have a right to do, for the traffic is illegal, Japanese gendarmerie rescue the ar- rested and exact a fine, not from the guilty be it understood, but from those who attempted to uphold the law. In recorded instances known to American investigators the Chinese magistrate himself has been compelled to pay an indemnity. In South China morphia is sold also by Chinese peddlers, each of whom carries a passport certifying that he is a native of the island of Formosa and therefore entitled to Japanese protection. Japanese drug stores throughout China carry large stocks of morphia. Jap- anese medicine vendors look to morphia for their largest profits. Everywhere Japanese female prostitution, the systematic extension of which from Yunnan city even to Urga is such an inspiring evi- dence of the business activities of our Asiatic Allies, goes hand in hand with the sale of morphia. Morphia, no longer purchasable in Europe, is manufactured now in well-equipped laboratories in Japan and in Formosa. During recent years the bulk of the Persian opium coming into the market has been purchased by Japan for conversion into morphia, for Persian opium yields a larger per- centage of morphia than Indian opium. Opium grown in Korea, THE CORRUPTION OF A NATION 213 the cultivation of which it is interesting to note followed immedi- ately upon the closing of the opium shops in Shanghai, Japanese officials providing the seeds; and opium grown under Japanese pro- tection in Manchuria, is an ever expanding source of the supply of morphia, and, it may be added, of opium required by the ad- ministration of Formosa. One must emphasize that this opium is not imported into Japan. It is transhipped in Kobe harbor to Tsingtao, from which point of vantage, assisted by the Japanese- controlled railway to Tsinanfu, it is smuggled through Shantung into Shanghai and the Yangtze Valley. Opium purchased in Cal- cutta for Rs. 3,500 per chest about Tls. 1,000 costs, delivered in Kobe harbor, all told, well under Tls. 1,200 per chest. This opium Tsingtao opium is sold in Shanghai at $500 a ball of 40 balls to the chest a total of 20,000 per chest. China's failure to sell "for me- dicinal purposes" her opium at $27,000 per chest, the price asked by the opium ring, is thus explained. The price is undercut by the Japanese. The dimensions that the traffic has already assumed are note- worthy. There is reason to believe that between January 1 and September 30 of this year, 1918, not less than 2,000 chests of opium purchased in India were imported into Tsingtao via Kobe. Upon this amount the Japanese authorities levy a tax, which does not ap- pear in the estimates, equivalent to Tls. 4,000 per chest, a total for the 2,000 chests at the present rate of exchange of two million pounds sterling. The acquisition of this immense profit from a contraband traffic would explain the origin of those immense sums now being lavished upon the development of Tsingtao and the establishment there of Japanese commercial supremacy. It may be asked how it is possible that at Dairen, where the morphia traffic is greatest, and at Tsingtao, which is the chief center of the Japanese opium trade, the importation of this contraband continues without the knowledge of the Chinese Maritime Customs. But at both Dalny and Tsingtao, the Chinese Maritime Customs are wholly under the control of the Japanese and wholly manned by them. 1 Japanese military domination would forbid in both ports any interference with a traffic in which the Japanese authorities were interested, either officially or unofficially. In Dalny the highest civic dignity has been conferred upon the chief dealer in morphia and opium. Moreover in the case of Tsingtao, by the agreement which relinquished to Japanese the exclusive charge of the Chinese i The predominance of Japanese officials in the Chinese customs offices at Antung, Dairen (Dalny), and Tsingtau, was among the concessions forced from China by the "agreement" of 1915, and other agreements. 214 DEMOCRACY AND THE EASTERN QUESTION Maritime Customs there, any trade in which the government is inter- ested, contraband or not, can be carried on without the official knowl- edge of the Customs. Article 3 of the Agreement of December 2, 1905, perpetuated in the Agreement of August 6, 1915, provides that any goods landed in Tsingtao under "certificates of govern- ment" shall be free from Customs examination. The way has thus been opened, not only for the illegal import of opium, but of con- traband in arms, by which the bandits of Shantung province are provided with the means of harrying and looting and murdering the peaceful peasants of the most sacred province of China, The China Maritime Customs returns of 1917 show that 45 piculs of boiled opium were admitted into Tsingtao in 1917. The actual amount was probably 50 times greater. The balance enters in cases stamped "Chun pung p'in" (military stores), and boxes so stamped are to be seen commonly in the Japanese drug stores along the Shantung railway. In 1917 morphia to the amount of nearly two tons is recorded as having entered Dairen for use in the Leased Territory, but no morphia is recorded as having entered Manchuria from the leased territory during the year, nor does any entry of morphia appear in the Tsingtao Customs returns for 1917. Yet a competent witness, Dr. Wu Lien-teh, states that "Almost every Jap- anese drug dealer or peddler in Manchuria (and Shantung he might have added) sells morphia in one form or another, and does so with impunity, because no Japanese can be arrested without first inform- ing the Consul." In an official report to the American Government made in September, 1918, on the subject of the demand by the Japa- nese administration at Tsingtau for the removal of American and other foreign mercantile property from certain areas, the question of the extensive improvements made by the Japa- nese at that place was discussed as follows : The secondary question as to where the Japanese military head- quarters obtains the money now being spent in large sums for the purchase of property, erection of schools, residences and public buildings, for the laying out of streets, for harbor improvements, and other public works, is an interesting one, but difficult of exact answer. Known sources of revenue are: (1) 20 % of the duty collected; (2) land taxes; (3) business and vehicle taxes; (4) income from public utilities, i.e., railways, mines, electric light, water works, etc. A source of income, whose amount has been variously THE CORRUPTION OF A NATION 215 estimated at from $700,000 to several millions per annum, is the im- portation under Japanese government license of opium. Regarding the Japanese morphia trade in Manchuria, where Japan controls the situation to an even greater degree than in Shantung, I will quote from an American official report on the subject, dated July, 1918 : I have the honor to report that, notwithstanding the stringent orders issued by the Japanese consular authorities at Mukden re- cently, forbidding their nationals to trade in illicit drugs, a con- siderable number of Japanese continue to dispense morphia and various other narcotics to Chinese who are disposed to buy. I may state that in order to obtain actual proof, I sent a Chinese member of the consular staff to brothels holding Japanese licenses and sit- uated in the Japanese railway area. The charge for 5 smokes is $1.00 small coin and the opium thus obtained is mostly provided through Japanese. The tolerance by the Japanese consular author- ities of this practice attracts more Japanese to Manchuria, and in- duces Chinese to settle in territory under Japanese jurisdiction and to contribute directly or indirectly to the Japanese. Since the Indian supply of opium has been cut off the votaries of this drug have been dependent upon the supply coming from the north, principally from the districts about Harbin. The drug is brought into Chinese territory via Changchun, and into Mukden through the South Manchurian Railway station, where the Chinese authorities have no power to search incoming passengers. The only way to purchase opium in Mukden is through middlemen, who conduct business in the district immediately surrounding the South Manchuria Railway station. Some of the dealers are Japanese and some are Chinese. The latter are principally from Chili province, a few coming from Shanghai. Opium arrives here in a semi-prepared condition and is known as red opium, and is quoted as $10 small coin (about $5.00 gold) per ounce. This price, of course, is subject to sudden fluctuations. Many people carrying on this illicit traffic have gained enormous profits at the expense of the ignorant classes. Regarding morphia and its by-products, it is always possible for the lowest class of Chinese laborers to purchase an injection from any so-called Japanese drug store at a price from 3 to 5 copper cents, say from l 1 /^ to 2% American cents. In this way the Jap- anese have accentuated the scarcity of copper coins, and at the same time have ruined many of the lowest class mentally, morally and physically. From the stringent orders issued by the Japanese consular author- ities regarding the sale of illicit drugs by Japanese subjects, as cited above, it would seem that the authorities in question are not desirous of complying with the wishes of the Chinese authorities in eradicating the opium evil, but their desire is simply to hood- wink the world and to go through the motions of suppressing the evil. The fact that opiates are sold openly on Japanese premises which are not under Chinese jurisdiction proves conclusively that the Japanese authorities are not at all anxious to cooperate with China and Great Britain in eliminating the drug evil. Customs statistics regarding the importation of morphia into Manchuria cannot be relied upon, owing to the enormous quantities brought into the country illicitly from Japanese sources. In this connection it is interesting to quote an item from the "Japan Chronicle," printed in November, 1918: SMUGGLING TO CHINA OPIUM, FIREARMS, FORGED NOTES, AND GIRLS The police authorities of Kyoto are examining a number of men in Kyoto, Osaka, and Kobe in connection with smuggling of opium and arms to China. It is stated that a man named Shibutani Yosh- isaburo, living at Yamato-oji, Shito, Kyoto, working in collusion with three other men, bought a large quantity of poppies and secretly manufactured opium. The drug was smuggled to China, the quan- tity shipped between January and April last amounting to 16 kwan, valued at Y12,000. The smugglers were making arrangements to make another 70 kwan, valued at Y50,000. when certain informa- tion came to the knowledge of the police and they were arrested. It is also alleged that Shibutani, with the help of certain dealers in Osaka and Kobe, smuggled some thousands of revolvers and rifles to the Chinese Revolutionists. Another charge laid against some of the men under examination is that of being implicated in the kidnapping of girls from Japan to China and in the forgery of Chinese bank-notes. It is stated that the men arrested have many accomplices in the South Sea Islands, Harbin, Shanghai, and Hongkong. After the exposures about the Japanese drug traffic in China, the Japanese Government issued a long explanation of THE CORRUPTION OF A NATION 217 its position and connection with the matter, which is very well summed up editorially by the "Japan Chronicle," on January 30, 1919, as follows : The Japan Advertiser contains a long explanation from official sources of the position of Japan in regard to the opium and morphia trade in China, which is in the familiar style. The chief crime seems to be that committed by the foreign Press in China which made the disclosures. Incidentally it makes Japan's case all the worse, because it describes how perfectly adequate the Japanese ma- chinery is for preventing the trade, and with this statement it is content to leave the matter, not venturing on the question whether the machinery is properly worked. It is also content "specifically to deny" the use of the post office as a means of distribution, and attempts to put the whole blame on smugglers who run their own cargoes into ports where Japan has no control. Then comes this ingenuous confession: "It was learnt yesterday that the trade in drugs flourishes in Manchuria, where large profits are reaped. Op- ium there is under monopolistic control of the Kwantung Govern- ment-General, which deals out the drugs to the Japanese and the Chinese dealers in Manchuria under the jurisdiction of the Govern- ment-general. Certainly, as some of the foreign journals state, the enormous profits thus gained by the monopoly are paying for a large part of the expenses of the Government-generals (sic} in main- taining schools and other branches of its administration." Surely it must have been known before yesterday. But the only official criticism on this is, "However, it is an international question," which means, presumably, that nothing will be done until an international commission makes up its deliberate mind on the subject. The official apologist further says that all nationalities are involved and that the amount of such drugs handled by Japanese cannot be compared with the British share. It is demanding a very large credulity when we are asked to believe that there is a greater British trade which is passed over in complete silence in these exposures. Are we to believe that the foreign Press in China is anxious only to deprive Japan of the profits so that those of its own nationals may be the greater? One of the nefarious methods employed by the Japanese to keep China constantly in a state of internal turbulence, and to make it appear that the Chinese Government is unable to maintain order and protect foreign interests, is the use of 218 DEMOCRACY AND THE EASTERN QUESTION the banditry who are one of China's hereditary institutions. Evidence is accumulating to prove that Japan's agents be- come members of the Chinese bandit bands, and that the bands are armed and otherwise supplied from Japanese sources. In the autumn of 1918 the bandits and lawless unpaid Chinese soldiery in Shantung Province began to stop and board the express-trains on the Tientsin-Pukou Railway, causing much annoyance to passengers. The relation between Japanese in Shantung and the Chinese bandits has been pretty well estab- lished, and Japan's reasons for giving out an impression that China cannot maintain order in that province are obvious. It is the same in other parts of China, especially in those regions where the Japanese predominate. I quote from an American official report about conditions in Manchuria, dated in September, 1918 : On August 31 there was a raid of about 200 bandits on several towns and villages on the China side of the Yalu river. The vil- lages were looted and many of the houses were burned. Circum- stances indicate that many of the bandits were Japanese soldiers in disguise. Other similar cases have occurred and the matter is be- coming serious. As has repeatedly been pointed out in reporting such instances, the only possible method of preventing trouble of this kind would be the effectual prevention of the import of arms, and this measure is rendered impractical by the facility with which lawless characters can at all times secure ample supplies of arms and ammunition from Japanese smugglers. Since this smuggling can easily be stopped by the Japanese authorities in Korea, their failure to take any effective steps indicates that they are not averse to the occurrence of disturbances along the border that may possibly give them ex- cuses for interference in Chinese jurisdiction. I quote another official report on the same subject, dated May 3, 1917 : Information received directly from two Americans, two English- men and one Dane all having first-hand knowledge of the question proves conclusively that the Japanese have been conniving with 219 the bandits and actively supporting them (specific instances given) . . . "The first object of the Japanese is to foment trouble and create serious disturbances in Manchuria so as to demonstrate to the world China's inability to preserve order and to maintain peace within her own dominions. Japanese cooperation with the Chinese rebels no doubt had a similar purpose and their encouragement of the monarchist party at the present time is directly in line with this policy. Anything to create dissension and disorder and to weaken the Chinese Government will receive their assiduous attention. The motive is two-fold. An excuse is provided for active intervention and control and even occupation, while the Chinese are weakened and divided, and the cost of sustaining a large armed force and pre- paring for incursions and insurrections keeps the treasury not only empty but in debt. A state of indebtedness not only enables the Japanese to make loans to China upon valuable concessions, but prevents the liquidation of old obligations and makes it easy for the Japanese to foreclose. . . . The disorder throughout China caused by the lax adminis- tration and internal strife naturally increases the opportuni- ties for outlaws, and between the demands of political fac- tions, exactions of officials, and the depredations of brigands, the peaceable Chinese citizenry know not what way to turn to protect their lives and property. They see everywhere Japan- ese going about their business freely and enjoying complete immunity from all those difficulties. So a somewhat remark- able condition has come about, which is described in a report of a foreign official, dated November, 1918, as follows: The Japanese, always alert to take advantage of conditions due to the disordered state of the country, have now organized a new business in many of the provinces, especially in central and southern China. For a money consideration, Japanese residents will store Chinese property on their premises, under the protection of a Jap- anese flag raised over the houses. This has developed into a large business in the disturbed areas, and many Japanese are amassing small fortunes in this way. It is curious to note that these Jap- anese who are able by the protection given them by the Japanese consulates and government, and who outside of the treaty ports have no legal right of residence, are nevertheless far more secure than the native citizens of the country, and are able to sell "protection" to them merely by running up a Japanese flag over Chinese property. The local Chinese officials frequently have protested at the practice, but dare not interfere with the Japanese, who evidently have the backing of their consular officers. A rough, and of necessity an incomplete computation of Japanese financial and trade activities in China during the Great War indicates that the profits of the illicit drug traffic and other contraband operations of Japanese there will nearly equal the total amount actually advanced to China in the same period. Among the Japanese schemes in this period, the so-called "gold brick" proposal (a plan for China to create a "credit" in Japan for Japanese currency notes, which would be circulated in China as legal tender), the so- called ' ' arms ' ' deal, the draining of China of copper cash, the Japanese evasions of the Salt duties, and others, might well be entitled to elucidation ; but the citations given should suffice. As a deliberate and persistent attempt to debauch and ruin a weak and friendly (part of the time an ally) nation, Japan's course in China has few parallels in history. CHAPTER IX CHINA AND ECONOMIC IMPERIALISM Definition of economic imperialism Its relation to international af- fairs Its working method War-causing elements of the system Its application to China Beginning of foreign trade with China Develop- ment of strategical phases The "sphere of influence" idea Dangerous phases Prevision of John Hay The Hay Doctrine Its outward ac- ceptance by the powers Private agreements based on the "sphere" thesis Recrudescence of the "sphere of influence" practice Due to Japan's policy War provided Japan's opportunity Japan's fear of American influence A flank movement The Shibusawa plan The "co- operation" idea Its real purpose exposed How it was contrary to traditional American policy How it was invidious to China China's situation Dangers inherent with the cooperation plan. MODERN political scientists almost without exception evince a growing realization of how international trade and economic relationships are interlocked with the causes of international hostilities and war. A new terminology for certain phases of these combined economic and political relationships is coming into use. "Economic Im- perialism" is now generally accepted as describing an inter- national relation which frequently is given first rank among war-making elements; with "peaceful penetration," "spheres of influence," "special position," " paramountcy, " and other phrases invented by diplomacy as euphemisms for the schemes and methods by which economic imperialism is applied. Of the numerous volumes on this topic that have been published recently, the authors usually take Germany's pre-war trade policy as a text to demonstrate the iniquities and dangers of the system. I quote Professor Alvin Johnson ("The Passing of Economic Nationalism," in "Harper's Magazine") : 221 222 DEMOCRACY AND THE EASTERN QUESTION Because political and military concepts have assumed definite shape, have organized themselves in well-wrought systems in our minds, we find it natural to interpret in purely political and mili- tary terms the struggle in Europe. The democratic world is striv- ing to pull down the German autocracy, that political freedom may be saved to the earth. The struggle is one of the naturally pacific peoples against a system of military aggression. These are indeed interpretations that are essentially valid. But they do not include the whole truth. German autocracy and militarism have had their counterpart in an aggressive system of economic nationalism. It is a system by which the whole economic life of a people, more espe- cially its foreign trade, is subordinated to a national purpose of domination. The economic nationalism of Germany does not aim merely to create trading relations of mutual advantage with for- eign states. It seeks so to entrench itself in weaker states that these may be compelled to exclude relations with other states. It seeks to stifle development of industry in the weaker states, in order that their dependence may be permanent. Economic nationalism is, in short, the principle of monopoly to the plane of statecraft. The destruction of the system may not, indeed, be an avowed object to the allied policy, but it will be no less certainly doomed by the defeat of Germany than aggressive militarism and intriguing autocracy. Economic nationalism of the German type, I hasten to qualify, has not been confined to Germany. It has influenced commercial policy throughout the world, just as German military organization has been widely envied and copied, and as even German autocracy has excited exaggerated admiration and has wrought modifications for evil in political systems that would naturally have developed in a more liberal direction. But just as the autocratic and mili- taristic ideas have been seized upon by the consciousness of the people as the essential spiritual content of the world-scourge of Germanism, and hence are certain to be discredited everywhere, so the policy of economic nationalism, no less characteristic of Ger- manism, is bound to encounter a rude shock when quiet is restored to earth and the shattered commercial relations of the nations come to be reconstructed. . . . The poverty of the weaker nations will survive the war, to be sure. And a poor nation will still be subject to the seductions of a trading organization that scours the country with engaging agents, studying the people's wants and having goods made up to suit any taste, to be paid for in nine months or twelve months so far in the future to those who are poor! And if then the customer can't CHINA AND ECONOMIC IMPERIALISM 223 pay, the same trading organization has a bank which will arrange extensions of credit, and which is also at hand to do other business. Perhaps there is a railway project in abeyance for want of funds; the bank will arrange for its promotion in the country to which the bank owes allegiance; it will also procure there rails and loco- motives, and engineers to construct the track. As good engineers might be had locally, and rails and equipment might be had cheaper in other countries. But then there would be difficulties about the promotion, and, besides, it would not be easy to arrange for the transportation of freight by the organization's ships, perhaps the only ones touching at the port. All manner of enterprises would have to be set up along the railway, and in these the organization would take stock. This is "peaceful penetration," as it was ap- plied by Germany to Italy, Turkey, Brazil, Venezuela, and what- ever other countries were poor and ambitious for development. Such countries there still will be. Will not the same kind of oper- ations be resuscitated 1 ? Yes, if the industrial nations become again as blind or supine as they were. But this is hardly conceiv- able. It is now coming to be understood that the supplying of the legitimate capital requirements of a poor country is a common con- cern of the advanced nations. They will not so soon be ready to consign a backward country to the mercies of Germany, or any other single state, to barter its independence for petty loans. David Jayne Hill (''Economic Imperialism" in "The Cen- tury Magazine") states his opinion positively: "Beyond dis- pute it was economic imperialism that caused the present war, and plunged Europe into it." He compares the two op- posite theories of the state and nationalism as follows: To those who accept the absolutist theory of the state there is nothing reprehensible in the spirit of conquest by imperial domina- tion. Why should any nation holding this theory refrain from ex- tending its power as far as possible? It is, in truth, Certain that it will not do so; but it follows with logical necessity that as long as this theory is held the conflict of nations will continue. . . . The whole future of civilization turns upon the decision whether the state is to be henceforth a creation of force or a creation of law. If it is to be considered merely a creation of force, then preparation for war is the only wisdom; for only the strong state can survive, and it must be at all times ready to fight for its exist- ence. But if, on the other hand, the state is rightly conceived as a creation of law, then all states accepting this theory are menaced 224 DEMOCRACY AND THE EASTERN QUESTION by the existence of strong embodiments of power which refuse to be governed by the rules of law. As long as they exist, as long as they arm themselves for aggression, as long as they devise and en- tertain schemes of conquest, so long the truly constitutional states must be prepared to defend themselves, and even to defend one another. The application of the arguments quoted to the situation of China and to the trade of all nations with China is very pointed. In the sense apparently meant by Professor John- son and Dr. Hill, China is one of the most complete examples of the effects of economic imperialism and the pass to which it will bring a weak nation. China affords an equally good example of that other phase of economic imperialism its potency for frictions among the strong nations that employ it. In its early beginnings and for many years thereafter, China's commercial intercourse with foreigners resulted al- most exclusively from the individual or corporate efforts of foreign merchants. As a nation China was indifferent to the expansion of this trade, from having slight comprehension of its benefits and possibilities, and when its contacts began to cause complications with foreign governments, the Chinese Government grew uneasy and tried to discourage it. Thus almost from its inception foreign trade with the Chinese de- veloped tendencies of economic imperialism from force of cir- cumstances, and with the frequent application of external pressure on China; but it was not until the closing years of the nineteenth century that dangerous and invidious phases of the system palpably began to appear there. This period marked the strategical development of economic competitions among the leading powers in China. It was the time when China's military impotency was conclusively revealed by her defeat by Japan, whose aspirations for a foothold on the con- tinent were obstructed then by a combination of European powers ; when Germany secured by intimidation a position at Kiaochou, Russia obtained one at Port Arthur and Dalny, Great Britain at Weihaiwei, France at Kwangchowwan. CHINA AND ECONOMIC IMPERIALISM 225 It was the period when the "sphere of influence" idea took root there, and the powers began to divide China into sec- tions specially reserved for their own exclusive exploitation. Of the so-called powers, only the United States claimed no "sphere." Japan, too, was not included in the tentative partition of China at that period, but she was planning to secure a place there, as the war against Russia soon was to reveal. At that juncture John Hay, then secretary of state, with remarkable prevision recognized the fundamental importance of the issue to the United States and to civilization, and de- vised a plan to check the progress of economic imperialism in China. In view of the fact that, subsequently, it was the concept of economic nationalism as practised by Germany that disturbed the world, it is interesting to recall that the particu- lar action which was the occasion of Mr. Hay 's diplomacy was an action of Germany in procuring a lease on Chinese terri- tory at Kiaochou Bay and certain railway and mining con- cessions in Shantung province. His efforts resulted ulti- mately in securing the acceptance by all the major powers of the principles of the commercial "open door" in China and preservation of the territorial integrity of China. 1 These principles are habitually termed the Hay Doctrine, and the doctrine embodies now, as it did then, the true bases for any solution of the Eastern problem. The Hay Doctrine can be said to date from the time of the Hay-Buelow correspondence and the coincident acquiescence of the other powers, given through the usual diplomatic chan- nels, in 1899. It therefrom constituted the public policy of all the powers on these questions, and still does. It was re- affirmed in the course of the next few years by several sep- arate agreements between the powers: the Anglo-Japanese alliance, the treaty of peace between Russia and Japan, a further special agreement between Russia and Japan, an agreement between France and Japan, and the special treaty i Appendix A. 226 DEMOCRACY AND THE EASTERN QUESTION between the United States and Japan known as the Root- Takahira agreement. Those agreements were signed during the years 1889-1907. Yet in this same period, most of the signatories to those agreements reaffirming the principles of the Hay Doctrine also concluded other agreements separately among themselves, outlining and defining their particular "spheres," actions which were subversive of the Hay Doctrine in their prin- ciple, and, without doubt in the case of some powers, with intent to evade it. There were instances where clauses af- firming the Hay Doctrine and clauses based on the "sphere of influence" principle were incorporated in the same agree- ment, notwithstanding their contradictory nature. For a few years after the acceptance of the Hay Doctrine by the powers, some of them apparently tried to reshape their poli- cies in China to conform to it. The result of the Russo- Japanese War, and the manifestations of Japan's policy which followed it, brought an immediate recrudescence of the "sphere" policy, and from then the Hay Doctrine has been rapidly undermined. The nation primarily responsible for this relegation of the Hay Doctrine is Japan. The Great "War gave Japan an unusual opportunity for commercial penetration of China. Her principal competitor there for the cheaper manufactured articles, Germany, was virtually out of business for the time; and war conditions greatly disorganized the foreign trade of all European na- tions. For the first three years of the war, however, the United States shared with Japan the advantage of being com- paratively free of access to China, and conditions there were developing in a way very favorable for the expansion of American interests. There was much talk of American loans, and a Chicago banking group did make a small loan to the Chinese Government with a view to further business. En- couraged by the American Government, a firm of American constructors (the Siems-Carey Company) approached the Chinese Government about the building of railways, and, after CHINA AND ECONOMIC IMPERIALISM 227 meeting the usual objections of other powers on the ground of alleged encroachment on rights and privileges previously granted to them (in this case, Russia and Great Britain were the objectors), signed in 1916 preliminary agreements for the construction of several railway lines and for the recon- struction of the Grand Canal. These projects are not in themselves of transcendent im- portance, but the circumstances which attended their negotia- tion very importantly illustrate conditions relating to Ameri- can commercial and financial development in the East, and the application of Japan's theory of economic penetration of China. The Chinese Government at that time was particu- larly anxious to induce the investment of American capital in China for political reasons, as an offset to the impending Jap- anese domination, and was willing to grant more favorable conditions to Americans than to any other foreigners. China needed money, and needed the improvements contemplated by these undertakings. Japan was strongly urging upon the Chinese Government that she should be allowed to finance and construct them, but so great was the Chinese fear and suspicion of Japan that the people, and the Chinese Govern- ment then, preferred that nothing should be done rather than extend Japan's vested interests in the country. During the course of these negotiations, which lasted for months, Japan's diplomacy at Peking was privately trying to obstruct the American projects, but without much success until their ef- forts to sow distrust of America received the tacit assistance of Americans. This came about by way of a flank movement by Japan, under cover of a plan for Americans to "cooperate" with Japanese in developing enterprises in China. A propaganda of unusual proportions was begun in favor of such coopera- tion. Baron Shibusawa, Japan's leading financier, visited America to promote it, and in the course of the years 1915, 1916, and 1917 other Japanese special missions to America, and Japan's well organized publicity propaganda in the 228 DEMOCRACY AND THE EASTERN QUESTION United States and in Japan, took occasion to advocate this idea. In "Millard's Review" for June 23, 1917, I discussed the so-called Shibusawa plan under the title, "Should Amer- ica Cooperate with Japan in China?", as follows: It is almost two years since Baron Shibusawa, then on a spe- cially timed visit to the United States, first began to lay the foun- dations for the so-called "cooperation" of America with Japan in China. I should say, perhaps, that he put it as asking Americans to cooperate, rather than the American Government; for Baron Shibusawa then pretended to be talking to American business men as a representative of Japanese big business interests. But Baron Shibusawa really was aiming at the American Government through the American business world, with a view to influencing its policy toward China; he really was a spokesman of the Japanese Govern- ment, for Japanese big business never does, and could not if it wanted to, operate independently of the Japanese Government in matters which touch foreign affairs and international policy. With that beginning, Japan's publicity propaganda has sedulously pushed the "cooperation" idea, until it seems to have taken root in some in- fluential quarters in America outside the Government, with a result that its effects have been strongly felt upon American interests in China, and give signs of having greater effects hereafter. The gravity of this question hardly can be exaggerated, and the time has come when it seems necessary, in the fundamental interest of not only China and America, but also of the world, to clarify it by examining its bases and principles. Since China is the point d'appui of this "cooperation" idea, then it must or ought to turn on the situation of China, and an elucidation of China's present condition would give the idea definition. A calm study of the situation of China as it exists today dis- closes, with some qualifying influences, that her immediate (I mean the next decade) future narrows down to two alternatives: A. A period during which she will tolerate a benevolent assist- ance in some of her fiscal affairs, which will necessarily carry with it some limitations of administrative autonomy. B. A period during which she will be forcibly subjected to an unbenevolent and much more stringent supervision of her fiscal af- fairs, and a much more severe and extensive limitation of her ad- ministrative autonomy, amounting to foreign suzerainty. The first alternative would carry with it a promising possibility of a complete recovery by China of her administrative and fiscal autonomy in a comparatively short time perhaps ten years. The CHINA AND ECONOMIC IMPERIALISM 229 second alternative would carry with it almost the certainty of China being a vassal State for an indefinite period. In this connection, it should be understood that in case alternative B prevails, the nations which promote and enforce it will of course pretend that it is alter- native A, and in their initial stages these alternatives will present great similarities, making it possible to confuse them superficially. Unfortunately, it does not rest with China exclusively to choose between these two alternatives, or to reject them altogether. China can now influence the decision only indirectly. The real decision rests with foreign powers. Whether the first alternative (A) is possible to bring about depends on whether the international agree- ments known as the Hay Doctrine, or those principles in new agreements, can be resuscitated. The Hay Doctrine cannot, in my opinion, be resuscitated and maintained hereafter except by the active participation of the United States of America in supporting it. If the United States does not take an active part in restoring and thereafter maintaining the doctrine, then it is practically cer- tain that alternative B will prevail. Therefore, the application to China of these alternatives depends to a great extent on the course and policy of the United States. It should be taken as axiomatic, after events of the last three years, that it will not be feasible for the United States to take an active part in sustaining the Hay Doctrine (or its equivalent) un- less the following things occur in conjunction and coordination : 1. A resolution of the United States Government so to act. 2. A world diplomacy based on that resolution. 3. Armaments, or their equivalents, sufficient to make this diplo- macy effective. 4. The cooperation of American finance and commerce. Whether the American Government will have the first three of these elements depends largely on how the American people inter- pret the meaning to them of the great war, and the world position of the nation at the end of the war. Whether American financiers and merchants will operate extensively in China depends on their Government having the first three of the elements I have enumer- ated. Given that resolution and diplomacy and armaments, it will be possible for the United States to align enough powers with it to sustain the Hay or a similar doctrine. With the United States indifferent or inactive, other powers probably will be so situated, and so influenced that they will fall in with a policy embraced in alternative B. The importance to China of the course of the United States is obvious, and this gives great interest to moves that are designed to influence the policy of the American Government 230 DEMOCRACY AND THE EASTERN QUESTION at this juncture. The "cooperation" plan is in that category, and therefore ought to be scrutinized closely. To give point to academic argument, practical illustrations are useful, even necessary; and I therefore will point my views of this "cooperation" idea by showing how it already has worked in some instances. To do this requires me to publish matters concerning American projects about which I would prefer to be silent at this time. My desire is to assist and promote in all legitimate ways these and similar projects; but I can see a serious danger to Amer- ican interests in some tendencies and developments, that ought to be threshed out while there is yet time to correct mistakes, or to prevent them from being repeated in subsequent enterprises. And besides, Samuel G. Blythe, who recently visited China, in a striking article in the "Saturday Evening Post" of May 26, already has given wide publicity to these same matters; in fact, I perhaps can- not do better than to quote something from Mr. Blythe's article. After he has developed a political argument along certain lines, he goes on to say, apropos this same cooperation idea, as follows : "Furthermore, the Japanese know what the investment of Amer- ican money in China means, and they are frantically trying to pre- vent that investment, and even more frantically trying to join with investment they cannot prevent in order that its effect may be les- sened to a degree. If there is any person in the United States who pretends to know anything of the politics and policies of the Far East, and especially ' of Japan, who thinks that Japan is making this present determined effort to join with American investment in China cooperate with any other idea than to nullify, so far as possible, the effect that investment will have in the way of lessen- ing Japanese influence and power in China, that person is sadly altruistically, mayhap, but sadly, none the less in error. "Another reason for this change of official attitude in Japan to- ward the United States was a rather tardy but none the less acute awakening by Japan to the fact that she cannot yet arbitrarily con- trol the financial and trade and commercial destinies of China. With- in the past eighteen months the evidences in China of a determination by the American International Corporation, and its subsidiary, the Siems-Carey Company, to operate in China, and the project of a large loan by Chicago financiers, as well as other American demon- strations, caused the adaptable Japanese, who realized that they are not yet strong enough in China to protest or disregard their paper adherence to the Open-Door policy, to about-face and make clever and, it may be, successful efforts to assume the attitude of tradi- CHINA AND ECONOMIC IMPERIALISM 231 tional friendship, in order to hold and to consolidate as much as they may of their already won advantage. Any portion of a loaf is better than no bread to the Japanese mind. If they can't control they hope to cooperate, and thus half control at any rate. "I do not know the details of the American end of this cooperation project, for I was in China during its inception and its original discussion; but I do know the Chinese end of it and the Japanese end of it, and I shall set down those phases of the plan as a part of this argument, basing what I have to say on five premises: "First: The only reason the Japanese desire to cooperate with the United States in China is because the Japanese have concluded they are not, as yet, strong enough to combat well-supported Ameri- can business enterprise in China, with the idea of diminishing that American business enterprise so far as they may be able, in order that they may retain as much economic and political dominion over China as possible; and not for any other reason. "Second : Any business cooperation with the Japanese in China that is based upon or recognizes any special or preferential political rights of the position of Japan in China will be suicidal. "Third: It is the diplomacy of Japan to join with America as a protection to themselves for their Closed-Door policy; for, if Amer- ica goes into partnership with Japan, America must, if the partner- ship is to be continued, accept what Japan does. "Fourth: Every proposition Japan makes to the United States for a cooperative investment in the development of China must necessarily be amended by Americans to include cooperation in the development of Southern Manchuria, Eastern Inner Mongolia and Shantung. Otherwise it becomes merely an extension of Japan's influence elsewhere. There is plenty of opportunity for develop- ment in Southern Manchuria, for example. "Fifth and most important: American capitalists must realize that when they form any partnership, or enter into any cooperation in such enterprises, they are taking part as Americans simply, as citizens, as a corporation or company, while the Japanese are taking part as a government that is to say, the Americans are going into partnership, as individuals, with the Japanese Government, not- withstanding what the Japanese proponents, as individuals, may say. "It is not my intention to decry the good faitli or excellent inten- tions of the American capitalists who are imbued with the coopera- tion idea; but there are certain elements of the situation that are perhaps not so well known to the bulk of Americans as they might be, and the purpose of this article is purely informative. It would be vain to endeavor to impress on American capitalists the fact that 232 DEMOCRACY AND THE EASTERN QUESTION money cannot do everything, or that the decision of money is not the great and wise decision. Millions can do no wrong. That is their creed. So, if American capitalists have decided to cooperate with Japan in China, what they have decided upon must neces- sarily be the part of ultimate wisdom." I concur with Mr. Blythe in crediting the honorable motives and sincere purposes of Americans who have been misled by the super- ficial appeal of the Shibusawa ''cooperation" scheme; but I do not agree when he says, "It would be vain to endeavor to impress on American capitalists the fact that money cannot do everything." With such grave possibilities in this question, surely our men in the statesman-financier class will give it sound study before even tentatively committing our financial world to it, or permitting this to be done by implication. There is nothing which the National Foreign Trade Council can do that is of more importance to the development of our trade with the East than to elucidate this proposition in all its bearings. More than trade is involved; our national honor and security are closely linked with the decision of this issue. The most pertinent recent instance (which Mr. Blythe alludes to) exemplifying the practical working of this "cooperation" idea is given by some things that have happened with relation to contracts undertaken in China by the Siems-Carey construction company, an American firm operating in conjunction with the American Inter- national Corporation. From their inception, the Siems-Carey un- dertakings in China have sought and have obtained the support of the American Government, which seemed anxious to demonstrate that it wants to extend all legitimate aid to American enterprises in this country. About the time when Baron Shibusawa visited America as the protagonist of the "cooperation" plan, negotiations were commenced at Peking for the Siems-Carey contracts. Japan's attitude toward such American enterprises is substantially as fol- lows: First, prevent them from getting a contract if possible, by oblique obstruction if it is not expedient to interpose open diplo- matic opposal; Second, if the contracts are secured, then try to prevent them from being carried out ; Third, if both the two first methods fail, then try to become parties to the contracts. All these methods were, in this instance, used in turn, and the manner of employing them was very interesting in some of their phases. On returning to Japan after his visit to America, Baron Shibusawa gave interviews which made an impression, and which were subtly intrepreted to give the impression, that his mission had CHINA AND ECONOMIC IMPERIALISM 233 been successful, and that the American financial world had agreed to "cooperate" with Japan in China. This interpretation was at once disseminated throughout China by Japan's press propaganda here, and almost succeeded in preventing the Siems-Carey contracts from going through. A sine qua non of this transaction, from China's standpoint, was a desire to avoid the use of Japanese capi- tal and supervision in the further extension of China's internal transportation system; and especially in regard to the Grand Canal improvement, which runs partly through Shantung province, where Japan is now claiming, as an evictor of Germany, an exclusive posi- tion under the old "sphere" theorem. So when the news was sent broadcast in China that American financiers had decided to cooper- ate with Japanese (out here everyone knows this means the Jap- anese Government) in these and other schemes, it at once aroused such suspicion of the American proposals among Chinese that it came near to defeating them. It was thought necessary to commu- nicate this phase of the situation officially to Washington, and thus to elicit an unequivocal denial from the Americans who were to finance the Siems-Carey work. In that case, the deep-rooted sus- picion of Japan's motives which now is entertained by a great ma- jority of Chinese was cleverly used by Japan to sow suspicions of America, by ostensibly placing these American projects in Japan's shadow. However, that device was frustrated, and the contracts were signed. Next came the effort to prevent the contracts, and particularly the canal improvement, (which lies partly in Japan's so-called "sphere") from being carried out: and in this the "cooperation" idea was used even more cleverly. The effort was transferred from Peking to New York; and the American Legation, and American representatives of these interests then in China, were astounded one day to hear, via Japanese news services, that an agreement had been made in New York whereby Japanese were admitted to par- ticipation in the canal improvement. This was coupled by com- ments, in Japanese newspapers in China and in the press of Japan, plainly intimating that the Americans had been forced to admit Japanese because of diplomatic representations, thus demonstrating that America was not strong enough to do anything in China with- out Japan's consent and help. Behind these considerations (in themselves sufficiently damaging to American prestige) lurked the further presumption, that with American concessions in China runs the possibility and the (to China) danger of them being obtained by representing them as purely American enterprises, and being then sold into other national control which is considered invidious 234 DEMOCRACY AND THE EASTERN QUESTION to China. And still behind that, was the presumption that the American Government would lend itself to such oblique political machinations. That is how American national honor comes into such transac- tions. A good deal has been raid, in recent years, [I have done some of the saying myself] about the duty of the American Govern- ment strongly to support its nationals in China, and to lend official countenance to financial and commercial enterprises. I think this must be done if we ever are to make headway here, and if we are to be of any effective aid to China. But the assumption of such official action by the American Government must include the as- sumption that American financial and commercial enterprises so supported will harmonize with the broad national interest, as con- ceived and practiced by the national foreign policy. Even before the world war had given a new meaning and a new tendency to both national and international commerce, we who re- side in China had come to perceive that a very close relation exists between American commercial efforts in China and the foreign pol- icy of the American Government; and that only by the consonance of these two elements can a really worth-while advance be made. Formerly we thought of this question principally, or altogether, in terms of the far East; but we now see that the principle is of world wide application that American trade- in China, and with China, may hinge on events in Europe, or anywhere in the world, which may by indirection affect political and economic conditions here. By this process we reach the conclusion that American Gov- ernment policy in China cannot be detached from American policy in other parts of the world, but must be coordinated with our na- tion's foreign policy as a whole. The same principle, it seems to me, also applies to American economic policy in China. In formulating 1 and practicing their foreign policies Govern- ments are forced, or consider it expedient, at times to take courses that impede and obstruct or seem to, and at least do discourage some business efforts of their nationals: and which bring, or seem to brine- a Government into opposition to business interests. When these frictions occur, some basis of compromise usually is worked out; but if business interests, however important and powerful, become definitely committed to opposition to a fundamental canon of national policy, then ineA'itably the business interests have to yield. This principle always has held true; and every day that passes witnesses some new accession of the power of States to dominate the activities and affairs of their citizenry. Therefore if, by any mischance or miscalculation, American financial and com- CHINA AND ECONOMIC IMPERIALISM 235 mercial interests in China should get at cross-purposes with a funda- mental issue of broad American national policy, it certainly would retard the development of our trade here, and might react disas- trously upon our nation as a whole. Also, if American business policy in China would permit itself, consciously or unconsciously, to be placed in an attitude unsympathetic or detrimental to the legitimate aspirations and national rights of the Chinese people, a sound and extensive expansion of American trade here will become impossible. // the policy of Japan toward China is predicated on a hypoth- esis expressed by the formula I have designated previously as Al- ternative B, and American policy toward China is expressed by Alternative A, then if American commercial policy here would "cooperate" with Japan in China on Japan's own conception of a policy and on Japan's terms, it would be placed in distinct opposi- tion to the broader interest of the American nation and to the* foreiyn policy of the American Government. Does the American financial and commercial world want to get into this position? And if it should, wittingly or unwittingly, get into this position, how can it expect to be listened to if it asks the support of the American Government (which to be effective must carry with it the idea that the national power goes with it, which in turn means that the Amer- ican people may become involved in war by such issues) in pro- moting its efforts in China? Those are the major aspects of this question. I have studied, from such information that I have, to discover what motives those Americans who incline to the "cooperation" idea, and who seem to have committed themselves partly to it by giving Japanese a posi- tion of some kind in the canal improvement, have been governed by in accepting that theorem for the expansion of American eco- nomic interests in China. Of course, it is denied that political con- siderations induced the admission of Japanese; but that explana- tion will not bear analysis. Surely, New York financiers would not have us believe that they, after entering on these engagements, could not finance them without Japanese help, or could not carry out the construction without Japanese expert advice? What was the reason, then, if not politics? The fact seems to be that American financiers, up to very recently, and perhaps now, have not believed that the United States Government would de- velop the elements that I have mentioned as being essential for the restoration and enforcement of the Hay "open-door" doctrine. It looks like they got "cold feet" as to whether the United States really is or ever will become a real power in the Pacific Ocean, and thought it better to go on under the aegis of Japan rather than stand pat and run the risk of being turned back. For the moment, the na- tional honor and prestige do not seem to have had much place in their calculations; present expediency was the apparent considera- tion. There is another phase to this question that has an influence on the attitude of American finance and commerce. Within the last ten years there has been a shift of conditions which has tended to array a considerable fraction of American trade in the far East to favor Japan rather than China. As American trade with China has lost ground (a loss in which Japan's policy has played a part), the trade of many American firms with Japan has become more im- portant proportionately, until a condition exists whereby their in- terests connected with Japan are more extensive and important than similar interests in China. Therefore, while these firms would like to have the door kept open in China, and sympathize with efforts to that end, commercial expediency deters them from being very active in promoting such a policy to an extent that will impair their connections with Japan. One can plainly see this motive in the present psychology of American finance and commerce toward the "cooperation" idea. Now trade with Japan is one thing; trade with China is another. Both America and Japan are good cus- tomers of each other, and I hope they always will be; but this simple fact, which applies to our commercial relations with all countries, should not lure our business interests off on a false eco- nomic trail. In commerce, Japan is Japan and China is China; just as France is France, Russia is Russia, and so forth. Japan doesn't trade with us because she loves us, but because of the opera- tion of economic and commercial processes that are of general ap- plication to all international trade, and which are moreover con- stantly shifting, and subject to political influences. Moreover, this particular "cooperation" scheme carries a distinct possibility of setting American interests in China into political antagonism with British, French and other foreign interests. I want to quote Samuel G. Blythe again, for a moment. He describes, in the "Saturday Evening Post" article previously quoted, how, when the Japanese Government tried to impose its notion of a right to participation with Americans in enterprises in Shantung, the American Legation at Peking politely mentioned some Japanese projects in Manchuria, and suggested that Americans might like to participate there, to which Baron Hayashi, after taking some time to think it ever, responded that such American participation in CHINA AND ECONOMIC IMPERIALISM 237 Manchuria did not come within the "cooperation" idea. Mr. Blythe remarks : "Well, there it was and there it is. Japan seeks to cooperate with the United States only in such places in China as Japan does not dominate at the present time. Japan brooks no cooperation or in- terference in places where Japan has nailed herself down, but will cooperate in places picked by Japan and not by America where Japan thinks Japan can be advantaged in her plans by such co- operation, and American profits and influence diminished." That really about gets at the heart of this "cooperation" idea as far as it has developed in China. I do not want to be understood as being opposed to any and all American-Japanese cooperation, in China or elsewhere. What I insist on is that in China Amer- ican cooperation with any other nation will be on lines that con- form with traditional American policy, with the sound develop- ment of American interests, and with the national integrity of China, CHAPTER X CHINA AND ECONOMIC IMPERIALISM CONCLUDED Blindness of Americans to certain conditions Applying lessons of the Great War Relation of militarism to economic imperialism Some as- pects of American trade in China Effects of the "hyphen" in foreign trade Fallacy of the Shibusawa plan A remarkable letter Why Amer- icans in China are anti-Japan Japan and China contrasted First and later impressions Coordination of Japanese political and commercial methods A strong arraignment of Japan Her recent course in China indicted How the Chinese are impressed Seeming inconsistency of Allied professions and policy Implication of America's weakness Japan's anti-Allied propaganda The coming reaction Japan's unpopu- larity with the Chinese How it may affect post-war business Japan's capital in China is force The moral issue Effects of the cooperation idea on American trade in China Its military aspect. ONE of the most remarkable political phenomena of modern times has been the singular blindness of Americans regarding certain conditions in the world, and their no less singular disinclination to take any steps to protect their own national life and interests from the opera- tion of some forces born of and reared by those conditions. For instance, the attitude of Americans toward armaments. Nothing but being dragged into war by the scruff could make the American people, and the Government, realize the neces- sity of increasing their armaments and military efficiency. They were slow to read the lesson, in an armed world be not unarmed. The reluctance with which Americans have ac- cepted and acted on this lesson can be scarcely comprehended by any except Americans, for few other peoples had such a naive frame of mind about world affairs and tendencies. But having at last, perforce, accepted it, and being in the way of acting on it by developing a military and naval power 238 CHINA AND ECONOMIC IMPERIALISM 239 commensurate with the national strength and position, Amer- icans will not be apt to unlearn it when peace comes. The lesson will be too costly to be easily forgotten. If the peace that Americans in their own minds fought for does not suc- ceed in suppressing militarism, and militarism will not nec- essarily be suppressed merely by defeating Germany, as many loosely think, then without doubt American military and naval power should be maintained at a degree that is re- quired by circumstances. On the other hand, if peace results in a genuine suppression of militarism, not just a transfer of military ascendency from one power or group of powers to another power or group, then there is the other question to deal with the moderation or suppression of war-causing phases of economic competitions. Militarism and economic imperialism go hand in hand. They are interdependent. Each breeds the other, and each sustains the other. Plainly, economic imperialism is not pos- sible without imperial militarism to back it up with force or with the threat of using force. Also, without the increments by economic reflex resulting from this use of militarism, or promised by governments as a result from it, peoples almost surely could not be induced to bear the fiscal burden of exces- sive armaments. Applying, now, these principles to condi- tions in the far East, it is evident that, if the peace brings a suppression of militarism, and also a suppression of the use of force through militarism to promote policies of economic imperialism, China's foreign commerce can pursue a normal and unintimidated course. On the other hand, if militar- ism is not suppressed or if it is only slightly moderated, then we may look to see the idea of economic imperialism persist for a time in respect to the economic development of China. This is a possibility that American commercial and financial interests having thought of China must not ignore. The reaction on British and French economic policies of Ger- man military efficiency and its meanings is shown by events and tendencies. As for Japan, both her military and ecq- nomic policies were long before the war frankly modeled after Germany; and since the war began they have steadily been applied on the German system until very recently, when changes of conditions have begun to circumscribe this method in its application to China. In respect to American trade in China, it has followed an unusual course since the war began. By the gradual cutting- off of Great Britain and Europe as sources of supply for manufactured articles and also as markets for the products of China, there has been a tendency to obtain such commodities from America and also to send raw and other products of China to America. In many manufacturing lines the war made America the manufacturer for the world, for that coun- try was the only place where many staple commodities could be obtained quickly. But this trade expansion has phases that demand attention of the American business and manu- facturing world and also of the United States Government. A considerable volume of this new trade has passed through non- American hands, being handled in China by British, Ger- man (before America and China became belligerents), Jap- anese, and other foreign firms. Almost without exception these foreign firms are also agents of similar British, German, or Japanese commodities, as the case may be. Rather than lose business, they will sell American goods for the time, and probably will sell them hereafter if their customers insist on having the American goods and no other. But after the war, when similar commodities can again be obtained from Eng- land, Europe, or anywhere, what is likely to happen to this new and expanding American trade if it is left in non-Ameri- can hands, and subject to conditions of transport and market dominated by other nations? I do not believe in or advocate a narrow intensively national system of economic development. I would prefer to have those conditions that helped to cause the war eliminated as far as possible. In my opinion too strict and close applica- tion of nationalism in trade, as in social relations, is not con- CHINA AND ECONOMIC IMPERIALISM 241 ducive to amicable international sentiment. The spirit of it is wrong. In our small dealings it is unpleasantly restrictive and narrow to have to stop and think, whenever anything is to be bought or sold, of the nationality of those whom we may cas- ually like to deal with; when buying a hat or when selecting the materials for our shirts. Americans never have followed that policy. "We feel inclined to resent any tendency of na- tionalism which invokes us to adopt it. But we also should resent its application by other nations to ourselves. Ameri- cans have felt the same way and thought much the same way about militarism among nations. Therefore, if other power- ful industrial and commercial nations that are the competitors of America pursue the imperialistic theory of trade expan- sion, or if they shape their economic policies on that line, then American industry and trade without doubt will have to meet that condition by adopting similar or contravening methods. If we are hereafter, or for a considerable time, to live in an armed world, then America must be armed as pow- erfully as any nation is. If after the war there is a possibility that the intensive nationalistic thesis is to direct international trade, then Americans should be forewarned, and should pre- pare to meet this condition by a closer economic organization within their own nationality. It will not suffice in such a world to get rid of the hyphen in respect to our political and military organisms if we continue to retain the hyphen in the ramifications of our foreign trade development. From the time when Japan's propaganda first advanced the idea of a Japanese- American financial and commercial co- operation in China, American business men and organizations in China showed a strong, even a bitter antagonism to the. plan. They regarded it as a subtle scheme to undermine America's moral position in China and to hinder and limit the progress of American trade and enterprises. Writing in "Millard's Review," September 1, 1917, I commented as fol- lows : 242 DEMOCRACY AND THE EASTERN QUESTION Very astute and persistent efforts are being made to tack hyhens of a subtle and objectionable character to the development of American interests and trade relations with China. Prominent among them was the so-called Shibusawa plan for the "coopera- tion" of Japanese and Americans (or Japan and the United States) in China. That plan is gasping for breath now, if it is not already dead. The only sound basis it ever had was a pre- sumption founded on Japan's dominating military power in this region, and the use of that power to push a policy of economic imperialism. One understands why, if Americans should see a good business or industrial opportunity in Japan, that it would perhaps be desirable and it might be necessary (as without doubt it is) to cooperate with Japanese. One understands also that, in such a case in China, it would perhaps be desirable (although, since China has not developed militarism nor economic imperialism, yet, this is not necessary) to cooperate with Chinese. But the Shibusawa plan insists that for Americans successfully to enter- prise in China, Japanese cooperation (which means the consent of Japanese militarism) is essential, while by that plan Chinese co- operation (or feeling) is regarded is negligible. If the Shibusawa plan, as it was originally conceived and advanced, is not dead, it ought to be. It is a piece of economic and diplomatic fustian whose roots are planted deeply in the ''militarism-economic im- perialism" doctrine, and whose political concepts lie in "special position" and "paramountcy" phrases in the mouths of diplomats and propagandists. It ought not to be needed to say (yet one feels that it has to be said) that in this criticism of Japan's previous policies toward China, with their effects and consequences to other foreign inter- ests here and to China, there is not meant any feeling of opposi- tion to whatever Japanese trade expansion in this region or in the world can be accomplished without exerting in its behalf a com- bined militarism and economic imperialism. This is an issue as between two absolutely hostile theses of international polity; an iscue which, forced on by Germany, probably was the principal cause of the great war. Yet it is necessary to state these matters clearly, and to reiterate them frequently and in various aspects in order to drive them in, because without doubt the American commercial world is not fully wakened to these conditions; and also because American commercial interests in China have scarcely yet grasped more than the outside of the meaning of events, and still are under the influence and the shadow of the economic im- perialism of Japan and other nations. This influence and this CHINA AND ECONOMIC IMPERIALISM 243 shadow are falling away, but they persist with astonishing psychological vitality with a considerable part of the American business world. Until they are completely thrown off, or reduced to just proportions, American foreign trade and financial enter- prise will not be standing on its own foundations; it cannot take its proper part in building up the national wealth, power and prestige. As giving a remarkably accurate and comprehensive epito- mization of the sentiment of Americans and other foreigners living in China toward this Japanese-American cooperation idea, I here include a letter which is self-explanatory. I omit the writer's name, not that I think he would object to its being used, but because it is not feasible (he having gone into the interior of Asia) to ask his permission. When I left China late in 1918, American organizations in China were preparing to issue this letter for the purpose of advising chambers of commerce in America of certain conditions, and I gladly give it this additional publicity. The writer goes beyond the so-called cooperation plan in the scope of his comments, but a just analysis will reveal that the cooperation plan comprehends all of those matters in its true significance. Shanghai, July 10, 1918. Dear : You will remember that when you were in Peking in January of this year you attended the annual dinner of the American As- sociation, and that you were somewhat shocked and disconcerted to find the majority of us intolerantly critical of Japan and Japa- nese policy, and incidentally of the magazine [name omitted,] upon which some of the discussion turned. I remember that during the dinner you urged upon the members of the association the necessity of seeing both sides of the Japanese question before pronouncing upon it dogmatically, and that you also urged us to become mem- bers of the Asiatic Society, the publishers of [name omitted], so that we could make whatever criticisms we had to make as mem- bers from the inside, as it were, and not as an antagonistic organ- ization. The members of the association had however framed its own conception of [name omitted] and of the policy of the interests supporting that paper, and would consider no such suggestion. 244 DEMOCRACY AND THE EASTERN QUESTION After the meeting, in a personal conversation which you had with me, you again emphasized the need of putting both sides of any argument upon Sino-Japanese or Japanese-American relations before all interested parties, and you asked me to enter into cor- respondence with the secretary of the American Association of Yokohama as the first step in an interchange of views between American residents in China and Japan. As you know, I left Peking within a few days of your return to Japan, which caused my resignation from the secretaryship of the American Associa- tion, and I doubt very much whether my successor, who is a new- comer in China and not so familiar with the trend of opinion among Americans in this country, was in a position to take up the correspondence suggested. Until our recent meeting in Shanghai it did not again occur to me that a presentation of the case of those of us in China who are credited with being unreasonably anti-Japanese would be of any particular value, but you have persuaded me this time that so little is known of political and economic conditions in this country, or of Japan's influence upon Chinese affairs, that a clear statement of the views of Americans in China and of the reasons for these opinions should be prepared for the benefit of Americans both in Japan and at home who are interested in doing business in the Orient or in promoting friendly relations between the American people and the various Oriental peoples. Of course there will be nothing official or final about my ideas, but I shall try to present the opinions which I know are held by the majority of Americans and Britishers here, and I shall finally submit this letter to several persons in whose judg- ment you have faith and let them delete anything with which they do not agree. The matter which we discussed during our last talk at the Carl- ton Restaurant was of course the question of American-Japanese cooperation in the development of the trade, industries, conces- sions, etc., in China. This cooperation scheme, which is now sup- ported by many big American interests and by some of the most reputable business men in Japan, has aroused the bitterest pos- sible antagonism among Americans in China, as you have probably discovered, apparently for the sole reason that we are prejudiced against Japan and that we are therefore opposed to having our judgment upon Japan reversed by Americans at home through a Japanese-American trade alliance. The average American casual traveler in this country comes to the conclusion that we oppose the cooperation scheme because it discredits what appears to be an unreasonable and unreasoning dislike for the Japanese, and CHINA AND ECONOMIC IMPERIALISM 245 that our opinions can therefore be safely ignored by the practical business folk who want to see American business expand in this part of the world. In the eyes of the tourist Japan is clean, comfortable, progres- sive, and prosperous, while China is dirty, corrupt, uncomfortable, backward and squalidly poor. In Japan the distinguished guest is motored up to modern buildings through arches bearing lauda- tory inscriptions, is received by intelligent officials who discuss everything that interests him intelligently, and who are solicitous for his comfort and entertainment while in the country. In China the same man wades ankle-deep in mud, gets pockets full of bad money, finds Chinese persons whom he wishes to see only after diligent search through gloomy and crumbling buildings, and may then be indifferently treated by an opium-smoking idler who owes his place to political corruption and who is interested in nothing so much as in ending the conversation and in getting his visitor off the premises. Naturally the visitor cannot understand why or how any reasonable person could ever object to Japan, who alone seems to be successful in getting things done in China, taking China over bodily, and cleaning it up in the interests of America and all other nations which hope to do business in this country. We have all had the same experiences and have gathered the same impressions upon our arrival in the East. We have all admired Japan and have cultivated a huge contempt for China during the first few weeks of our sojourn in the Orient. But in- controvertible the fact remains that, of those who have lived three years or more in the country, fully ninety-five per cent have ac- quired not only a sentimental liking for the Chinese, but a great faith in the capabilities and future of the Chinese people, which seems blind and fatuous to the visitor, and also a cordial dislike for the Japanese, which the new-comer can explain only as a malicious prejudice. The reasons for this would fill many volumes if fully stated. The personality of the Japanese whom most of us meet here is of course objectionable, but we all realize that the commercial and political adventurers who come to China are not representative, and we are not unreasonable enough to condemn the whole people on these grounds. The extracts from Japanese papers which appear in the English press are often anti-American, imperialistic, extremely egotistical, and complacent, and almost in- variably opposed to the democratic standards which the Anglo- Saxon peoples support. The Japanese press naturally fans prej- udice and antagonism, just as the Japanese whom we meet con- firm prejudice; but the essential reason for our consistent damn- 246 DEMOCRACY AND THE EASTERN QUESTION ing of the Japanese is the unscrupulous and immoral China policy of the Japanese Government, and the confirmed tendency of Jap- anese commercial interests to occupy and hold every vantage- point which the Japanese Government gains in this country through coercion or corruption. No one ever hears a word of criticism in China of legitimate Japanese enterprises which are legitimately established and which enter into legitimate competition with the interests of other nations. If Japanese trade and Japanese im- perial policy were entering this country through separate channels and through independent tactics, there would not be the slightest opposition to Japanese commercial expansion here or to an Amer- ican trade alliance with Japanese commercial people on any scale. Unfortunately, however, nearly every Japanese commercial move brings in its wake a political invasion of some sort, and every political imposition upon China or upon the interests of others in China is complacently regarded by the Japanese traders as a legitimate opening for their expansion. Japan's political policy in China is now no less objectionable than it was in 1915. Then it was one of coercion, of frank jingo- ism ; now it is one of corruption through alliance with purchasable Chinese officials who are put in office and kept there by Japanese influence. The latter is certainly a much more insidious policy than the former, and more dangerous because it does not attract the attention abroad which it deserves. You have been in Peking recently, so there is no need to remind you of the loans which Japan is negotiating with the official clique in the capital, or to dwell upon the character of these loans. You know as much about the Sino-Japanese military alliance of recent date as we do here, and you know that the sole purpose of that agreement, apart from the incidental advantage which it gives Japan of controlling China's military resources, was to make China's declaration of war against Germany somewhat more ineffectual than it already was and to obviate the last possibility of China being of service to the Allies and of thereby gaining any prestige which would stand her in good stead in the course of a hypothetical post-bellum set- tlement of Sino-Japanese disputes. You know quite well from what you have seen for yourself in China on your various visits and from what your numerous well- informed friends in China have told you at various times, that Japan has taken every possible step during the four years of this war to ruin China by creating and sustaining trouble, by financing the most objectionable elements in every community in which she has been interested, by the employment of agents provocateurs, CHINA AND ECONOMIC IMPERIALISM 247 by the encouragement of the use of morphine over large areas, by the use of Japanese immoral women in Chinese official house- holds^ by the protection given to bandits and other outlaws, by the wrecking of native banks, as in the recent Mukden case, by the cor- ruption of officials through loans, bribes, and threats; and by the wholesale misrepresentation of Allied war aims and the most -vigor- ous efforts to prevent China from coming into war and then later to discredit the country by preventing China from being of any use or service to the Allies. You also know that during these four years, which have been publicly heralded as Japan's years of op- portunity, it has been the distinct object of the Japanese to gain a monopoly upon political influence in China, and at the same time to make openings for Japanese trade which would give the Japanese commercial folk as strong a commercial monopoly as pos- sible. And in every instance in which the Government has created an opening through political maneuvering, seldom creditable, the Japanese business man, said by his defenders to be opposed to the truculent and unscrupulous policy of the Japanese Govern- ment, has been only too ready to take advantage of the oppor- tunities offered to drive in the trade wedge, whether the trade was in legitimate imports and exports or in morphine or cocaine or women or Chinese cash or the rights and liabilities of the Chinese people. Not only* has Japan been working against the present interests and future good of the Chinese people, but her policy in China has been deliberately shaped to undermine the trade, influence, and prestige of the Occidental peoples, nominally her Allies, throughout the East. Every ideal which we have developed and announced as participants in the present European War is dis- owned or discounted in the Japanese press and by Japanese prop- agandists among the Chinese; and in actual diplomatic practice Japanese officials in China have practised every subterfuge and committed every diplomatic crime with which we credit the Ger- mans, and have invariably been supported by the home Govern- ment and encouraged by their commercial representatives in China. It is our business in the East as Americans or Britishers to make the Chinese believe in our announced war aims and purposes and to convince them that we are sincere and are therefore entitled to their loyalty and support ag-ainst Prussianism. The Chinese do not understand what Prussianism is, but they do understand Nip- ponism, and it is very difficult to persuade them to give us their whole-hearted moral support when we give countenance by com- mercial and diplomatic alliances in this hemisphere to policies 248 DEMOCRACY AND THE EASTERN QUESTION which are identical with those which we condemn under another name and which we are eradicating from another hemisphere, re- mote from Chinese interests, by the expenditure of so much treas- ure and blood. The Chinese have seen the most unscrupulous policies succeed in their country, carried out to their shame and humiliation without a murmur or a whimper from the Allies. They see the Japanese brand of Prussianism succeed in this part of the world without palpable opposition, and they have nothing more than our word for it that it is not succeeding elsewhere. They have heard and have digested all the statements of our high ideas about the protection of weak nations from alien interfer- ence, and they have waited for us to prove our consistency by bringing our Japanese ally in line with these ideals, until they are convinced that we are either afraid of Japan or that we place no value upon consistency. In Chinese eyes and the eyes of all other Orientals, including the Japanese, we either are too weak to make our announced international policy effective, or we are satisfied to make it effective where it is expedient and to close our eyes to violations of our political ethics, perpetrated by a recognized ally, whenever it is inexpedient to interfere. Although the notorious Japanese twenty-one demands have now receded into history and although much of the rancor which they aroused has been softened by time, this conspicuous Japanese at- tempt to take advantage of the preoccupation of the Allies and of America is one which we cannot and must not forget. The principle of the protection of the weaker nations to which Japan is supposed to have subscribed was never more flagrantly violated, nor could the Allies who had put their faith in Japan as their far-Eastern agent have been more insidiously betrayed. Japan has pretended to regret this incident and to have had a change of heart but you will note that Japan has not renounced any of the special privileges acquired, nor has she canceled the clause in the treaty in which she reserves the right to revive at a future date the particularly offensive "Group V." If Japan were to renounce the spoils while she deplores the methods of a former ministry, we might have some faith in the alleged change of heart. As it is we must continue to keep alive the memory of the twenty-one demands, and call Japan to account, when the opportunity arrives, for flagrant violation of past treaties and of present international ethics. Whenever we think of allying ourselves in any enterprise with the Japanese we must remember that they still hold, and in- sist upon holding, the fruits of the diplomatic move that was so treacherous that the highest statesmen in Japan were ashamed to CHINA AND ECONOMIC IMPERIALISM 249 own it, and adopted the unprecedented expedient of lying to the whole world. To come back to the question of Japanese-American cooperation, a commercial alliance with Japan would now emphasize our incon- sistencies, would prove us willing to overlook all the outrages which Japan has perpetrated against China and against us during these four years, and would be tangible evidence of an American sanction of Japanese political and commercial methods and of a willing- ness to participate in Japanese spoils. I do not believe that if the American people saw the cooperation proposition in this light which is the light in which we all see it out here, they would sanc- tion such cooperation; for I believe that the American people have too high a standard of both commercial and of international honor and are too sincere in their present war aims. These arguments are, however, based purely on moral grounds, and the appeal is not strictly practical. I know that to prove to the business man that Japanese-American cooperation is bad busi- ness one has to demonstrate that it is not only immoral, but in- expedient and unprofitable as well. When [name omitted] first arrived here as a representative of [name omitted] he argued that while it would be no credit to us to enter into commercial relations with the Japanese, it was essential, because America either would not or could not afford sufficient protection to business in a coun- try like China, where investments were precarious, to warrant the investor in putting up his money, while Japan always took care of the interest of her subjects and would protect American interests as well as if they came in under the Japanese standard. Now, such an argument as this should be sufficient to shame most of us into disclaiming all connection with the cooperation scheme, but since [name omitted] came out here with that idea, and since the representatives of several big American corporations in this country have been known to make similar statements, it must be assumed that there are great interests at home controlled by men who are either ignorant enough or shameless enough to make such statements and to believe them, and who are willing to do business under such auspices as the Japanese would provide in China, if there was any profit in it. Obviously the thing to impress upon these people, to whom one cannot plead justice or morality, is that Japan's power to get business and protect it in this country is a power which cannot possibly survive the war if the East is again thrown open to free competition, because the methods and policies by which her in- fluence is acquired will not be tolerated for a day by any other 250 DEMOCRACY AND THE EASTERN QUESTION nation when Europe is at liberty to think of something other than the war in France. Japan's prestige among the Chinese has been acquired by force and corruption, and is not founded upon superior knowledge of the country or of the people, as the Japanese are fond of telling the American business world. While Japan is using her purchased official puppets in Peking to ac- quire control over Chinese liberties and national properties, she is arousing among the Chinese people a bitter antagonism which will not be forgotten in generations. Kemove the coercive power behind Japanese enterprises and the element of corruption from Sino-Japanese official relations in Peking, and Japan's good-will in this country will not only be worthless, but a tide of reaction against the Japanese will set in which would not only hamper Japanese trade in China, but will handicap every line of enter- prise allied with Japanese business men at a time when the latter are earning as much opprobrium as profit. America would cer- tainly share in the opprobrium, whether or not the Japanese see fit to make any division of the spoils; and when the time comes after the war for putting an end to the Japanese practices which are so inconsistent with our war policies and with our Anglo-Saxon conception of fair dealing that we must make war upon them in one way or another to prove our consistency, American commerce will and should be involved in the collapse of Japanese trade and will be equally discredited throughout the Orient. Our only asset in this country in the past has been Chinese good-will. We could always get nearly as much from the Chinese by asking for it as the Japanese could get by force or bribery, and if a check is put upon Japan's present policy in Peking, this Chinese good-will will still be a most valuable asset, unless at that time we have sacrificed it by becoming implicated with Japan. Nearly every military and naval authority who has been in the East recently has assured us that Japan is no longer a military menace, that her military resources in a modern war would be ex- hausted in six months, and that she has not the wealth or the de- veloped industries to maintain an army in the field for long even if she were given ample time for preparation. We are told that the European and American governments no longer entertain any fear of Japan's possible movements, and that any false step on her part could be checked with very little effort and expenditure at almost any juncture. This means that we have no reason to fear Japan, as both Japa- nese and Chinese seem to believe we have, and that when the vast Occidental armies now in Europe are at liberty to set elsewhere, CHINA AND ECONOMIC IMPERIALISM 251 there will be no difficulty in impressing upon Japan, if it is neces- sary, our disapproval of her policy on the continent of Asia, or of the advantage which she takes of our preoccupation in these four years. Consistency and honor demand that we must have some settlement, that Japan must be checked and corrected in some way. Those who have been storing up data in the various foreign offices, who have been keeping elaborate records and files, and have also been storing up indignation for four years, are going to insist upon some sort of a settlement, and the enormous growth of the military power of America and Great Britain insures that it will be possible to dictate to Japan where and how her reform shall begin. There is little reason to doubt that it will begin in China, and that the end of the war will mark the end of the present Japanese tactics, and at the same time the end of the peculiar trade advantages dependent upon them which, Japan is offering to Amer- ica as her share of the capital in a cooperation scheme. The advantages which Japan's partners would enjoy for the period of the war would then disappear, and the disadvantage of having been allied with an unscrupulous bully would begin to ap- pear. I cannot see how any one familiar with the trend of opinion in the East and in the various foreign offices at home, unless he is either extremely short-sighted or content with a brief period of exploitation, can hope for any advantage or profit from an alliance with an unscrupulous nation whose Nemesis is fairly upon it. The only reason that Japanese policy in China is not now as well advertised and as cordially denounced as German policy in Europe is that those who have not yet realized Japan's power- lessness to do us any harm consider it expedient to reserve judg- ment until after the war. Any one who would now propose a com- mercial alliance with the Germans in Belgium or Poland would have short shrift; but there is no reason in the minds of most of us out here who have a daily opportunity to read denunciations of German policy and to consider with what remarkable fitness could we substitute "Japanese" for "German" wherever the latter word occurs, for showing any more consideration for those who suggest a commercial alliance with Japan for the exploitation of China; and we do not believe that much more consideration will be shown when the war is over and the Allies are free to put into practice here the theories and ideals which have been evolved from their experience with the Germans. The suggestion which you made of allying ourselves with the Japanese in order to correct them, of taking them into partner- 252 DEMOCRACY AND THE EASTERN QUESTION ship so as to educate them up to our standard of international decency and fair play, is also subject to an odious comparison with a similar hypothetical proposition to take the Germans into a close alliance in the development of much abused European states for the benevolent purpose of humanizing and educating the Ger- mans. It is not our Western practice to join bandit forces in order to show the bandits the errors of their ways, nor do we take our outlaws into our armies and make officers of them, as the Chinese sometimes do, in order to avoid the painful duty of set- tling with them. If the sins of the Japanese, political and com- mercial, were due entirely to folly and ignorance, and if they were in a sufficiently modest state of mind to accept tuition, some such suggestion as yours might seem a particularly charitable and kindly one; but, as you know, the egotism of the Japanese military party, which now controls the nation's policy, is rivaled only by the am- bitious scope and brutality of that policy, and the Japanese Gov- ernment will never accept teaching or improve its international manners voluntarily until it has been demonstrated that better behavior can be forced from it. The Japanese are a people, or rather the Japanese Government is a Government, which we can- not take into our arms, but must take by the ear. When the time comes for such treatment to be administered, as it must come if our present war apostles are not hypocrites, we do not want to see our American business men taken by the ear also for being caught in bad company, and I do not believe that if our American business men fully realized what they were in for, they would want to be caught under any such circumstances. After this war is over, we are going to be in as good a position to command the Chinese and Japanese respect for our vested in- terests in the Orient as any nation on earth, and if we are then tied up with a chastened and disgraced Japan, we shall be carrying a discreditable burden instead of working with an ally. We do not want any monopoly or any unusual privileges in this part of the world. We shall be amply satisfied with equal opportunity, and we shall be in the best possible position to insist upon equal op- portunity both in our dealing with China and in our relations with the other powers if we do not besmirch our reputation now by joining Japan in her filching exploits behind the world's back. China as a nation is now chaotic. The people of this country, who have given the whole East their civilization and whose indus- try has been the foundation of much wealth and power through many ages, have just emerged from a long period of darkness and have not yet found themselves. They are working very slowly CHINA AND ECONOMIC IMPERIALISM 253 toward a realization of democracy, of which they have just sufficient conception to keep them groping ahead, and while they are reach- ing out they are being devoured by a parasitical official class, totally lacking in all sense of responsibility, ambitious only for the wealth which they can strip from the awakened slumberer before he rubs his eyes, and now sold, body and soul, to the Japanese expansionists, who are interested in keeping the befuddled giant tormented and distracted while they get the pickings from his pockets away from the official pilferers. Toward such a people the Americans and the British, who have been educated for a good many centuries in the morality of fair play and of giving every one a chance, should be particularly sym- pathetic and helpful, and should at least use what power and in- fluence they may have over the tormentors to restrain them. All that China wants is that time to come to herself and a chance to work and fight out her problems in her own way, the right of a weak nation to develop her strength and her national character without malicious interference. If the Japanese hand were with- drawn from the support of the evils which are dragging China into deeper and deeper humiliation every day, the Chinese people would be free and able to fight them and eventually to conquer them, and to set up a clean and substantial government under which all the protection that any of us need would be afforded without the necessity for disgraceful and compromising alliances. This very long letter does not exhaust any of the questions with which it deals, of course; and, because the subject is so big, it is almost impossible to cite illustrations and proofs for every statement; but if there is anything in it which you feel inclined to challenge, I suggest that you call upon [names omitted] to supply you with illustrative cases, citing places, dates, etc., and I am sure they will swamp you with evidence. I trust that you will have a pleasant trip in America and that you will find opportunity to tell a few people at home just how we look at things out here. You might always add with truth and accuracy that these opinions are not held by Americans alone, but are shared by Britishers in par- ticular, and by virtually all other Occidentals in general. Yours very truly, As an example of how other foreign business in China felt regarding the Japanese-American cooperation scheme, may be quoted some comment of the "Peking and Tientsin Times" (British), in its issue of January 9, 1918: 254 DEMOCRACY AND THE EASTERN QUESTION Now most of us in the Orient would rather not do business than to do it on these terms. The rest of us might be willing to shelve our scruples and turn our trade over to Japanese agents if we thought that the benefits to be gained would be permanent. None of us in the Orient believes now that Japanese methods or Japa- nese prestige are going to outlive this European war. As long as we believe that the Allied and American governments are sincere in the announced principles for which they are fighting, and as long as we believe in their ultimate victory, we must believe that both Japanese influence and Japanese methods in this country are going to be effectually checked after the war. While we have this faith we must also believe that any American interest allied with Jap- anese interests and established by Japanese methods will be sub- ject to the same check. If we had not this faith we should still be loth to believe that American interests entrusted to the Japanese would be handled to the ultimate profit of anyone but the Japanese. American money will be used to establish a Japanese trade mo- nopoly in China. If the post-bellum readjustments do not make an end of Japanese commercial policy in China, as we believe, then American money will have helped Japan to establish a system which will put independent American, British and French trade in this country at the mercy of Japan, and will leave the Japanese free to crowd their American partners out of the cooperative scheme at their earliest pleasure. It must be clearly manifest to every American in the East that the cooperative scheme is com- mercially immoral in the first place, and that apart from all moral issues it is fatally shortsighted, no matter how conditions are adjusted after the war. The cooperation plan has also strategical military aspects. I quote from a report made by a military expert in 1917 : The example set them by the previous attempts at business coopera- tion (in China) between the British and Germans, and its attendant dangers, seems to have had little or no effect upon American business men, for they are falling into the same trap set by the Japanese. Let alone the utter foolishness of the arrangement viewed from a business standpoint, considering that big business of all kinds in Japan is under the dictation of the Japanese Gov- ernment to a greater degree than it is in Prussia, there is the ad- ditional point of assisting financially what we may assume to be a potential, if not a certain enemy. From the military standpoint, everything possible should be done to discourage such cooperation. CHINA AND ECONOMIC IMPERIALISM 255 While I agree with the estimate of Japan's policy toward China given in the letter previously quoted, I feel that the writer's justifiable aspersions of corrupt Chinese officials who have for their own pecuniary gain been willing and conscious agents of Japan's schemes may create a wrong impression. The writer of the letter omits (he could not be ignorant of the facts) to mention that class of Chinese officials outnumbering the venal ones, who through all this period have resisted at- tempts to corrupt and intimidate them, and who never have relaxed their efforts to protect their country. As to the purely business aspect of the cooperation plan, I never have met an American business man who had five years' experience in the far East (I don't mean a long-range connection) who did not believe that cooperation with Jap- anese in China will be as detrimental to the balance-sheet of American business, as it plainly is inimical to any just, inter- pretation of American political purposes and commitments there. CHAPTER XI THE OPEN-DOOR POLICY Definition of the open door Talk with Viscount Motono China, Japan, and America Monroe Doctrine and Hay Doctrine compared Their principles identical The Japanese Monroe Doctrine for China False analogies Causes for failure of the Hay Doctrine Nullified by private agreements Japan and the open door Manchuria a test case Japan's discriminations there Spy and police systems Making it unpleasant for other foreigners Influence over Chinese officials Reac- tions from the Lansing-Ishii agreement Japanese interpretation ac- cepted Special antagonism to Americans Incidents showing Japanese contempt for Europeans Case of British woman missionary Japan exercising sovereign authority Summary of methods handicapping American trade in Manchuria and Shantung The mail and shipping matters Views of American organizations. WHAT is the open-door in China? Broadly speak- ing, it is a political principle designed to apply to international commerce; and like a contract, it must be construed by the adjustment of particular instances to the basic principle of the agreement. I have not seen any really authoritative or official definition of the open door, but I have my own idea of what it is or should be in its applica- tion in China. In September, 1917, I passed through Japan en route to America, and I had a talk with Viscount Motono, then Japanese minister of foreign affairs, at Tokio. It was understood, at Viscount Motono 's request, that the conversa- tion was private and that I would not publish what he said, which I have not, although, as a Japanese diplomat who was present afterward remarked, there was nothing said that might not have been published without any impropriety. However, I did make a confidential memorandum of the con- versation, and it may be interesting now to quote a few para- graphs from it. 256 THE OPEN-DOOR POLICY 257 I said that, by way of opening the conversation, it would be well to find out where we were in agreement and where we disagreed, and to that end I would beg to state some of my own opinions. I said that in my opinion it was of little use to try to bring a genuine improvement of the situation em- braced in the triangle of Japan, China, and the United States, with the questions arising from that juxtaposition, until these nations were fully agreed on the definition of treaties; and definition of treaties means a definition of terms. I felt that there could be no real understanding until all the na- tions that have subscribed to the open-door and integrity of China principles were agreed as to what these phrases mean in practice. There cannot be any real sympathy between Japanese and American policies toward China as long as, for instance, Japan understands the open door to mean one thing and the United States understands it to mean something else, or while Japan places a construction on the integrity of China that works out diametrically opposite to the American theory. Viscount Motono replied that he agreed with that state- ment, and he asked me to give my definition of the open door as it should be practised. I then stated that I understood the open door to relate particularly, perhaps exclusively, to commerce in China and with China, commerce to include, of course, all financial and industrial enterprises which are directly or indirectly a part of general commercial operations. My idea of the open door in commerce would be, to give a concrete example, if British, German, Japanese, and American firms were competing in China, trying to sell railway supplies or machinery for a fac- tory, this competition should be confined strictly to legitimate business methods and should be determined on that basis. If, for instance, a Japanese firm found itself defeated by one of its competitors, it should not be able to invoke the further support of the diplomacy of the Japanese Government, ap- plied by means of pressure backed by force or by the implied or actual threat of force, or of any diplomatic reprisal against 258 DEMOCRACY AND THE EASTERN QUESTION China. My idea of a real open door in China would inhibit the method that is coming to be called economic imperialism. I said that it had not been the practice of the United States Government, even in regions where the Monroe Doctrine is held to apply, to sustain the commercial efforts of its nationals beyond the point of legitimate and open aid of the depart- ments organized for this work (consular and commerce), and consequently such extra methods by other governments in China or elsewhere placed American enterprises at a disad- vantage which could not fail to cause irritations, and to be provocative of a similar diplomatic policy by the United States, a situation containing serious possibilities for war, and which had caused a good deal of irritation in the relations of Japan and America. Viscount Motono replied that he agreed with this definition of the open door, which has accorded with the policy of the Japanese Government. I said that I could not feel that the relations of Japan and America vis-a-vis China could proceed harmoniously as long as Japan was disposed to pursue a policy of economic impe- rialism in China and was disposed to assert or to claim a spe- cial position toward China or any kind of paramountcy in China in a political and economic sense. Of course it would follow naturally that the development of international trade with and in China would proceed unevenly as among com- peting nations; that some nations, having special advantages of location or otherwise, would gain over other nations by legitimate process. Americans could not object if for those reasons they were unable to be the first in helping to develop China. What they do want, and should demand, is equal opportunity as to the conditions of international trade with and in China, subject to no discrimination or preference ex- cept such as might be voluntarily instituted by the Chinese Government by formal treaties and for sufficient reasons re- lating to China's own just requirements. I further said that as a resident of and a friend of China I must regard as being THE OPEN-DOOR POLICY 259 invidious to China, and also injurious to the status and de- velopment of American interests there, any policy of "peace- ful penetration ' ' there by any foreign nation which aimed at, and would have the effect of subordinating, the economic de- velopment of China to the control of foreign nations, and I must sympathize with the natural objections of Chinese to such a process and aid them in resisting it. Viscount Motono replied that he recognized that the com- mercial theory known as economic imperialism is doomed by the defeat of Germany, and Japan is prepared to abandon it if the other principal nations will. He remarked, as ex- plaining Japan's seeming adoption of that policy, that Japan had done this in self-defense, as a precautionary measure. He felt that such a policy would be inconsistent with the status of international relations that was being aimed at by the Allied nations opposed to Germany, and Japan was ready to do her part in bringing a better state of affairs. I said that in respect to the integrity of China I could not regard any assertion or claim by Japan of a special position or paramount cy in China as compatible with a genuine in- tegrity of China. I asked if the Ishii mission to America had any purpose to urge such a claim for Japan or to induce the United States to acquiesce with it. Viscount Motono replied that the Ishii mission was not ended, and consequently it would not be discreet to speak of it too definitely before its results were known. Although Viscount Motono has since died, I feel that no confidence is violated now in making public my recollection of his comments about the open door made less than eighteen, months ago ; indeed, after the interview I sailed for America an hour after the talk ended a Japanese diplomat told an- other man that the caution about privacy was not necessary, as nothing was said by Viscount Motono that could not be published. In speaking to Viscount Motono on that occasion, I men- 260 DEMOCRACY AND THE EASTERN QUESTION tioned the Monroe Doctrine with a purpose. For several years past, and until very recently, Japan's propaganda has striven to compare Japan's attitude toward China with the objects, purposes, and results of the Monroe Doctrine. A falser comparison hardly could be imagined. In one of my previous books, "Our Eastern Question," published in 1916, I discussed the so-called "Japanese Monroe Doctrine for China ' ' at considerable length, and wrote : Thus we see that the Monroe Doctrine was intended to accom- plish two principal things (a) To preserve the territorial integrity and political autonomy of the weak American republics; (b) To secure and preserve in those countries the commercial principle of the Open-Door for all nations. And when we look back at the record of history, from the enunciation of the doctrine to the pres- ent day, we see clearly that it has worked out that way. Suppose that the United States had used, or would hereafter use, the Monroe Doctrine to apply in South America a commercial and financial policy like Japan has practised in Korea and Man- churia, and which is embodied in her demands on China in 1915. Suppose that the Monroe Doctrine would be construed to mean that no railway could be built in South America except under con- ditions dictated by the United States; that no mines or other natural resources could be exploited there without the United States being first consulted ; that no foreign loan could be made to any South American nation without the consent of the United States being first obtained, and except with American participation (whether Americans had the money to lend or not) : that the United States must be consulted in all important industrial enterprises requiring foreign capital ; that Americans must be employed as political, financial, and military advisers to South American Governments; that South American Governments must consult the United States when they want to purchase armaments, and must purchase a ma- jority of such supplies from the United States; that when foreign capital is used to build railways in those countries, American man- agers must be employed, and the traffic rates be fixed so as to give American commodities an advantage over other foreign goods; that supplies used in railways and other utilities in those countries must be purchased in the United States, or be purchased through American firms; that American goods entering those countries will be given preferential customs rates; that Americans shall have a right to own lands and reside in all parts of South America, and THE OPEN-DOOR POLICY 261 not be subject to the laws of those countries; that Americans must be heads of police in important South American cities; that South American Governments could not lease any of their own territories without first consulting the United States; that no contracts to build naval bases or harbor works in those countries would be permitted without first obtaining the consent of the United States; that the United States would have to be consulted when South American countries desired to change their fiscal systems. Every condition I have enumerated, Japan already has put into effect in Manchuria, and wherever she has succeeded in establish- ing a sphere of influence. If the United States placed such a con- struction on the Monroe Doctrine, for how long would other Powers accept the doctrine without protest? Is that how a Jap-ized Monroe Doctrine for China, and the Orient, will work out? Is what Japan is trying to do in China today rightly comparable to President Monroe's purposes when he formulated his famous doctrine? The Monroe Doctrine was de- signed to protect the political autonomy of the countries it covers, and to preserve the "open door" there, and has done it. In short, the Monroe Doctrine, in its theory, and also in its practical ap- plication, is almost exactly what the territorial integrity and open door doctrines in respect to China are, as they were originally ad- vocated by Great Britain, and afterwards formulated by the United States. So there is already one Monroe Doctrine that applies to China a doctrine which all the Powers interested in the fate of China have subscribed to, and which presumably is still binding upon them, since none of them has openly repudiated it. Japanese have a completely different idea of the Monroe Doctrine than Americans usually have. In a recent editorial (February 13, 1919) on "The Monroe Doctrine and Japan," the "Japan Chronicle" said: There are few political phrases which have been subjected to such contradictory interpretations as the Monroe doctrine To one group it represents a check on imperialistic aggression and a protection of democracy, to the other the predominance of a strong and power- ful State over the others within its immediate influence. The Japa- nese invariably interpret the Monroe doctrine in the latter sense. Analysis of the causes for the failure of the Hay Doctrine to solve the question of international political and trade riv- alries in China shows that its weakness, or what made it in- 262 DEMOCRACY AND THE EASTERN QUESTION effective, was that the powers that were parties to it, except America, also had other agreements with one another based on the sphere of influence thesis, and when a practical issue would arise, they invariably would give weight and authority to the private agreements rather than to the open interna- national doctrine. 1 In short, a majority of the powers did not want the Hay Doctrine to work in practice, apparently believing that their own advantage lay in protecting by pri- vate agreements their own spheres and special concessions. The history of the open-door doctrine may be divided into three periods : first, from its acceptance in 1889 to the Russo- Japanese War ; second, from the conclusion of the Russo-Jap- anese War in 1905 to the great World War ; third, from the beginning of the World War in 1914 to the present. The first period was marked by an apparent effort of several pow- ers to readjust their policies in China in accordance with a genuine acceptance of the principle. The second period marked the appearance of Japan on the continent and the re- vival of the sphere of influence idea by all the powers except- ing America. In the third period Japan played practically a lone hand. Japan's policy in its relation to the open door in the years following the Russo-Japanese War, which gave Japan control of Korea and a strong foothold in Manchuria, is extensively reviewed by me in previous books ("America and the Far Eastern Question," 1909; and "Our Eastern Question," 1916) ; but it was not until the Great War that Japan's pol- icy was fully displayed. Prior to that time all the powers were jealous of their interests and positions in China, and were able to support them effectively. During the war, un- til near its end, Great Britain, France, and Russia were forced, or felt compelled, to subordinate their interests in i A good example of this process is the defeat of the Knox proposal to neutralize railways in Manchuria, a full account of which is given, with the diplomatic notes, in Chapter I of "Our Eastern Question." Alo see Appendix A. TfiE OPEN-DOOR POLICY 263 China to more pressing exigencies, and the United States was disinclined to strong action in the East. In these circum- stances Japan's policy came out in its true colors. In a conversation I had at Peking soon after the Russo- Japanese War with the late W. W. Rockwell, then American minister to China and later ambassador to Russia and Turkey, we were discussing the situation in Manchuria, where I had just been, and he remarked: "Manchuria will provide the real test of the open-door policy." I have traveled in Man- churia frequently in the course of the last fifteen years and have considerable firsthand knowledge of conditions which in that period have existed there, and one is tempted to re- view them. But perhaps the best, and also the more credible, picture of recent events there as they touch the open door is found in the numerous reports of official agents of foreign governments who have investigated, and who have resided in the country. I shall quote from some of these recent reports, without stating how they came into my possession, except that in no case did I obtain them from the men who prepared them. Dated, January 16, 1918. Subject, Japanese Ways of Hampering Foreign Trade in Manchuria I have the honor to state that the Japanese in Manchuria not only contrive special advantages for themselves in contravention of the open door principle as reported from time to time but they manage in various ways to hamper the commercial operations of Europeans and Americans through their control of public and quasi-public utilities, and through the questionable methods which they are willing to adopt in fighting foreign competitors. Their spy and police systems are very highly developed in this region and the movements of all foreigners are closely watched and re- ported to police headquarters. The information is given to the Japanese who are able to use it to the best advantage. Between the Japanese secret service men who pester travelers with ques- tions and surveillance, hotels which pry into one's private affairs as well as baggage, telephone operators who report conversations, telegraph clerks who work similarly, the post office which opens 264 DEMOCRACY AND THE EASTERN QUESTION the correspondence, and railway employes who cooperate with the rest, there is not much about the foreign business man which is not known to the Japanese authorities. The most recent and interesting case in point is that of Mr. W. F. Thomas, agent of the Geo. A. Watson Tobacco Company of Danville, Virginia. He came to Manchuria last year to sell to- bacco. Upon his arrival he remarked to an American that he had been followed by Japanese who were evidently bent on know- ing all about his business and he expressed the hope that they would not pry into his trunks containing samples. The American replied that Mr. Thomas could consider himself fortunate if the Japanese did nothing more than examine his trunks; that they would not hesitate to steal them if they thought that this would hamper his business. Two days later Mr. Thomas reported that the trunk with all of his samples had been stolen while it was in charge of the South Manchurian Railway. In a letter of Octo- ber 18, 1917, the Geo. A. Watson Tobacco Company described the incident as follows: "In August we sent our representative, Mr. W. F. Thomas, to the East to solicit business. In passing through Japan his sample trunk was robbed and every sample taken, the trunk being afterward returned to him empty. This happened between Mukden and Antung on or about August 21 on the South Manchurian Railway. Mr. Thomas seems to think that the rob- bery was committed by the people in authority for the purpose of discouraging American business houses seeking to develop to- bacco business in Manchuria and China." This is by no means the first time that trunks or their contents have disappeared in this way, but the circumstances of this case are striking and sug- gestive. Japanese hotels in Manchuria because of the large subsidies which they receive and their special railway privileges have driven most other hotels out of business. The foreign commercial traveler therefore is in some Japanese hotel during most of his stay in Manchuria and is obliged to depend on them almost entirely. Some of these Japanese hotels have lately shown an open and decided hostility to Americans. An agent of the Standard Oil Company of New York went to Supingkai recently since the Ishii mission was accomplished, in fact and was met at the train by a runner from the Japanese hotel who asked him to stop there. He went along with the runner and when he arrived at the hotel there was some inquiry as to his nationality. He told the hotel people that he was an American. The hotel people replied: "Oh, we thought that you were English; we are very sorry, but we have THE OPEN-DOOR POLICY 265 no room for you." He told them that any kind of a room would do, but they refused absolutely to give him any accommodation and turned him away. He related this incident to an American traveler for the British-American Tobacco Company who moves about a great deal in this region. The latter stated that he has been treated with so much contempt and discourtesy and rudeness as an American at the Japanese hotels in Manchuria that he had got the habit of registering as an Englishman, and was thus able to obtain accommodations and good service. The attitude of the Japanese telephone company here is in keep- ing with the policy above described. The manager of the Stand- ard Oil Company has been trying for more than six months to have a telephone installed. Two months ago the workmen went to the company's native agency, where oil is also stored, and an- nounced their intention of putting in the telephone. They began the work shortly before lunch time and said that they wanted to cook their food on the premises. The Chinese agent refused to let them cook it where they wanted to because he was afraid that the oil might become ignited. The Japanese thereupon became highly indignant and went away, and refuse now to put the tele- phone in at all. This is not the only Japanese difficulty which the agent has had however. At another place he called for the long distance service in order to talk with the Tiehling agent, etc. In a report from Antung some years ago, entitled : ''Japanese Fraud, as it affects the open door," I mentioned the case of a British sawmill which was placed at a disadvantage in competition with the Japanese mills on account of certain Japanese fraudulent practices. Not long afterward the British sawmill was destroyed by fire under very mysterious circumstances. While nothing posi- tive could be proven against the Japanese, there was excellent rea- son to believe that they were instrumental in causing the destruc- tion. The same may be said of the fire here which destroyed the factory of the British-American Tobacco Company. Like the fires which are occurring now along the waterfronts of America, the fires above mentioned are difficult to trace, but the peculiar com- bination of circumstances just at the time of the conflagration are very suggestive to say the least, and the occurrence of these fires in Manchuria do not encourage the investment of foreign capital in enterprises here. [Other instances given] While the blandishments of Viscount Ishii were calculated to show how carefully the Japanese keep the "open door" ajar, there is much evidence tending to prove that the fraudulent and cunning practices of the Japanese in this region destroy 'the "equality of commercial opportunity" which is supposed to exist, and make the "open door" more fictitious than real. Several reports in this regard have already been submitted and more are now in the course of preparation. Material in this connection is being con- stantly gathered and will be submitted from time to time in re- ports of this nature so that some adequate opinion may be formed as to just what extent the ''open door" is really open under the auspices of the Japanese in a region where their "special interests" have now been formally recognized by the American Government. Extracts from Report dated June 27, 1918 Referring to my despatches to the Department Nos. 113, 125 and 127, all sent through the Legation, I have the honor to further state that the Japanese enjoy special financial and commercial ad- vantages (in Manchuria) not only according to the local Chinese practice, but according to theory as well. In a recent conversa- tion with the (Chinese) Governor General concerning the failure of (Chinese) officials in this province to give Americans and Europeans the rights which are enjoyed by the Japanese, he prac- tically said that Americans should be the last to complain, as we formally and officially recognized Japan's special interests in this region and that we cannot be surprised when they take advantage of such a declaration and demand special treatment and get it. I tried, of course, to give the Governor General the view of our recognition of special interests which our Government tried to offer, but he, like most Chinese, did not take the explanation as any- thing which really explained, and said that such a recognition of special interests must have meant something special and it implied that the Japanese had something which others could not expect to have, and therefore, why do we now expect it? I feel certain now, as I wrote officially long before we recognized Japanese "special interests," that such a formal recognition will prove to be extremely embarrassing when we come to demand equal treat- ment with the Japanese, and the conversation above mentioned indicates the effect upon the Chinese official mind which the recogni- tion has had and which it is likely to have after the Japanese care- fully foster such a belief on the part of the Chinese. While the American government carefully sought to safeguard our interests by emphasizing the equal rights which are enjoyed according to the "open door" theory, the reiteration of this oft-repeated state- ment did not impress the Chinese 1/100 as much as the startling recognition of Japanese special interests which they take to mean something very special that somehow places the Japanese on a THE OPEN-DOOR POLICY 267 higher political and commercial plane in the region to which this theory applies. Enclosed is a copy of a letter about the special treatment of the Japanese as regards the financial situation here and a copy of the reply received from the Special Delegate for Foreign Af- fairs (Chinese). It will be seen from the latter that the Special Delegate shares the view of the Governor General that the Jap- anese are entitled to special treatment probably because of their ''special interests," although he does not expressly say so. He does say, however: "The general conditions relating to the merchants and citizens of your nation (America) are not the same as those affecting the Japanese; therefore, they can be treated only in accordance with arrangements made for the Chinese. The method adopted is dif- ferent, but there is nothing in contravention of the existing treaties." That the Delegate for Foreign Affairs here should have the effrontery probably with the concurrence of the Governor General (for he seldom acts in such matters alone) to maintain in writing that American citizens are not entitled to the same treatment as the Japanese, is a matter of the gravest importance and calls for the most drastic diplomatic action, it seems to me. And this statement by him has been made in spite of the repeated and em- phatic declaration on the part of this office that we demand and will insist upon equal rights. The correspondence enclosed will also show that the Chinese authorities here, prior to June 8th, warned the Japanese Consul General about the danger of accepting notes issued by the Bank of Territorial Development, requesting him to notify the Japanese merchants accordingly. On June 13th he (the Delegate for Foreign Affairs) said that he was just about to write to this office in this regard. It is probable that he had no such intention, and if he did have any such intention the question arises as to why the Japanese Consul General should have the information so far in advance of all others. His letter to me was dated June 13th and received on the evening of that day, yet he says that all holdings of Americans (of the bank notes) should be reported to him be- fore the 14th, an absolute impossibility. When the Bank of Territorial Development was closed, its notes immediately dropped in value and many refused to accept them at any price. The Japanese, knowing that they were safe on account, of their preferential treatment in such matters as has been frequently reported by this office bought the depreciated 268 DEMOCRACY AND THE EASTERN QUESTION notes at a heavy discount, and foreign firms sold at a loss in order to avoid being loaded down with paper worthless to them. This office assured all Americans concerned that every effort would be made to have all notes redeemed for them on the same terms as for the Japanese, but they felt that the Japanese have such a hold throughout China as well as in Manchuria that there is no real assurance of equal treatment. When the Japanese flout the British and American governments, and British and Americans in China lose confidence in their governments' willingness or ability to protect them, it is, I believe, high time that some decisive and definite steps be taken to dispel such impressions and to maintain the dignity and prestige of these two great occidental nations. The Japanese also should be made to see that they cannot steal a march on their Allies in any such manner and obtain special advantages from the Chinese government and use them in driving out their western competitors. The enclosed correspondence and the letters in this connection received and sent by my British colleague are absolutely identical. We decided to take similar action in order to bring the greater pressure to bear upon the local Chinese authorities, and we now both agreed that all local resources are exhausted and have decided to present the whole matter to our respective Legations for settlement. The question has reached a very critical stage and requires the strongest kind of diplomatic pressure, as predicted in my previous despatches. That the situation described in reports on this subject is incom- patible with the "open door" theory is very evident. The "open door" in China is a trap-door for us to fall through when the Japanese are ready to release the spring* They are perfecting the apparatus from day to day and unless adequate steps are taken we shall assuredly be the victims. As the Governor General and the Delegate for Foreign Affairs are thoroughly acquainted with the views of my colleague and myself, and as we have repeatedly expressed ourselves concerning the equal rights which we demand for British and Americans and, as both the Chinese officials not only disregard but scorn the representations which we have made, it is time for pressure to be exerted from above, if such a thing is possible. . . . As the Japanese have secured a deposit of three millions gold yen to cover any loss which they may incur by accepting the de- preciated paper currency here a fact not denied by the Delegate for Foreign Affaris in his letter, a copy of which is enclosed it may be that the Americans and British can secure a similar deposit, or that the suggestion of one might bring the Chinese to terms. THE OPEN-DOOR POLICY 269 Some of the Salt Gabelle money, in fact, might be retained for this purpose in foreign banks. A proposition like this might readily solve the problem. Some solution must be found if Euro- pean and American firms are to enjoy that ''equality of com- mercial opportunity" which is supposed to exist. It is most significant that, after the publication in China of the Lansing-Ishii Agreement and the interpretations given to that instrument by the Japanese officials and propaganda there, Chinese officials in regions with spheres claimed by Japan began to act in accordance with the Japanese con- ception of the agreement. Incidents of discriminations against other foreigners in Manchuria, and especially against Americans, were more numerous and provocative than for- merly. These incidents became so frequent and pointed that the American consul-general at Mukden, on April 9, 1918, asked instruction as follows : As several Americans in this district have asked what attitude they should take toward the impudent and aggressive Japanese officials and spies in this region [Manchuria], I should appreciate some expression from the Department on this subject, which is likely to become very important. I see no reason why the Japa- nese Government should not be asked to instruct their detectives and other officials in such a way that their objectionable and in- sulting activities may at least be mitigated. Another incident showing Japanese particular contempt for Americans in Manchuria occurred at Mukden in April, 1915, at the time the twenty-one demands were being pressed on China by the Japanese Government, and when the Jap- anese press was representing America as being opposed to the demands. This was a demonstration conducted by Jap- anese troops before the American consulate at Mukden, and was officially reported as follows: . . . the other party [of Japanese troops], two score or so, turned off the main street and proceeded to the American Con- sulate General. This is a group of old temple buildings with a raised gateway facing a rather wide street. This body of soldiers halted directly in front of the Consulate, and the commanding 270 DEMOCRACY AND THE EASTERN QUESTION officer stood in the raised gateway directing them while they maneuvered for some fifteen minutes. The American flag was fly- ing overhead. After a time the soldiers were marched away. It is to be emphasized that this demonstration took place near the climax of the negotiations over the Twenty-One Demands, just before Japan delivered her ultimatum to China and began to move troops into Manchuria. Further ... it was the climax of a series of outrages [against Americans] by Japanese subjects, which had occurred during recent years in Manchuria, and for which I believe no real satisfaction had been obtained. These in- cluded an assault upon the American Consul at Dalny, an assault upon the American Consul at Newchwang, an attack upon the wife of the American Consul-General at Mukden. Of course these in- cidents all served the purpose of helping to convince the Chinese, who are so impressionable in matters of this kind, that America had given up interest in Manchuria, and even that America is willing to submit to what would appear to Chinese, at least, a deliberate and official affront. The truculence of Japanese in China, and especially in Manchuria and Shantung has been growing ever since the Russo-Japanese War, but it attained a climax in 1918. The conduct of Japanese officials and troops in Manchuria led to many unpleasant incidents. I overheard a colloquy between British and American officials there. "The Japanese act now as if they own this country," re- marked one. "Yes, only they would not dare act in Japan as they do here," was the reply, "for in that case the foreign govern- ments would make a fuss." One of the most striking demonstrations of this attitude of Japanese, or one that caused more than usual indignation among other foreigners, was the experience of a young woman attached to the Irish mission at Changchun. Her story, as reported in writing to the nearest British consul, follows : Irish Mission, Changchun, October 3rd, 1918. Sir, Yesterday afternoon I went for a walk. After a mile or two I struck the South Manchuria Railway line at a point I should THE OPEN-DOOR POLICY 271 judge to be two or three miles west of Changchun station. There was a good path along by the side of the railway and I decided to return home that way as I had done before on several occasions without let or hindrance. I had gone about a mile and was just about to leave the railway line by a road running south towards the Mission House, when I met three Japanese soldiers coming from the direction of Changchun station. I was about to pass quietly on when one of them blocked my way and pushed me back with his hand, shouting something unintelligible. I thought that they were merely taking advantage of my being alone and un- protected to indulge in some horse play, so stood my ground. They could speak no English and only a word or two of Chinese. After a rather fruitless argument in which they were rude and unpleasant, I decided discretion was the better part of valour, and tuned to go back the way I had come only to find that way also barred by one of the other soldiers, who threatened to strike me if I attempted to pass. There was an embankment on either side. I protested that I must be allowed either to go back or go for- ward and was thereupon struck forcibly by the soldier in front. I regret I lost my temper and struck the man across the face with my walking stick. With that the three of them fell upon me. They broke my stick in two and beat me with it. They buffeted me about the face and head, threw me down and dragged me by the hair of the head. They pulled out quantities of my hair and broke my combs with the force of their blows. They then sub- jected me to a humiliating search, ostensibty for bombs, the de- tails of which I do not care to enter into, and finally bound me with a rope and marched me to barracks. While standing in the barracks, bound in such a way that I was almost choking, await- ing the arrival of the superior officer, two soldiers from among the crowd which had gathered around me struck me across the face with great force. I have the marks of their blows still upon me. When the officer arrived on the scene he ordered me to be un- bound and brought into his office, and I must admit that from that time on, although I was detained for over three hours and in- terviewed by three or four officials, including the Vice Consul, I suffered no further ill treatment. I should like to emphasize the following facts: That the part of the line where I was walking was nowhere near any bridges, munition dumps or war materials of any kind; that I was struck first, by the soldier and that apart from the one blow in self defense I offered no resistance to arrest; that after I was bound and help- 272 DEMOCRACY AND THE EASTERN QUESTION less I was stuck repeatedly on the head and face and was assaulted gratuitously in the barracks by soldiers who had not seen the circumstances of my arrest. I can see now that to walk along the railway line under pres- ent conditions was a mistake as there may be regulations forbid- ding it of which I was unaware, but I had walked that way several times before without being molested. Granting even that my arrest was justifiable, the brutality with which it was effected and the un- speakable conduct of the soldiers subsequent to it were utterly indefensible and inexcusable. Much as I resent the intolerable indignity to which I have been subjected I would be glad to avoid the publicity involved in bring- ing the matter before you, Sir, but I feel that it is my duty as a British subject to bring the facts to your notice. I have also sought the advice of the only Anglo-Saxon diplomatic agent at present in Changchun, W. M. Palmer, Esq., Commercial Attache to the American Legation, who strongly recommends your being informed of the occurrence. I have therefore written you full details in the hope that you may be able to take the steps necessary to secure satisfaction for this and to avoid similar outrages against others of my countrymen resident in Manchuria. I am, Sir, Yours faithfully, On receipt of this report, a British consular officer went to Changchun to make an investigation. He was treated rudely by the Japanese consul there, but he obtained most of the facts, which he reported to the British legation at Peking. As usual in such instances, the Japanese press tried to ob- scure and misrepresent the incident. The "Manchurian Daily News," organ of the South Manchurian Railway, pub- lished in its issue of October 22, 1918 : Another Unpleasant Affair Near Changchun We are sorry to have to report another unpleasant affair, this time involving a British lady missionary at Changchun. The in- cident would have been passed over by us if the matter had not been carried to the British Legation at Peking. On the 2nd inst., about 6 p. m., after the shadows of dusk sufficiently deepened as to make it difficult to tell the people's faces, the figure of some one taking a walk up and down the rail- way track at Shihipu, about three miles south of Changchun, could THE OPEN-DOOR POLICY 273 be made out. Lately the fish plates and rivets of the railway tracks had often been found removed to the menace of the railway traffic. The stranger was found to be a British lady missionary residing at Changchun, who, when challenged by one of the Japa- nese patrolling soldiers made as if to deal a blow on the soldier with a cane carried in hand. This only strengthened the suspicion of the Japanese soldier, and the lady was taken to the Railway Guard Office, then to the Gendarmery, and lastly to the Consular Police. The lady was found in a temper, but, it is said, finally owned her own indiscretion in strolling along the railway track after dark. She was allowed to go home without further ado. It transpired later on that a complaint about an alleged insult to a British lady was lodged with the British Consul General, Mukden, who hastened in person to Changchun and saw Japanese Consul Yamanouchi, demanding an apology from the offending Japanese soldier. Mr. Yamanouchi expressed his wonder how it was that the lady who had owned her own indiscretion and gone home should lay a complaint, but promised to look into the truth of the case for himself. Mr. O'Brien Butler, the British Consul General, then returned to Mukden. Before hearing from the Japa- nese Consul at Changchun, a version of the incident, as rendered by the lady missionary, was transmitted to the British Legation, Peking, and the case was duly referred to the Japanese Legation people. Thereupon the Legation authorities asked the Consular people at Changchun for particulars, and the matter was very carefully gone into. We should like to hear the story of the other side or at least some official account of the regrettable incident before committing ourselves to any remarks. However, we are nevertheless sorry that another unpleasantry should have thus been added. It may be well for us to publish that a Japanese soldier on duty is only alive to duty and respects no person. This trait is one of the points that make the Japanese soldiers formidable. For instance, inside a war zone or even a closely guarded zone, any one who fails to respond to a challenge, especially after night- faJl, made by a Japanese sentry or patrol will be courting the danger of being fired at. Ed. M. D. N. Of the scores of specific occurrences that I have informa- tion of from official sources, I mention one that illustrates one phase of the constant efforts of Japan to establish actual 274 DEMOCRACY AND THE EASTERN QUESTION sovereignty in China and to force the nationals of other na- tions to recognize it. I quote from an official report, dated June, 1918: Recently . . . , a British subject who represents one of the largest of British firms in the East in this territory (Manchuria) and who is well known personally to the inhabitants of this region, was traveling on a train of the South Manchurian Railway. One of the Japanese train officials, after having been very impudent in making inquiries regarding the passenger's personal affairs and business, demanded to see his passport. The passenger was not accustomed to carry his passport, as it is not required by the Chinese authorities and he is well known. He even was known to the train employes from having traveled so frequently on the line. When he could not produce a passport he was treated with indignity and violence by the train employes. When the train reached Changchun, he was taken to a police station (Japanese) and detained there for several hours and subjected to various ex- aminations. He was refused an interpreter. He was finally taken before the Japanese Consul, who, so the British subject reports, said: "In the view and contention of the Japanese Government you are in Japanese territory (the railway zone) and must sub- mit to the Japanese, who are the ruling authority in the East and must be obeyed." The Japanese Vice Consul said that he had in- structions that no foreigner was to be allowed to travel on the South Manchurian Railway without having a passport visaed by a Japanese Consul. He also told the Britisher that he could not re- main in Changchun without having his passport visaed by the Jap- anese consulate there. It may be interesting to state that the firm for which his Britisher traveled is a strong competitor in the Orient of the big Japanese sugar factors. Recently a special agent of the United States Department of Commerce made a summary of the disabilities under which American merchants now operate in Manchuria and Shan- tung, as follows : 1. Delays at the Japanese banks. Shroffs of American and other foreign firms are made to wait while Japanese are given prompt attention. 2. Holding of goods at the ports of entry and railway sta- tions on various pretexts, while goods shipped by or con- THE OPEN-DOOR POLICY 275 signed to Japanese merchants are moved and handled promptly. 3. Similar delays at Kobe, Japan, and at other points of transhipment, where cargo shipped by or consigned to Ameri- can firms is held up, while cargo shipped by or consigned to Japanese firms is moved promptly. 4. Special favors accorded by the railways in China under Japanese control to Japanese shippers, including an obscure system of rebates. 5. Subjection of Chinese to a "graft" system, except those who work in with the Japanese. 6. Encroachments on Chinese business and property, except those who work in with the Japanese. 7. Evasion of local Chinese taxes by Japanese traders and merchants, while other foreign merchants and the Chinese have to pay them. 8. Manipulation of public utilities controlled by Japanese, like postal and telephone and telegraph communications, to give advantage to Japanese merchants. 9. Taking advantage of the war censorship and the circum- stances which have caused mails from America destined to China and other places in the Orient to be turned over to the Japanese postal authorities in Japan to be forwarded, to delay the business mail of American firms trading in China and other Oriental countries, to learn the business secrets of those firms, and to use the information thus gained to obtain the business for Japanese firms ; and similar use of telegraph and other communications controlled by Japan. 10. Refusing space in Japanese ships to American cargo in order to give advantage to competing Japanese firms, and giving lower rates or rebates to Japanese shippers than are given to competing American firms. 11. Counterfeiting of the trade-marks and other distin- guishing features of well-known American manufactured ar- ticles and the extensive sale in China of inferior Japanese imitations of those articles. 276 DEMOCRACY AND THE EASTERN QUESTION A large volume could be filled with specific citations of evidence and proofs of the allegations contained in that sum- mary. Many of the matters it mentions have in recent years become the occasion of action and recommendations by Amer- ican commercial organizations in China. The delay and wrong uses of American mails made possible by the censor- ship in Japan finally caused, in 1918, the American Govern- ment to order that American mails destined to China should be sent by American ships only, and that they should not be transhipped at Japan, thereby avoiding their being over- looked by Japanese. The reason for this transhipment of American mails was to save time. For instance, ships from America touch first at Yokohama, then proceed to Kobe and Nagasaki, with stops at each port. By taking the mails off a ship as soon as it reaches Yokohama, and sending them on by rail to Shimonoseki, thence by Japanese ship to Shanghai, or by rail through Korea and Manchuria to Tientsin and Peking, several days can be saved. Also, during the war, many Amer- ican and British ships, and Japanese mail ships from Amer- ica, proceeded from Nagasaki to Manila before going to Shanghai, and the China mails and passengers were trans- ferred. The manipulation of Japanese shipping in the China and trans-Pacific trade during the war against American and other foreign commerce was the cause of bitter complaints. I quote from a consular report on this subject : Subject : Shipping Activities of Japanese in the Far East. Aug. 31, 1917. Much complaint is made regarding Japan's unfair methods. The Japanese have their national characteristics, and they may be ex- pected to exploit every form of what we may consider questionable trade maneuvering in accomplishing their ends. This should be taken for granted, and should be met and overcome by the demon- strated superior abilities which Americans are capable of display- ing. . . . In the enclosed memorandum, an alert and active trader has sum- marized a number of startling shipping reports, all of which, I THE OPEN-DOOR POLICY 277 am assured and believe, may be supported, in a general sense, con- fidentially, by affidavits. I quote from the annual report of the American Association of China made on December 29, 1914: Turning now from trade in general to some particular consider- ations what is the outlook? American cotton formerly held a premier position in Manchuria. Under Russian occupation, every nation stood on an equal footing in Manchuria. The same duties and charges were assessed against all and facilities for distributing goods and doing business in general were satisfactory. Now it is all changed. Under Japanese administration, no chance to advance its own trade is overlooked and to competitors the means taken appear to be a departure from fair trading. In fact, they con- stitute a most serious violation of the open door principle on which the diplomacy of the United States in China is based. Japanese competition takes the form of a system of rebates not only in freight and steamer rates, but in remission of duties and charges which are assessed against all other nations. In' addition to this many forms of petty annoyances have been worked out for the non-Japanese trader, and the imitation of established trade-marks is common. Now that the Japanese are in Shantung, not the mere foothold that the Germans held at Tsingtau, but with an apparent deter- mination to dominate the Province, the same tactics may be ex- pected, since it would be exactly in line with the course employed in Korea and Manchuria. With Dalny on the northern promontory and Tsingtau on the southern Japan has secured a potential con- trol of the trade of North China from the Russian frontier to the Yangtze upon whose valley her traders have long cast covetous eyes. In this connection it will become apparent that not only ourselves, but other nationalities face a loss of trade. The apprehensions expressed about results of Japan's oc- cupation of Shantung have been fully justified by events. The American Association of China is composed of repre- sentative American residents of all classes and occupations. The American Chamber of Commerce of China, as its name implies, is composed of business men principally. The offi- cers of the chamber in 1918 were : J. Harold Dollar, of the Robert Dollar Company, President; W. C. Sprague, manager 278 DEMOCRACY AND THE EASTERN QUESTION of the Standard Oil Company, Vice-President; J. \V. Galla- gher, of the United States Steel Products Company, Treas- urer; J. B. Powell, of "Millard's Review," Secretary. The chamber recently made public the following letter: Shanghai, December 16, 1918. Dr. Paul S. Reinsch, American Minister to China, Peking. Dear Sir: The American Chamber of Commerce of China, several members of which organization have interests in Tsingtao, have the honor to draw your urgent attention to the terms on which the Japanese Government has declared its readiness to restore the Leased Terri- tory of Kiaochow to China and to what in our opinion would be their inevitable consequence to American interests in North China. You will recall that the Note relative to the Leased Territory presented by the Japanese Minister to the Chinese Government in the autumn of 1917 stated we quote the translation published by the "Japan Chronicle" on November 8th, 1917 that : "When after the termination of the present war the leased terri- tory of Kiaochow Bay is completely left to the free disposal of Japan, the Japanese Government will restore the said leased terri- tory to China under the following conditions: "1. The whole of Kiaochow Bay to be opened as a commercial port. "2. A concession under the exclusive jurisdiction of Japan to be established at a place to be designed by the Japanese Govern- ment. "3. If the foreign powers desire it, an international concession may be established. "4. As regards the disposal to be made of the buildings and properties of Germany and the conditions and procedures relating thereto, the Japanese Government shall arrange the matter by mutual agreement before the restoration." We submit that in view of actual developments there these terms would amount in reality to the absolute control of Tsingtao and its hinterland by the Japanese and would in effect be equivalent, from a business point of view, to outright annexation of the Port and to virtual annexation of the Province by the Japanese Govern- ment. For the concession which the Japanese intend to demand is that part of Tsingtao in which the commerce of the Port is THE OPEN-DOOR POLICY 279 inevitably centered, namely the districts surrounding the harbor, the Customs House, and the proposed new railway goods station. The part of the town left for an international concession would be the present residential district and this could be rendered valueless from the point of view of revenue by such ''disposal" as is proved in clause 4 of the terms quoted above, which would even include the Public Slaughter House and the Electricity Station. The evidence for this view of Japanese intention is unmistakable and patent. It meets the eyes in business houses, banks, schools and tea-houses, and private residences, all the outcome of an adroitly conceived and rapidly executed program designed entirely to oc- cupy and effectively to enrich the district essential to trade and commerce. What Japanese control of wharves, railways and Cus- toms Houses would mean, has, we submit, been amply illustrated in Dalny and Manchuria, where are practically no prospects what- ever of American or other "foreign" participation in business which should be open to all. Accordingly we urge that if non-Japanese subjects are to have equal opportunities with the Japanese for business in Tsingtao and the Province of Shantung as a whole, the whole port should be either internationalized or restored to the Chinese Government, and further that in either case, if the Japanese be given the choice of location for their concession all wharves, railways and Customs House should be kept from their control. We urge this not on behalf of American interests in Tsingtao, but on behalf of those of Shanghai and Tientsin, the export and import trade of which would be seriously handicapped were con- trol of this port and of the Shantung Railway and its proposed ex- tensions to be vested in Japanese hands, to be made the hinge of an Open Door for Japanese only. In view of the recent develop- ments in America and the probability of an almost immediate discussion of the Far Eastern situation as a whole we feel sure that you will appreciate the urgency of this memorandum. As to the preference of this Chamber in reference to the future disposition of this former German leased property, we are in favor of making it a real international settlement with all harbor facilities and water-front privileges under the absolute control of an in- ternational commission. As soon as our special committee can make further investigation of this matter of international control, we shall take pleasure in sending to you copies of our memorandum and recommendations. As you are doubtless aware, detailed information corroborating 280 DEMOCRACY AND THE EASTERN QUESTION and illustrating our views is already in the possession of the Amer- ican Government, but should you require further or specific par- ticulars, we shall be ready to supply them. Very truly yours, (Signed) AMERICAN CHAMBER OF COMMERCE OF CHINA. I include an extract from a letter written by an American business man who has resided at Tsingtau before and during the war, and the comment of the office of the American Com- mercial Attache to China on the letter. The letter was written in July, 1917 (my italics) : If you want to do some real good to American business men it would be well for you to find some means to transport merchandise to and from China, without compelling a shipper to have a Japanese connection in order to ship his goods. It is very nice for the De- partment of Commerce to send men abroad to gather information, and to maintain a foreign service, but the whole purpose is handi- capped because of lack of shipping facilities. If a buyer buys goods here in north China he is at the mercy of the foreign steamship lines entirely, the agents of which are likewise merchants who want to market their own goods. The same thing applies to imports. . . . The plain truth is, if you don't buy through the Japanese here, you can't ship your goods. Ask Mr. , who says he cannot fly the American flag, nor put a sign in English on his gate-post because of the Japanese regulations. Comment of Commercial Attache. I am in receipt of your communication of Sept. 7, enclosing a letter from Tsingtau, dated July 27 and addressed to the Department of Commerce and Labor. You ask me for my opinion as to whether or not the statements made in the enclosure are justified. In most parts I believe the statements are justified by facts. Japan appears to be doing everything within her power to strengthen her position in China, before the conclusion of the war. The Japanese Govern- ment evidently has instructed Japanese shipping companies to dis- criminate against shippers of other than Japanese nationality. I make this statement as a result of evidence furnished me by Ameri- can merchants in China. Several American firms have informed me that they have been refused space on Japanese steamers for cargo, which space was subsequently given to Japanese firms. A very com- THE OPEN-DOOR POLICY 281 mon complaint on the part of American firms in China is that goods in transit through Kobe either to or from the United States and China, are often held unnecessarily at Kobe, while the transshipment of goods shipped by Japanese firms on the same ships and destined to or from the same ports, is expedited. One firm informed me that certain materials for a heating plant, shipped from the United States and destined to Peking, via Kobe, lay in Kobe for three months, during which time Japanese firms were bidding on the same mate- rials at Peking and offering immediate delivery. American firms in Shanghai state that shipments of steel and iron from the U. S. to China, via Japanese ships during the past two years, have been ar- riving short, the Japanese shipping companies willingly paying all claims for such shortages. In one case a Japanese ship was beached in Japan, and the cargo of American iron and steel billed to Ameri- can firms in China, was removed and the claims of these firms was paid in full. These methods were used to secure all possible stocks of American iron and steel for the Japanese ship-building industry. American merchants in China also state that Japanese shipping companies use information secured through shipping documents of American firms to assist Japanese merchants. Another source of embarrassment to American shippers comes in practices of the Japanese in Tsingtau and Dairen. . . . On the whole, it appears that Japan is doing everything possible in the United States to make it appear that America will have noth- ing to fear from Japanese paramountcy in China, or, in other words, that a so-called Japanese Monroe Doctrine in Asia will guar- antee to America equality of trade opportunity in China. Further- more, it appears that Japan is also trying to convince the American public that it will fare well with Japanese control of Pacific ship- ping. Unfortunately, Japan's acts in China are not, in any sense, in keeping with the representations made through her agencies and propaganda in the United States. Here in China, Japan is doing everything possible to block American enterprise and to force Amer- ican trade with China to pass through Japanese channels. ... I fear that protests to Japan at this time will be futile. Our most effective recourse lies in providing such American shipping and other facilities as will conserve our trade independence. The discrimination of Japanese shipping companies during the war against merchandise shipped to, from or through other foreign firms in China, was especially noticeable also on the Yangtze River. This question of ships as a means for the pro- 282 DEMOCRACY AND THE EASTERN QUESTION motion, or the obstruction, of foreign trade is one of tre- mendous importance to the American nation ; for ships or the lack of them can be made to interpose handicaps to trade as effectual as discriminating tariff or taxation regulations. CHAPTER XII THE SIBERIAN QUESTION Siberia and the Eastern question Their close relation Developments after Russia's collapse Japan and intervention The attitude of Rus- sians The propaganda for intervention Japan's sounding of the Allies Attitude of France Great Britain's attitude Japan and Germany Danger of a combination The interests of China The menace to China Japan's proposal to intervene exclusively Motives of Great Britain and France Effort to obtain America's assent A flood of propaganda America's interest analyzed Importance of protecting democratic peoples Territorial proximity The old diplomacy at work Suspicion of Japan Rejection of the one-nation plan Change of Ja- pan's attitude Conversion from asset to liability. SIBERIA is bound up inextricably with the far-Eastern problem, and when, following the collapse of govern- ment in Russia in 1917, disorder extended to Russia's Asiatic territories, it reacted strongly on the international balance of power in that region, and came at once into the purview of the politics of the Great War. Japan was the more sensitive of the meaning and possibili- ties of these developments. There is much evidence that the Tokio Government hardly knew how to take them at first. Regarded one way, the disorganization of Russia complicated Japan's position in world politics seriously. From another point of view, the inability of the new Russian Government to protect the outlying territories of the old empire, and their weakness as separate governments, might bring a great oppor- tunity for Japan's expansion on the continent. This pros- pect was so alluring that for a time it almost diverted Jap- anese attention from China. Two schools of opinion quickly formed in Japan on this question, having the common object 283 of gaming advantage for Japan, but differing as to the meas- ures to be taken to accomplish that end. Sifted down, the course which almost unanimously would have been indorsed by Japanese sentiment was to send a large military force into Siberia, occupy that country as far to the east as seemed practicable and expedient, use the period of occupation to intrench Japanese interests there, prolong the period of occupation as long as possible, and then to use the position so gained as a trading proposition at the general peace settlement. But there were difficulties in the way of putting this policy into effect. For Japan to have acted in- dependently would have caused serious complications with strong nations in the Allied group. The situation perhaps can be made clear by an analysis of the overlapping national interests and sensibilities that were involved. If Japan alone had sent troops into Siberia and had occu- pied that territory, without doubt it would be construed by the greater part of the Russian people as a thinly-masked en- croachment. Russians would assuredly believe that Japan's ultimate purpose was acquisition of the territory so occupied, by the same process that Germany was then using in the west of Russia, and Japan used in Korea, Manchuria and Shantung. Russians profoundly distrust Japan, which nation they regard as absolutely autocratic and imperialistic in form of govern- ment and national aims. At that juncture the great masses of Russians, however keenly they felt that they must for the time accept the unsatisfactory peace with Germany, would be less resentful of German penetration than of a similar Japan- ese penetration. As between a European or an Asiatic foreign domination of them, Russians will prefer to be controlled by a white civilization. That is the fundamental psychology of this juxtaposition with Russians en masse. Allied "assist- ance" of Russia, which took the shape of an Asiatic invasion of Russia's far-Eastern possessions by a nation which only a decade before was at war against Russia in that region, prob- ably would have dried up any remaining sentiments of sym- THE SIBERIAN QUESTION 285 pathy for the Allied war aims among Eussians and inclined them to accept Germany's efforts at conciliation and peace- ful penetration of Russia in Europe, and would provide Ger- man agents in Russia with a potent anti-Allies argument. At that time the military situation in Europe was precarious, and it was thought to be very inexpedient to risk turning Russian sentiment wholly against the Allies. Moreover, the question had numerous other aspects which affected the in- terests of other nations and world conditions after the war. The idea that Japan should intervene in Siberia was first advanced in the summer of 1917. It always is interesting to watch Japan's publicity propaganda in its handling of such matters. In this case the device of having the suggestion ap- pear to come from another power was used. The first pub- licity that I noticed was in telegrams from London to the press in Japan and America, stating that the British and French governments were becoming uneasy at developments in Siberia, and they might ask Japan to intervene there. These despatches probably were inspired by the Japanese em- bassy at London, and served to start discussion of the ques- tion. Apparently the press propaganda, which continued in a desultory way during the summer and autumn of 1917, had no definite official foundation until Japan gave it that by ad- dressing a note to several of the Allied nations and to the United States, in December, 1917. I have seen what purports to be a copy, or rough draft, of that note. It pointed out certain alleged conditions, and suggested terms for Japan providing troops to "preserve order" and to protect the Allied interests in Siberia. Japan disclaimed any purpose of territorial annexations or permanent occupation, but she asked that her paramount position with respect to China would be recognized, and that she would have exclusive con- cessions for mining and timber exploitation and fisheries in eastern Siberia. In return, Japan engaged to aid in protect- ing the economic and political interests of the Allied nations in European Russia. 286 DEMOCRACY AND THE EASTERN QUESTION This action of the Japanese Government brought attention to the question, and compelled the Allied Powers to outline their positions. In this connection it should be remembered that the United States was not technically one of the Allied nations, as the American Government had reserved inde- pendence of action and had not entered into any agreements or alliances with the nations it jointly was making war with. It was a foregone conclusion that Italy and the lesser Euro- pean belligerents on the side of the Allies would agree to Japan's actions in the East in exchange for a promise that Japan would support their special desires in Europe. This left only Great Britain and France to be dealt with. The national policy of France at that juncture can be put in a sentence, ' ' Get Alsace and Lorraine back ! " Everything was subordinated to that object and to making France secure after the war. France had virtually no interests that are directly affected by the Manchurian and eastern Siberian questions except as the loss or alienation of Siberia would affect Russia's ultimate solvency. France's investments in Russia were a grave consideration, and the revolutionary Government in Russia already had given intimation of a thought to repudiate the empire's debts. As to French eco- nomic opportunities in Manchuria, they years before had been traded off for the recognition by other powers of France's special position in South China. French sentiment seemed vaguely to connect a Japanese intervention in Siberia with a restoration of former conditions and a sustaining of the financial obligations of the Imperial Russian Government. It was however by no means certain that a Japanese occupa- tion of eastern Siberia would accomplish that, and it might have an opposite effect by angering the Russians against their former allies. It was of course certain that the Jap- anese Government would not bestir itself or make any sacri- fices to save or protect French investments in Russia ; indeed, it safely can be assumed that Japan is indifferent whether these investments are lost or recovered. Japan was anxious THE SIBERIAN QUESTION 287 to secure Russia 's war indebtedness to Japanese, which would be assured by a Japanese occupation of Siberia. At the mo- ment the French view of world politics was obscured by the German peril, and, moreover, the Eastern question means comparatively little to France. In the abstract, if no other matters were involved, French statesmen probably would in- cline to restrain Japan's expansion on the continent of Asia, although France's economic reasons for opposition are less than those of Great Britain. Great Britain's attitude toward the Siberian question has been perplexing at times, and it seems to have been actuated solely by imperial expediency. As a separate and detached proposition, the British Government probably would not want Japan to enter Siberia, for such action will tend further to impair British position and prestige in China. But the col- lapse of Russia and the opening of a way for German political influence, and possibly a combined German and Turkish mili- tary pressure, to reach India, had at that time exposed that part of the British Empire dangerously. With the war situa- tion in Europe as it was then, Great Britain could ill spare troops to protect India in the event of latent nationalistic aspirations and German propaganda inciting a seditious up- rising there. In such an event, there were intimations that Japan might be asked to send troops to India, and the Anglo- Japanese alliance provided apparently for this contingency. But there is a sharp difference of opinion among the British about the use of Japanese troops in India. Many students of Asiatic politics firmly believe that Japan's Pan- Asian propa- ganda constitutes a far more potent danger to British rule in India than Germany's propaganda and intrigue there, or than Russia's propaganda and intrigue did formerly. At that time (1917) it seemed that the British Government might have to choose between two evils, a German propaganda sup- ported by a military approach through the Caucasus, with a Mohammedan coloring; or a Japanese influence brought within the country and extended everywhere by a Japanese 288 DEMOCRACY AND THE EASTERN QUESTION army. Contemporary utterances in Parliament indicated that the British Government was inclined to regard Japanese military help as the lesser danger, but many Englishmen dis- sent. On the other hand, there was the possibility, which lurked in the background of the Allies' policy during most of the war, that Japan might come to an understanding with Ger- many. There was the possibility that German influence would cross the Ural Mountains, and somewhere in Siberia come in contact with the influence of Japan or China, as the case may be. This is not to say exactly that Germany or any nation in the East ever will succeed in annexing or in- corporating Russia; but whether what was Great Russia and its dependencies becomes united under one wide-spread gov- ernment, or if its former territories are divided among sev- eral governments, the internal situation of the country will be such that it will be susceptible to the process of peaceful economic penetration from the stronger nations that are contiguous to it, East and West. So Germany, having a thor- ough understanding of the real character of the Japanese na- tion and its ambitions, will at this time be indifferent to the extension of Japanese influence or the establishment of a Japanese "sphere" in eastern Siberia. In that event, the German and Japanese spheres would move forward gradu- ally until they met somewhere in Siberia. Their limitations could then be adjusted by mutual agreement, just as, after the war between Japan and Russia in 1904-05, those nations by treaty agreed to divide the regions about which they had fought, and which had belonged to neither of them ; and then in 1916 by a later secret treaty they mutually agreed to de- fend what they had gained against any third power. Ger- many probably would have welcomed an exclusive interven- tion by Japan in Siberia, for it would have tended to alienate Russian sympathy from the Allies and make a German policy of friendly assimilation in Russia easier, and it also would have caused disagreement among nations in the Allied group. THE SIBERIAN QUESTION 289 The logic of independent intervention by Japan was that it was more likely to work out in Germany's favor than it was to benefit the Allies or Russia. China is the focus of the Eastern question, and her interest in all phases of it is absolute. It is not too much to say that China's interest in the Siberian question is as vital to her future security and national position as the Alsace-Lorraine question is vital to France, or the existence of buffer states like Holland and Belgium in Europe has been vital to the security of England. As a result of the Russo-Japanese War, China virtually lost control of her vast provinces of Man- churia and Mongolia. As a result of Russia's collapse in the Great War, China has a chance to regain control of northern Manchuria and to recover Mongolia. Now came a proposed Japanese occupation of eastern Siberia to menace again the whole of China's northern territories and to cast a longer shadow over the Middle Kingdom. By all the catch-phrase tests which diplomacy has invented in the process of mod- ern empire building, China's interest in the Siberian question is fundamental. By the test of "territorial propinquity," China has a major position, for China and Siberia are con- tiguous on a land frontier extending for several thousands of miles. By the test of "vested interests," China is again paramount by reason of her reversionary ownership of the Chinese Eastern Railway, which lies for about a thousand miles in Chinese territory. By the test of population con- tacts, China also is paramount, for hundreds of thousands of Chinese reside in Siberia and own much property there. By the test of the alleged menace of Bolshevism, China is more exposed to its penetration, for China at bottom is a great, loosely knit democracy and very susceptible to such penetra- tion; whereas, for instance, Japan is a rigid autocracy re- markably impervious to such penetration. In the circum- stances that existed, China could not feel otherwise than menaced if Japan was given a "free hand" in Siberia, for a Japanese occupation of that country east of Lake Baikal 290 DEMOCRACY AND THE EASTERN QUESTION would envelop China's northern provinces in an elbow, with a large part of southern Manchuria already under a Japanese quasi-sovereignty. In short, the considerations that were po- tent in inducing China to join the Allied group at war against the Central powers would vanish in good part, and a situa- tion would be created that probably would work out adversely to China in practice. At any rate, the Chinese were much alarmed at the prospect, and made their uneasiness known. Early in 1918, probably in January, an understanding on the Siberian intervention proposal was reached by the Japa- nese, French, and British governments. The details of this understanding as yet are confidential with those governments, but there scarcely is room to doubt that Japan induced the French and British governments to consent to her exclusive intervention provided the United States also would agree. Japan chose a time to press this proposition when the military situation for the Allies was in its darkest phase, just preced- ing the big German drive on the western front. France and Great Britain were not then in a position to offend Japan by showing distrust of her motives; and still less, since Ameri- can military reinforcements and supplies were imperatively essential to defeat Germany, could they venture to affront America. "What Japan offered or promised in return for the support of her allies on the Siberian question is not known positively outside the inner circles of governments, but it is believed to include a promise to send troops to Europe in cer- tain contingencies, and to exert pressure on Russia jointly with the Allies to validate Russia's foreign debts. France and Great Britain were to support Japan in adjusting certain questions and conditions in the far East. Strengthened with this support, Japanese diplomacy then began a campaign to gain the assent of the United States to Japan's plan for intervention. Late in January, 1918, and through the month of February, Japan's publicity propa- ganda in America, strongly supported by both the British and French propagandas, made an active drive in favor of THE SIBERIAN QUESTION 291 giving Japan a free hand. "Trust Japan" was the slogan, and an effort was made to hush arguments against the pro- posal by attributing them to German propaganda. The American press was complaisant to a remarkable degree, and it seemed for a while that Japan would get her way and that the United States would be rushed into giving its assent With respect to the policy of the United States, on February 28, 1918, I then analyzed the issue as follows, in a memoran- dum not published before: By reason of its relation to the war in Europe, the Government of the United States of America can, if it will, exercise a deter- mining influence on this and other Eastern questions. The ob- jects of the American Government in participating in the war have been announced by the President to be the establishment of the democratic forms of government in a secure position, the relega- tion of military autocracy as a ruling factor in civilization, and the suppression of all international policies and methods which are outgrowths of military autocracies and the imperialistic tendencies of nations. The two largest democracies in the world, in terri- tory and population, are Russia and China. We see how these two countries and peoples may be affected by this Siberian ques- tion. Both countries are struggling, somewhat vaguely and very inefficiently, to establish democratic forms of government. If a Japanese military occupation of eastern Siberia should happen to be co-existent and co-extensive with a German similar advance from the other side, and the two autocracies should effect a combination for mutual security of their gains, it is evident what might be the fate, at least for a long time, of the nascent democra- tic movements in Russia and China. Furthermore, if that would come about, it might occur that the forces of efficient autocracy, as expressed by that combination, and control over the destinies of more than half of humanity and nearly half of the earth's natural resources under those two powers and their satellites, would ulti- mately overcome democratic forms in government and set civiliza- tion backward for centuries. The United States also has very considerable material interests in this question or rather, in some of its probable results. The future development of Russia and China offers a great opportunity for American finance and commerce. While America has many good reasons for desiring always (if that is possible) to remain on very friendly terms with Japan, this desire is secondary in im- 292 DEMOCRACY AND THE EASTERN QUESTION portance to the maintenance of the independence and integrity of China fis-a-vis Japan or another autocratic Government. Also, the commercial possibilities of Russia and China, singly or to- gether, are vastly more important potentially than commerce be- tween Japan and America will be in the future. Should Japan occupy eastern Siberia, and not be dislodged after the war; and on the other side Germany should obtain possession of or economic domination over Russia's western provinces; then after the war American trade can enter Russia only by passing through a Japa- nese zone on the East and a German zone on the West. Japan's commercial policy in the parts of China which she already has penetrated, and what is known of Germany's policy of commercial penetration of weaker nations, give sufficient intimation of what such zones on each border of Russia would mean to American and all other foreign trade. American statesmen no doubt are not oblivious to certain utter- ances of some high officials of our co-belligerent nations about the thesis of world governance after the war. In a recent speech in Parliament, Mr. Balfour plainly intimated that the British Govern- ment is not prepared to, or cannot yet see its way clear to abandon what is usually called the balance of power theory of world politics. This presages, after the war, a continuation of international poli- tics on the checks-and-balances principle. Under this system, it will not be in the ultimate interest of America, or of democracy, to augment the power and influence, in any balance of power, of powers whose governments are based on the autocratic principle. The application of this argument to the existing Siberian ques- tion, and its relation to China, are evident. The peace which is made at the end of this war will not settle the struggle for a really democratic world ; it may not even make much of an advance toward this object except that it will awake the democratic peoples to their peril, and stimulate them to con- tinue to work for free institutions and to equip themselves for this work. If the war results only in extending the balance of power system for another epoch, and creates a balance almost even as between the autocratic and democratic forces in civilization, it might be that the way the Russian and the Chinese peoples are propelled by events will be the deciding weight in the balance. This possibility, with the fundamental interest which America always will have in the balance of power in the Pacific Ocean, gives to the Siberian question great importance at a time when the other democratic powers are preoccupied. Notwithstanding that the British and French Governments appear to acquiesce with the THE SIBERIAN QUESTION 293 proposed move of Japan into Siberia, it is evident that this attitude of those nations is inspired either by political expediency, by pre- vious secret agreements, or by too close concentration or proccupa- tion with the situation in Europe. The true interests of Great Britain and of France are not likely to be served by allowing Japan a free hand in Siberia and in China. It is very likely that the British and French Governments, while inhibited from openly op- posing an independent move by Japan in this case because of previous commitments or immediate interests elsewhere, will not be displeased if objections of America to the move should stop it, or give it a different character. And even if the United States should diverge from the views of the British and French Govern- ments in this instance, such a policy by America is more apt to serve British and French interests in the end than a free hand for Japan and the far East will. The very close proximity of extreme eastern Siberia Kamchatka and beyond to Alaska, a valuable and rapidly developing posses- sion of the United States, should be considered by the American Government in this connection. A permanent occupation by Japan of that region would have in the future a serious effect on the military security of America. While, in relation to the present proposal for Japan to occupy eastern Siberia, the contingency of a Japanese possession of the part of Asia lying directly across Behring Straits from Alaska (with the possibility in time of a railway connection between the two continents by that route) may seem remote, it should be remembered that Japan never has given up any territory which she has occupied on the excuse of military necessity, although she frequently has given assurances that she would. The great and undeveloped natural resources of eastern Siberia in minerals, coal and timber, offer a great temptation to Japan if she once gets in possession of them; and for her to give them up would mark a reversal of her whole history as a modern power. If she takes military control of this vast region for the period of the war, it is reasonable to assume that she will use the time to entrench herself there, and with Russia probably a weak and disintegrated nationality for many years to come, no force from that quarter will be able to dislodge Japan. In that situation, Japan can perhaps so manceuver in the field of world politics that she can get the assent of a majority of the powers to her retention of eastern Siberia; just as, treaties and positive assurances to the contrary notwithstanding, Japan was able to get the assent of the powers to her annexation of Korea. Once Japan's occupation of eastern Siberia becomes de facto, it gradually will be accepted as 294 DEMOCRACY AND THE EASTERN QUESTION a fait accom-pli in world politics, and no power except America will have sufficient interest in the question to make it worth while to go to extreme in opposing Japan. This aspect of the Siberian Question ought not to be allowed to pass unnoticed now by the American Government. Later it may be difficult to raise the point, after perchance Japan has become established in military occupation of those regions closely con- tiguous to United States territory. In case events subsequently should really disclose a genuine necessity for an Allied occupation of eastern Siberia, then without doubt the United States might itself take over the task of policing the trans-Amur region, on the ground that by reason of its nearer territorial propinquity to United States possessions, it is the right and duty of the American Govern- ment to undertake the preservation of order there. Geographically, a large part of that region is closer to America than to Japan. In securing the assent of France and Great Britain to her independent intervention in Siberia, Japan's methods of ap- proach demonstrates the old oblique diplomatic method aptly. The Tokio Foreign Office no doubt realized all along that the real difficulty would be to obtain the consent of Washington, but Washington was not approached directly. In presenting the matter at London and Paris, Japan, so I am reliably in- formed, stated that since the American Government had by the Lansing-Ishii Agreement recognized Japan's special mis- sion in China, according to Japan's interpretation of that agreement, it hardly could refuse to recognize Japan's similar relation to eastern Siberia. It may be that the Brit- ish and French governments accepted the Japanese interpre- tation of the Lansing-Ishii notes: certainly almost any old- school diplomat would so interpret them. At any rate, the British and French foreign offices may have thought it a good time to ' ' pass the buck ' ' and put the issue up to Washington. But, somewhat, unexpectedly, Washington was cold to the proposal. Several things may have influenced the State De- partment 's attitude. For one thing, Washington at that time took a more optimistic view of the war situation than Paris and London did, and consequently did not feel that the situa- tion was so desperate that important principles had to be THE SIBERIAN QUESTION 295 traded off or qualified. For another thing, "Washington by that time may have begun to feel uneasy at constructions Japan was giving the Lansing-Ishii Agreement, and thought it was time to make its position better understood. At any rate, Washington refused to assent to the plan for Japan to intervene exclusively, and that killed it. This outline of the broader political motives which ani- mated the policies of the principal powers in the Allies group indicates why the "give Japan a free hand" idea of inter- vention in Siberia was rejected. That suspicion of Japan was the major reason for rejecting it was so obvious that the inspired propaganda of all the western powers devoted col- umns to asserting how implicitly trusted Japan was by all of them, that distrust of her was not the reason for dropping the one-nation intervention plan, but that other important considerations required that the move, if made, should be of international character. The plain truth probably is that the Washington Government (that is, President Wilson) insisted that there should be joint action in Siberia or none at all, and its influence was sufficient to decide the matter. The decision to make action in Siberia a joint operation in case intervention became necessary completely changed the situation for Japan, and therefore changed her policy. It is clear that intervention in Siberia by Japan alone, with a secret free-hand mandate from the other powers in the Allied group, is a very different situation for Japan than participa- tion by her in a joint international intervention. Acting singly, Japan would have everything in her own hands and could fix matters to her own satisfaction without being inter- fered with, and probably could get whatever status quo that resulted confirmed in the peace terms. On those conditions Japan was anxious to intervene. That situation was a dis- tinct imperialistic asset, or could be worked out into one. But joint international intervention, with the limitations it necessarily would place on military and civil functions in the occupied regions, and the further need of having the sit- 296 DEMOCRACY AND THE EASTERN QUESTION uation take an international character in the peace settle- ment, took on to Japan the aspect of a liability. If Japan in- tervened alone, she could at the peace conference set her action out as a special contribution to the cause of the Allies and claim compensation, or accept a "special position" in eastern Siberia as compensation, to be converted after a few years into annexation, as in the case of Korea. But if Japan intervened jointly with the United States and other powers, then they would have an equal say in the final disposition of the region; and if, as was probable in the case of the United States, the cost of the expedition and occupation was charged on the general expense of the war, and not charged on the country occupied, then the cost to Japan of her expe- dition might be a total loss. So from the time the one-nation intervention plan was defeated, Japanese sentiment was against any intervention. In short, Japan would prefer to let disorder run its course in Siberia and take a chance on fishing quietly in the troubled waters there rather than have military forces and civil officers of other powers established in the country; for once there, their presence would be a check on Japan, and it might be years before they would be with- drawn. With this survey of the elements of the situation, we can turn to events in Siberia and Manchuria. CHAPTER XIII THE SIBERIAN QUESTION CONCLUDED Effects of the Russian Revolution Its extension to the East The position of Siberia How it differed from Russia in Europe China's close relation to the question The Chinese Eastern Railway Disorders in Manchuria Political elements analyzed Different motives Japan's selfish policy The German influence Various Russian factions Col- lapse of Russian authority in Manchuria China forced to act Japan's fear of America A secret diplomatic note Japan, Russia, and Ger- many Japan seeking for advantage Proposals to Russian groups Backing different factions Secret anti-American propaganda Some examples of this The American intervention plan Japan and the Chinese Eastern Railway Obstruction of the Allies Rushing Japanese troops into Manchuria Usurpation of China's prerogatives The Man- chuli incident Attitude of Japanese toward other allies Incident at Changchun The armistice and after. BY the latter part of 1917 the Russian revolution had extended to the far-Eastern possessions of the empire, where its effects were up to a point almost identical with its course in European Russia. There was a time when society instinctively submitted to the existing administrative regime, which continued to function automatically after a fashion. Then came a period of rapid disintegration, when the old authority and forms crumbled and were succeeded by unlicensed personal liberty, when the ties holding the remote and sparsely populated dominions to the older seats of gov- ernment weakened and then parted altogether, when efforts were made to form new governments under various groups and leaders, when rivalries and dissensions sprung up among those groups and leaders, and when all of them were seeking the support of governments in the Allied combination. A3 297 298 DEMOCRACY AND THE EASTERN QUESTION to its internal condition, Siberia was moving under the same impulses and stimulus, composed of the same constituent ele- ments, from which the revolution had grown. But there were important differences in the external con- tacts of European and Asiatic Russia. In Europe, Russia was contiguous to the Central powers and cut off from the Allies. Siberia was contiguous to three nations in the Allied group, China, Japan, and America; to China by a very long land frontier, and to Japan and America by close oversea proximity. These geographical and political contacts, cou- pled with semi-detachment from Russia in Europe, marked out Siberia as a new, almost a separate problem. It was natural that the international reactions from Siberia would first be felt by China. This came about chiefly by reason of the location of the Chinese Eastern Railway, that part of the so-called Siberian trunk-line which skirts Mongo- lia and crosses Manchuria, and is the main-traveled route be- tween Chita, where the Amur line branches off northward, and Vladivostok. Under the old agreement this railway in Manchuria, which China has a right to purchase outright at the expiration of a stated period, was operated and policed by Russia. The offices of the trans-Baikal division were at Harbin, in the center of Manchuria, a junction-point with railways connecting with Peking and Port Arthur. There was a large Russian garrison at Harbin and smaller garrisons at other points, and a considerable Russian civil population had settled in Manchuria, especially at Harbin. At times in previous years a controversy had occurred between Russia and China about the extent of Russia's administrative au- thority in the railway zone, and on several occasions the United States Government had taken China's side by refus- ing to recognize Russia's pretensions. This attitude of the United States had irritated the Russian Government, espe- cially in view of the fact that Great Britain and other powers acquiesced with Russia's interpretation and had submitted their nationals at Harbin and other places to the Russian THE SIBERIAN QUESTION 299 jurisdiction, thereby qualifying, in effect, China's sov- ereignty. 1 Strikes and other manifestations of insubordination among the workmen of the Siberian and Chinese Eastern railways, and among garrisons along the railways, began to develop late in 1917. Thousands of ex-officers and soldiers from the dis- banded army of Russia in Europe were drifting eastward to escape conditions caused by the revolution, and many of them found Harbin a convenient refuge. Also drifted to Harbin, where, because of the dual municipalities (Russian and Chinese), police administration was confused and lax, many Bolshevik agitators, and agents of the Central powers. Harbin became a center of intrigue. At that time and during the year 1918 the distinguishable political elements operating in eastern Siberia and Manchuria can be differentiated as follows : Western Allies, including Great Britain, France, Italy, United States. China. Japan. Russian groups. Three pro-Ally groups roughly defined territorially as the Omsk, Harbin, and Vladivostok adminis- trations ; the Bolsheviks, who were trying to overturn the more orderly groups in all those administrations. German agents, composed partly of trained men assigned by the German Government and partly of released German and Austrian prisoners of war. Czecho-Slovaks. I have so outlined these elements because of their distinctly different motivations. Although at war against Germany, China had no deep hostility to that nation and no special fear of it. China i This agreement between Russia and Great Britain (Appendix F) is a very good example of the practice of the powers to make private agreements among themselves, based on the rcognition of their various spheres in China.. 300 DEMOCRACY AND THE EASTERN QUESTION nominally was allied with Japan, and Japan was the nation she most feared. China's motive was to protect her own ter- ritories, to sustain her authority within those territories, to protect her rights and property there, and to prevent Rus- sian disorders from penetrating farther into China. Beyond that China did not want to go. Her attitude was purely defensive. She was distinctly averse to interfering in Rus- sia (that is, in Siberia) or to any action that could be con- strued as aggression. In that course China continued to fol- low the United States, as she had done on broad questions since entering the war. I shall state Japan's motives here as I believe them to have been, and shall present evidence later. Japan's motives were complex, yet perfectly definite. She hoped to take advan- tage of Russia's disorganization and disintegration to oust Russia from Manchuria and to replace her there by gaining control over the Chinese Eastern Railway. To do that she schemed to foment Russian dissensions, secretly backing dif- ferent factions and leaders against one another, sowing mu- tual suspicions among them: on the other hand, she gave encouragement to the Bolsheviks for the purpose of adding to the disorder and creating an excuse for intervention ; she pri- vately tried to sow distrust of America among the Russians, for the purpose of putting difficulties in the way of the American railway commission that had been sent to help put the Siberian line in order, and to incline the Russians to ac- cept assistance from Japan ; she occupied Manchuria with her troops, arrogantly thrusting aside the Chinese and taking over their functions; she maneuvered diplomatically to pre- vent joint Allied action in Siberia, and when that was adopted, she obstructed it by surreptitious methods. This tortuous course required seeming inconsistencies and contradictions, but the ruling motive always was perceptible. The motives of Great Britain, France, and Italy were the same as those of the United States in principle, but subject to private understandings among them which circumscribed THE SIBERIAN QUESTION 301 their acts to some extent, especially in their application to Japan. The motives of the United States were not tainted by any purpose to reap a national advantage in any form except by helping to create a situation beneficial to Russia and to the general Allied interests, and to respect the territories and rights of all nations involved. The Czecho-Slovaks were a part of the situation not by de- sign, but by circumstances, having forced their way out of Russia in an effort to reach the western front. They had no motive except to protect themselves against attacks from the Bolsheviks and to aid the general cause of the Allies, on the theory that after the war the Allies would support the creation of a Czecho-Slovak nation in Europe. They supplied a highly picturesque feature to the situation, but one de- void of any fundamental relation to it. The activities of German agents and the factor of released German and Austrian prisoners requires elucidation, and then it can be dismissed, for its influence was brief and transitory. It is necessary to distinguish between Germans and Austrians in Siberia and Manchuria who were working under orders from their governments, and released prisoners who were passive or of their own notion joined the Bol- sheviks to escape repatriation and further military service. This latter class is negligible, for it was merged into the Bol- shevik mob without appreciably adding to its strength, and it passed out of control or intelligent direction of the Cen- tral powers. The other and less numerous class of Germans and Austrians who responded to direction from their govern- ments pursued a definite and easily distinguishable course. For some time after the revolution the German agents in eastern Siberia followed the same policy as those in European Russia and for the same object to disorganize Russia and make her incapable of further participation in the war, and to pave the way for a German commercial penetration of the country. In Manchuria these agents did what they could 302 to sow dissensions among the Allies, and especially to play upon China's fear of Japan and Japan's jealousy of Amer- ica. But a time soon came when the German Government saw that it was not to its advantage to have disorder in east- ern Siberia, for that would bring intervention by the Allies, an armed intervention that might develop into a serious menace to Germany's eastern front by rallying the Russians to resume the war. The German Government realized that a tranquil and detached Siberia was for the time more to Germany's advantage, for it would serve as a buffer against an Allied advance from that quarter. So the German agents and propaganda in eastern Siberia were called off as to their incitements of turbulence or provocations of the Allies. "German propaganda" continued to serve Japan as a con- venient scapegoat to which exposures of her true policy can be attributed. There remained, however, enough turbulent qualities in Bolshevism to keep Siberia in disorder. In every prominent Siberian city Tomsk, Omsk, Irkutsk, Blagovestchenk, Khabarosk, Vladivostok the Bolsheviks made an effort to seize the reins of administration. Fighting occurred in many places, with attendant destruction of property. Supplies of a military character purchased by the old Russian Govern- ment from its allies and America, but not paid for, were ac- cumulated at Vladivostok and other points on the Siberian and Chinese Eastern railways as far as Irkutsk and beyond. These supplies had been stationary at those points for months, even before the military collapse of Russia and prior to the revolution. When Japan began a propaganda in Europe and America to pave the way for her exclusive intervention in Siberia, the alleged need to protect these supplies was given prominence. In the winter of 1917-18 several of the Allied powers sent war-ships to Vladivostok to aid the Russian au- thorities there to preserve order, as it was explained. Japan was one of the powers to send ships, and Japanese thought on this question was very clearly revealed by the tone of THE SIBERIAN QUESTION 303 the Japanese press then, which voiced a distrust of the mo- tives of the United States in sending war-ships. By that time the alleged peril from an army of released German and Austrian war prisoners was really past, and with German intrigue removed as a factor, the other intriguing elements began to stand out more plainly. By that time, also, the other powers, especially the United States, were taking meas- ures to learn the real situation by having their officials re- port and by sending confidential agents to study conditions on the ground. Early in 1918 it became apparent that the Chinese East- ern Railway was becoming disorganized, and the local admin- istration of the railway zones at Harbin and other towns in Manchuria was so lax and inefficient that ministers of some of the Allied powers at Peking suggested to the Chinese Government the advisability of its taking over the adminis- tration of the railway and of the railway zone. It was pointed out, since the ability of Russia to preserve order and to operate the railway had collapsed, that this responsibility and right devolved on China. At that time Japan was pressing the Chinese Government to extend the "military agreement" relating to joint operations against the enemy, and when the Japanese legation at Peking heard of the proposal that China should take over the administration of the Chinese Eastern Railway and the policing of the rail- way zone, it at once interposed private diplomatic objections on the ground that these matters were included in the agree- ment. Japan tried to prevent the Chinese Government from taking that step, and to arrange so that Japan would succeed Russia as administrator of the railway and of the zone, or would act jointly with China. China evaded the issue, but finally decided to increase her military forces in Manchuria and to take over the policing of Harbin and other places. It is interesting now to go back a little and cite steps taken by Japan from the time of the Russian revolution to secure a preferential and predominant position in eastern Siberia. 304 DEMOCRACY AND THE EASTERN QUESTION The fall of the empire might have carried off with it the secret treaty made between Japan and Russia in 1916, and Japan was anxious to replace it by understandings with the new Government. It is evident that the Japanese Govern- ment felt that it had by private arrangements then in effect assured its position in that region with regard to the Euro- pean Allied powers. But the United States remained, and that nation was becoming a very important factor. From its entrance as a belligerent the American Government had taken a strong interest in the situation of Russia. Immediately following the revolution it had sent a special mission to Russia to offer counsel and aid, and as one of those measures there was created a railway commission (called the Stevens commission) to help Russia to put her railway system on an efficient basis. There were further proposals of economic help by America to Russia by way of developing her mineral and agricultural resources, and there w r as a good deal of dis- cussion of those plans in the press. How Japan regarded American assistance to Russia is revealed both by the con- temporaneous comment of the Japanese press and by certain moves of Japanese diplomacy. Among the secret documents published after the revolution in Russia was a telegram to the Russian Foreign Office from Krupensky, Russian am- bassador at Tokio, dated July 7, 1917: The Japanese Minister of Foreign Affairs has asked me to verify a rumor that the self-styled Kussian Government has granted ex- clusive concessions, covering mining undertakings in the regions of the Pacific littoral, and the island of Saghalien. Viscount Motono added that if this rumor was in accordance with the truth it would have a very depressing- effect in Japan. While fully recognizing that Russia v y as entitled to dispose of Russian terri- tory, Viscount Motono remarked, on the other hand, that Japanese capitalists had long expressed the desire to participate in the de- velopment of those mining resources and at the present time, as in the past, they were ready to organize private Japanese companies for that purpose to co-operate with Russian capitalists to that end. While still acting as ambassador at Petrograd the Viscount had raised this question, but the reply he had received was that the THE SIBERIAN QUESTION 305 Russian mining laws did not permit the participation of these foreigners in mining in that province. If at the present time any modification of that law had been decided upon, the Japanese, as the nearest neighbors and the oldest explorers of those regions, had a pre-eminent right to the concessions in question. The Min- ister pressed the point that if such negotiations (? with foreign capitalists) had already been begun, the Japanese Government would much appreciate their cancellation. The Russian Ambassador in calling attention to the importance of this declaration, believes that in the event of unfavorable com- plications the Japanese claims might result in very dangerous con- sequences. In view of the Japanese attitude the Ambassador thinks it extremely desirable that the rumors of negotiations with Amer- ican capitalists should be denied. A Russo-Japanese alliance: Confidential report to a foreign lega- tion at Peking, October 27, 1917. On or about October 20 there arrived in Peking direct from Rus- sia a special representative of the Premier of Japan, General Terauchi. This man had an interview with the Chinese Premier (General Tuan) in which he stated that Russia would be forced to conclude a separate peace with the Central Powers, that Japan would then enter into an alliance or arrangement with Russia, and that it was extremely desirable that China should join them, which action would be welcomed by Japan. He ended by saying that this was for China's best interest, as when the European war was concluded there icould be but two great Powers left and these would rule the world. He named Japan and Germany as the two Powers. This report is absolutely authentic. The purpose of the United States Government at that time in trying to aid Russia was absolutely confined to a desire to enable Russia again to become useful as an ally in the war against Germany, and for that purpose it would have aided by capital and by supplying experts to put Russian agricul- ture, transportation, and mineral production on an efficient basis. But Japan saw these projects only as moves to pro- cure for America an economic and political predomination in Russia. It is perfectly logical that the Japanese Govern- 306 DEMOCRACY AND THE EASTERN QUESTION ment would put this construction on all moves of other na- tions, for it never made a move anywhere during the war except with such objects. Thus in the early months of the revolution Japan was trying to establish for herself an ex- clusive and preferential position in eastern Siberia, and to prevent any other nation from getting a foothold. From that time every development, every move made by any nation in Siberia or relating to Siberia, every move made by Japan herself in that region or relating to conditions there, was calculated by Japanese statesmen with that motive. In this policy Japan was reckoning primarily of America, not that her people and statesmen have any special antipathy to America, but because they regard that nation as the nat- ural and at present the only formidable opponent of Japan's ambitions in Asia. While Japan did not want any of the powers to interfere or to send forces into Siberia, and showed an irritation at all of them when they did so, she was specially uneasy about America. The course of her intrigue and prop- aganda during that period revealed this plainly. I quote from some reports of American and other official investigators and secret agents who were observing conditions in Siberia then: Dated Harbin, April 23, 1918. The Japanese plans, so far as they have been disclosed, exhibit little of advantage to the Allies and offer the prospect of Japan creating for herself in Siberia one of those exclusive positions which it is one of our purposes in the war to remove from inter- national relations. I have talked with no element (Russian) yet which does not seem to me to be treating Japanese offers of assist- ance and actual assistance only as a last resort, reluctantly accepted, and which was not eager for American assistance as the only help that could be fully trusted to be both unselfish and sympathetic toward the legitimate aspirations of the Russian people. The Japanese, with their excellent knowledge of the extraordinary pos- sibilities of the region, have opportunities for acquiring properties at a time when industrial conditions are unsettled, as they are at present. Their purchases at Harbin up to the present time, as ascertained by , are: . . . THE SIBERIAN QUESTION 307 Dated, April 23 (Harbin). I am confidentially informed by the Russian Committee that they are assured by the Japanese Government, through its repre- sentatives here, that Japan is prepared to send troops in sufficient numbers to control the situation and to place in power any govern- ment backed by Japan. The Committee has informed me that Japan asks, for her support, the following terms: 1. Vladivostok to be made a free port. 2. Japan to be granted exclusive mining rights in Siberia. 3. Japan to have free navigation of the Amur river. 4. Any further financial needs of the Chinese Eastern Railway to be first submitted to Japan. While the other Allied powers were debating ways and means to solve the Russian question, Japan already was on the ground and taking an active part. I quote from a con- fidential report of a secret agent employed by a foreign government to study conditions in Siberia. This man spoke Russian fluently and was thoroughly familiar with that re- gion from long residence and experience there: Dated June, 1918. All the Russian groups and factions require money for conduct- ing a propaganda in their favor, for expenses of their military forces and for other needs of their administrations. The Japanese understand very well these difficulties and are the first to propose to make them loans. The Japanese have offered loans to almost every faction and group of Russians in Siberia at different times since the revolution, and frequently have made loans to opposing factions at the same time. I mention especially the proposed loan of 100,000,000 rubles on most favorable conditions to the new Sibe- rian Provisional Government. According to the statement to me of the Minister for Interior Affairs of the Siberian Provisional Government (M. Novosseloff) this loan was not accepted by the Government, but he recognizes that the situation of the Siberian Government in Vladiostok was critical owing to lack of necessary cash in hand and to difficulties met in obtaining funds. The at- tempts of the Government to get money from America were un- successful, though the Americans did not refuse but were only promising to arrange the matter later, probably after the situation of the Government is more stable. In any case we see that Japan is continuing the same policy which she practiced toward Seminoff; that means the policy of secret loans on unknown conditions. It is the same policy that was not long ago discussed in the newspapers concerning Japanese loans in China, which loans attracted special attention of the Allied Powers. It seems that something definite must be under- taken by the Allies to prevent the possibility of Japan to continue her separate loan policy, which sooner or later will bring com- plications in Russian affairs, if in fact it is not intended to create confusion and dissension. From another point of view something must be done to organize an open and legal assistance by the Allies to the authorities responsible for these localities which are in none of the Czech's influence, because measures directed to main- tain order require money before all. Here we must point out a considerable difference in the ma- terial (money) security of the rival groups. The group of Horvath disposes considerable official and private resources, thanks to the exceptional situation of Horvath personally and the support of the Bourgeoise class; whilst the Siberian government has absolutely no money at its disposition in the Far East. Here follows a good example of the Japanese anti-American propaganda and intrigue in Siberia and Manchuria, extracted from a confidential official report to a foreign government. It is a letter from the Japanese consul-general at Harbin to the Eussian newspaper there. Imperial Japanese Consulate General at Harbin, June 8, 1918, No. Ex. 6. To the Editor of the "Novosti Zhizni" : The Japanese Consul General has the honor to forward you herewith a translation in Russian of a leading article from the Japanese newspaper "Osaka Mainichi Shimbun" of May 31, 1918, which is one of the most influential press organs in Japan. This article was translated from Japanese' into Russian by an amateur in this Consulate General, and I request you not to refuse to pub- lish it in the earliest issue of your esteemed paper, giving a frank critique of the content of the article in question. But at the same time this Consulate General humbly requests that under no circum- stances should it be indicated by your esteemed newspaper that this document was received from this Consulate General. 309 The official report transmitting this letter to a foreign gov- ernment commented thus: The article in question contained an attack on the motives of the Allies, and especially the United States, in their dealings with Russia, and as propaganda it can only do harm to the Allies, and tend to create mistrust of American motives. As examples of the method of Japan's propaganda in the far East and its special anti-American trend, I will give a few pertinent instances. When Japan was trying to obtain a hold on the Chinese Eastern Railway after the revolution in Russia, one effort was to make it security for a loan to be given to the political faction led by General Horvath, head of the Chinese Eastern Railway administration at Har- bin. This scheme was discovered, and was exposed by the press in China before it could be carried through (although there is still uncertainty about whether Horvath has com- promised the Russian title with Japan in some way), where- upon the "Manchurian Daily News," the Japanese organ in Manchuria printed in English, published a report that an American loan was being negotiated on the same collateral. This was criticized as a characteristic American move to gain a position in Manchuria, and it set off the press in Japan in a great clamor. Of course there was no truth in the report of an American loan with the Chinese Eastern Railway as security, and it was a pure fabrication by the "Manchurian Daily News." Another example was the premature report in Japanese press organs that an American fleet had been sent to Vladivostok with the purpose of occupying Siberia. Another canard circulated by Japanese newspapers was that the United States had purchased and would take over the Siberian Railway. Another canard was that the United States had purchased the northern part of the island of Saghalin from Russia. Another canard was that the United States, or American capitalists, had obtained an exclusive concession to work all mines in Siberia, this being given out 310 to offset the publication of the diplomatic correspondence revealing that Japan actually was trying to obtain such a right. The method is, when some secret Japanese scheme is discovered prematurely and published, for a Japanese propa- ganda organ to create a "smoke screen" by attributing the plan to America. A very pertinent example of this method is the following, printed in the "Japan Advertiser," an American-owned newspaper published at Tokio, on April 27, 1918: Asahi Service VLADIVOSTOK, April 26. An important diplomatic document re- garding a secret agreement between the Governments of Siberia and America has been discovered by Soviet officials at the residence of a man called Kolobov, one of the committee of the Siberian Government. The document is a sensational one, in which the following articles are stated as the proposals of the Siberian Gov- ernment to America. 1. Eastern Siberia is to be recognized as an independent self- governing state. 2. The people of Eastern Siberia are to be guaranteed as hav- ing the right of not being intervened with by foreign powers. 3. A republic form of government is to be guaranteed for East- ern Siberia. 4. The United States Government may assume the right of con- trol over the whole Trans-Siberian and Chinese Eastern Railways, to be restored to the Siberian Government as soon as the war is over. 5. In view of preventing the main points along these railways from possible distui'bances, the American Government holds the right of dispatching its troops or asking the expedition of troops of the other Allied Powers, and occupy the territories as far as from Vladivostok to Irkutsk. 6. The Siberian Government should not conclude peace with Germany without America's approval. 7. All administrative and military affairs are to be entrusted to the American Government. 8. In case the American Government decides to give financial assistance to the Siberian Government, the former may hold an absolute controlling power over the expenditures of the Siberian Government. This includes affairs regarding ammunition. The discovery was naturally a shock to the Russian public, THE SIBERIAN QUESTION 311 especially to the Soviet, who had regarded America as their best friend. It is anticipated that the friendly diplomatic inter-course between America and the Soviet Government will be greatly af- fected by this discovery. To this "Asahi" despatch the "Advertiser" prefixed this comment : The "Asahi's" correspondent at Vladivostok telegraphs an extra- ordinary story, about an alleged agreement between Americans, unnamed, and a Siberian provisional government. The agreement is said to have been discovered by Soviet officials in a domiciliary search that convenient method of discovering what one wants to discover. It is an obvious fabrication. America* is still in diplo- matic relations with Petrograd, and would not be the least likely to enter into such extraordinary negotiations with unauthorised persons. The terms of this alleged "secret treaty" would be tanta- mount to the creation of an American protectorate over Siberia, exactly such a relation as Japan has for years been trying to establish for herself with respect to China, and which at that very time she was scheming to create for her- self in Siberia. Conditions in Russia continued to grow worse, and in the summer of 1918 the principal Allied powers decided upon action in Siberia. This time the United States took the initiative, and proposed a joint and proportionately equal in- tervention, with express limitations as to extent and objects. It was interesting to note how the Japanese press, which had been actively propagandizing for separate intervention by Japan, now began to doubt the need for it. The fact was that the Japanese Government wanted to intervene by itself, but it preferred no intervention to joint intervention. But the Allied governments were very well informed by that time, and Japan had the alternative of joining or of seeing the other powers intervene without her. In that situation she, of course, joined. It was agreed that the four leading Allied powers, Great Britain, Japan, France, and the United States, 312 DEMOCRACY AND THE EASTERN QUESTION would supply a maximum of seven thousand troops each, while Italy also was to send a contingent. That force, with the small Czecho-Slovak army, was deemed sufficient for the purposes of the intervention as then conceived. Japan did not wait upon a decision of the other Allied powers to move. As early as the spring of 1918 Japan be- gan to send troops into Manchuria by increasing the gar- risons, or "railway guards/' there. This was done chiefly to intimidate the Chinese Government, which had increased its forces in north Manchuria for the purpose of policing the Chinese Eastern Railway, which remained under the direction of General Horvath by virtue of an arrangement made at Peking in April, 1918, whereby the railway admin- istration was declared to be detached from the authority of the Petrograd Government. Japanese diplomacy had favored that arrangement because it was backing Horvath, and it prevented China from taking full control. The increase of Chinese forces in north Manchuria made necessary by the lapse of Russian authority in that region was resented by Japan, which claimed the right to decide such measures un- der the "military agreement" recently concluded between Japan and China. Meanwhile Great Britain had taken a hand and was giving some financial and military support to the Russian leader Seminoff, who had organized a mixed force of Russians, Chinese, Japanese (volunteers) and Mon- gols to oppose the Bolsheviks in the Baikal territory. Sem- inoff and Horvath did not agree very well, owing to clever playing upon their mutual jealousy by the elements (Japa- nese and German) that wanted to create dissension. Seminoff had made an effort to take Irkutsk, but was repulsed near the Manchuria frontier and retreated into Chinese territory, where most of his troops were interned by the Chinese Gov- ernment, which was trying to observe neutrality toward the revolution in Russia, and of course could not permit its terri- tory to be used as a military base of operations for armed excursions into Siberia. During this time it was convenient, THE SIBERIAN QUESTION 313 owing to congestion at Vladivostok, to ship medical and other Red Cross supplies, and supplies needed for other Allied uses, into Manchuria and Siberia by the South Manchurian Railway, which connects with the Chinese Eastern Railway at Changchun. As illuminating a phase of the situation, I quote from an official report to a foreign government, dated in April: I have the honor to state that the Japanese railway authorities here have, during the past week, been seriously hampering Allied war operations. Their motives in doing so are easily imagined, but difficult to determine with any certainty or exactness. They are more or less inscrutable, as many of their recent actions are. The Japanese evidently do not want order restored by the Rus- sians themselves in Siberia, for in such a case they would have no excuse to interfere. Another chance to "fish in troubled waters" would thereby be lost. Then, too, it seems that they are moving large quantities of their own arms and munitions to the north and they want theirs to arrive first. However, their action in this matter hardly accords with the statements made by Viscount Ishii and other Japanese diplomats about Japan ''standing shoulder to shoulder with the Allies" and doing their utmost, etc. When one considers the celerity and efficiency with which the Japanese move their own supplies over the railway, it cannot for a moment be thought by any rational person that the delays and ineptitude which characterize their actions where other Allied interests are concerned are anything but studied and deliberate. That, at least, is the opinion of every official here who has anything to do with the incidents described. The British Consul-General, who is a careful, cautious and conservative man, expressed his opinion on this subject in unmeasured terms. The action of the Japanese in holding up the Allied supplies is in keeping with their general railway policy in Manchuria, and affords another striking example of their abuse of railway rights, which abuse has been frequently reported in my despatches Nos. 79 and 84, dated respectively February 16 and March 5, 1918. When American Red Cross supplies were being sent to Russia, this office had the utmost difficulty in getting the Japanese to accept them for shipment. They deliberately placed obstacles in the way, and showed no disposition whatever to help. It was a sorry day for European and American interests when the Japanese 314 DEMOCRACY AND THE EASTERN QUESTION gained control of the railway lines in South Manchuria, and all the plausible explanations about "equal rights" and the hypocritical vaporings by the Japanese about the impartiality of their railway administration carry no weight with those who have any personal knowledge of the subject. At the time when the Japanese Government was consider- ing the proposal of the United States Government for a joint and limited intervention in Siberia, and when it began to perceive the expediency of accepting the American view of the situation, a strict censorship was clapped on the press in Japan, which up to then had been allowed free expression on the topic. In July, 1918, a special order was issued, re- ported by the "Japan Advertiser" as follows: NEWSPAPERS ARE WARNED REGARDING SIBERIAN VIEWS As is the order on the eve of important events in Japan, the Met- ropolitan Police last night issued to all newspapers a warning against the publishing of conjectures regarding particulars of negotiations between Japan and the Allies in regard to the Siberian question. The police also warned against the publication of anything that is likely to cause resentment to the Allies among the Japanese. This last warning is evidently issued in view of the attitude of some Japanese newspapers in commenting on the reported attitude of the United States toward intervention in Siberia. The joint Allied intervention in Siberia was promulgated in August, 1918. In that connection it is interesting to quote in full the official announcement of its participation by the Japanese Government: The Japanese Government, actuated by the sentiments of sincere friendship toward the Russian people, have always entertained the most sanguine hopes of the speedy reestablishment of order in Russia, and a healthy and untrammeled development of her na- tional life. Abundant proof, however, is now afforded to show that the Central European Empires, taking advantage of the chaotic and defenceless condition in which Russia has momentarily been THE SIBERIAN QUESTION 315 placed, are consolidating their hold on that country, and are steadily extending their activities to the Russian far Eastern posses- sions. They have persistently interfered with the passage of the Czecho- Slovak troops through Siberia. In the forces now opposing these valiant troops German and Austrian prisoners are freely en- listed, and they practically assume the position of command. The Czecho-Slovak troops, aspiring to secure a free and independent existence for their races and loyally espousing the common cause of the Allies, justly command every sympathy and consideration from the cobelligerents to whom their destiny is a matter of deep and abiding concern. In the presence of the threatening danger to which the Czecho-Slovak troops are actually exposed in Siberia at the hands of the Germans and Austro-Hungarians, the Allies have naturally felt themselves unable to view with indifference the untoward course of events, and a certain number of their troops have already been ordered to proceed to Vladivostok. The Govern- ment of the United States, equally sensible of the gravity of the situation, recently approached the Japanese Government with pro- posals for early despatch of troops to relieve pressure now weigh- ing upon the Czecho-Slovak forces. The Japanese Government, being anxious to fall in with the desires of the American Govern- ment, and also to act in harmony with their Allies in this expedi- tion, have decided to proceed at once to disposition of suitable forces for the proposed mission. A certain number of these troops will be sent forthwith to Vladivostok. In adopting this course, the Japanese Government remain unshaken in their constant desire to promote the relations to enduring friendship with Russia and the Russian people, and they reaffirm their policy of respecting the territorial integrity of Russia and of abstaining from all inter- ference in her internal politics. They further declare that, upon the realization of the objects above indicated, they will immed- iately withdraw all the Japanese troops from the Russian terri- tories, and will leave wholly unimpaired the sovereignty of Russia in all its phases whether political or military. Once intervention was decided on, Japan easily forestalled her allies in celerity in moving troops, because of proximity and also because she had been ready for a long time. (I have trustworthy information that Japan mobilized three divisions for occupation of Siberia in August, 1917). By her railway communications through Korea and Manchuria, 'Japan quickly had troops at Harbin, and soon pushed them 316 DEMOCRACY AND THE EASTERN QUESTION westward. At all points of contact, and particularly on the line of the Chinese Eastern Railway, the Japanese military commanders at once assumed a superior authority over the officers of Chinese troops that had been sent to maintain or- der in those localities. Japan asserted this seniority under the terms of the so-called "military agreement" with China. China did not place that interpretation on the agreement, and the Chinese commanders in Manchuria showed firmness in maintaining that they controlled in Chinese territory, and in refusing to yield authority there to the Japanese. This situation led to many clashes between Chinese and Japanese troops in Manchuria, some of which assumed serious proportions. Japanese troops moved along the Chinese East- ern Railway, placing guards at all bridges, culverts, and stations. As Chinese guards in ample numbers already were stationed at all those points, and the line was, to quote from a report of an American military expert, "as safe as Broad- way," the Chinese resented being thrust aside, especially as the political motive of Japan in trying to take over the rail- way was fully understood. At several places Japanese troops actually drove the Chinese guards away by force. As an example of this condition, the occurrence known as the "Manchuli incident" will serve. Manchuli is a town on the line of the railway between Chita and Vladivostok at the point where it enters Chinese territory in western Manchuria, and has importance because it is where frontier customs examinations are made, pass- ports visaed, and other official functions performed. At that time the town was a rendezvous for Russian refugees drifting across the frontier, and stragglers from Seminoff's little army that was operating against the soviet government at Irkutsk. I quote from an official report of the incident made by a foreign military officer who obtained the facts on the ground : I have to report an unpleasant collision that occurred at Man- chuli between Japanese and Chinese troops and officials. This THE SIBERIAN QUESTION 317' point has lately been the scene of considerable trouble owing to the attempt of the Seminoff forces to use it as a base and as a place to which they can retreat when repulsed by the enemy. It has been necessary for the Chinese authorities here to take meas- ures to preserve China's neutrality in this warfare between Rus- sian political factions, and the Chinese troops have disarmed many of Seminoff's men who have been thrust back into Chinese terri- tory. This has led to some unpleasant incidents, but the Chinese officials were acting with moderation and a fair amount of dis- cretion. This was the situation when a Japanese military force com- manded by General Fujii arrived at Manchuli. General Fujii, I am informed, at first tried to take command of the Chinese troops, claiming to be the senior officer. The Chinese commander declined to yield the command, and on being pressed by General Fujii, he referred the question to the Peking Government. I understand that the Japanese Government through its legation at Peking put pressure on the Chinese Government to concede the authority of the Japanese commander here, but the Chinese Government refused. The relations between the Japanese and Chinese headquarters here therefore have been strained, and there have been brawls between the Japanese and Chinese troops which, according to my investiga- tion, are almost invariably caused by the truculence of the Japanese soldiers, who show their contempt of the Chinese in all ways. This was the general situation when the unfortunate incident occurred. At midnight or thereabout on last Tuesday night a detachment of Japanese soldiers, about fifteen men with one non-commissioned of- ficer, went to the headquarters of the Chinese military commandant. The Japanese were armed with rifles and hand grenades. They found the outer gate of the compound closed, and they told the Chi- nese sentry that they wanted to talk with the Chinese commander and demanded admittance. The guard refused to let them inside and tried to induce them to leave. The Japanese then attempted to force an entrance. The Chinese sentry resisted and was killed. The Jap- anese then forced the gate and marched in a body to the inner en- trance, again demanding to talk with the Chinese commandant. By this time the Chinese commandant (General Pao) was awakened and one of his staff parleyed with the Japanese, who demanded admit- tance. The Chinese officer told them that General Pao could not dis- cuss matters with them as there was no Japanese officer present, and asked them to go and bring an officer. This the Japanese refused to do, and started to force an entrance to the building where General Pao and his staff were quartered. The Chinese guard then fired. 318 DEMOCRACY AND THE EASTERN QUESTION Three Japanese soldiers were killed and the rest retreated. The bodies of three men in the uniform of the Japanese army were found in the compound after the affray was over. The next day, before the Chinese commander had time to make a report of the affair, the Japanese commanding general demanded an apology for the injury done to Japanese troops and practically detained the Chinese commandant under arrest. The Japanese Government make a diplomatic issue of the incident, backed up the Japanese General, and demanded an apology from China and that the Chinese troops be withdrawn from Manchuli, except a few. While a Chinese officer was parleying with the Japanese soldiers on the night of the incident, another Chinese officer telephoned to the Japanese military headquarters asking that a Japanese officer be sent to discipline the Japanese soldiers who were making the disturbance, but no attention was paid to this request. I understand that the matter has now been settled by the Japa- nese and Chinese Governments as follows: China is to pay an in- demnity in money for the three Japanese who were killed, and the Chinese commandant is to apologize to the Japanese commander here; Japan is to pay an indemnity for the one Chinese who was killed. Thus China is put officially in the wrong and is com- pelled to submit to humiliation and "loss of face," as is usual in such cases. The facts seem to be that the incident was a case of wanton and insolent affront by Japanese soldiers who took this way of showing their contempt of the Chinese. Soon after the Manchuli incident, the Japanese Govern- ment suddenly and without previous intimation notified the Chinese Government that it intended to act under the "mili- tary agreement." China was not consulted as to this action in any way, either as to its advisability or the means to be used. At the time when China was so officially notified, Japanese troops already were moving. This notice to China was given on September 20. By September 28 it was esti- mated by a foreign military expert on the ground that there were 22,000 Japanese troops north of Changchun, the north- ern terminus of the South Manchurian Railway; 3,000 at Changchun, and 15,000 at Mukden. By the end of October there were about 60,000 Japanese troops in Manchuria out- side of the alleged Japanese sphere tapped by the South 319 Manchurian Railway, and the Kirin and Mukden-Antung lines. By the understanding among the powers about joint intervention in Siberia, each of the four principal powers was to send 7.000 troops. Japan did send about 10,000 to Siberia by way of Vladivostok, which evidently the Tokio Government considered its quota under the joint intervention. But, including those in South Manchuria, Japan had about 75,000 troops in Manchuria, showing that the Japanese Government regarded Manchuria as its special field and as not included in the joint intervention plan. At the time when the United States had approached the Allied nations with its intervention plan, China also was invited to par- ticipate, and had consented; but China's quota of troops was not fixed, it being apparently assumed that her part would be to preserve order in Manchuria and on the line of the Chinese Eastern Railway. That is, China was to do what was neces- sary within her own territory contiguous to Siberia, and was to facilitate the Allies' operations as she could. It quickly developed that Japan was determined that China should take no part, at least no creditable part, in these op- erations, just as Japan had succeeded in preventing China from having any real participation in the war elsewhere. Japan took it solely to herself to decide upon when and how the "military agreement" would be applied, and in acting professedly under it Japan did not consult China or assign any part to China. Yet the operations alleged to be under- taken by agreement were confined exclusively to China's ter- ritory, and affected Chinese interests more importantly than those of any other nation. The period from the time joint Allied intervention in Siberia began (August, 1918) until November, when the armistice was signed, can be summarized briefly. Out of courtesy, a Japanese general was given command (or senior- ity) of the Allied expeditionary forces in theory, but in fact each different national force was directed according to the policy of its government. For instance, Japan for her own 320 DEMOCRACY AND THE EASTERN QUESTION reasons desired to push as far into Siberia as was possible without having to do much actual fighting. The excuse to do this was to support the Czecho-Slovak forces that were com- bating the army of the Soviets in central and western Si- beria. France and Great Britain also seemed to favor a move deeper into Siberia, Great Britain probably on the theory that the general war situation for the Allies would be helped, and France perhaps for the same reason. The American Government, however, held its forces at or near the coast and declined to participate in a move toward the interior. Evidently Washington foresaw the end of the war and did not want to become further involved in Russia's civil strife. This period, brief as it was, was long enough to demon- strate the strong antagonism felt by the Japanese toward all of their allies. The Japanese seemed to regard the British, French, and American troops as interlopers, as trespassers in a Japanese preserve, with the sole motive of depriving Japan of legitimate spoils of war. This disposition caused numerous very unpleasant incidents, and serious trouble be- tween the Japanese troops and those of the other allies was at times narrowly averted. I could relate dozens of incidents illustrative of this condition, but two will be enough. Two British officers, in uniform, were walking in the outskirts of Vladivostok on some military business, when they noticed the peculiar actions of a Japanese soldier who was stationed as a sentry near some supplies. The sentry was beckoning, and seemed to wish the officers to approach him. Disregarding his unmilitary demeanor, and thinking the man might be in trouble, the officers walked over to where he was and asked what he wanted. The sentry greeted them with an insolent grin and a tirade in Japanese, which the officers could not understand. Then the sentry seized a swagger-stick which one of the officers was carrying, broke it, and cast the pieces into a near-by puddle of water. By this time the officers comprehended that the soldier meant to insult them, and they THE SIBERIAN QUESTION 321 took him suddenly by his arms and threw him, gun and all, into the puddle. They then continued their walk. The of- ficers did not report the incident formally, for many previ- ous similar incidents had shown that no satisfaction would be obtained from the Japanese superior command. Japa- nese troops in Vladivostok and Manchuria habitually failed to salute officers of other Allied forces, and on occasion even would shoulder them off sidewalks and display other studied rudeness toward them. By the late autumn of 1918 there was a feeling almost of hostility between the Japanese troops in that region and the troops of other Allied forces, which became so intense that measures had to be taken to prevent serious collisions. An example of this attitude of the Japanese military was given in Manchuria. Italy's part in the Siberian interven- tion was to send a battalion of troops from the garrison main- tained in North China under the protocol of 1901. The short- est and quickest way for these troops to reach the scene of events was by the Chinese Government railways to Mukden, then by the South Manchurian Railway to Changchun, where was a connection with the Chinese Eastern Railway on to Harbin. The practice has been, in transferring passengers at this point, to shunt trains from the Japanese line over to the Russian station, when trains could be changed by merely walking across a platform. The train conveying the Italian troops had arrived at Changchun and was shunted over to the Russian station. There the troops detrained for trans- fer. While this was taking place, an Italian sentry was posted to guard some supplies on the station platform. A number of Japanese soldiers were strolling about the plat- form, and one of them started to examine the supplies, where- upon the sentry properly warned him off. The Japanese went away, and soon returned with a Japanese officer, who reprimanded the Italian sentry. The sentry stood his ground, and when the Japanese officer started to handle the supplies, presented his bayonet. The Japanese officer then 322 DEMOCRACY AND THE EASTERN QUESTION left, and returned soon with a file of Japanese soldiers fully armed, which he drew up in a line on the platform. By then an Italian officer had appeared, and a sharp colloquy occurred. The Japanese officer demanded that the sentry be ordered to apologize, which the Italian officer refused to order him to do, and objected to the presence of the file of Japanese soldiers and their menacing attitude. After an argument, the Japanese withdrew. In the opinion of officers of other nationalities, the Japanese adopt these methods to impress the natives that the other powers are subservient to Japan, and that Japan is the dictator in Manchuria. The situation caused by the conduct of Japanese troops in Siberia and Manchuria became so strained that a joint pro- test, which, I am informed, was quite strong in its phraseol- ogy, was sent to the Japanese commanding general by the other allied commanders. "With the signing of the armistice in Europe, the joint Allied intervention in Siberia took a new character. It no longer had the complexion of an oblique military move against the Central powers, which was no longer necessary. It now became purely an intervention in Russia's internal affairs, a situation that called for fresh consideration by the peace conference at Paris. Therefore military measures in Siberia were suspended pending the adoption of a new policy. The Japanese Government soon grasped the meaning of these events. In December it announced that it was with- drawing its troops from Siberia and Manchuria, and it is probable that the number was reduced. In February, 1919, it was reported that Japan had agreed to advance a loan to the Siberian Provisional Government at Omsk and to give military aid and support to that Government. For this aid Japan is, so the reports said, to receive exclusive concessions in central and eastern Siberia. Such a step of course would be a violation of the inter-allied agreement regarding inter- vention in Russia, by which none of them were to act except in consultation, and conjunction with the other allied nations. THE SIBERIAN QUESTION 323 Semi-official denials of the reports were given out at Tokio. Observers of far-Eastern politics are apt to conclude that Japan makes a show of withdrawing from Siberia in order to get the other powers out, and at the same time is planning to take an active part, for a definite quid pro quo, in the civil war in Russia by renting Japanese troops (for the reported arrangement amounts to that) to one of the factions. In January, 1919, it was announced that an agree- ment had been reached among the Allied powers (which in effect meant between Japan and the United States) by which the Chinese Eastern and Siberian railways are for a while to be operated by the Stevens Commission under joint interna- tional control. In response to inquiries of press correspondents at Wash- ington, the State Department questioned the correctness of the reports about Japanese loans to the Omsk government in return for concessions in the Pri-Amur district of Siberia, and pointed out that Japan, as a loyal ally, and with full representation at the peace conference, could not take inde- pendent action in Russia. A few days later, on February 12, the State Department announced that the United States and Japan had agreed in regard to plans for the restoration of railway traffic in Siberia. Acting Secretary of State Polk was quoted by the Associated Press as stating: The purpose of the agreement is to assist the Russians in Siberia in regaining their normal condition of life, and has been reached upon a definite understanding that the railways are to be operated for the interests of the people of Siberia. The United States and Japan have expressly voiced their disinterested purpose not to in- fringe on any existing right, either of Russia or, where the Chinese Eastern is concerned, of China. Under the plan adopted, which was to be put into effect immediately, the Siberian railway system, including the Chinese Eastern Railway, was to be supervised by an inter- Allied committee with a Russian as chairman. Russia, Great Britain, Japan, the United States, France, Italy and China are to have representation on the Committee. The technical and economic management of the railways will be in the hands of a technical board, the president of w T hich will be John F. Stevens, head of the American railway commission sent to Russia in 1917. An inter-Allied military board will co- ordinate matters affecting military transportation arising from the presence in Russia of military forces of the United States and the Allies. It required months of negotiations to effect this simple ar- rangement, owing to the difficulties raised by Japan. As friction developed, the other Allied powers fell into the back- ground, and left the issue to be adjusted by Japan and America. The result, so far, indicates that the American Government is not disposed to abandon the Manchurian and Siberian situations, to the exclusive treatment of Japan. CHAPTER XIV THE SOLUTION Effects in China of the collapse of Germany The internal situation Composition of the Government Japan forcing her schemes The armistice Weakening of Japanese influence at Peking Some causes of this Injection of American ideals President Wilson's prin- ciples Their application to China Work of American propaganda Japan's plan to represent China at the peace conference The scheme blocked Uneasiness of Chinese The Southern point of view Further effort by Japan to intimidate China Effort to prevent the publication of secret treaties Outcome of that matter Further advice of the Al- lied powers to China Trying to end the civil strife The conference at Shanghai What shall be done for China? The case of China sum- marized Responsibility of America The problem analyzed Question of extra-territoriality A plan for its gradual abolition This plan con- sidered The railway question The question of loans and finance New declaration of the American Government Will China take the cure? China's appeal to civilization. THE breakdown of the German military offensive in France in the summer of 1918 threw a shadow over ^^^__j Japan's influence at Peking, and alarmed the group of corrupt Chinese officials who owed their positions and power to Japanese backing. For a while it was felt that the forma- tion of a new "liberal 7 ' ministry at Tokio might mean an ac- tual change in Japan's China policy. But events quickly showed the fallacy of such expectations. It soon developed that the Japanese Government did not in- tend to change its course in China except under compulsion, but would continue during the probably long period of peace negotiations to push the China game for all it would stand. Baron Hayashi, the Japanese minister at Peking, who had been out of sympathy with the reckless Japanese loan policy and was not a believer in drastic methods, was recalled, and 325 326 DEMOCRACY AND THE EASTERN QUESTION replaced by Mr. Obata. Obata was known in China as the "table-pounder," because during the pressure for the secret acceptance of the twenty-one demands and the negotiation of the " agreement " of 1915 he, so it is said, would emphasize Japan's arguments during the conferences by thumping the council table vigorously. Obata 's return to Peking at that juncture was taken to mean that Japan would, if necessary, revert to table-pounding tactics to gain her points. A brief resume of the condition of China internally at that time is necessary to make the situation comprehensible. The government at Peking was composed of a president, a cabinet, and an assembly, or council. The president, Hsu Shih-chang, was amiable, and was believed to be a patriotic man, but one lacking a forceful personality. The strong man in the Gov- ernment was the premier, Tuan Chi-jui, who with his hench- men composed the predominant group in the cabinet, and con- trolled the ministries of war, finance, and communications. Tuan Chi-jui's power rested on his affiliations with the north- ern Tuchuns, his command of such troops that were in and near Peking, and the financial and diplomatic support of Japan. The other cabinet ministries, including the ministry of foreign affairs, were not strongly under Japanese influence, and felt that China's safest course was to follow the United States and the western powers. The council, which had been set up to replace the seceding parliament, really amounted to nothing, and did nothing. As president of the senate, Liang Shao-yi, who had been powerful in the regime of Yuan Shih K'ai, had a foothold from which he exercised a certain influ- ence. Outside of the Tuan group there was a strong sentiment in favor of compromising the dispute with the South and creating a united national government. The Peking Govern- ment exercised nominal authority over about three fifths of the country. The remaining provinces, mostly lying south of the Yangtze River, supported the secession government estab- lished at Canton. The so-called Southern Government was composed of mem- THE SOLUTION 327 bers of the old parliament, that had been dissolved in 1917 by President Li Yuan Hung at the dictation of the Tuchun's party led by Tuan Chi-jui, and a number of liberal leaders, prominent among whom were Wu Ting-fang and Tang Shao- yi. Sun Yat Sen for a while also affiliated with this faction, but in 1918 he severed relations with it and retired to Shang- hai. The Southern Government protested strongly against any foreign loans being made to the Peking Government after the schism, on the ground that the money was used only to at- tempt to suppress the effort to maintain democratic institu- tions in China. In 1918 Tang Shao-yi undertook a visit to Japan for the purpose of trying to persuade the Japanese Gov- ernment to stop the lending of money by Japanese to the Northern Tuchuns and Government, and to stop the supply of arms and ammunition from Japan ; but the visit had no prac- tical results. The Southern Government subsisted from per- sonal contributions, provincial revenues, and portions of the Salt Gabelle it was able to withhold. It denied ever taking money from Japan, but it is quite clearly established that some of the southern Tuchuns and local officials went into the Jap- anese loan game pretty deeply. Foreseeing an end of the war, but not its abrupt termination, the Japanese Government evidently decided to strike while the iron was hot, and to try to close up a number of matters which had been brought to a certain point, but not fully con- summated. For some time Japan had been pressing to have the Chinese Government ratify a number of additional or sup- plementary clauses to the "agreement" of 1915 and the "mili- tary agreement" of 1918. These clauses related to Japan's position in Shantung and Manchuria, and would give Japan almost complete control over all future development and or- ganization of China's military and naval forces, with right to supply arsenals, naval plants, arms, and munitions ; to provide Japanese officers to oversee those equipments and train China 's forces. Several grandiose projects also were afoot : one a plan for China to entrust her interests at the peace conference 328 DEMOCRACY AND THE EASTERN QUESTION to Japan; and another for Japan to acquire from Russia (which meant from the Horvath party in eastern Siberia, or another of the Russian groups in Siberia) with China's con- sent the Russian interests and rights in the Chinese Eastern Railway; and various concessions and loans negotiated with provincial officials, and with men in the Tuan group, were being pressed for ratification by the central Government. These negotiations were being conducted chiefly at Tokio, in order to avoid the too close scrutiny to which Japan's moves were subjected at Peking, and because Japan seemed to have obtained a strong influence over the Chinese minister at Tokio. In October, 1918, it was announced that General Hsu Chang, who was considered the right hand of Premier Tuan, had ac- cepted an invitation to attend the autumn field military maneuvers in Japan. This announcement at once aroused much suspicion and comment, for General Hsu was one of the leaders of the pro-Japan group in the Chinese Government and the chief lieutenant of the premier. The pro-China and anti-Japan Chinese press published speculations on the pur- pose of General Hsu's visit, and the consensus of opinion was that he was to sign an agreement by which Japan was to ad- vance Tls. 100,000,000 to the Peking Government (which meant to the Tuan group) ; and that China was to delegate Japan to represent her at the peace conference, was to ratify the supplementary articles of the 1915 and military agree- ments and other loan concessions, and was to give additional security and concessions. It was reported, in return for those concessions of China, that Japan would return to China the balance of the "boxer" indemnity still due to Japan; a plan which, under the conditions that existed, would have been merely an adroit form of bribery. In the midst of these dis- cussions, and in the face of a bitterly hostile attitude of the greater part of China and open accusations that he had been bribed to betray his country, General Hsu departed for Japan. Before he had time to develop his projects there the sudden signing of the armistice brought another change in the situa- THE SOLUTION 329 tion. The Hsu mission dropped quietly into the background, or the soft pedal was put on it. The peace conference, which had been considered as an event months and perhaps a year in the future, now was actually at hand. Partly to recall to the Chinese Government a sense of its true position and responsibility, and perhaps also for its oblique effect upon Japanese influence at Peking, the Allied governments took occasion in October, 1918, to address a friendly remonstrance and admonition to China concerning her part in the war. This act was called a protest in current press discussion, and it pointed out a number of matters wherein it was alleged that China had been delinquent. One was that the remissions of the "boxer" indemnity payments had been spent foolishly; another was that the War Partici- pation Bureau had accomplished nothing ; another matter was the prevalence of banditry ; and failure to intern enemy sub- jects, to liquidate enemy business, to prevent trading with the enemy, were other points made. The protest was based on just grounds; but the representatives of the powers who drafted and presented it knew that the Peking Government was only partly to blame for its failures in the war, and that a much stronger indictment would rest against Japan ; indeed, the pro- test probably was meant for Japan although made to China. Evidence that Japanese were evading the enemy trading regu- lations in China had been accumulating since early in the war. After it was plain that Germany would be defeated, and that Germans would be deported from China and their business liquidated, the Germans were very anxious to dispose of their property. Japanese were the principal purchasers. At Tsingtau, at Tsinan, Tientsin, Hankow, and many other places, German real and other property was purchased by Japanese. By the end of 1918 a large proportion of the desirable German property in China had passed into Japanese hands. The armistice weakened Japan's influence at Peking in sev- eral ways. First, it completely disproved one of the most potent arguments which Japanese sub rosa propaganda in 330 DEMOCRACY AND THE EASTERN QUESTION China had been using to depress pro-Ally sentiment among the Chinese the argument that Germany eventually would win the war or get a stalemate. With that theory also went down a number of arguments which depended on it, such as a new alliance of Japan and Germany, with Russia and China under their protection, a plan which had been presented to the Chinese Government by Japan as being a possible and a logical outcome of the war. But the principal thing which lessened Japan's influence at Peking was the demonstration of the power of the United States as shown by events of the year 1918, and the growing influence of the American Government, or rather of President Wilson, in world politics. To most Chinese the result of the war resolved into comparatively simple elements. As they saw it, for years the Allies could not defeat Germany, and Germany seemed to be getting the better of it. Then America entered the war, and changed its whole aspect, resulting in a victory of the Allies. Chinese also were impressed by the fact that Germany, when she came to sue for peace, addressed not France or Great Britain or the Allies in Europe, but the President of the United States ; and as far as they could judge, it was the decision of the President that led to the end of the war. Furthermore, the Chinese had by then begun to learn something about the purposes of the American Government in entering the war. This information had been conveyed to them by the United States Committee on Public Information, which, after repeated urging of Americans in China, finally, in the summer of 1918, had created an organization for propa- ganda in China. This propaganda was under the direction of Carl Crow, formerly with "The China Press," "The Japan Advertiser," and "Millard's Review"; and with Dr. Paul S. Reinsch, the American minister to China, and John B. Powell, of "Millard's Review," as official advisers. A telegraph serv- ice of American news was instituted, and circulated among the Chinese vernacular and foreign press in China. But even more effective was the translation into Chinese and publication THE SOLUTION 331 in book form of the principal war addresses of President Wil- son. My last information was that this edition of the Presi- dent 's addresses in Chinese was running into the hundreds of thousands and was taxing the "Commercial Press" of Shang- hai to meet the demand. Placards in Chinese and English, with striking phrases of President Wilson's speeches, suitable for hanging in windows and homes or for posting on walls, were printed and circulated in all parts of China. One of these placards quoted a paragraph of the President's Fourth of July address of 1918 : Second, the settlement of every question, whether of territory, of sovereignty, of economic arrangement, or political relationship upon the basis of the free acceptance of that settlement by the people immediately concerned and not upon the basis of the material in- terest or advantage of any other nation or people which may desire a different settlement for the sake of its own exterior influence or mastery. And almost as hopeful to Chinese was another paragraph of that same address of Mr. Wilson : First, the destruction of every arbitrary power, anywhere, that can separately, secretly and of its single choice disturb the peace of the world or, if it cannot be presently destroyed, at least its reduction to virtual impotence. The utterances of leading officials of the European Allied governments about the war and their aims and purposes in waging it to a conclusion had not been lacking in eloquence and force, and all had been published in China by the British and French press there. But such utterances of European statesmen had come to be meaningless to Chinese, in view of what they knew of the actions of one of the Allies, Japan, with the tacit and perhaps the positive secret assent and approval of the other Allied powers. The Chinese also knew of some of the secret agreements made among the leading Allied powers during the war relating to annexations of territories of other belligerent nations and even of some neutral states. Now 332 DEMOCRACY AND THE EASTERN QUESTION came a new voice, speaking words and principles which to the Chinese seemed to be written especially to apply to them and to their country and its situation. It was a new voice, from a new world leader, representing a nation that Chinese long had regarded as friendly to their country. They listened to the voice, and for the first time the war began to take a mean- ing to them which they could apply to themselves. Now came the positive proof that the nation and its leader who uttered those principles were a great, perhaps the greatest, power for the settlement of the issues of the war and the questions of the peace. Doubts and fears began to diminish. The Chinese officials who were holding out against Japan's blandishments, inducements, and pressure took heart again and strengthened their resistance. Then there was the hope held out by the proposed league of nations, as stated by another paragraph of President Wilson 's Fourth of July address : Fourth, the establishment of an organization of peace which shall make it certain that the combined power of the free nations will check every invasion of right and serve to make peace and justice the more secure by affording a definite tribunal of opinion to which every international readjustment that cannot be amicably agreed upon by the people directly concerned shall be sanctioned. Notwithstanding Japan's pressure to induce the Chinese Government to commit, or in some way to delegate. China's representation at the peace conference to her care, the Peking Government, supported by the advice of the American, British, and other Allied legations, declined so to act, and decided to send a separate delegation to Paris. Lu Cheng Hsiang, minis- ter of foreign affairs, was nominated as head of the delegation ; with V. K. Wellington Koo, Chinese minister at Washington ; Alfred Tze, Chinese minister to Great Britain ; Wei Tsun-chu, Chinese minister to Belgium, as advisers; and with a staff of counselors and secretaries. Failing to become China's attorney in the case, Japan then instigated an intrigue through the pro-Japan group at Peking to have the peace delegation include a majority of Chinese THE SOLUTION 333 who were under Japan 's control. To this end it was proposed that the premier, Tuan Chi-jui, should be a member of the delegation, and that Tsao Ju-lin, the minister of finance, and General Hsu Chang, should accompany Tuan as expert advis- ers. It also was suggested to the Chinese Government pri- vately by the Japanese legation at Peking that the relations of Japan and China and their mutual interests at the peace conference would be greatly facilitated if China would ap- point a Japanese adviser to her delegation at Paris. This offer was declined. The suggestion that Tuan Chi-jui and his chief lieutenants should be sent as delegates aroused so much opposition throughout the country, and especially among the Southern party, that it was quietly dropped. I was in Peking during this time, and a little later I met some of the Southern leaders at Shanghai and discussed the situation with them. I found them willing, even anxious, to make peace with the Northern party provided a suitable basis for compro- mise could be arrived at. They seemed to realize the danger to China of divided counsels and motives at such a world crisis, and that it would seriously impair her position at the peace conference. But they did not trust the Peking Government as long as Tuan Chi-jui and his satellites were in power. A principal Southern leader thus discussed the question with me: "At this time all Chinese must put aside party advantage and personal ambitions and concentrate on getting justice for our nation in the peace settlement. To this end we of the Southern party are willing to concur with and to take part in the conferences at Paris. I think the South should be repre- sented in the delegation at the conference. We fear that Japan's control of Tuan Chi-jui and his followers will some- how commit the Peking Government to delegate China's case to Japan, or to cause it to be presented inadequately. There are a number of men in the Tuan crowd at Peking who, for a money consideration, will sign 'on the dotted line' at the end of any kind of agreement which Japan will write. Their sig- natures, of course, will not make the documents valid, but it may be that Japan, if she can get them signed cheaply enough, will think that somehow she will be able to get them ratified later ; and at any rate she may be able to use them for trading purposes at Paris. I believe it is true that a large number of secret agreements have been signed with Japan by different officials of the Tuan crowd at Peking with, as you Americans say, the 'blue sky as the limit.' Most of these secret agree- ments never have been formally ratified, for that requires action by the parliament, and to present them to parliament, or even to the Peking council, would give them publicity. So far a few officials at Peking, whose signatures are necessary, have held out against all Japanese inducements and intimida- tion. The Southern party will raise any amount of money to prevent Japan from controlling the Chinese delegation at Paris or to prevent it from being muzzled there." A result of this sentiment was that C. T. Wang, who had gone to America as a representative of the Canton Government in September, 1918, was appointed by President Hsu as an associate of the Chinese peace delegation, and joined it in Paris with several other members of the Southern party. Although it is futile to draw conclusions about events that are in process of formulation, as I write this the peace confer- ence already has developed some very interesting matters of China vis-a-vis Japan. On its way from Peking to Paris the original Chinese delegation traveled by rail through Man- churia and Korea, across the straits of Shimonoseki, and on to Yokohama by rail, where a Japanese ship conveyed it to Seattle. From Mukden, in Manchuria, on to America, the delegation, and of course all of its numerous pieces of luggage, moved entirely by Japanese-owned, and, so far as the railways are concerned, Government-owned and managed means of transportation. At Yokohama, the day before the delegation sailed, I met one of the Chinese secretaries, and he told me that some pieces of the delegation's luggage were missing, hav- ing been lost or delayed in transit, and that the luggage con- THE SOLUTION 335 tained documentary matter for use at Paris. Later it was reported that this luggage, containing certified copies of cer- tain documents, was not recovered, and the delegation arrived at Paris without it. This became public when the Chinese delegates at Paris made known their intention to submit to the conference copies of all secret agreements signed and rati- fied or not ratified, or proposed by Japan, but not signed, between Japan and China during the course of the war. The report that the Chinese delegation would place all these questions confidentially before their confreres at Paris caused a somewhat sensational incident, which is aptly illustrative of Japan's methods in China. Through the Japanese legation at Peking it was strongly put to the Chinese Government that those matters were private between Japan and China, and should not be submitted to the Paris conference; and it was urged that the Chinese Government would immediately repudi- ate the action of its representatives at Paris. The Chinese Government refused to be intimidated, and informed the other Allied legations at Peking of what had occurred, and also made the matter public. The disclosures placed Japan in such a bad light that the whole of Japan's diplomatic organization and propaganda was focused on an effort to deny her part in the matter and to obscure the facts. For instance, as a "smoke screen," the Japanese embassy at Washington gave out statements to the effect that Japan was indifferent about the publication of all her agreements with China, that indeed she always had in- tended to publish them herself, and as an evidence of that, the embassy gave out for publication the old "agreement" of 1915, which of course had been published years before. Find- ing that China could not be bluffed by such methods, Japan then proposed to China that she (Japan) would withdraw certain of the unratified and pending agreements, and that the remaining ones would be jointly given out for publication. It appears that China assented to this proposal, which had advantages for her in that it amounted to wiping out a number 336 DEMOCRACY AND THE EASTERN QUESTION of embarrassing issues ; for on February 25, 1919, a statement was given out at Paris containing texts of the secret supple- mentary agreements in the form of notes exchanged at Tokio on September 24, 1918, between Baron Goto, Japanese minis- ter of foreign affairs, and the Chinese minister. The notes follow : [Note 1. Tsung-hsiang Chang to Baron Goto.] The Chinese Government has decided to obtain loans from Japa- nese capitalists and proceed speedily to build railways connecting the points as below set forth. Having received authorization from my Government, I ha\c the honor to communicate the same to your Government. First, between Kaiyuan, Hailung, and Kirin; second, between Chang-ghun and Taonan, and, third, from a point between Taonan and Jehol to some seaport. (This line to be determined subject to future investigation.) Should there be no objection to the above propositions, it is re- quested that your Government lose no time in taking the necessary steps to cause capitalists in your country to agree to enter negotia- tions for loans on the same. A reply to the above is awaited and will be appreciated. [Note 2. Baron Goto to the Chinese Minister.] I have the honor to acknowledge the receipt of your Excellency's note, intimating that your Government has decided speedily to build with loans from Japanese capitalists railways connecting the points as set forth below. (The note cites items 1, 2, and 3 as contained in the note of the Chinese Minister.) The Imperial Government, while noting with much pleasure the communication of the Chinese Government, begs to state in reply that it will lose no time in taking necessary steps to cause Japanese capitalists to enter into negotiations for loans on the same. [Notes 3 and 4 missing.] [Note 5. Baron Goto to the Chinese Minister.] I have the honor to inform you that the Imperial Government, in view of the feeling of good neighborhood existing between the two countries and in a spirit of mutual accommodation, has deemed it fitting, and accordingly has decided, to propose to your Government to settle various questions relating to the Province of Shantung in a manner as set forth below: THE SOLUTION 337 First To concentrate at Tsing-tao all Japanese troops stationed along the Tsing-tao-Tsinan Railway, excepting a contingent to be left at Tsinan. Second The Chinese Government to provide for the guarding of the Tsing-tao-Tsinan Railway and to organize a police force for that purpose. Third The Tsing-tao-Tsinan Railway to contribute an appropri- ate sum to defraying the expenses of such police force. Fourth Japanese to be employed at the headquarters of the police force, the principal railway stations, and the training stations of the police force. Fifth Chinese to be employed on the Tsing-tao-Tsinan Railway. Sixth On determination of ownership, the Tsing-tao-Tsinan Rail- way to be run as a joint Chino-Japanese undertaking. Seventh The civil administrations now in force to be withdrawn. In acquainting you with the above, the Japanese Government de- sires to be advised as to the disposition of your Government regard- ing the proposals. [Note 6. Tsung-hsiang Chang to Baron Goto.] I have the honor to acknowledge receipt of your note with contents to the following effect. (Repeats almost verbatim the contents of Baron Goto's note.) I beg to acquaint you in reply that the Chinese Government gladly agrees to the proposals of the Japanese Govern- ment above alluded to. The Japanese and Chinese delegates at Paris, and the Chi- nese and Japanese governments at Peking and Tokio, at the same time stated publicly that these notes were all the agree- ments that had been made between those governments, and that there were no other secret agreements. That statement probably is not true literally ; but it can be taken to mean that any other secret agreements were abrogated by mutual con- sent, leaving only these in issue as to their validity. By mak- ing that statement to the Conference, the Japanese Govern- ment is estopped from presenting later as valid instruments any other agreements with China that it may be holding up its sleeve. The Japanese Government probably preferred thus to disclaim secret agreements that it has extorted from China or obtained by bribery or attempted to obtain, rather than to have them exposed to the world. 338 While these events connected with the peace conference were developing, attention was being given by the Allied powers to the internal situation of China. As at several times previously, the lead was taken by the United States, and on October 10, the anniversary of the Chinese Revolution, which is a national holiday, President Wilson sent a telegram to the President of China. The telegram and the reply follow: The President of The Republic of China, Peking. On this memorable anniversary when the Chinese people unite to commemorate the birth of the Republic of China I desire to send to you on behalf of the American people my sincere congratulations upon your accession to the Presidency of the Republic and my most heartfelt wishes for the future peace and prosperity of your country and people. I do this with the greatest earnestness not only because of the long and strong friendship between our countries but more especially because in this supreme crisis in the history of civilisation, China is torn by internal dissension so grave that she must compose these before she can fulfil her desire to cooperate with her sister nations in their great struggle for the future existence of their high- est ideals. This is an auspicious moment as you enter upon the duties of your high office for the leaders in China to lay aside their differences and guided by a spirit of patriotism and self-sacrifice to unite in a determination to bring about harmonious cooperation among all elements of your great nation so that each may contribute its best effort for the good of the whole and enable your Republic to reconstitute its national unity and assume its rightful place in the council of nations. WOODROW WILSON. Hsu Shih-chang's reply follows : The President of The United States of America, Washington. Please accept my very sincere thanks for your telegram of con- gratulations upon my assumption of the office to which I was duly elected by the Parliament of the Republic. It is my earnest desire that not only the traditional intimate friendship existing between our two countries will be maintained and strengthened but also all efforts within our power will continue to be exerted toward the furtherance of the common cause in which the splendid success of the army of your country has won the admiration and respect of the world. THE SOLUTION 339 National unity upon which the welfare of the people entirely de- pends is a matter demanding my first attention, and you may be assured that I will put forth my best effort to bring about its con- summation and meet the wishes of the people of the whole country that in the coming councils of the family of nations our country may assume its rightful place and work with your country hand in hand toward the realisation of the highest ideals. Hsu SHIH-CHANG. As was to have been expected, this telegram of President Wilson was taken amiss by the Japanese press, which made the usual effort to construe it as an interference in China's affairs contrary to the Lansing-Ishii Agreement. As typical of the Japanese view of this question, can be quoted a telegram sent from Peking by a Japanese news agency, and published in the " Shanghai Times," a Japanese organ: It has been noticed that since his return from the United States, Dr. Reinsch, the American minister to Peking, has been endeavoring to arrange a compromise between the North and the South. If this is true, it will be an infringement of the American-Japanese agree- ment. This in effect meant that the Japanese idea of the Lan- sing-Ishii Agreement is that the American Government or President properly cannot address a communication to the Chinese Government or to Chinese without first consulting Japan or by sending the communication through Tokio. Some Japanese newspapers stated that plainly. Of course Dr. Reinsch, who had just returned from a short trip to Washing- ton to consult with his Government, was taking absolutely no part in China 's internal strife except as instructed by the state department ; but there is no doubt that all the Allied legations- at Peking were very strongly urging upon their governments the need for some action by the powers to settle China's politi- cal troubles and bring the North and South together. Only Japan did not want that done, and every move toward that end irritated the Japanese press exceedingly. However, after the armistice was signed, the Japanese Government made an- 340 DEMOCRACY AND THE EASTERN QUESTION other change of attitude, and when it was again suggested that the powers advise China jointly to make internal peace, Japan rushed to the front and tried to carry off the matter as if it was her proposal and initiative. On December 2, 1918, the following joint note was presented to the Chinese Government through the legations at Peking: It is with grave concern that the American, British, French, Italian and Japanese governments have witnessed the continued civil strife which for the past two years has divided this country. This un- happy division has proved no less harmful to foreign interests than disastrous to the welfare of China itself. The consequent unrest has been an encouragement to the enemy, and during the crisis of the war hampered the effective cooperation of China with the Allies and now that that crisis is past and the nations look forward to the hope of effecting some reorganization of the world for the realization of peace and justice among all peoples, the disunion still prevailing in China makes their task more difficult. The associated governments aforesaid have observed with hopefulness the steps already taken by the President of the Republic of China with a view to the settlement of civil strife, and have been happy to believe that the attitude of the Southern leaders indicated no less a desire on their part to arrive at a suitable adjustment of differences. These governments, therefore, have taken the occasion to express the sympathy and hopefulness with which they regard these indications of a desire on the part both of the Peking government and the leaders of the Southern party to set aside all considerations of merely personal sentiment and legal technicality and, while carefully refraining from taking any step which might be an obstacle to peace, to seek without delay, by frank conference, some means of attaining a reconciliation upon a basis of law and devotion to the interests of the Chinese nation such as is necessary to assure to China peace and unity within its borders. In taking this action to express earnest sympathy with the efforts of both sides to achieve a solution of the difficulties that have hitherto divided them, the governments aforesaid desire to make clear that in so doing they have contemplation of no ulterior plan of intervention and no desire to control or influence the particular terms of the ad- justment, which must remain for the Chinese themselves to arrange. They only desire to lend what encouragement they can to the aspira- tions and efforts of both parties for a reconciliation and re-union which will enable the Chinese nation to bear the more worthily of its THE SOLUTION 341 own traditions its part in the reconstruction which the nations of the world are now hoping to attain. In Japanese newspapers and news services in the far East this note was represented, in some cases, as having been pre- sented by Japan exclusively, and in all other cases it was made to appear that the other powers had acted only on Japan's request that they do so. Thus the fiction of Japan's alleged paramountcy in China was preserved, in so far as Japanese propaganda could do that, among the natives of far Eastern countries. An immediate result of this note was that the Northern and Southern groups made arrangements for a conference at Shanghai for the purpose of agreeing upon a cessation of the civil war. These conferences are going on at this writing, but it already has developed that Japanese intrigue, operating through the Tuan Chi-jui group in the Peking Government and through other pro-Japan Chinese officials in the provinces, is working to prevent agreement. This civil war in China will soon die of inanition if its leaders are deprived of funds to pay their private armies. The Japanese loan orgy of 1917- 18 has provided most of the funds, and even after the Shang- hai peace conference was convened, Japanese financiers, with the knowledge and backing of their Government, were trying to arrange for a large loan to the Tuan Chi-jui faction. Without doubt such loans, and only such loans, will keep the civil strife alive ; for as long as the military party can obtain funds it can hold the reins of power in at least a part of the country. The pro-Japan group of Chinese officials at Peking seem to have decided that it is as well to be hanged for a sheep as for a goat and to play out their string to its last thread. Until China is rid of them, there can be little progress toward reform. Of the so-called weak nations whose fates may be decisively influenced by acts or omissions of the peace conference, China ranks with Russia as the more important. Her population, 342 DEMOCRACY AND THE EASTERN QUESTION territory, and resources indisputably give her that place. China has been a sick nation for many years. Only yesterday Russia was ranked among the great powers. Her rapid de- cline shows how easy it may become to convert a nation from a power into a distracted and impotent country that is a menace to civilization. China is trembling on the brink of a similar abyss; or, conversely, she might as unexpectedly and almost as rapidly, by organizing her vast human and material resources, assume a respected place among nations. These alternative possibilities ought to be enough to obtain attention for her case. But with regard to China's case, Americans should realize that they and their nation have very definite obligations relat- ing thereto. Events daily remind us that we have become en- tangled with, and to some extent have become responsible for, the right settlement of European questions in which our na- tional interests are not very clearly involved except on broad humanitarian and sociological grounds. There are no pre- vious treaties or published agreements that commit the United States to any policy regarding the Balkan question or the dis- position of Turkey or the reconstitution of Poland or the security of Belgium or the reconstruction of Russia ; yet many Americans, on moral grounds, now feel a degree of responsi- bility for the solution of these issues, and the war has demon- strated how they can impair our peace and safety and prop- erty. Toward China the United States, many years ago and recently, assumed specific obligations and responsibilities, written into international treaties and agreements. Further- more, almost every modern authority on the Eastern question has reached a conclusion that of all western nations the United States, because of geographical juxtaposition and modern economic propulsions, has the greatest practical inter- est in the future course of China, and also that no satisfactory future for China can be assured without the direct and active participation some say leadership of America. As the protagonist of the Hay doctrine, the United States is THE SOLUTION 343 obligated to observe and to maintain the territorial integrity and administrative autonomy of China, and the commercial "open door" in China's territories. The American Govern- ment has itself signed several international covenants asserting these principles, and has been instrumental in inducing five other powers to sign similar agreements. Moreover, I know that a majority of Chinese are now looking hopefully to America to use its friendly offices in China's behalf, and if our Government fails in this obligation, it will forfeit the con- fidence and respect of the Chinese, and diminish its influence in far Eastern affairs for many years to come. Since the American Government is thus obligated about China, and our nation has such an enormous stake in the future development and nationalistic impetus of that country, it obviously is very important for Americans to understand what China wants, what she purposes to ask, what justice demands should be given her, and in what the problem of stabilizing China during the reconstruction period consists. Probably none would be willing or able at this time to announce a specific list of what China wants as a result of the peace settlement. Chinese, that is, the politically intelligent class, have a tolerably clear idea of what China wants; but opinion among them differs about the expediency of asking or demanding this or that. Some Chinese and foreigners think that China should be modest, and should confine her petition to a few essential points, without referring to some issues that are certain to arouse controversy and incite opposi- tion. Others believe that the appointed hour has struck and that China must seize the opportunity forcibly to assert her full rights; that unless she speaks now she may have forever after to hold her peace -, that it is better to ask and be refused than to allow certain issues presumably to go by default. There are two points of view regarding what China wants, Chinese and foreign. Even the most pro-Chinese foreign friends of China scarcely are willing to grant all that the radi- cal pan-China element now assert. In outlining China's case 344 DEMOCRACY AND THE EASTERN QUESTION I will try to draw the line of moderation, for I believe that the greater part of intelligent Chinese will approve a settle- ment that will also accord with the views of progressive for- eigners in China. First, I shall set out China 's case in summary : 1. Cancellation of all treaty provisions with foreign govern- ments that grant or recognize rights tantamount to "spheres of influence" within China's territories, or any monopolistic privileges that cannot be available to all nations under the most-favored nation clauses. 2. Nationalization and international neutralization of all railways in China's territories. 3. Cancellation of all monopolistic mining rights accorded to foreigners or foreign nations in China, and of all other "concessions" that tend to limit and impair China's sover- eignty and the commercial "open door" principle. 4. Relinqnishment of all leases of China's territories to foreign nations, and the temporary substitution therefor of international control, with a proviso that they will revert fully to China on the fulfilment by her of certain stipulations. 5. Removal of all foreign troops from China's territories, except those provided by the protocol of 1901, these to be also withdrawn on the fulfilment by China of certain stipulations. 6. Removal of all foreign posts and telegraphs from China, and foreign supervision over the Chinese postal service to cease on the fulfilment by China of certain stipulations. 7. Establishment of a uniform currency system in China, to be supported by an international loan under conditions tending to a gradual assumption of Chinese control. 8. Granting of complete tariff autonomy to China, under certain specified conditions whereby China's fiscal adminis- tration will be gradually reformed. 9. Abolition of extra-territoriality in China on the fulfil- ment by China of certain stipulations. 10. Consolidation of the national debts of China; all out- standing loans, provincial and national, to be absorbed in a THE SOLUTION 345 single loan or series of loans underwritten by a financial syndi- cate under international supervision. 11. Restoration of Chinese local administrative autonomy in all parts of Chinese territories where during recent years it has been insidiously subordinated to foreign authority. The effort to obtain justice for China in the peace settle- ment has two aspects : the protection of China in her age-estab- lished territories and national life and help for the Chinese in changing their country into a modern nation, and the re- moval in China of those frictions and causes for antagonism among foreign nations that in modern times are the chief causes of war. Both of these conditions distinctly fall within the main and explicit purposes of the American nation in making war, as repeatedly uttered by President Wilson and scores of our public men, and also acceded to by other major nations in the Allied group. They embody the principles that constitute the essence of the famous fourteen articles, which opened a way to peace. The eleven articles of China's petition, as I have composed it, will, I think, be found to comprehend all essential matters and questions involved in the present very complicated situa- tion of that country. Numbers 1, 2, 3, and 10 will cover the whole list of quasi-political, foreign "concessions" that have been foisted on China in the last twenty-five years, including the Japanese loan and concession madness of the last two years. Although many of these loans and concessions were conceived and obtained by and through bribery, coercion, and intimidation, it is not now proposed to repudiate all of them, but to liquidate those which have any sound status in equity in a way that will remove them as a disturbing political factor in international affairs and as obstacles to China's internal progress. The means to finance this liquidation would be pro- vided under Number 10, which also would provide for the currency reform mentioned in Number 7. It is probable that the question included in article Number 4 contains serious difficulties ; yet it should not if the principal 346 DEMOCRACY AND THE EASTERN QUESTION powers are sincere and far-sighted in their recent professions. This article would embrace the leased territories of Kiaochou (Tsiugtau), Weihaiwei and Kwangtung (Port Arthur and Dalny), and in its complete meaning also would include the so-called "foreign settlements" at the various principal treaty ports. Attention, however, is called to the proviso that these leased regions and municipal settlements would remain under international jurisdiction until, according to stipulation, China should be judged capable of taking over the full ad- ministration. Such a system seems entirely compatible with any practical plan for a league of nations, which presumably must have a supervisory body and a method to deal with the affairs of the weaker and temporarily disorganized nations. Article Number 9 probably will arouse greater opposition than any of the others in my list. It is certain that a majority of foreigners, who live in and know China and who may be willing to grant all of the other ten articles, will enter strong objections to the abolition of extra-territoriality now. But, I hasten to point out. the article as I have drawn it does not call for the immediate or even the early abolition of extra- territoriality. It is true that a radical section of the Young China party have taken this occasion to agitate for the imme- diate abolition of extra-territoriality, but they are getting little serious approval even among the Chinese. I am sure, from having discussed the subject with many of the politically in- telligent Chinese class, that the substantial elements in Chinese society would not approve having the extra-territorial system abolished suddenly and before China has organized something to take its place. The present system, anomalous and galling to Chinese pride as it undoubtedly is, nevertheless does throw about even Chinese business and property safeguards that otherwise would be lacking. Foreigners residing in China and foreign business and property interests there would regard the early substitution of Chinese authority for the extra-terri- torial system as criminal recklessness. Yet in recent years I have become aware of a disposition among those foreign resi- THE SOLUTION 347 dents who reflect seriously about conditions there and the future, to realize that the present system cannot be considered permanent, and there is a feeling that a plan should be devised that not only would promise to restore to the Chinese the full administration of law in their own country (such international promises already exist), but would also have a working method to bring such a condition about by aiding China to establish it. I believe such a plan to be feasible, and that an accom- modation of foreign powers to meet the spirit of article Num- ber 9 in the previous list need not alarm foreign interests or enterprises in China; on the contrary, I think the eventual result will greatly benefit and extend foreign trade and in- vestments in China. In 1918 Mr. Charles Denby visited China as a special official of the American Government. His work was chiefly in con- nection with the activities and regulations of the "War Trade Board, but Mr. Denby took advantage of his sojourn to study anew the situation of China in other than commercial matters. He had many qualifications for such investigation. His youth, when his father was American minister at Peking, and much of his adult life were spent in China. He has been associated with such Chinese officials as Li Hung Chans: and Yuan Shih K'ai, and later was United States Consul-General at Shanghai. Mr. Denby evolved a plan by which the Western powers can aid China in preparing for the abolition of extra-territoriality by a gradual process, which was submitted to the state depart- ment in a memorandum. This plan is, having given reason- able notice of the change, to abolish all foreign courts in China, these to be replaced by Chinese courts after the order of the present mixed court at Shanghai. As a preliminary to this change, China would be required and aided to establish a de- partment of justice, having direction of all courts in the na- tion, and also over the courts with jurisdiction of foreigners and foreign legal causes. The leading official of the depart- ment of justice, next to the minister of justice, would be a foreigner, just as in the Maritime Customs and Salt Gabelle 348 DEMOCRACY AND THE EASTERN QUESTION administrations. Foreigners also would be a part of the machinery of all the mixed courts, but under the department of justice, not under various foreign consulates, as now. In time, by this process, it is hoped that China would reach a point when she could safely be entrusted with the sole ad- ministration of justice. By the Denby plan, however, extra- territorialitj' is not to be fully abolished until China, in the opinion of the powers, has fully qualified to act by herself. Under a department of justice, with foreign legal advisers, the legal codes could be brought up to date, and the adminis- tration of justice completely reorganized. A government law college, with foreign as well as Chinese instructors, would edu- cate young Chinese for legal and judicial careers. That, in brief, is an outline of the plan proposed by Mr. Denby. He submitted it, I understand, to many legal authorities, includ- ing Judge Lobingier of the United States Court for China, to Dr. W. W. Willoughby, former adviser on constitutional law to the Chinese Government, and to W. C. Dennis, now legal adviser to the Chinese Government, all of whom thought favor- ably of it. I firmly believe that the time has come when it not only is safe, but it is necessary in the interest of foreigners as well as of China, to devise a way to eliminate the anomaly of extra- territoriality. This of course does not mean that extra-terri- toriality should be at once, or even quickly, abolished. As I understand the Denby plan, it almost surely would require twenty years, and might take even longer than that, before a sound organization for the administration of justice in China could be created. But that plan would provide a practical way to attain that goal, whereas the present system merely stands still, tending to extend and perhaps to perpetuate itself. The complete abolition of extra-territoriality of course would depend and be contingent upon a decision of the powers, or of a League of Nations, that China had fulfilled the stipulated requirements. Candid foreign students of conditions in China have felt THE SOLUTION 349 for some time that a system of continuing and perpetuating the existing status of foreigners in China had outworn its use- fulness, and should be changed as much in the interest of foreigners and foreign trade as in justice to the legitimate aspirations of Chinese. Any condition that causes resentment among Chinese at the presence and status of foreigners in their country must operate as a handicap to the development of good relations between them, and to the development of foreign trade. If the same protection can be thrown about the per- sons, property, and legal rights of foreigners residing in China by a new class of courts administered under a reorganized de- partment of justice, as these now have under the foreign and mixed courts in the foreign settlements, and Chinese sentiment can be appeased thereby, it is worth considering. The fact is that extra-territoriality as now practised, coupled with certain other events and tendencies, are placing Western interests in China somewhat at a disadvantage. For in- stance, by encroachments upon Chinese administrative auton- omy in Manchuria, Shantung, and in other parts of China, and by provisions enforced on China by the so-called agree- ment of 1915, Japan has managed to establish for her subjects in China a preferential position and extra-legal status. The Japanese are now able to travel and reside and do business anywhere in China, and they carry with them wherever they go the protection of Japanese laws. Now, the disadvantages that foreign residents of Japan are under because of the peculiar administration and interpretation of Japanese laws when foreigners are involved vis-a-vis Japanese are too well known for it to be necessary to give details here. By the process of their penetration of China in the last few years Japanese are carrying with them to the vast hinterland of China, outside the treaty ports, where the extra-territorial position of other foreigners is confined, the same advantages over foreigners in commercial legal status and security that Japanese have over foreigners in Japan. The only protec- tion foreigners in China other than Japanese have against 350 DEMOCRACY AND THE EASTERN QUESTION this process is either in the extension of extra-territoriality over the whole of China, the restriction of Japanese to the position of other foreigners, or the creation of a system for all China that will make all foreigners equal under the laws and before the courts. In China it is notorious that the Japanese consular courts in the treaty ports will not properly punish Japanese for minor and even for serious offenses, and that it is virtually useless for other foreigners and Chi- nese to sue Japanese in the Japanese consular courts. This condition, coupled with the presence of Japanese gendarmes and police, frequently leads to serious clashes between Chinese and Japanese, and sometimes even between other foreigners and Japanese. By recent treaties wrung from China under menace, and by quasi-occupation of large regions in China, Japan now in effect has extended the jurisdiction of Japanese law and Japanese courts over Japanese in all parts of China, and with the same results that appear in the treaty ports and in Japan. An important point in laying the foundations for a modern legal system for China is the character of the system to be given to or selected by her, and handed on as the permanent code for future generations of Chinese and foreign residents to live under. In modernizing her jurisprudence, Japan copied the German code, with changes which did not improve it any from the point of view of peoples accustomed to the Anglo-Saxon system. If Japan obtains control or direction of China's legal administration, it will without doubt be modeled after that in Japan, which is a Nipponized version of the German system. While the German code may have much in it that is well applicable to Oriental peoples in the process of shifting from old to new forms of government, Americans and British in China, who of western foreigners have the predominating population and vested and trade interests, probably will prefer to see China, in shaping her course on democratic lines, adopt or adapt Anglo-Saxon legal practices and principles. The more nearly the new China THE SOLUTION 351 harmonizes with the administrative forms of the leading democratic nations of the West, the easier it should be to main- tain a sympathy and understanding between Chinese and those western peoples, and to extend their international and personal relations. For many years the American Government has desired, and at times has made efforts, to solve the difficulty embodied in article Number 2 of my list. The proposal of Mr. P. C. Knox, when he was secretary of state, to neutralize the railways in Manchuria, and its defeat by a combination of Russia, Japan, Great Britain, and France, will be readily recalled. 1 But with the passing of time conditions in the world have changed, and, let us hope, some lessons have been learned. The powers that survive the Great War may now see the ad- visability of discontinuing the system of playing the railway game in China (and in other regions, too) for their own strategical interests, on the old theory of the balance of power. That will mean the complete and perhaps final aban- donment by some of them of long-cherished imperialist designs and ambitions. They already have abjured these ambitions in pronouncement ; will they now relinquish them in practice ? In discussing the railway question with informed persons I have found a general belief that the old system must be aban- doned not only in justice to China, but also in the interest of world peace. While different men have different thoughts about methods, those with whom I have talked recently are almost unanimous in agreeing upon principles. In the article as I have phrased it, it asks for the "nationalization and inter- national neutralization of all railways in China." Used in this connection, nationalization and international neutraliza- tion amount substantially to the same thing, or would accom- plish the same results, working together. What I mean is, the railways to be nationalized under the ownership and ad- i A full account of this proposal, with the official representations of the various governments about it, is given in Chapter I of the author's book, "Our Eastern Question." 352 DEMOCRACY AND THE EASTERN QUESTION ministration of the Chinese Government, to focus control; while the foreign investments in them and the foreign super- vision over them necessary to protect the investments and assure efficient administration should be neutralized, or, in other words, made international in character, similar to the Maritime Customs and Salt administrations. In drafting such a plan I can think of no better model than Mr. Knox's proposal about railways in Manchuria, advanced in 1909, as to the principle it displays. To finance the various liquidations embraced in this case of China and the administrative reforms which it contemplates, will require some hundreds of millions of dollars. Much of this sum would be used to retire debts now existing, and the remainder would be used to promote constructive measures. In this connection, it is pertinent to point out that among large nations China is to-day, next perhaps to the United States, in the most solvent condition fundamentally. By this I mean that her debts, as compared with her realizable re- sources, are comparatively small. Unfortunately, however, it is not feasible now to entrust the Chinese Government with the exclusive administration of the country's fiscal affairs. The disturbed and divided condition of the country, the lack of modern administrative teehnic, and other causes, combine to detain China as yet in the class of nations not quite able to dispense with outside help. Almost all educated Chinese, except a few of the radical Young China party, now openly say that China is at present incapable of straightening out her affairs, and that she needs foreign help. They want this help to be temporary, and given with a view to making China eventually able to dispense with it altogether. They realize that such foreign help will of necessity carry with it a degree of foreign assistance and supervision in China's administra- tion, and they are ready to accept this. In view of the semi- dependent state of many nations that were recently proud and powerful, sensible Chinese begin to see that it would be THE SOLUTION 353 a false and foolish pride that would pretend that China is independent of foreign influence, counsel, and aid. But with regard to this matter of foreign financial and ad- ministrative aid and supervision, there is one condition that is absolutely essential to make it acceptable to the Chinese. This condition is that the United States will be an active par- ticipator, if not the recognized leader, in its organization. It is safe to say that no international consortium that does not include the United States, or any plan that does not receive the approval and cooperation of America, with respect to China, will now be acceptable to Chinese. By its action, early in the first administration of Woodrow Wilson as President, in withdrawing from the six-power financial group that was organized to finance administrative reform in China, the American Government had taken a stand against any participation in financing in China that would impair, or that could be construed as impairing, China's political autonomy. Certain provisions of the reorganization loan agreement had seemed to the American Government then as having that tendency and perhaps that purpose. After that withdrawal, various attempts were made to secure inde- pendent American loans by the Chinese Government, but with the exception of the small loan made by the Continental & Commercial Bank of Chicago, they resulted in failure because, as it seemed to American financiers, the policy of the Ameri- can Government did not sufficiently protect their investments. To remedy this situation, and probably also realizing that changes in world conditions relating to the policy of the United States applied also to China, the state department an- nounced, on July 29, 1918, its policy with regard to loans in China as follows : [My italics.] China declared war against Germany very largely because of the action of the United State*. Therefore this Government has felt a special interest in the desire of China so to equip herself as to be of more specific assistance in the war against the Central Powers. 354 DEMOCRACY AND THE EASTERN QUESTION Until the present time the engagements of the United States in preparing to exert effectively its strength in the European theatre of war has operated to prevent specific constructive steps to help China realize her desires. Recently, 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 bankers, who had been interested in the past in making loans to China and who had had experience 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 co- operate 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 group 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 encourage and facilitate the free inter- course between American citizens and foreign States which is mu- tually advantageous, the Government will be willing to aid in every way possible and to make prompt and vigorous representations and to take even' possible step to insure the execution of equitable con- tracts made in good faith by its citizens in foreign lands. It is hoped that the American group will be associated with bank- ers of Great Britain, Japan, and France. Negotiations are now in progress between the Government of the United States and those Governments which it is hoped will result in their co-operation and in the participation by the bankers of those countries in equal parts in any loan which may be made. Following that announcement, a group of American bank- ers was formed to take up the matter of American participa- tion in loans in China, and it began investigations of all con- ditions relating to the fiscal obligations of that country. The THE SOLUTION 355 news that the American Government would support loans to China was received in China with enthusiasm, and the natural expectation of most Chinese was that an American loan would be forthcoming immediately. Those expectations, of course, were disappointed, for owing to the world situation and the need to clarify the various international relationships involved in financing China, and to formulate a comprehensive plan ac- ceptable to all the powers or to a majority of them, it was not advisable to move prematurely. The expected American loan, therefore, was delayed, and is still pending, thereby pro- longing the lease of life of the Japanese loan orgy. An in- ternational plan for the financial support and relief of China should be one may put it must be, if we are to secure order in the far East a result of the conditions of peace and the machinery for its preservation. In connection with American participation in loans to China hereafter, one point needs to be made clear. The American financial policy in China must keep absolutely free of any association with Japanese business methods there, and with Japan's political policy as it has been expressed in recent years. All important American financial operations in China should be under the supervision and only with the approval of the American Government, and should conform to whatever plan for international cooperation that is adopted. For in- stance, American capital should not become associated with distinctly or exclusively Japanese railway or mining schemes in China. In the last year or two Japanese, by methods which are described previously, have obtained many so-called "con- cessions" for railways and other industrial enterprises there. The validity of many of these concessions is dubious ; and some of them are purely strategical in character. As an example of this, take certain projected railways in Manchuria and Mongolia which Japan has forced China to grant. They have no tangible commercial basis at this time. Their real purpose is to strengthen Japan 's position in those regions in a military sense; and they will weaken China's defensive position. 356 Judge, therefore, the feelings of Chinese if hereafter Japan should obtain the capital in America to develop and exploit her strategical position in China ! Such use of American capi- tal not only will be invidious to China, but it also will be in- vidious to American commercial interests there, and to the thesis of the policy of the American Government. A careful analysis of the foregoing eleven articles and the methods by which they of necessity would become practicable at once suggests the thought that such a settlement will in some respects extend foreign authority in China, rather than diminish it. This is true. But foreign friends of China, and also enlightened Chinese, ought frankly to face the truth, that in order to deliver China from foreign quasi-domination it is necessary to use foreign administrative efficiency. "We have this paradox: that to diminish foreign intervention in China's administrative processes it is first necessary to increase it. But the new conditions would be very different from those that have burdened China for the last half century. They would differ not only in form and application, but in purpose. An enlightened foreign assistance, under the asgis of a league of nations, having the object of restoring China's complete administrative and fiscal autonomy by educating Chinese in modern methods and tranquilizing the country, would carry a real hope for that people and a real benefit to the world. Article Number 11 of my list scarcely permits of qualifica- tion or extenuation, as most of the other articles do. It refers to a condition that is an open and flagrant outrage upon China, the usurpation in large regions of her administration functions, and their restriction under the intimidation of for- eign military occupation. First introduced by Russia in con- nection with the policing of the Chinese Eastern Railway zone, the system was greatly extended by Japan when she by conquest secured the reversion of Russia's rights in southern Manchuria, and later was extended over nearly the whole of Shantung province. This system has even been implanted in the heart of China by Japanese police supervision of coal- and THE SOLUTION 357 iron-mines and plants in the Yangtse valley, and by the in- stallation of a Japanese garrison in permanent barracks at Hankow; and the beginnings of the system have recently ap- peared in Fukien province. Put succinctly, China's appeal to the democratic nations amounts to a cry to be delivered from the old system of predatory penetration and exploitation by imperialistic pow- ers, and to be allowed, and helped, to work out a peaceful national destiny on democratic lines. The league of nations is not yet perfected or adopted, but its first draft, which re- ceived the assent of all the nations represented at Paris, should be satisfactory to China with one proviso. That is how the matter of creating mandatary nations for the super- vision, under the league, of weak and backward nations, might be applied in practice. It is evident from the tone of the Japanese press that Japan may be expecting, under that pro- vision, to be nominated the mandatary of the league with re- spect to China, thereby confirming her "special position" and paramountcy in the far East. Chinese will bitterly resent that, and probably they will rebel with force against such a solution. First, China should not be put in the class of na- tions or states that require a mandatary guardian ; and, second, if China should against her wish be placed under a manda- tary, Japan probably is the last nation the Chinese would want to occupy that position. However, the provision that the back- ward states will be allowed to choose their mandatary guar- dians, or that they must approve them, seems to safeguard them from being subjected to an objectionable alien super- vision. Taking the case of China in toto, it presents almost an ideal test to apply the announced principles of the major nations in prosecuting the war and in making the peace. It con- tains as yet no extraordinary difficulties, as the case of Russia does; no conglomeration of national and racial problems, as middle Europe does; no such festering caldron of jealousies and hatreds, as the Balkan question does. Yet in the last 358 DEMOCRACY AND THE EASTERN QUESTION twenty years China has been developing into a combined Russia, middle Europe, and Balkans, with the antagonistic ambitions of several powerful nations concentrated on a. strug- gle to control her, or to possess the lion 's share of her remains. What this situation leads to in international affairs has been sufficiently demonstrated by recent events. If China's case does not get sympathetic attention and just treatment by the world, it will not be possible for any one who knows the reali- ties of international politics hereafter to hear their altruistic professions with any confidence or respect. APPENDICES APPENDIX A THE HAY DOCTRINE NOTES AND TREATIES BETWEEN THE POWERS AFFIRM- ING THE COMMERCIAL PRINCIPLE OF THE ''OPEN DOOR" AND DECLARING THEIR INTENTION TO RE- SPECT THE INDEPENDENCE AND TERRITORIAL IN- TEGRITY OF CHINA, AND SEPARATE AGREEMENTS AMONG THE POWERS CONCERNING, AND DEFINING THEIR RESPECTIVE "SPHERES OF INTEREST" AND "SPECIAL POSITIONS" IN CHINA. I. MR. HAY, AMERICAN SECRETARY OF STATE, TO MR. WHITE, AMERICAN AMBASSADOR TO GERMANY Department of State, Washington, September 6, 1899. Sir: At the time when the Government of the United States was in- formed by that of Germany that it had leased from His Majesty the Emperor of China the port of Kiaochou and the adjacent territory in the province of Shantung, assurances were given to the Ambassador of the United States at Berlin by the Imperial German Minister for Foreign affairs that the rights and privileges insured by treaties with China to citizens of the United States would not thereby suffer or be in anyAvise impaired within the area over which Germany had thus obtained control. More recently, however, the British Government recognized by a formal agreement with Germany the exclusive right of the latter country to enjoy in said leased area and the contiguous "sphere of influence or interest" certain privileges, more especially those re- lating to railroads and mining enterprises; but, as the exact nature and extent of the rights thus recognized have not been clearly de- fined, it is possible that serious conflicts of interests may at any time arise, not only between British and German subjects within said area, 361 362 APPENDICES but that the interests of our citizens may also be jeopardized thereby. Earnestly desirous to remove any cause of irritation and to insure at the same time to the commerce of all nations in China the un- doubted benefits which should accrue from a formal recognition by the various Powers claiming ''spheres of interest" that they shall en- joy perfect equality of treatment for their commerce and navigation within such "spheres," the Government of the United States would be pleased to see His German Majesty's Government give formal as- surances, and lend its cooperation in securing like assurances from the other interested Powers, that each within its respective sphere of whatever influence First. "Will in no way 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 ap- ply to all merchandise landed or shipped to 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 vessels of another nationality frequenting any port in such "sphere" than shall be levied on vessels of its own nationality, and no higher railroad charges over lines built, controlled, or operated within its "sphere" on merchandise belonging to citizens or subjects of other nationali- ties transported through such "sphere" than shall be levied on sim- ilar merchandise belonging to its own nationals transported over equal distances. The liberal policy pursued by His Imperial German Majesty in declaring Kiaochou a free port and in aiding the Chinese Govern- ment in the establishment there of a custom-house are so clearly in line with the proposition which this Government is anxious to see recognized that it entertains the strongest hope that Germany will give its acceptance and hearty support. The recent Ukase of His Majesty the Emperor of Russia declaring the port of Ta-lien-wan open during the whole of the lease under which it is held from China to the merchant ships of all nations, coupled with the categorical assurances made to this Government by His Imperial Majesty's representative at this capital at the time, and since repeated to me by the present Russian Ambassador, seem to insure support of the Emperor to the proposed measure. Our Ambassador at the Court of St. Petersburg has in consequence been instructed to submit it to the Russian Government and to request their early consideration of it. A copy of my instruction on the APPENDICES 363 subject to Mr. Tower is herewith enclosed for your confidential in- formation. The commercial interests of Great Britain and Japan will be so clearly served by the desired declaration of intentions, and the views of the Governments of these countries as to the desirability of the adoption of measures insuring the benefits of equality of treatment of all foreign trade throughout China are so similar to those enter- tained by the United States, that their acceptance of the proposition herein outlined and their cooperation in advocating their adoption by the other Powers can be confidently expected. I enclose herewith copy of the instruction which I have sent to Mr. Choate on the sub- ject. In view of the present favorable conditions, you are instructed to submit the above considerations to His Imperial German Majesty's Minister for Foreign Affairs, and to request his early consideration of the subject. Copy of this instruction is sent to our Ambassadors at London and at St. Petersburg for their information. I have, etc. JOHN HAT. COUNT VON BULOW, HIS IMPERIAL GERMAN MAJESTY'S MINISTER FOR FOREIGN AFFAIRS, TO MR. WHITE (Translation.) Foreign Office, Berlin, February 19, 1900. Mr. Ambassador: Your Excellency informed me, in a memorandum presented on the 24th of last month, that the Government of the United States of America had received satisfactory written replies from all the Pow- ers to which an inquiry had been addressed similar to that contained in Your Excellency's note of September 26 last, in regard to the policy of the open door in China. While referring to this, Your Excellency thereupon expressed the wish that the Imperial Govern- ment would now also give its answer in writing. Gladly complying with this wish, I have the honor to inform Your Excellency, repeating the statements already made verbally, as fol- lows: As recognized by the Government of the United States of America, according to Your Excellency's note referred to above, the Imperial Government has, from the beginning, not only asserted, but also practically earned out to the fullest extent in its Chinese possessions absolute equality of treatment of all nations with regard 364 APPENDICES to trade, navigation, and commerce. The Imperial Government en- tertains no thought of departing in the future from this principle, which at once excludes any prejudicial or disadvantageous commer- cial treatment of the citizens of the United States of America, so long as it is not forced to do so, on account of considerations of reci- procity, by a divergence from it by other governments. If, there- fore, the other Powers interested in the industrial development of the Chinese Empire are willing to recognize the same principles, this can only be desired by the Imperial Government, which in this case upon being requested will gladly be ready to participate with the United States of America and the other Powers in an agreement made upon these lines, by which the same rights are reciprocally secured. I avail myself, etc. BULOW. II. BRITISH AND GERMAN AGREEMENT RE RAILWAY CONSTRUCTION IN CHINA Minutes of Meeting held at New Court, St. Swithen's Lane, Lon- don, on the 1st and 2nd September, 1898. Present: Representing the German Syndicate M.A. von Hanse- mann. Representing the British and Chinese Corporation, Ltd. Mr. "W. Keswick. Representing the Hongkong and Shanghai Bank- ing Corporation Mr. Ewen Cameron, Mr. Julius Brussel. M. VON HANSEMANN T proposed the following: "It is desirable for the British and German Governments to agree about the sphere of interest of the two countries regarding the railway constructions in China, and to mutually support the interest of either country." This proposal was agreed to. The following proposal of M. von Hansemann regarding: the British and German spheres of interest for applications for Railway concessions in China, viz. "1. British sphere of interest, viz. The Yangtze 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. German sphere of interest, viz. The Province of Shantung and the Hoangho Valley with connection to Tientsin and Chengting, or other point of the Peking-Hankow line, in the south with connec- APPENDICES 365 tion to the Yangtze at Chinkiang or Nanking. The Hoangho Valley is understood 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 said sphere of interest/' Was agreed to with the following alterations, viz. "The line from Tientsin to Tsinan, or another point of the northern frontier of the Province of Shantung, and the line from the southern point of the Province of Shantung to Chinkiang to be constructed by the Anglo- German Syndicate (meaning the German Syndicate on the one part, and the Hongkong and Shanghai Banking Corporation and the British and Chinese Corporation, Limited, on the other part) in the following manner, viz. "1 The capital for both lines to be raised jointly. "2 The line from Tientsin or Tsinan or another point on the northern frontier of the Province of Shantung to be built and equipped and worked by the German group. "3 The line from the southern point of the province of Shantung to Chinkiang to be built and equipped and worked by the English Group. "4 On completion the lines to be worked for joint account." So far the minutes of the proceedings of the meetings, and it is further agreed upon that neither the German Group nor the English Group will be bound to construct the lines assigned to their sphere unless the Shantung lines be constructed simultaneously. Signed London, September 2, 1898. Approved of and signed by A. VON HANSEHANN, W. KESWTCK, EWEN CAMERON, JULIUS BRUSSEL. III. AGREEMENT BETWEEN GREAT BRITAIN AND GERMANY DEFINING THEIR MUTUAL POLICY IN CHINA SIGNED AT LONDON, IGra OCTOBER, 1900 Her Britannic Majesty's Government and the Imperial German Government being desirous to maintain their interests in China and their rights under existing Treaties, have agreed to observe the fol- lowing principles in regard to their mutual policy in China : 1. It is a matter of joint and permanent international interest that the ports on the rivers and littoral of China should remain free and open to trade and to every legitimate form of economic activity for the nationals of all countries without distinction; and the two 366 APPENDICES Governments agree on their part to uphold the same for all Chinese territory as far as they can exercise influence. 2. Her Britannic Majesty's Government and the Imperial German Government will not, on their part, make use of the present compli- cation to obtain for themselves any territorial advantages in Chinese dominions, and will direct their policy towards maintaining undimin- ished the territorial condition of the Chinese Empire. 3. In case of another Power making use of the complications in China in order to obtain under any form whatever such territorial ad- vantages, the two Contracting parties reserve to themselves to come to a preliminary understanding as to the eventual steps to be taken for the protection of their own interests in China. 4. The two Governments will communicate this Agreement to the other Powers interested, and especially to Austria-Hungary, France, Italy, Japan, Russia, and the United States of America, and will invite them to accept the principles recorded in it. SALISBURY. HATZFELDT. DECLARATION BY GREAT BRITAIN RESPECTING WEIHAIWEI APRIL 19, 1898 England formally declares to Germany that in establishing herself at Weihaiwei, she has no intention of injuring or contesting the rights and interests of Germany in the Province of Shantung, or of creating difficulties for her in that province. It is especially under- stood that England will not construct any railroad communication from Weihaiwei and the district leased therewith into the interior of the Province of Shantung. IV. IDENTIC NOTES EXCHANGED BETWEEN THE UNITED KINGDOM AND RUSSIA WITH REGARD TO THEIR RESPECTIVE RAILWAY INTERESTS IN CHINA April 28, 1899. SIR C. SCOTT TO COUNT MOURAVIEFF The undersigned, British Ambassador, duly authorized to that effect, has the honor to make the following declaration to His Excel- lency Count Mouravieff, Russian Minister for Foreign Affairs. APPENDICES 367 Great Britain and Russia, animated by a sincere desire to avoid in China all cause of conflict on questions where their interests meet, and taking into consideration the economic and geographical gravi- tation of certain parts of that Empire, have agreed as follows : 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, applications for railway concessions in that region sup- ported 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 conces- sions in the basin of the Yangtze and not to obstruct, directly or indirectly, applications for railway concessions in that region sup- ported by the British Government. The two Contracting Parties, having nowise in view to infringe in any way the sovereign rights of China or existing Treaties, will not fail to communicate to the Chinese Government the present arrange- ment, which, by averting all cause of complications between them, is of a nature to consolidate peace in the far East, and to serve the primordial interests of China herself. CHARLES S. SCOTT. St. Petersburg, April 28, 1899. SIR C. SCOTT TO COUNT MOURAVIEPP In order to complete the notes exchanged this day respecting the partition of spheres for concessions for the construction and work- ing of railways in China, it has been agreed to record in the present additional note the agreement arrived at with regard to the line Shanhaikwan-Newchwang, for the construction of which a loan has been already contracted by the Chinese Government with the Shang- hai-Hongkong Bank, acting on behalf of the British and Chinese Corporation. The general arrangement established by the above-mentioned notes is not to infringe in any way the rights acquired under the said Loan Contract, and the Chinese Government may appoint both an English engineer and an European accountant to supervise the construction of the line in question, and the expenditure of the money appropri- ated to it. But it remains understood that this fact cannot be taken as con- stituting a right of property or foreign control, and that the line in question is to remain a Chinese line, under the control of the Chinese Government, and cannot be mortgaged or alienated to a non-Chinese Company. 368 APPENDICES As regards the branch line from Siaohieshan to Simmintin, in ad- dition to the aforesaid restrictions, it has been agreed that it is to be constructed by China herself, who may permit European not necessarily British engineers to periodically inspect it, and to verify and certify that the work is being properly executed. The present special agreement is naturally not to interfere in any way with the right of the Russian Government to support, if it thinks fit, applications of Russian subjects or establishments for con- cessions for railways, which, starting from the main Manchurian line in a southwesterly direction, would traverse the region in which the Chinese line terminating at Simmintin and Newchwang is to be con- structed. CHARLES S. SCOTT. St. Petersburg, April 28, 1899. The same, mutatis mutandis, was sent the same day by Count Mouravieff, Russian Minister for Foreign Affairs, to Sir Charles Scott. V. FRANCO-JAPANESE ARRANGEMENT SIGNED AT PARIS, JUNE 10, 1907. ARRANGEMENT The Government of His Majesty the Emperor of Japan and the Government of the French Republic, animated by the desire to strengthen the relations of amity existing between them, and to re- move from those relations all cause of misunderstanding for the future, have decided to conclude the following Arrangement: "The Governments of Japan and France, being agreed to respect the independence and integrity of China, as well as the principle of equal treatment in that country for the commerce and subjects or citizens of all nations, and having a special interest to have the order and pacific state of things preserved especially in the regions of the Chinese Empire adjacent to the territories where they have the rights of sovereignty, protection or occupation, engage to sup- port each other for assuring the peace and security in those regions, with a view to maintain the respective situation and the territorial rights of the two High Contracting Parties in the Continent of Asia." In witness whereof, the Undersigned : His Excellency Monsieur Kurino, Ambassador Extraordinary and Plenipotentiary of His Maj- APPENDICES 369 esty the Emperor of Japan to the President of the French Republic, and His Excellency Monsier Stephen Pichon, Senator, Minister for Foreign Affairs, authorized by their respective Governments, have signed this Agreement and have affixed thereto their seals. Done at Paris, the 10th of June, 1907. (L. S.) S. KURINO. (L. S.) S. PICHON. DECLARATION The two Governments of Japan and France, while reserving the negotiations for the conclusion of a Convention of Commerce in re- gard to the relations between Japan and French Indo-Chiua, agree as follows : The treatment of the most favored nation shall be accorded to the officers and subjects of Japan in French Indo-China in all that con- cerns their persons and the protection of their property, and the same treatment shall be applied to the subjects and proteges of French Indo-China in the Empire of Japan, until the expiration of the Treaty of Commerce and Navigation signed between Japan and France on the 4th of August, 1896. Paris, the 10th of June, 1907. (L. S.) S. KURINO. (L. S.) S. PICHON. VI. CONVENTION BETWEEN JAPAN AND RUSSIA SIGNED JULY 30, 1907 The Government of His Majesty the Emperor of Japan and the Government of His Majesty the Emperor of All the Russias, desir- ing to consolidate the relations of peace and good neighborhood which have happily been reestablished between Japan and Russia, and wishing to remove for the future every cause of misunderstand- ing in the relations of the two Empires, have agreed to the following arrangements : ARTICLE I. Each of the High Contracting Parties engages to re- spect the actual territorial integrity of the other, and all the rights accruing to one and the other Party from treaties, conventions and contracts in force between them and China, copies of which have been exchanged between the Contracting Parties (in so far as these rights are not incompatible with the principle of equal opportunity) of the Treaty signed at Portsmouth on the 5th day of September 370 APPENDICES (23rd of August) 1905, as well as the special conventions concluded between Japan and Russia. ART. II. The two High Contracting Parties recognize the inde- pendence and the territorial integrity of the Empire of China and the principle of equal opportunity in whatever concerns the com- merce and industry of all nations in that empire, and engage to sustain and defend the maintenance of the status quo and respect for this principle by all the pacific means within their reach. In witness whereof, the undersigned, duly authorized by their re- spective Governments, have signed this Convention and have affixed their seals. Done at St. Petersburg, the 30th day of the 7th month of the 40th year of Meiji, corresponding to the 30th (17th) of July, 1907. (Signed) I. MOTONO. (Signed) ISWOLSKY. VII NOTES EXCHANGED BETWEEN THE UNITED STATES AND JAPAN, NOVEMBER 30, 1908, DECLARING THEIR POLICY IN THE FAR EAST Imperial Japanese Embassy, Washington, November 30, 1908. Sir: The exchange of views between us, which has taken place at the several interviews which I have recently had the honor of holding with you, has shown that Japan and the United States holding im- portant outlying insular possessions in the region of the Pacific Ocean, the Governments of the two countries are animated by a com- mon aim, policy, and intention in that region. Believing that a frank avowal of that aim, policy, and intention would not only tend to strengthen the relations of friendship and good neighborhood, which have immemorially existed between Japan and the United States, but would materially contribute to the preser- vation of the general peace, the Imperial Government have author- ized me to present to you an outline of their understanding of that common aim, policy, and intention : 1. It is the wish of the two Governments to encourage the free and peaceful development of their commerce on the Pacific Ocean. 2. The policy of both Governments, uninfluenced by any aggres- sive tendencies, is directed to the maintenance of the existing i-tatus quo in the region above mentioned and to the defense of the prin- APPENDICES 371 ciple of equal opportunity for commerce and industry in China. 3. They are accordingly firmly resolved reciprocally to respect the territorial possessions belonging to each other in said region. 4. They are also determined to preserve the common interest of all powers in China by supporting by all pacific means at their dis- posal the independence and integrity of China and the principle of equal opportunity for commerce and industry of all nations in that Empire. 5. Should any event occur threatening the status quo as above described or the principle of equal opportunity as above defined, it remains for the two Governments to communicate with each other in order to arrive at an understanding as to what measures they may consider it useful to take. If the foregoing outline accords with the view of the Govern- ment of the United States, I shall be gratified to receive your con- firmation. I take this opportunity to renew to Your Excellency the assur- ance of my highest consideration. K. TAKAHIRA. HONORABLE ELIHU ROOT, Secretary of State. Department of State, Washington, November 30, 1908. Excellency : I have the honor to acknowledge the receipt of your note of to- day setting forth the result of the exchange of views between us in our recent interviews defining the understanding of the two Govern- ments in regard to their policy in the region of the Pacific Ocean. It is a pleasure to inform you that this expression of mutual understanding is welcome to the Government of the United States as appropriate to the happy relations of the two countries and as the occasion for a concise mutual affirmation of that accordant policy respecting the far East which the two Governments have so fre- quently declared in the past. I am happy to be able to confirm to Your Excellency, on behalf of the United States, the declaration of the two Governments em- bodied in the following words: 1. It is the wish of the two Governments to encourage the free and peaceful development of their commerce on the Pacific Ocean. 2. The policy of both Governments, uninfluenced by any agres- sive tendencies, is directed to the maintenance of the existing status quo in the region above mentioned, and to the defense of the. prin- ciple of equal opportunity for commerce and industry in China. 372 APPENDICES 3. They are accordingly firmly resolved reciprocally to respect the territorial possessions belonging to each other in said region. 4. They are also determined to preserve the common interests of all powers in China by supporting by all pacific means at their disposal the independence and integrity of China and the principle of equal opportunity for commerce and industry of all nations in that Empire. 5. Should any event occur threatening the status quo as above described or the principle of equal opportunity as above defined, it remains for the two Governments to communicate with each other in order to arrive at an understanding as to what measures they may consider it useful to take. Accept, Excellency, the renewed assurance of my highest con- sideration. ELIHU ROOT. His Excellency BARON KOGOEO TAKAHIRA. VIII. EXTRACTS FROM THE ANGLO-JAPANESE ALLIANCE TREATIES, RELATING TO THE HAY DOCTRINE (SECOND ALLIANCE TREATY, SIGNED AT LONDON, AUGUST 12, 1905) (b) The preservation of the common interest of all Powers in China by insuring the independence and integrity of the Chinese Empire and the principle of equal opportunities for the commerce and industry of all nations in China. (THIRD ALLIANCE TREATY, SIGNED JULY 13, 1911) B. The preservation of the common interests of all the Powers in China by insuring the independence and integrity of the Chinese Empire and the principle of equal opportunities for the commerce and industry of all nations in China. APPENDIX B JAPAN'S DIPLOMATIC DEMANDS ON CHINA IN 1905, WITH THE ORIGINAL SECRET TWENTY-ONE ARTICLES, THE ELEVEN ARTICLES PRESENTED TO THE POW- ERS INCORRECTLY REPRESENTING JAPAN'S DE- MANDS, THE REVISED DEMANDS, THE CHINESE GOVERNMENT'S OFFICIAL STATEMENT OF THE NEGOTIATIONS, AND THE AGREEMENT AND NOTES WHICH CHINA WAS COMPELLED TO SIGN. THE ORIGINAL TWENTY-ONE DEMANDS The Japanese Government and the Chinese Government being de- sirous of maintaining the general peace in Eastern Asia and fur- ther strengthening the friendly relations and good neighborhood existing between the two nations agree to the following articles : Article 1. The Chinese Government engages to give full assent to all matters upon which the Japanese Government may hereafter agree with the German Government relating to the disposition of all rights, interests, and concessions, which Germany by virtue of treaties 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 Power under any pretext. Article 3. The Chinese Government consents to Japan's building a railway from Chefoo or Lungkou to join the Kiaochou-Tsinanfu Railway. Article 4. Th^ Chinese Government engages, in the interest of trade and for the residence of foreigners, to open by herself as soon as possible certain important cities and towns in the Province of Shantung as commercial ports. What places shall be opened are to be jointly decided upon in a separate agreement. 373 374 APPENDICES II The Japanese Government and the Chinese Government, since the Chinese Government has always acknowledged the special position enjoyed by Japan in South Manchuria and eastern inner Mongolia, agree to the following articles : 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 Manchurian Railway and the Antung-Mukden Railway shall be extended to the period of ninety-nine years. 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 subjects shall be free to reside and travel in south Manchuria and eastern inner Mongolia and to engage in business and in manufacture of any kind whatsoever. Article 4. The Chinese Government agrees to grant to Japanese subjects the right of opening the mines in south Manchuria and eastern Mongolia. As regards what mines are to be opened, they shall be decided upon jointly. Article 5. The Chinese Government agrees that in respect of the (two) cases mentioned herein below the Japanese Government's con- sent shall be first obtained before action is taken : (a) Whenever permission is granted to the subject of a third Power to build a railway or to make a loan with a third Power for the purpose of building a railway in south Manchuria and eastern inner Mongolia. (b) Whenever a loan is to be made with a third Power pledging the local taxes of south Manchuria and eastern inner Mongolia as security. Article 6. The Chinese Government agrees that if the Chinese Government employs political, financial or military advisers or in- structors in south Manchuria or eastern Mongolia, the Japanese Government shall first be consulted. Article 1. 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 ninety-nine years dating from the signing of this agreement. Ill The Japanese Government and the Chinese Government, seeing that Japanese financiers and the Hanyehping Company, have close APPENDICES 375 relations with each other at present and desiring that the common interests of the two nations shall be advanced, agree to the following articles : Article 1. The two contracting parties mutually agree that when the opportune moment arrives the Hanyehping Company shall be made a joint concern of the two nations 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 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 apprehended, may directly or indirectly affect the interests of the said company, the consent of the said company shall first be obtained. IV The Japanese Government and the Chinese Government with the object of effectively preserving the territorial integrity cf China agree to the following special article : The Chinese Government engages not to cede or lease to a third Power any harbor or bay or island along the coast of China. Article 1. The Chinese Central Government shall employ in- fluential Japanese as advisers in political, financial, and military affairs. Article 2. Japanese hospitals, churches and schools in the in- terior of China shall be granted the right of owning land. Article 3. Inasmuch as the Japanese Government and the Chinese Government have had many cases of dispute between Japanese and Chinese police 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 or that the police departments of these places shall em- ploy numerous Japanese, so that they may at the same time help to plan for the improvement 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 376 APPENDICES the Chinese Government) or that there shall be established in China a Sino-Japanese jointly worked arsenal. Japanese technical ex- perts are to be employed and Japanese material to be purchased. Article 5. China agrees to grant to Japan the right of construct- ing a railway connecting Wuchang with Kiukiang and Nanchang, another line between Nanchang and Hangchow, and another be- tween Nanchang and Chaochou. Article 6. If China needs foreign capital to work mines, build railways and construct harbor-works (including dock-yards) in the Province of Fukien, Japan shall be first consulted. Article 7. China agrees that Japanese subjects shall have the right of missionary propaganda in China. THE INCORRECT VERSION OF JAPAN'S DEMANDS AS COMMUNICATED BY THE JAPANESE GOVERNMENT TO THE OTHER POWERS IN RESPONSE TO THEIR INQUIRIES. I. In relation to the Province of Shantung. 1. Engagement on the part of China to consent to all matters that may be agreed upon between Japan and Germany with re- gard to the disposition of all rights, interests and concessions, which in virtue of treaties or otherwise Germany possesses in relation to the Province of Shantung. 2. Engagement not to alienate or lease upon any pretext the Province of Shantung or any portion thereof and any island lying near the coast of the said province. 3. -.Grant to Japan the right of construction of a railway con- necting Chifu or Lungkow and the Tsinan-Kiaochou railway. 4. Addition of open marts in the Province of Shantung. II. In relation to south Manchuria and eastern inner Mongolia. 1. Extension of the terms of the lease of Kwangtung, the South Manchuria Railway, and the Antung-Mukden Railway. 2. (A). Acquisition by the Japanese of the right of residence and ownership of land. (B). Grant to Japan of the mining rights of mines specified by Japan. 3. Obligation on the part of China to obtain in advance the con- sent of Japan if she grants railway concessions to any third Power, or procures the supply of capital from any Power for railway construction or a loan from any other Power on the security of any duties or taxes. APPENDICES 377 4. Obligation on the part of China to consult Japan before em- ploying advisers or tutors regarding political, financial or military matters. 5. Transfer of the management and control of the Kirin-Chang- chuu Railway to Japan. III. Agreement in principle that, at an opportune moment in the future, the Hanyehping Company should be placed under Jap- anese and Chinese cooperation. IV. Engagement in accordance with the principle of the main- tenance of the territorial integrity of China, not to alienate or lease any ports and bays on, or any island near, the coast of China. JAPAN'S REVISED DEMANDS PRESENTED APRIL 26, 1915 GROUP I The Japanese Government and the Chinese Government, being desirous of maintaining the general peace in Eastern Asia and further strengthening the friendly relations and good neighborhood existing between the two nations, agree to the following articles: Article 1. The Chinese Government engages to give full assent to all matters upon which the Japanese Government may hereafter agree with the German Government, relating to the disposition of all rights, interests, and concessions, which Germany, by virtue of treaties or otherwise, possesses in relation to the Province of Shantung. Article 2. (Changed into an exchange of notes). The Chinese Government declares that within the Province of Shantung and along its coast no territory or island will be ceded or leased to any Power under any pretext. Article 3. The Chinese Government consents that as regards the railway to be built by China herself from Chefoo or Lungkow, to connect with the Kiaochow-Tsinanfu Railway, if Germany is will- ing to abandon the privilege of financing the Chefoo- Weihsien line, China will approach Japanese capitalists to negotiate for a loan. Article 4. The Chinese Government engages in the interest of trade and for the residence of foreigners, to open by China herself as soon as possible certain suitable places in the Province of Shantung as commercial ports. (Supplementary exchange of notes.) 378 APPENDICES The places which ought to be opened are to be chosen, and the regulations are to be drafted, by the Chinese Government, but the Japanese minister must be consulted before making a decision. GROUP II The Japanese Government and the Chinese Government, with a view to developing their economic relations in south Manchuria and eastern inner Mongolia, agree to the following articles: Article 1. The two contracting Powers mutually agree that the term of lease of Port Arthur and Dalny and the term of the South Manchurian Railway and the Antung-Mukden Railway, shall be extended to 99 years. (Supplementary exchange of notes.) The term of lease of Port Arthur and Dalny shall expire in the 86th year of the Republic or 1997. The date for restoring the South Manchurian Railway to China shall fall due in the 91st year of the Republic or 2002. Article 12 in the original South Man- churian Railway Agreement that it may be redeemed by China after 36 years after the traffic is opened is hereby canceled. The term of the Antung-Mukden Railway shall expire in the 96th year of the Republic or 2007. Article 2. Japanese subjects in south Manchuria may lease or purchase the necessary land for erecting suitable buildings for trade and manufacture or for prosecuting agricultural enterprises. Article 3. Japanese subjects shall be free to reside and travel in south Manchuria and to engage in business and manufacture of any kind whatsoever. Article 3a. The Japanese subjects referred to in the preceding two articles, besides being required to register with the local au- thorities passports which they must procure under the existing regulations, shall also submit to police laws and ordinances and tax regulations, which are approved by the Japanese consul. Civil and criminal cases in which the defendants are Japanese shall be tried and adjudicated by the Japanese consul; those in which the defendants are Chinese shall be tried and adjudicated by Chinese authorities. In either case an officer can be deputed to the court to attend the proceedings. But mixed civil cases between Chinese and Japanese relating to land shall be tried and adjudicated by delegates of both nations conjointly, in accordance with Chinese law and local usage. When the judicial system in the said region is completely reformed, all civil and criminal cases concerning Jap- anese subjects shall be tried entirely by Chinese law courts. APPENDICES 379 Article 4. (Changed to an exchange of notes.) The Chinese Government agrees that Japanese subjects shall be permitted forthwith to investigate, select, and then prospect for and open mines at the following places in south Manchuria, apart from those mining areas in which mines are being prospected for or worked; until the mining ordinance is definitely settled, methods at present in force shall be followed : Province of Feng-tien LOCALITY DISTRICT MINERAL Niu Hsin T'ai Pen-hsi Coal Tien Shih Fu Kou Pen-hsi do. Sha Sung Kang Hai-lung do. T'ieh Ch'ang T'ung-hua do. Nuan Ti T'ang Chin do. An Shan Chan region From Liao-yang to Pen-shi Iron Province of Kirin (Southern Portion) Sha Sung Kang Ho-lung C. & I. Kang Yao Chi-lin (Kirin) Coal Chia Pi'i Kou Hua-tien Gold Article 5. (Changed to an exchange of notes.) The Chinese Government declares that China will hereafter pro- vide funds for building railways in south Manchuria; if foreign capital is required the Chinese Government agrees to negotiate for a loan with Japanese capitalists first. Article 5a. (Changed to an exchange of notes.) The Chinese Government agrees that hereafter, when a foreign loan is to be made on the security of the taxes of south Manchuria (not including customs and salt revenue on the security of which loans have already been made by the Central Government), it will negotiate for the loan with Japanese capitalists first. Article 6. (Changed to an exchange of notes.) The Chinese Government declares that hereafter if foreign ad- visers or instructors on political, financial, military, or police mat- ters are to be employed in south Manchuria, Japanese will be em- ployed first. Article 7. The Chinese Government agrees speedily to make a fundamental revision of the Kirin-Changchun Railway Loan Agree- ment, taking as a standard the provisions in railway loan agreements made heretofore between China and foreign financiers. If, in fu- 380 APPENDICES ture, more advantageous terms than those in existing railway loan agreements are granted to foreign financiers, in connection with railway loans, the above agreement shall again be revised in ac- cordance with Japan's wishes. Chinese Counter-Proposal to Article 7 All existing treaties between China and Japan relating to Man- churia shall, except where otherwise provided for by this conven- tion, remain in force. Matters Eelating to Eastern Inner Mongolia 1. The Chinese Government agrees that hereafter when a foreign loan is to be made on the security of the taxes of eastern inner Mongolia, China must negotiate with the Japanese Government first. 2. The Chinese Government agrees that China will herself pro- vide funds for building the railways in eastern inner Mongolia; if foreign capital is required, she must negotiate with the Japanese Government first. 3. The Chinese Government agrees, in the interest of trade and for the residence of foreigners, to open by China herself, as soon as possible, certain places suitable in eastern inner Mongolia as commercial ports. The places which ought to be opened are to be chosen, and the regulations are to be drafted, by the Chinese Gov- ernment, but the Japanese minister must be consulted before making a decision. 4. In the event of Japanese and Chinese desiring jointly to un- dertake agricultural enterprises and industries incidental thereto, the Chinese Government shall give its permission. GROUP III The relations between Japan and the Hanyehping Company being very intimate, if the interested party of the said company comes to an agreement with the Japanese capitalists for cooperation, the Chinese Government shall forthwith give its consent thereto. The Chinese Government further agrees that, without the consent of the Japanese capitalists, China will not convert the company into a state enterprise, nor confiscate it, nor cause it to borrow and use foreign capital other than Japanese. APPENDICES 381 Article IV China to give a pronouncement by herself in accordance with the following principle : No bay, harbor, or island along the coast of China may be ceded or leased to any Power. NOTES TO BE EXCHANGED As regards the right of financing a railway from Wuchang to connect with the Kiukiang-Nanchang line, the Nanchaug-Hangchow Railway, and the Nanchang-Chaochow Railway, if it is clearly as- certained that other Powers have no objection, China shall grant the said right to Japan. As regards the right of financing a railway from Wuchang to con- nect with the Kiukiang-Nanchang Railway, a railway from Nan- chang to Hangchow and another from Nanchang to Chaoehow, the Chinese Government shall not grant the said right to any foreign Power before Japan comes to an understanding with the other Power which is heretofore interested therein. NOTES TO BE EXCHANGED The Chinese Government agrees that no nation whatever is to be permitted to construct, on the coast of Fukien Province, a dock- yard, a coaling station for military use, or a naval base; nor to be authorized to set up any other military establishment. The Chinese Government further agrees not to use foreign capital for setting up the above-mentioned construction or establishment. Mr. Lu, the Minister of Foreign Affairs, stated as follows: 1. The Chinese Government shall, whenever, in future, it con- siders this step necessary, engage numerous Japanese advisers. 2. Whenever, in future, Japanese subjects desire to lease or pur- chase land in the interior of China for establishing schools or hos- pitals, the Chinese Government shall forthwith give its consent thereto. 3. When a suitable opportunity arises in future, the Chinese Government will send military officers to Japan to negotiate with Japanese military authorities the matter of purchasing arms or that of establishing a joint arsenal. 382 APPENDICES Mr. Hioki, the Japanese minister, stated as follows: As relates to the question of the right of missionary propaganda, the same shall be taken up again for negotiation in future. OFFICIAL STATEMENT BY THE CHINESE GOVERNMENT RESPECTING THE SINO-JAPANESE NEGOTIATIONS NOW BROUGHT TO A CONCLUSION BY CHINA'S COM- PLIANCE WITH THE TERMS OF JAPAN'S ULTIMATUM DELIVERED ON MAY 7, 1915. At three o'clock on the afternoon of May 7, 1915, His Excellency, the Japanese Minister in Peking delivered to the Chinese Govern- ment, in person an Ultimatum from the Imperial Japanese Govern- ment, with an accompanying Note of seven articles. The conclud- ing sentences of the Ultimatum read thus: "The Imperial Government hereby again offer their advice and hope that the Chinese Government, upon this advice, will give a sat- isfactory reply by six o'clock p. m. on the ninth day of May. It is hereby declared that if no satisfactory reply is received before or at the specified time the Imperial Government will take such steps as they may deem necessary." The Chinese Government, having received and accepted the Ulti- matum, feel constrained to make a frank and plain statement of the facts connected with the negotiations which were abruptly ter- minated by this drastic action on the part of Japan. The Chinese Government have constantly aimed, as they still aim, at consolidating the friendship existing between China and Japan, and, in this period of travail in other parts of the world, have been particularly solicitous of preserving peace in the far East. Un- expectedly on January 18, 1915, His Excellency the Japanese Min- ister in Peking, in pursuance of instructions from his Government, adopted the unusual procedure of presenting to his Excellency the President of the Republic of China a list (hereto appended) of twenty-one momentous demands, arranged in five Groups. The first four Groups were each introduced l)ij a preamble, but there was no preamble or explanation to the fifth Group. In respect of the char- acter of the demands in this Group, however, no difference was in- dicated in the document between them and those embodied in the prceding Groups. Although there was no cause for such a demarche, the Chinese Government, in deference to the wishes of the Imperial Japanese Government, at once agreed to open negotiations on those articles which it was possible for China to consider, notwithstanding that APPENDICES 383 it vis palpable that the whole of the demands were intended to extend the rights and interests of Japan without securing a quid pro quo of any kind for China. China approached the pending conferences in a spirit of utmost friendliness and with a determination to deal with all questions frankly and sincerely. Before negotiations were actually com- menced, the Japanese Minister raised many questions with regard to the number of delegates proposed to represent China, the num- ber of conferences to be held in each week, and the method of dis- cussion. The Chinese Government, though their views differed from those of the Japanese Minister, yielded in all these respects to his contentions in the hope of avoiding any delay in the negotiations. The objections of the Japanese Minister to the customary recording and signing of the minutes of each conference, which the Chinese Government suggested as a necessary and advisable precaution, as well as one calculated to facilitate future reference, were also ac- cepted. Nor did the Chinese Government retaliate in any way when in the course of the negotiations the Japanese Minister twice sus- pended the conferences, obviously with the object of compelling compliance with his views on certain points at the time under dis- cussion. Even when delay was threatened owing to the unfortunate injury sustained by the Japanese Minister as a result of a fall from his horse, the Chinese delegates, in order to avert interruption, proposed that the conferences should be continued at the Japanese Legation, which proposal was accepted. Later, when, on March 22, the Japanese Government despatched large bodies of troops to South Manchuria and Shantung for the ostensible purpose of re- lieving the garrison whose term of service had not then expired the Japanese Minister stated at the conference, in reply to a direct question as to when the retiring troops would be withdrawn, that this would not be done until negotiations could be brought to a satisfactory conclusion. Although this minatory step caused much excitement, indignation and alarm on the part of the Chinese people, and made it difficult for the Chinese Government to con- tinue the conferences, they successfully exerted efforts to avert a rupture and thus enabled the negotiations smoothly to proceed. All this demonstrates that the Chinese Government were dominated by a sincere desire to expedite the progress of the conferences; and that the Japanese Government recognized this important fact was made clear on March 11 when the Japanese Minister conveyed to the Chinese Government an expression of his Government's ap- preciation of China's frankness and sincerity in the conduct of the negotiations. 384 APPENDICES One of the supplementary proposals was in these terms : From February 2, when the negotiations were commenced, to April 17, twenty-four conferences were held in all. Throughout this whole period the Chinese Government steadfastly strove to ar- rive at an amicable settlement and made every concession possible. Of the twenty-one demands originally submitted by Japan, China agreed to fifteen, some in principle and some textually, six being initialled by both parties. IN" THE MATTER OF THE DEMANDS TO WHICH CHINA AGREED At the first conference, held on February 2, China agreed in prin- ciple to the first article of the Shantung group of demands which provides that China should give her assent to the transfer of Ger- many's rights in Shantung to Japan. The Chinese Government maintained at first that the subject of this demand related to the post bellum settlement, and, therefore, should be left over for dis- cussion by all the parties interested at the Peace Conference. Fail- ing to persuade the Japanese Minister to accept this view, the Chinese Government agreed to this demand in principle, and made certain supplementary proposals. "The Japanese Government declares that when the Chinese Gov- ernment give their assent to the disposition of interests above re- ferred to, Japan will restore the Leased Territory of Kiao-chou to China, and further recognizes the right of the Chinese Government to participate in the negotiations referred to above between Japan and Germany." The provision for a declaration to restore Kiao-chou, was clearly not a demand on Japan but only a reiteration of Japan's voluntary statement in her Ultimatum to Germany on August 15, 1914 (a copy of which was officially transmitted to the Chinese Government for perusal on August 15), and repeated in public statements by the Japanese Premier. Appreciating the earnest desire of Japan to maintain the peace of the far East and to cement her friendship with China, as evidenced by this friendly offer, the Chinese Govern- ment left the entire question of the conditions of restoration to be determined by Japan, and refrained from making any reference thereto in the supplementary proposal. The suggestion relating to participation in the Conference between Japan and Germany was made in view of the fact that Shantung, the object of future nego- tiation between Japan and Germany, is a Chinese Province, and therefore China is the Power most concerned in the future of that territory. Another supplementary proposal suggesting the assumption by APPENDICES 385 Japan of responsibility for indemnification of the losses arising out of the military operations by Japan in and about the leased terri- tory of Kiao-chou was necessitated by the fact that China was neutral vis-a-vis the war between Japan and Germany. Had China not inserted such a provision, her position in relation to this con- flict might have been liable to misconstruction the localities in which the operations took place being a portion of China's terri- tory and might also have exposed herself to a claim for indemnifica- tion of losses for which she was in no way responsible. In a further supplementary proposal the Chinese Government suggested that, prior to the restoration of the Kiao-chou territory to China, the Maritime Customs, the telegraphs and post offices should be continued to be administered as heretofore; that the mili- tary railway, the telegraph lines, etc., which were installed by Japan to facilitate her military operations, should be removed forthwith; that the Japanese troops now stationed outside of the leased terri- toiy should be first withdrawn, and those within the territory should be recalled at the time when Kiao-chou is returned to China. Shan- tung being a Chinese Province, it was natural for China to be anxious concerning the restoration of the status quo ante bellum. Although the Chinese Government were confident that the Japanese Government would effect such restoration in pursuance of their official declaration, it was necessary for China, being neutral throughout the war, to place these matters on record. At the third conference, held on February 22, China agreed to the second demand in the Shantung Groiip not to cede or lease to any Power any territory or island on the sea border of Shantung. At the fifth conference, held on February 29, China agreed to give Japan the preference, provided Germany abandoned the privilege, to supply the capital for the construction of a railway from Chefoo or Lungkow to connect with the Kiao-chou-Tsinanfu Railway, in the event of China deciding to build that railway with foreign capital. At the si-jcth conference, held on March 3, China, in the interests of foreign trade, agreed to open certain important cities in Shan- tung as trade marts under regulations approved by the Japanese . Government, although this was a demand on the part of Japan for privileges additional to any that hitherto had been enjoyed by Ger- many and was not an outcome of the hostilities between Japan and Germany, nor, in the opinion of the Chinese Government, was its acceptance essential to the preservation of peace in the far East. At the eighth conference, held on March 9, China agreed (1) to 386 APPENDICES the extension of the term of the lease of Dairen and (2) Port Arthur, and (3) of the South Manchuria and (4) Antung-Mukden railways, all to 99 years. Owing to the bitter experiences which China sustained in the past in connection with the leased portions of her territory, it has become her settled policy not to grant further leases nor to extend the term of those now in existence. Therefore, it was a significant indication of China's desire to meet Japan's wishes when she agreed to this exceptional departure from her settled policy. At the same conference the Chinese Government also agreed to refrain from raising objections to the principle of cooperation in the Hanyehping Company, if the latter should arrive at an agreement in this respect with the Japanese capitalists concerned. With refer- ence to this question it was pointed out to the Japanese Minister that, in the Provisional Constitution of the Republic of China, Chinese subjects are guaranteed the right of protection of their property and freedom to engage in any lawful occupation. The Government were precluded, therefore, from interfering with the private business of the people, and could not find any other solution than the one thus agreed to. As regards the single article of the Fourth Group, and the pre- amble thereto, the Chinese Government held that they were incon- sistent with Chinese sovereignty. However, China, at this confer- ence, expressed her readiness to meet the wishes of Japan so far as it was possible without infringing her sovereignty, and agreed to make a voluntary pronouncement that she would not alienate any portion of her coast line. In connection with the South Manchuria Railway it is worthy of note that the provision regarding the repurchase period in the agree- ment (36 years from 1902) was not mentioned in Japan's original proposal. Subsequently the Japanese Government, on the ground that the meaning of this provision was not clear, requested China to agree to its cancelation. To this request the Chinese Government acceded, though well aware that the proposed change could only benefit Japan. China thus relinquished the right to repurchase the railway at the expiration of another 23 years. In connection with the Antung-Mukden Railway, the nvfiole, which was originally initialled at the conference, provided for the reversion of the railway to China at the end of 99 years without paj'ment, but, at the subsequent meeting, the Japanese Minister requested that the reference to the reversion without payment be deleted from the initialled article. In acceding to the Japanese Minister's re- quest, China again showed her sincere desire to expedite matters APPENDICES 387 and to meet Japan's wishes even at the sacrifice of a point in her favor, to which Japan had already agreed. At the eleventh conference, held on March 16, China agreed to give Japan preference in regard to loans for railway construction in South Manchuria. At the thirteenth conference, held on March 23, China agreed (1) to the amendment of the Kirin-Changcliun Railway loan agreement; (2) to give preference to Japan if the revenue of South Manchuria were offered as security for loans; (3) to give preference to Jap- anese in the event of the employment of advisers for South Man- churia; (4) to grant to Japanese the right of mining in nine speci- fied areas in South Manchuria. In its original form the demand with reference to mining in South Manchuria tended to creat a monopoly for Japanese subjects, and, therefore, was entirely inconsistent with the principle of equal opportunity. The Chinese Government explained that they could not, in view of the treaty rights of other Powers, agree to this monopoly, but they readily gave their acceptance when Japan con- sented to the modification of the demand so as to mitigate its mo- nopolistic character. In connection with the Kirin-Changchun Railway, the amendment agreed to involves a fundamental revision of the original agree- ment on the basis of the existing railway loan contracts concluded by China with other foreign capitalists, as well as an engagement on the part of the Chinese Government to extend to this railway any better terms which may be hereafter accorded to other railway concessionaires in China. The capital of this railway was originally fifty per cent. Chinese and fifty per cent. Japanese. The effect of this undertaking is to transfer the capital originally held by the Chinese, as well as the full control and administration of the rail- way, to the Japanese. At the ticentfi-first conference, held on April 10, China agreed, in regard to the demands concerning Fukien Province, to give Japan an assurance in accordance with Japan's wishes at a future time. As regards demands 2 and 3 in the Manchuria Group, relating to the ownership of land for trade, manufacture, and agricultural enterprises, as well as for the right of settlement in the interior of South Manchuria, the Chinese Government, after discussion at sev- eral conferences, agreed to them in principle, but desired to intro- duce certain amendments concerning the control and protection of the Japanese subjects who might avail themselves of these rights. The course of the negotiations in connection with these amendments will be referred to subsequently. 388 APPENDICES IN THE MATTER OF THOSE DEMANDS TO WHICH CHINA COULD NOT AGREE Of the twenty-one original demands there were six, as previously mentioned, to which China could not agree on the ground that they were not proper subjects for international negotiation, conflicting as they did with the sovereign rights of China, the treaty rights of other Powers, and the principle of equal opportunity. Thus, for example, the second article of the Hanyehping question in the original Third Group in particular seriously affected the prin- ciple of equal commercial opportunity. The proposal that there should be joint administration by China and Japan of the police in China was clearly an interference with the Republic's domestic affairs, and consequently an infringement of her sovereignty. For that reason the Chinese Government could not take the demand into consideration. But when it was explained by the Japanese Minister that this referred only to South Man- churia, and he suggested that his Government would be satisfied if China agreed to engage Japanese as police advisers for that ter- ritory, the Chinese Government accepted the suggestion. The two articles relating to the acquisition of land for schools, hospitals, and temples, as well as to the right of missionary prop- aganda, would, in the opinion of the Chinese Government, have presented grave obstacles to the consolidation of the friendly feel- ing subsisting between the two people. The religions of the two countries are identical and, therefore, the need for a missionary propaganda to be carried on in China by Japanese does not exist. The natural rivalry between Chinese and Japanese followers of the same faith would tend to create incessant disputes and friction. "Whereas "Western missionaries live apart from the Chinese com- munities among which they labor, Japanese monks would live with the Chinese; and the similarity of their physical characteristics, their religious garb, and their habits of life would render it im- possible to distinguish them for purposes of affording the protection which the Japanese Government would require should be extended to them under the system of extra-territoriality now obtaining in China. Moreover a general apprehension exists among the Chinese people that these peculiar conditions favoring conspiracies for polit- ical purposes might be taken advantage of by some unscrupulous Chinese. The demand for railway concessions in the Yangtze Valley con- flicted with the Shanghai-Hangchow-Ninr/po Railway Agreement of March 6, 1908, the Nanking-Changsha Railway Agreement of March APPENDICES 389 31, 1914, and the engagement of August 24, 1914, giving preference to British firms for the projected line from, Nanchang to Chao- choucfu. For this reason the Chinese Government found themselves unable to consider the demand, though the Japanese Minister, while informed of China's engagements with Great Britain, repeatedly pressed for its acceptance. In respect to the demand for the appointment of influential Jap- anese to be advisers and instructors in political, financial and mili- tary affairs, the policy of the Chinese Government in regard to the appointment of advisers has been similar to that which has pre- sumably guided the Japanese Government in like selection of the best qualified men irrespective of their nationality. As an indica- tion of their desire to avail themselves of the services of eminent Japanese, one of the earliest appointments made to an advisership was that of Dr. Ariga, while later on Dr. Hirai and Mr. Nakayami were appointed to the Ministry of Communications. It was considered that the demand that Japanese should be ap- pointed in the three most important administrative departments, as well as the demand for the joint control of China's police, and the demand for an engagement to purchase a fixed amount of arms and ammunition from Japan or to establish joint arsenals in China, so clearly involved the sovereignty of the Republic that the Chinese Government were unable even to consider them. For these reasons the Chinese Government, at the very outset of the negotiations, declared that they were unable to negotiate on the demands; but, in deference to the wishes of the Japanese Min- ister, the Chinese delegates consented to give the reasons for de- clining to enter into a discussion of them. IN THE MATTER OF THE QUESTIONS OF DISPUTE INVOLVED IN SOME OF THE FOREGOING DEMANDS The demand by Japan for the right of her subjects in South Man- churia to lease or own land, and to reside and travel, and to engage in business or manufacture of any kind whatever, was deemed by the Chinese Government to obtain for Japanese subjects in this region a privileged status beyond the tenms of the treaties existing between the two nations, and to give them a freedom of action which would be a restriction of China's sovereignty and a serious in- fringement of her administrative rights. Should Japanese subjects 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. Moreover, residence in the interior was incompatible with the existence of extra-territorial- 390 APPENDICES ity, the relinquishment of which is necessary to the actual enjoy- ment of the privilege of inland residence, as evidenced in the prac- tice of other nations. Japan's unconditional demand for the privilege of inland resi- dence accompanied with a desire to extend extra-territoriality into the interior of China and to enable Japanese subjects to monopolize all the interests in South Manchuria, was also palpably irreconcilable with the principle of equal opportunity. For this reason the Chinese Government were, in the first instance, unable to accept this demand as a basis of negotiation. Their profound regard for the friendly relations of the two countries, however, persuaded them to exert their utmost efforts, in spite of all the inherent difficulties, to seek a solution of a question which was practically impossible to solve. Knowing that the proposal made by Japan was incompatible with treaties, they nevertheless sought to meet her wishes within the limits of treaties. Accordingly they submitted a counter-proposal to open more places in South Manchuria to international trade and to establish Sino-Japanese joint reclamation companies. This suggestion was made in the belief that the places to which Japanese subjects would desire to resort for purposes of trade, could not be other than important localities; if all these localities were opened to commerce, then they could reside, trade, and lease land there for joint reclamation. Thus Japanese subjects might en- joy the essence of the privilege of inland residence and would still be able to reconcile their position with China's treaties and the prin- ciple of equal opportunity. After the Japanese Government declined to accept this sugges- tion, China withdrew it and replaced it with an amendment to the original articles. It was proposed in this amendment to grant to Japanese subjects the extra-treaty privilege of inland residence with the provisos that Japanese subjects in places outside of trade marts should observe Chinese police regulations and pay taxes in the same manner as Chinese; and that civil and criminal cases involving such Japanese subjects should be adjudicated by Chinese authori- ties, the Japanese Consul attending merely to watch the proceed- ings. This suggestion was not an innovation ; it was based upon the modus operandi now in force as regards the Korean settlers in inland districts in Chientao. But the Japanese Government again declined to accept it. The Chinese Government thereupon made a third proposal along the line of what constitutes the present practice in Turkey, making a distinction, however, in favor of Japanese subjects, in the exercise APPENDICES 391 of jurisdiction over civil and criminal cases. This was once more objected to by the Japanese Government. Then the Chinese Government proposed to concede still another step the fourth endeavor to meet Japan's wishes. They proposed to agree to the full text of Articles 2 and 3 relative to the question of inland residence, except that "the right of owning land" was changed into ''the right of leasing land" and to the phrase "culti- vating land" was added this clause: "the regulations for which shall be determined separately;" and, further, to add a supplementary article which embodied a modus operandi which the Chinese Govern- ment had constrained themselves to make, out of a desire to come to a settlement over this question. The view advanced in this sup- plementary article was based upon the Japanese Minister's declar- ation made on March 6, 1915, that a separate article embodying some compromise might be added to the original articles 2 and 3 for the purpose of avoiding any conflict with China's sovereignty or the system established by treaties. These suggestions made by the Chinese Government were not accepted by Japan. As regards Eastern Inner Mongolia, not only have no treaties been entered into with Japan concerning this region, but also the people are so unaccustomed to foreign trade, that the Chinese Gov- ernment invariably feel much anxiety about the safety of foreigners who elect to travel there. The Chinese Government, therefore, con- sidered that it would not be in the interest of foreigners to open the whole territory to them for residence and commerce, and on these grounds based their original refusal to place Eastern Inner Mon- golia on the same footing as South Manchuria. Still, their desire to meet the wishes of the Japanese Government eventually prompted them to offer to open a number of places in the region to foreign trade. IN THE MATTER OP JAPAN'S REVISED DEMANDS The foregoing is an outline of the negotiations up to April 17. It was hoped by the Chinese Government that the Japanese Govern- ment, in view of the great concessions made by China at the con- ferences held up to this time, would see a way of effecting an amicable settlement by modifying their position on certain points. In regard to these it had, by this time, become manifest that China would encounter almost insuperable difficulties in making further concessions. The Japanese Government, however, suspended the negotiations until April 26 when they surprised the Chinese Government by 392 APPENDICES presenting a new list of twenty-four demands (which is hereto ap- pended), and requested the Chinese Government to accord their ac- ceptance without delay, adding that this was their final proposal. At the same time the Japanese Minister stated that the Japanese Government would restore the leased territory of Kiaochow to China at an opportune time in the future and under proper conditions, if the Chinese Government would agree to the new list of twenty-four demands without modification. In this new list, although the term "special position" in the pre- amble of the Manchuriau Group was changed to "economic rela- tions," and although the character of the articles in the original Fifth Group was altered from Demands to a recital of alleged statements by the Chinese Foreign Minister, four new demands were introduced concerning Eastern Inner Mongolia. In deference to the wishes of the Japanese Government, the Chinese Government gave the revised list the most careful consideration ; and being sin- cerely desirous of an early settlement offered new concessions in their reply presented to the Japanese Minister on May 1. (An- nexed.) In this reply the Chinese Government reinserted the proposal in reference to the retrocession of Kiaochow, which they advanced at the first conference on February 2, and which was postponed at the request of the Japanese Minister. This, therefore, was in no sense a new proposal. The Chinese Government also proposed to agree to three of the four articles relating to Eastern Inner Mongolia. There was some difficulty in determining a definition of the boundaries of Eastern Inner Mongolia this being a new expression in Chinese geograph- ical terminology but the Chinese Government, acting upon a state- ment made at a previous conference by the Japanese Minister that the Japanese Government meant the region under Chinese admin- istrative jurisdiction, and taking note, in the list presented by the Japanese Minister, of the names of places in Eastern Inner Mon- golia to be opened to trade, inferred that the so-called Eastern Inner Mongolia is that part of Inner Mongolia which is under the juris- diction of South Manchuria and the Jehol Intendency; and re- frained from placing any limitations upon the definition of this term. The Chinese Government also withdrew their supplementary pro- posal resen'ing the right of making regulations for agricultural en- terprises to be undertaken by Japanese settlers in South Manchuria. In respect of the trial of cases involving land disputes between Japanese only, or between Japanese and Chinese, the Chinese Gov- APPENDICES 393 ernment accorded to the Japanese Consul the right of deputing an officer to watch the proceedings. The Chinese Government also agreed to accept the suggestion of the Japanese Government to modify the term ''police law and or- dinances" into "police rules and regulations," thereby limiting the extent of control which the Chinese would have over Japanese sub- jects. As regards the Hanyehping demand, the Chinese Government accepted the draft made by the Japanese Government, embodying an engagement by the Chinese Government not to convert the Com- pany into a State-owned concern, nor to confiscate it, nor to force it to borrow foreign capital other than Japanese. In respect of the Fukien question the Chinese Government also agreed to give an assurance in the amplified form suggested by the Japanese Government that the Chinese Government had not given their consent to any foreign nations to construct a dockyard, or a coaling station, or a naval base, or any other military establishment along the coast of Fukien Province; nor did they contemplate bor- rowing foreign capital for the foregoing purposes. Having made these concessions which practically brought the views of China into line with those of Japan, and having explained in a note accompanying the reply the difficulty for China to make fur- ther concessions, the Chinese Government hoped that the Japanese Government would accept their reply of May 1, and thus bring the negotiations to an amicable conclusion. The Japanese Government, however, expressed themselves as being dissatisfied with China's reply, and withdrew the conditional offer to restore Kiaochow to China made on April 26.' It was fur- ther intimated that if the Chinese Government did not give their full compliance with the list of twenty-four demands, Japan would have recourse to drastic measures. Upon receiving this intimation the Chinese Government, inspired by the conciliatory spirit which had been predominant from the very beginning of the negotiations and desirous of avoiding any pos- sible rupture in the relations of the two countries, made a supreme effort to meet the situation, and represented to the Japanese Gov- ernment that they would reconsider their position and make another attempt to find a solution that would be more satisfactory to Japan, in respect to those articles which China had declared could not be taken up for consideration, but to which Japan attached great im- portance. Even in the evening of May 6, after the Japanese Min- ister had notified the Chinese Government that the Uultimatum had arrived in Peking, the Chinese Government in the interests of peace 394 APPENDICES still exerted efforts to save the situation by offering to meet Japan's wishes. These overtures were again rejected, and thus exhausted the means at the disposal of the Chinese Government to prevent an impasse. It is plain that the Chinese Government proceeded to the fullest extent of possible concession in view of the strong national senti- ment manifested by the people throughout the whole period of negotiations. All that the Chinese Government strove to maintain was China's plenary sovereignty, the treaty rights of foreign Pow- ers in China and the principle of equal opportunity. To the profound regret of the Chinese Government, however, the tremendous sacrifices which they had shown themselves ready to make, proved unavailing, and an Ultimatum (the text of which is appended) was duly delivered to them by the Japanese Minister at three o'clock on the afternoon of May 7. As to the allegations made in the Ultimatum against China, the Chinese Government hope that the foregoing outline of the history of the negotiations constitutes a clear, dispassionate, and complete reply. In considering the nature of the course they should take with reference to the Ultimatum the Chinese Government was influenced by a desire to preserve the Chinese people, as well as the large num- ber of foreign residents in China, from unnecessary suffering, and also to prevent the interests of friendly Powers from being im- periled. For these reasons the Chinese Government were con- strained to comply in full with the terms of the Ultimatum (the re- ply being hereto appended), but in complying the Chinese disclaim any desire to associate themselves with any revision, which may thus be effected, of the various conventions and agreements con- cluded between other Powers in respect of the maintenance of China's territorial independence and integrity, the preservation of the status quo, and the principle of equal opportunity for the com- merce and industry of all nations in China. Memorandum Bead \>y the Minister of Foreign Affairs to Mr. Hioki, the Japanese Minister, at a Conference Held at Waichiaopu, May 1, 1915. The list of demands which the Japanese Government first pre- sented to the Chinese Government consists of five Groups, the first relating to Shantung, the second relating to South Manchuria and Eastern Inner Mongolia, the third relating to the Hanyehping Com- pany, the fourth asking for non-alienation of the coast of the APPENDICES 395 country, and the fifth relating to the questions of national advisers, national police, national arms, missionary propaganda, Yangtze Valley railways and Fukien Province. Out of profound regard for the intentions entertained by Japan, the Chinese Government took these momentous demands into grave and careful consideration and decided to negotiate with the Japanese Government frankly and sincerely what were possible to negotiate. This is a manifestation to Japan of the most profound regard which the Chinese Government entertains for the relations between the two nations. Ever since the opening of the negotiations China has been doing her best to hasten their progress, holding as many as three con- ferences a week. As regards the articles in the second group, the Chinese Government, being disposed to allow the Japanese Gov- ernment to develop the economic relations of the two countries in South Manchuria, realizing that the Japanese Government attaches importance to its interests in that region, and wishing to meet the hopes of Japan, made a painful effort, without hesitation, to agree to the extension of the 25-year lease of Port Arthur and Dalny, the 36-year period of the South Manchuria railway and the 15-year period of the Antung-Mukden railway, all to 99 years; and to abandon its own cherished hopes to regain control of these places and properties at the expiration of their respective original terms of lease. It cannot but be admitted that this is a most genuine proof of China's friendship for Japan, As to the rights of opening mines in South Manchuria, the Chinese Government has already agreed to permit Japanese to work mines within the mining areas designated by Japan. China has further agreed to give Japan a right of pref- erence in the event of borrowing foreign capital for building rail- ways or of making a loan on the security of the local taxes in South Manchuria The qxiestion of revising the arrangement for the Kirin- Changchun railway has been settled in accordance with the proposal made by Japan. The Chinese Government has further agreed to employ Japanese first in the event of employing foreign advisers on political, military, financial and police matters. Furthermore, the provision about the repurchase period in the South Manchurian railway was not mentioned in Japan's original proposal. Subsequently, the Japanese Government, alleging that its meaning was not clear, asked China to cancel the provision al- together. Again, Japan at first demanded the right of Japanese to carry on farming in South Manchuria, but subsequently she con- sidered the word "farming" was not broad enough and asked to replace it with the phrase "agricultural enterprises." To these re- quests the Chinese Government, though well aware that the proposed 396 APPENDICES changes could only benefit Japan, still acceded without delay. This, too, is a proof of China's frankness and sincerity toward Japan. As regards matters relating to Shantung, the Chinese Govern- ment has agreed to a majority of the demands. The question of inland residence in South Manchuria is, in the opinion of the Chinese Government, incompatible with the treaties China has entered into with Japan and other Powers, still the Chi- nese Government did its best to consider how it was possible to avoid that incompatibility. At first, China suggested that the Chinese Authorities should have full rights of jurisdiction over Japanese settlers. Japan declined to agree to it. Thereupon China recon- sidered the question and revised her counter-proposal five or six times, each time making some definite concession, and went so far as to agree that all civil and criminal cases between Chinese and Japanese should be arranged according to existing treaties. Only cases relating to land or lease contracts were reserved to be ad- judicated by Chinese Courts, as a mark of China's sovereignty over the region. This is another proof of China's readiness to concede as much as possible. Eastern Inner Mongolia is not an enlightened region as yet and the conditions existing there are entirely different from those pre- vailing in South Manchuria. The two places, therefore, cannot be considered in the same light. Accordingly, China agreed to open commercial marts first, in the interests of foreign trade. The Hanyehping Company mentioned in the third group is en- tirely a private company, and the Chinese Government is pre- cluded from interfering with it and negotiating with another govern- ment to make any disposal of the same as the Government likes, but having regard for the interests of the Japanese capitalists, the Chinese Government agreed that whenever, in future, the said com- pany and the Japanese capitalists should arrive at a satisfactory arrangement for cooperation, China will give her assent thereto. Thus the interests of the Japanese capitalists are amply safe- guarded. Although the demand in the fourth group asking for a declara- tion not to alienate China's coast is an infringement of her sov- ereign rights, yet the Chinese Government offered to make a vol- untary pronouncement so far as it comports with China's sovereign rights. Thus, it is seen that the Chinese Government, in deference to the wishes of Japan, gave a most serious consideration even to those demands which gravely affect the sovereignty and territorial rights of China as well as the principle of equal opportunity and the APPENDICES 397 treaties with foreign Powers. All this was a painful effort on the part of the Chinese Government to meet the situation a fact of which the Japanese Government must be aware. As regards the demands in the fifth group, they all infringe China's sovereignty, the treaty rights of other Powers or the prin- ciple of equal opportunity. Although Japan did not indicate any difference between this group and the preceding four in the list which she presented to China in respect of their character, the Chinese Government, in view of their palpably objectionable features, per- suaded itself that these could not have been intended by Japan as anything other than Japan's mere advice to China. Accordingly China has declared from the very beginning that while she en- tertains the most profound regard for Japan's wishes, she was un- able to admit that any of these matters could be made the subject of an understanding with Japan. Much as she desired to pay regard to Japan's wishes, China cannot but respect her own sovereign rights and the existing treaties with other Powers. In order to be rid of the seed for future misunderstanding and to strengthen the basis of friendship, China was constrained to iterate the reasons for refus- ing to negotiate on any of the articles in the fifth group, yet in view of Japan's wishes China has expressed her readiness to state that no foreign money was borrowed to construct harbor works in Fukien Province. Thus it is clear that China went so far as to seek a solution for Japan of a question that really did not admit of negotiation. Was there, then, evasion on the part of China? Now, since the Japanese Government has presented a revised list of demands and declared at the same time that it will restore the leased territory of Kaiochow, the Chinese Government recon- siders the whole question and herewith submits a new reply to the friendly Japanese Government. In this reply the unsettled articles in the first group are stated again for discussion. As regards the second group, those articles which have already been initialled are omitted. In connection with the question of inland residence the police regulation clause has been revised in a more restrictive sense. As for the trial of cases re- lating to land and lease contracts the Chinese Government now permits the Japanese Consul to send an officer to attend the pro- ceedings. Of the four demands in connection with that part of Eastern Inner Mongolia which is within the jurisdiction of South Manchuria and the Jehol Intendency, China agrees to three. China, also, agrees to the article relating to the Hanyehping Company as revised by Japan. 398 APPENDICES It is hoped that the Japanese Government will appreciate the con- ciliatory spirit of the Chinese Government in making this final con- cession and forthwith give her assent thereto. There is one more point. At the beginning of the present nego- tiations it was mutually agreed to observe secrecy, but unfor- tunately a few days after the presentation of the demands by Japan an Osaka newspaper published an "Extra" giving the text of the demands. The foreign and the Chinese press has since been paying considerable attention to this question and frequently publishing pro-Chinese or pro-Japanese comments in order to call forth the world's conjecture, a matter which the Chinese Government deeply regrets. The Chinese Government has never carried on any news- paper campaign and the Chinese Minister of Foreign Affairs has re- peatedly declared it to the Japanese Minister. In conclusion, the Chinese Government wishes to express its hope that the negotiations now pending between the two countries will soon come to an end and whatever misgivings foreign countries en- tertain toward the present situation may be quickly dispelled. CHINA'S RELY TO JAPAN'S REVISED DEMANDS CHINA'S REPLY OP MAY 1, 1915, TO THE JAPANESE REVISED DEMANDS OF APRIL 26, 1915. GROUP I The Chinese Government and the Japanese Government, being desirous of maintaining the general peace in Eastern Asia and further strengthening the friendly relations and good neighborhood existing between the two nations, agree to the following articles: ARTICLE 1. The Chinese Government declare that they will give full assent to all matters upon which the Japanese and German Governments may hereafter mutually agree, relating to the dis- position of all interests which Germany, by virtue of treaties or recorded cases, possesses in relation to the Province of Shantung. The Japanese Government declares that when the Chinese Gov- ernment give their assent to the disposition of interests above re- ferred to, Japan will restore the leased territory of Kiao-chou to China; and further recognize the right of the Chinese Govern- ment to participate in the negotiations referred to above between Japan and Germany. ART. 2. The Japanese Government consent to be responsible for the indemnification of all losses occasioned by Japan's military op- APPENDICES 399 peration around the leased territory of Kiao-chou. The customs, telegraphs and post offices within the leased territory of Kiao-chou shall, prior to the restoration of the said leased teriitory to China, be administered as heretofore, for the time being. The railways and telegraph lines erected by Japan for military purposes are to be re- moved forthwith. The Japanese troops now stationed outside the original leased territory of Kiao-chou are now to be withdrawn first, those within the original leased territory are to be withdrawn on the restoration of the said leased territory to China. ART. 3. (Changed into an exchange of notes.) The Chinese Government declare that within the Province of Shantung and along its coast no territory or island will be ceded or leased to any Power under any pretext. ART. 4. The Chinese Government consent that as regards the railway to be built by China herself from Chefoo or Lungkow to connect with the Kiao-chou-Tsinanfu Railway, if Germany is willing to abandon the privilege of financing the Chee-foo-Weihsien line, China will approach Japanese capitalists for a loan. ART. 5. The Chinese Government engage, in the interest of trade and for the residence of foreigners, to open by herself as soon as possible certain suitable places in the Province of Shantung as Commercial Ports. (Supplementary exchange of notes.) The places which ought to be opened are to be chosen, and the regulations are to be drafted, by the Chinese Government, but the Japanese Minister must be consulted before making a decision. ART. 6. If the Japanese and German Governments are not able to come to a definite agreement in future in their negotiations re- specting transfer, etc., this provisional agreement contained in the foregoing articles shall be void. GROUP II The six articles which are found in Japan's Revised Demands of April 26, 1015, but omitted herein, are those already initialed by the Chinese Foreign Minister and the Japanese Minister. The Chinese Government and the Japanese Government, with- a view to developing their economic relations in South Manchuria, agree to the following articles : ART. 2. Japanese subjects in South Manchuria may, by ar- rangement with the owners, lease land required for erecting suit- able buildings for trade and manufacture or for agricultural enter- prises. ART. 3, Japanese subjects shall be free to reside and travel 400 APPENDICES in South Manchuria and to engage in business and manufacture of any kind whatsoever. ART. 3a. The Japanese subjects referred to in the preceding two articles, besides being required to register with the local authorities passports, which they must procure under the existing regulations, shall also observe police rules and regulations and pay taxes in the same manner as Chinese. Civil and criminal cases shall be tried and adjudicated by the authorities of the defendant's nationality and an officer can be deputed to attend the proceedings. But all cases purely between Japanese subjects, and mixed cases between Japanese and Chinese, relating to land or disputes arising from lease contracts, shall be tried and adjudicated by Chinese Authorities and the Japa- nese Consul may also depute an officer to attend the proceedings. When the judicial system in the said Province is completely reformed, all the civil and criminal cases concerning Japanese subjects shall be tried entirely by Chinese law courts. RELATING TO EASTERN INNER MONGOLIA (To be exchanged by notes.) ARTICLE 1. The Chinese Government declare that China will not in future pledge the taxes, other than customs and salt revenue, of that part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and Jehol Intendency, as security for raising loans. ART. 2. The Chinese Government declare that China will herself provide funds for building the railways in that part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and the Jehol Intendency; if foreign capital is required, China will negotiate with Chinese capitalists first, provided this does not conflict with agree- ments already concluded with other Powers. ART. 3. The Chinese Government agrees, in the interest of trade and for the residence of foreigners, to open by China herself certain suitable places in that part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and the Jehol Intendency, as Com- mercial Marts. The regulations for the said Commercial Marts will be made in accordance with those of other Commercial Marts opened by China herself. GROUP III The relations between Japan and the Hanyehping Company being very intimate, if the said Company comes to an agreement with the Japanese capitalists for cooperation, the Chinese Government shall forthwith give their consent thereto. The Chinese Government APPENDICES 401 further declare that China will not convert the Company into a state enterprise, nor confiscate it nor cause it to borrow and use foreign capital other than Japanese. LETTER TO BE ADDRESSED BY THE JAPANESE MINISTER TO THE CHINESE MINISTER OF FOREIGN AFFAIRS Excellency: I have the honor to state that a report has reached me that the Chinese Government have given permission to foreign nations to construct on the coast of Fukien Province dock-yards, coaling sta- tions for military use, naval bases and other establishments for military purposes and further that the Chinese Government are bor- rowing foreign capital for putting up the above-mentioned construc- tion or establishments. I shall be much obliged if the Chinese Gov- ernment will inform me whether or not these reports are well founded in fact. Excellency : I have the honor to acknowledge the receipt of your Excellency's Note of . In reply I beg to state that the Chinese Government have not given permission to foreign Powers to con- struct, on the coast of Fukien Province, dock-yards, coaling stations for military use, naval bases or other establishments for military purposes; nor do they contemplate borrowing foreign capital for putting up such constructions or establishments. JAPAN'S UTIMATUM ULTIMATUM DELIVERED BY JAPANESE MINISTER TO MINISTER OF FOREIGN AFFAIRS AT 3 O'CLOCK P. M. ON MAY TTH, 1915 The reason why the Imperial Government opened the present nego- tiations with the Chinese Government is first to endeavor to dispose of the complications arising out of the war between Japan and Ger- many, and secondly to attempt to solve various questions which are detrimental to the intimate relations of China and Japan with a view to solidifying the foundation of cordial friendship subsisting between the two countries to the end that the peace of the far East may be effectively and permanently preserved. With this object in 402 APPENDICES view, definite proposals were presented to the Chinese Government in January of this year, and up to to-day as many as twenty-five con- ferences were held with the Chinese Government in perfect sincerity and frankness. In the course of the negotiation the Imperial Government has con- sistently explained the aims and objects of the proposals in a con- ciliatory spirit, while on the other hand the proposals of the Chinese Government, whether important or unimportant, have been attended to without any reserve. It may be stated with confidence that no effort has been spared to arrive at a satisfactory and amicable settlement of those questions. The discussion of the entire corpus of the proposals was practically at an end at the twenty-fourth conference; that is, on 17th of the last month. The Imperial Government, taking a broad view of the nego- tiations and in consideration of the points raised by the Chinese Gov- ernment, modified the original proposals with considerable conces- sions and presented to the Chinese Government on the 26th of the same month the revised proposals for agreement, and at the same time it was offered that, on the acceptance of the revised proposals, the Imperial Government would, at a suitable opportunity, restore with fair and proper conditions, to the Chinese Government the Kiao-chou territory, in the acquisition of which the Imperial Gov- ernment had made a great sacrifice. On the 1st of May, the Chinese Government delivered the reply to the revised proposals of the Japanese Government, which is con- trary to the expectations of the Imperial Government. The Chinese Government not only did not give a careful consideration to the revised proposals, but even with regard to the offer of the Japanese Government, to restore Kiao-chou to the Chinese Government, the latter did not manifest the least appreciation of Japan's good will and difficulties. From the commercial and military points of view Kiao-chou is an important place, in the acquisition of which the Japanese Empire sacrificed much blood and money, and, after the acquisition, the Empire incurs no obligation to restore it to China. But with the object of increasing the future friendly relations of the two coun- tries, she went to the extent of proposing its restoration, yet to her great regret, the Chinese Government did not take into consideration the good intention of Japan and manifest appreciation of her diffi- culties. Furthermore, the Chinese Government not only ignored the friendly feelings of the Imperial Government offering the restoration of Kiao-chou Bay, but also in replying to the revised proposals they even demanded its unconditional restoration; and again China de- APPENDICES 403 manded that Japan should bear the responsibility of paying indem- nity for all the unavoidable losses and damages resulting from Japan's military operations at Kiao-ehou; and still further in con- nection with the territory of Kiao-chou China advanced other de- mands and declared that she has the right of participation at the future peace conference to be held between Japan and Germany. Although China is fully aware that the unconditional restoration of Kiao-chou and Japan's responsibility of indemnification for the unavoidable losses and damages can never be tolerated by Japan, yet she purposely advanced these demands and declared that this reply was final and decisive. Since Japan could not tolerate such demands, the settlement of the other question, however compromising it may be, would not be to her interest. The consequence is that the present reply of the Chi- nese Government is, on the whole, vague and meaningless. Furthermore, in the reply of the Chinese Government to the other proposals in the revised list of the Imperial Government, such as South Manchuria and Eastern Inner Mongolia, where Japan particu- larly has geographical, political, commercial, industrial and strategic relations, as recognized by all the nations, and made more remark- able in consequence of the two wars in which Japan was engaged, the Chinese Government overlooks these facts and does not respect Japan's position in that place. The Chinese Government even freely altered those articles which the Imperial Government, in a compro- mising spirit, have formulated in accordance with the statement of the Chinese Representatives thereby making the statements of the Representatives an empty talk ; or on seeing them conceding with the one hand and withholding with the other, it is very difficult to at- tribute faithfulness and sincerity to the Chinese Authorities. As regards the articles relating to the employment of advisers, the establishment of schools and hospitals, the supply of arms and am- munition and the establishment of arsenals, and railway concessions in South China in the revised proposals, they are either proposed with the proviso that the consent of the Power concerned must first be obtained, or they are merely to be recorded in the minutes in accordance \vith the statement of the Chinese delegates, and thus they are not in the least in conflict either with Chinese sovereignty or her treaties with the Foreign Powers. Yet the Chinese Government in their reply to the proposals, alleging that these proposals are incom- patible with their sovereign rights and the Treaties with the Foreign Powers, defeat the expectations of the Imperial Government. In spite of such attitude of the Chinese Government, the Imperial Gov- ernment, though regretting to see that there is no room for further 404 APPENDICES negotiation, yet warmly attached to the preservation of the peace of the far East, is still hoping for a satisfactory settlement in order to avoid the disturbance of the relations. So in spite of the circumstances which admitted no patience, they have reconsidered the feelings of the Government of their neighbor- ing country and with the exception of the article 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 feelings of the Imperial Government by im- mediately accepting without any alteration all the articles of Groups I, II, III and IV and the exchange of notes in connection with Fukien Province in Group V as contained in the revised proposals presented on the 26th of April. The Imperial Government hereby again offer their advice and hope that the Chinese Government upon this advice will give a satisfactory reply by 6 o'clock p. M. on the 9th day of May. It is hereby de- clared that if no satisfactory reply is received before or at the desig- nated time, the Imperial Government will take steps they may deem necessary. JAPAN'S EXPLANATORY NOTE EXPLANATORY NOTE ACCOMPANYING MEMORANDUM DELIVERED TO THE MINISTER OF FOREIGN AFFAIRS BY THE JAPANESE MINISTER THE SEVENTH DAY OF MAY, 1915 1. With the exception of the question of Fukien to be arranged by an exchange of notes, the five articles postponed for later nego- tiations refer to (a) the employment of advisers, (b) the establish- ment of schools and hospitals, (c) the railway concessions in South China, (d) the supply of arms and ammunition and the establishment of arsenals, (e) the propagation of Buddhism. 2. The acceptance by the Chinese Government of the article relat- ing to Fukien may be either in the fonn as proposed by the Minister of Japan on the 26th of April or in that contained in the Reply of the Chinese Government of May 1st. Although the Ultimatum calls for the immediate acceptance by China of the modified proposals presented on April 26th, without alteration, but it should be noted that it merely states the principle and does not apply to this article and articles 4 and 5 of this note. 3. If the Chinese Government accept all the articles as demanded APPENDICES 405 in the Ultimatum the offer of the Japanese Government to restore Kiao-chou to China made on the 26th of April, will still hold good. 4. Article 2 of Group II relating to the lease or purchase of land, the terms "lease" and "purchase" may be replaced by these terms, "temporary lease" and ''perpetual lease" or "lease on consultations," which means a long-term lease with its unconditional renewal. Article 4 of Group II relating to the approval of laws and ordi- nances and local taxes by the Chinese Consul may form the subject of a secret agreement. 5. The phrase "to consult with the Japanese Government" in con- nection with questions of pledging the local taxes for raising loans and the loans for construction of railways, in Eastern Inner Mon- golia, which is similar to the agreement in Manchuria relating to the matters of the same kind, may be replaced by the phrase "to consult with the Japanese capitalists." The article relating to the opening of trade marts in Eastern Inner Mongolia in respect to location and regulations, may, following the precedent set in Shantung, be the subject of an exchange of notes. 6. From the phrase "those interested in the Company" in Group III of the revised list of demands, the words "those interested in" may be deleted. 7. The Japanese version of the Formal Agreement and its annexes shall be the official text or both the Chinese and Japanese shall be official texts. CHINA'S RELY TO THE ULTIMATUM THE REPLY OF THE CHINESE GOVERNMENT TO THE ULTIMATUM OP THE JAPANESE GOVERNMENT, DELIVERED TO THE JAPANESE MIN- ISTER OF FOREIGN AFFAIRS ON THE STH OF MAY, 1915 On the 7th of this month, at three o'clock p. M., the Chinese Gov- ernment received an Ultimatum from the Japanese Government to- gether with an Explanatory Note of seven articles. The Ultimatum concluded with the hope that the Chinese Government up to 6 o'clock p. M. on the 9th of May, will give a satisfactory reply, and it is hereby declared that if no satisfactory reply is received before or at the designated time, the Japanese Government will take steps she may deem necessary. The Chinese Government with a view to preserving the peace of the far East, hereby accepts, with the exception of those five articles of Group V postponed for later negotiation, all the articles of Groups I, II, III and IV, and the exchange of Notes in connection with Fukien Province in Group V as contained in the revised pro- 406 APPENDICES posals presented on the 26th of April and in accordance with the Explanatory Note of seven articles accompanying the Ultimatum of the Japanese Government with the hope that thereby all outstanding questions are settled, so that the cordial relationship between the two countries may be further consolidated. The Japanese Minister is hereby requested to appoint a day to call at the Ministry of For- eign Affairs to make the literary improvement of the text and sign the Agreement as soon as possible. NEW TREATIES AND NOTES BETWEEN CHINA AND JAPAN (Translated from the Chinese) TREATY RESPECTING THE PROVINCE OF SHANTUNG His Excellency the President of the Republic of China and His Majesty, the Emperor of Japan, having resolved to conclude a Treaty with a view to the maintenance of general peace in the Extreme East and the further strengthening of the relations of friendship and good neighborhood now existing between the two nations, have for that purpose named as their Plenipotentiaries, that is to say: His Excellency the President of the Republic of China, Lou Tseng-tsiang, Chung-ching, First Class Chia Ho Decoration, Minis- ter of Foreign Affairs. And His Majesty the Emperor of Japan, Hioki Eki, Jushii, Second Class of the Imperial Order of the Sacred Treasure, Minister Pleni- potentiary, and Envoy Extraordinary: Who, after having communicated to each other their full powers and found them to be in good and due form, have agreed upon and concluded the following Articles: ARTICLE 1. The Chinese Government agrees to give full assent to all matters upon which the Japanese Government may hereafter agree with the German Government relating to the disposition of all rights, interests and concessions with Germany, by virtue of treaties or otherwise, possesses in relation to the Province of Shantung. ART. 2. The Chinese Government agrees that as regards the rail- way to be built by China herself from Chef oo or Lungkow to connect with the Kiao-chou-Tsinanfu railway, if Germany abandons the privilege of financing the Chefoo-Weihsien line, China will approach Japanese capitalists to negotiate for a loan. ART. 3. The Chinese Government agrees in the interest of trade and for the residence of foreigners, to open by China herself as soon APPENDICES 407 as possible certain suitable places in the Province of Shantung as Commercial Ports. ART. 4. The present treaty shall come into force on the day of its signature. The present treaty shall be ratified by His Excellency the President of the Republic of China and His Majesty the Emperor of Japan, and the ratification thereof shall be exchanged at Tokio as soon as possible. In witness whereof the respective Plenipotentiaries of the High Contracting Parties have signed and sealed the present Treaty, two copies in the Chinese language and two in Japanese. Done at Peking this twenty-fifth day of the fifth month of the fourth year of the Republic of China, corresponding to the same day of the same month of the fourth year of Taisho. EXCHANGE OF NOTES RESPECTING SHANTUNG Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, In the name of the Chinese Government I have the honor to make the following declaration to your Government : "Within the Prov- ince of Shantung or along its coast no territory or island will b leased or ceded to any foreign Power under any pretext." I avail, etc., (Signed) Lou TSENQ-TSIANG. His Excellency, Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I Have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you made the following declaration in the name of the Chinese Government: "Within the Province of Shantung or along its coast no territory or island will be leased or ceded to any foreign Power under any pretext." In reply I beg to state that I have taken note of this declaration. I avail, etc., T-,. _, (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister Foreign Affairs. 408 APPENDICES EXCHANGE OF NOTES RESPECTING THE OPENING or PORTS IN SHANTUNG Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, 1 have the honor to state that the places which ought to be opened as Commercial Ports by China herself, as provided in Article 3 of the Treaty respecting the Province of Shantung signed this day, will be selected and the regulations therefor will be drawn up, by the Chinese Government itself, a decision concerning which will be made after consulting the Minister of Japan. I avail, etc., (Signed) Lou TSENG-TSIANC. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you stated "that the places which ought to be opened as Commercial Ports by China herself, as pro- vided in Article 3 of the Treaty respecting the province of Shantung signed this day, will be selected and the regulations therefor will be drawn up, by the Chinese Government itself, a decision concerning which will be made after consulting the Minister of Japan." In reply, I beg to state that I have taken note of the same. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. EXCHANGE OF NOTES RESPECTING THE RESTORATION OF THE LEASED TERRITORY OF KIAO-CHOU BAY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, In the name of my Government I have the honor to make the following declaration to the Chinese Government: When, after the termination of the present war, the leased terri- tory of Kiao-chou Bay is completely left to the free disposal of APPENDICES 409 Japan, the Japanese Government will restore the said leased territory to China under the following conditions: 1. The whole of Kiao-chou Bay to be opened as a Commercial Port. 2. A concession under the exclusive jurisdiction of Japan to be established at a place designated by the Japanese Government. 3. If the foreign Powers desire it, an international concession may be established. 4. As regards the disposal to be made of the buildings and proper- ties of Germany and the conditions and procedure relating thereto, the Japanese Government and the Chinese Government shall arrange the matter by mutual agreement before the restoration. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. REPLY Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to acknowledge the receipt of your Excellency's note of this day's date in which you made the following declaration in the name of your Government: "When, after the termination of the present war, the leased terri- tory of Kiao-chou Bay is completely left to the free disposal of Japan, the Japanese Government will restore the said leased territory to China under the following conditions: "1. The whole of Kiao-chou Bay to be opened as a Commercial Port. "2. A concession under the exclusive jurisdiction of Japan to be established at a place designated by the Japanese Government. "3. If the foreign Powers desire it, an international concession may be established. "4. As regards the disposal to be made of the buildings and prop- erties of Germany and the conditions and procedure relating thereto, the Japanese Government and the Chinese Government shall arrange the matter by mutual agreement before the restoration." In reply, I beg to state that I have taken note of this declaration. I avail, etc., (Signed) Lou TSENG-TSIANG. 410 APPENDICES TREATY RESPECTING SOUTH MANCHURIA AND EASTERN INNER MONGOLIA His Excellency the President of the Republic of China and His Majesty the Emperor of Japan, having resolved to conclude a Treaty with a view to developing their economic relations in South Man- churia and Eastern Inner Mongolia, have for that purpose named as their Plenipotentiaries, that is to say : His Excellency the President of the Republic of China, Lou Tseng-tsiang, Clmng-ching, First Class Chia-Jio Decoration, and Min- ister of Foreign Affairs; and His Majesty the Emperor of Japan, Hioki Eki, Jushii, Second Class of the Imperial Order of the Sacred Treasure, Minister Plenipotentiary and Envoy Extraordinary; Who, after having communicated to each other their full powers, and found them to be in good and due form, have agreed upon and concluded the following Articles : ARTICLE 1. The Two High Contracting Parties agree that the term of lease of Port Arthur and Dalny and the terms of the South Manchuria Railway and the Antung-Mukden Railway, shall be ex- tended to 99 years. ART. 2. Japanese subjects in South Manchuria may, by negotia- tion, lease land necessary for erecting suitable building's for trade and manufacture or for prosecuting agricultural enterprises. ART. 3. Japanese subjects shall be free to reside and travel in South Manchuria and to engage in business and manufacture of any kind whatsoever. ART. 4. In the event of Japanese and Chinese desiring jointly to undertake agricultural enterprises and industries incidental thereto, the Chinese Government may give its permission. ART. 5. The Japanese subjects referred to in the preceding three articles, besides being required to register with the local Authorities passports which they must procure under the existing regulations, shall also submit to the police laws and ordinances and taxation of China. Civil and criminal cases in which the defendants are Japanese shall be tried and adjudicated by the Japanese Consul ; those in which the defendants are Chinese shall be tried and adjudicated by Chinese Authorities. In either case an officer may be deputed to the court to attend the proceedings. But mixed civil cases between Chinese and Japanese relating to land shall be tried and adjudicated by delegates of both nations conjointly in accordance with Chinese law and local usage. When, in future, the judicial system in the said region is com- APPENDICES 411 pletely reformed, all civil and criminal cases concerning Japanese subjects shall be tried and adjudicated entirely by Chinese law courts. ART. 6. The Chinese Government agrees, in the interest of trade, and for the residence of foreigners, to open by China herself, as soon as possible, certain suitable places in Eastern Inner Mongolia as Commercial Ports. ART. 7. The Chinese Government agrees speedily to make a fundamental revision of the Kirin-Changchun Railway Loan-Agree- ment, taking as a standard the provisions in railway agreements made heretofore between China and foreign financiers. When in future, more advantageous terms than those in existing railway loan agreements are granted to foreign financiers in connec- tion with railway loans, the above agreement shall again be revised in accordance with Japan's wishes. ART. 8. All existing treaties between China and Japan relating to Manchuria shall, except where otherwise provided for by this Treaty, remain in force. ART. 9. The present Treaty shall come into force on the date of its signature. The present Treaty shall be ratified by His Excellency the President of the Republic of China and His Majesty the Em- peror of Japan, and the ratifications thereof shall be exchanged at Tokio as soon as possible. In witness whereof the respective Plenipotentiaries of the two High Contracting Parties have signed and sealed the present Treaty, two copies in the Chinese language and two in Japanese. Done at Peking this twenty-fifth day of the fifth month of the fourth year of the Republic of China, corresponding to the same day of the same month of the fourth year of Taisho. Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to state that, respecting the provisions contained in Article 1 of the Treaty relating to South Manchuria and Eastern Inner Mongolia, signed this day, the term of lease of Port Arthur and Dalny shall expire in the 86th year of the Republic or 1997. The date for restoring the South Manchuria Railway to China shall fall due in the 91st year of the Republic or 2002. Article 21 in the Original South Manchurian Railway Agreement providing that it 412 APPENDICES may be redeemed by China after 36 years from the day on which the traffic is opened is hereby canceled. The term of the Antung-Muk- den Railway shall expire in the 96th year of the Republic or 2007. I avail, etc., (Signed) Lou TSENG-TSIANG. His Excellency, Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you stated that "respecting the pro- visions contained in Article 1 of the Treaty relating to South Man- churia and Eastern Inner Mongolia, signed this day, the term of lease of Port Arthur and Dalny shall expire in the 86th year of the Re- public or 1997. The date for restoring the South Manchurian Rail- way to China shall fall due in the 91st year of the Republic or 2002. Article 12 in the original South Manchurian Railway Agreement pro- viding that it may be redeemed by China after 36 years from the day on which the traffic is opened, is hereby canceled. The term of the Antung-Mukden Railway shall expire in the 96th year of the Re- public or 2007." In reply I beg to state that I have taken note of the same. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. EXCHANGE OF NOTES RESPECTING THE OPENING OF PORTS IN EASTERN INNER MONGOLIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to state that the places which ought to be opened as Commercial Ports by China herself, as provided in Article 6 of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day, will be selected, and the regulations therefor will be APPENDICES 413 drawn up, by the Chinese Government itself, a decision concerning which will be made after consulting the Minister of Japan. I avail, etc., (Signed) Lou TSENG-TSIANG. His Excellency, Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you stated "that the places which ought to be opened as Commercial Ports by China herself, as provided in Article of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day, will be selected, and the regulations therefor, will be drawn up, by the Chinese Government itself, a decision concerning which will be made after consulting the Minister of Japan." In reply, I beg to state that I have taken note of the same. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. SOLTTH MANCHURIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to state that Japanese subjects shall, as soon as possible, investigate and select mines in the mining areas in South Manchuria specified hereinunder, except those being prospected for or worked, and the Chinese Government will then permit them to prospect or work the same; but before the Mining regulations are definitely settled, the practice at present in force shall be followed. Fengtien. LOCALITY DISTRICT MINERAL Niu Hsin T'ai Pen-hsi Coal Tien Shih Fu Kou " " Sha Sung Kang Hai-lung " T'ieh Ch'ang Tung-hua " Nuan Ti T'ang Chin " 414 APPENDICES An Shan Chan region From Liaoyang to Pen-hsi Iron Kirin (Southern portion) Coal & Iron Sha Sung Kang Ho-lung Coal Kang Yao Chi-lin (Kirin) Gold Chia P'i Kou Hua-tien I avail, etc., His Excellency, Hioki Eki, (Signed) Lou TSENG-TSIANG. Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day respecting the opening of mines in South Man- churia, stating: " Japanese subjects shall, as soon as possible, in- vestigate and select mines in the mining areas in South Manchuria specified hereunder except those being prospected for or worked, and the Chinese Government will then permit them to prospect or work the same; but before the Mining regulations are definitely set- tled, the practice at present in force shall be followed." Fengtien. LOCALITY DISTRICT MINERAL Niu Hsin T'ai Pen-hsi Coal Tien Shih Fu Kou " " Sha Sung Kang Hai-lung " T'ieh Ch'ang Tung-hua " Nuan Ti T'ang Chin " An Shan Chan region From Liaoyang to Pen-hsi Iron Kirin (Southern portion) Sha Sung Kang Ho-lung Coal & Iron Kang Yao Chi-lin (Kirin) Coal Chia P'i Kou Hua-tien Gold I avail, etc., His Excellency, (Signed) HIOKI EKL Lou Tseng-tsiang, Minister of Foreign Affars of the Republic of China. APPENDICES 415 EXCHANGE OF NOTES RESPECTING RAILWAYS AND TAXES IN SOUTH MANCHURIA AND EASTERN INNER MONGOLIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, In the name of my Government, I have the honor to make the following declaration to your Gov- ernment : China will hereafter provide funds for building necessary railways in South Manchuria and Eastern Inner Mongolia; if foreign capital is required China may negotiate for a loan with Japanese capitalists first: and further, the Chinese Government, when making a loan in future on the security of the taxes in the above-mentioned places (ex- cluding the salt and customs revenue which have already been pledged by the Chinese Central Government) may negotiate for it with Japanese capitalists first. I avail, etc., His Excellency, (Signed) Lou TSENG-TSIANG. Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date respecting railways and taxes in South Man- churia and Eastern Inner Mongolia in which you stated : "China will hereafter provide funds for building necessary rail- ways in South Manchuria and Eastern Inner Mongolia; if foreign capital is required China may negotiate for a loan with Japanese capitalists first ; and further, the Chinese Government, when making a loan in future on the security of taxes in the above mentioned places (excluding the salt and customs revenue which have already been pledged by the Chinese Central Government) may negotiate for it with Japanese Capitalists first/' In reply I beg to state that I have taken note of the same. I avail, etc., His Excellency, (Signed) HIOKI EKI. Lou Tseng-tsiang, Minister of Foreign Affairs. 416 APPENDICES EXCHANGE OP NOTES RESPECTING THE EMPLOYMENT OF ADVISERS IN SOUTH MANCHURIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, In the name of the Chinese Government I have the honor to make the following declaration to your Government: "Hereafter, if foreign advisers or instructors on political, finan- cial, military or police matters are to be employed in South Man- churia, Japanese may be employed first." I avail, etc., His Excellency, (Signed) Lou TSENG-TSIANG. Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you made the following declaration in the name of your Government : "Hereafter if foreign advisers or instructors in political, military or police matters are to be employed in South Manchuria, Japanese may be employed first." In reply, I beg to state that I have taken note of the same. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. EXCHANGE OF NOTES RESPECTING THE EXPLANATION OF "LEASE BY NEGOTIATION" IN SOUTH MANCHURIA Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to state that the term "lease by negotiation" con- tained in Article 2 of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day shall be understood to imply APPENDICES 417 a long-term lease of not more than thirty years and also the possi- bility of its unconditional renewal. I avail, etc., (Signed) HIOKI EKI. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. REPLY Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you state : "The term 'lease by negotiation' contained in Article 2 of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day shall be understood to imply a long-term lease of not more than thirty years and also the possibility of its unconditional renewal." In reply I beg to state that I have taken note of the same. (Signed) Lou TSENG-TSIANO. I avail, etc., His Excellency, Hioki Eki, Japanese Minister. EXCHANGE OF NOTES RESPECTING THE ARRANGEMENT FOR POLICE LAWS AND ORDINANCES AND TAXATION IN SOUTH MANCHURIA AND EASTERN INNER MONGOLIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur ]e Ministre, I have the honor to state that the Chinese Authorities will notify the Japanese Consul of the police laws and ordinances and the taxa- tion to which Japanese subjects shall submit according to Article 5 of the Treaty respecting South Manchuria and Eastern Inner Mon- golia signed this day so as to come to an understanding with him before their enforcement. I avail, etc., His Excellency, (Signed) Lou TSENG-TSIANG. Hioki Eki, Japanese Minister. 418 APPENDICES REPLY Peking, the 25th day of the 5th month of the 4th year- of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you state : "The Chinese Authorities will notify the Japanese Consul of the police laws and ordinances and the taxation to which Japanese sub- jects shall submit according to Article 5 of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day so as to come to an understanding with him before their enforcement." In reply, I beg to state that I have taken note of the same. I avail, etc., His Excellency, (Signed) HIOKI EKI. Lou Tseng-tsiang, Minister of Foreign Affairs. THE POSTPONEMENT OF ARTICLES 2, 3, 4 AND 5 OF THE TREATY RE- SPECTING SOUTH MANCHURIA AND EASTERN INNER MONGOLIA Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to state that, inasmuch as preparations have to be made regarding Articles 2, 3, 4 & 5 of the Treaty respecting South Manchuria and Eastern Inner Mongolia signed this day, the Chinese Government proposes that the operation of the said Articles be post- poned for a period of three months beginning from the date of the signing of the said Treaty. I hope your Government will agree to this proposal. I avail, etc., (Signed) Lou TSENG-TSIANG. His Excellency, Hioki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you stated that, "inasmuch as prep- arations have to be made regarding Articles 2, 3, 4 & 5 of the Treaty APPENDICES 419 respecting South Manchuria and Eastern Inner Mongolia signed this day, the Chinese Government proposes that the operation of the said Articles be postponed for a period of three months beginning from the date of the signing of the said Treaty." I avail, etc., (Signed) HIOKI EKI. In reply, I beg to state that I have taken note of the same. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. EXCHANGE OF NOTES RESPECTING THE MATTER or HANYEHPING Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to state that if in future the Hanyehping Com- pany and the Japanese capitalists agree upon cooperation, the Chinese Government, in view of the intimate relations subsisting between the Japanese capitalists and the said Company, will forthwith give its permission. The Chinese Government further agrees not to confis- cate the said Company, nor without the consent of the Japanese capitalists to convert it into a state enterprise, nor cause it to bor- row and use foreign capital other than Japanese. I avail, etc., (Signed) Lou TSENG-TSIANG. His Excellency, Hoki Eki, Japanese Minister. REPLY Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date in which you state: "If in future the Hanyehping Company and the Japanese capital- ists agree upon cooperation, the Chinese Government, in view of the intimate relations subsisting between the Japanese Capitalists and the said Company, will forthwith give its permission. The Chinese Government further agrees not to confiscate the said Company, nor, without the consent of the Japanese capitalists to convert it into a 420 APPENDICES state enterprise, nor cause it to borrow and use foreign capital other than Japanese." I avail, etc., (Signed) HIOKI EKI. In reply, I beg to state that I have taken note of the same. His Excellency, Lou Tseng-tsiang, Minister of Foreign Affairs. EXCHANGE OP NOTES RESPECTING THE FUKEEN QUESTION Peking, the 25th day of the 5th month of the 4th year of Taisho. Excellency, A report has reached me to the effect that the Chinese Government has the intention of permitting foreign nations to establish, on the coast of Fukien Province, dock-yards, coaling stations for military use, naval bases, or to set up other military establishments ; and also of borrowing foreign capital for the purpose of setting up the above- mentioned establishments. I have the honor to request that your Excellency will be good enough to give me a reply stating whether or not the Chinese Gov- ernment really entertains such an intention. I avail, etc., His Excellency, (Signed) HIOKI EKI. Lou Tseng-tsiang, Minister of Foreign Affairs. REPLY Peking, the 25th day of the 5th month of the 4th year of the Republic of China. Monsieur le Ministre, I have the honor to acknowledge the receipt of Your Excellency's note of this day's date, which I have noted. In reply I beg to inform you that the Chinese Government hereby declares that it has given no permission to foreign nations to con- struct, on the coast of Fukien Province, dock-yards, coaling stations for military use, naval bases, or to set up other military establish- ments ; nor does it entertain an intention of borrowing foreign capital for the purpose of setting up the above-mentioned establishments. I avail, etc., His Excellency, 'Signed) Lou TSENG-TSIANG. Hioki Eki, Japanese Minister. APPENDIX C TEXT OF THE MILITARY AGREEMENT (Signed March 19, 1918) NOTE : No official text of this agreement has been published. The text given hereunder is, as the author was informed by a Chinese official, correct except for the omission of a few unimportant para- graphs. 1. China and Japan, realising the fact that the gradual ex- tension of enemy influence towards the East may jeopardise the peace of the two countries, consider it their mutual duty as par- ticipants in the war, to take concerted action against the common enemy. 2. As regards military co-operation each country shall pay due respect to the prestige and interests of the other country, and both parties shall be considered to be on an equal footing. 3. When the time comes to take action in accordance with this Agreement the two countries shall instruct their military and civil officials and people to adopt a friendly attitude towards those of the other country in the military areas. The Chinese officials shall do their best to aid the Japanese troops in the said areas so that no obstacles shall arise to impede their movements, and the Japanese troops shall respect the sovereignty of China, and shall not be al- lowed to act in a manner contrary to the local customs and cause inconvenience to the people. 4. The Japanese troops in Chinese territory shall be withdrawn as soon as military operations cease. 5. Whenever troops have to be despatched outside Chinese ter- ritory, the two countries shall despatch them jointly whenever necessary. 6. The military areas and other matters relating to the military operations shall be decided by the military authorities of the two countries whenever necessary, in accordance with the military strength of each country. 7. In order to facilitate matters, in the course of the military 421 422 APPENDICES co-operation the military authorities of two countries shall observe the arrangements: (a) In regard to the making of all arrangements for carry- ing on military operations, both countries shall appoint deputies who shall arrange all matters regarding co-op- eration. (b) In order to secure rapid transportation by land or by water and rapid communication, both sides shall co-oper- ate to this end. (c) When occasion arises the two Gommanders-in-chief shall arrange all necessary military constructions such as mili- tary railway, telegraph and telephone lines. These shall all be removed at the conclusion of the military operations. (d) Regarding the necessary military supplies and materials required for taking concerted action against the enemy the two countries shall supply each other to such an ex- tent as not to affect the supplying of ordinary demands. (e) The two countries shall assist each other in carrying out sanitary measures for the troops in the military areas. (f) With regard to the question of military experts for direct military operations, should the necessity arise for mutual assistance, if one country requests the assistance of such experts the other shall supply it. (g) In the areas in which military operations are taking place intelligence agencies may be established, and the two countries shall exchange important military maps and military reports. The intelligence agencies of the two countries shall exchange information and render mutual assistance. (h) All secret passAvords shall be agreed upon mutually. The questions as to which of the above arrangements shall be considered first, and which shall be first entered upon shall be mutually arranged in a separate agreement, be- fore the actual commencement of hostilities. 8. When military transportation necessities the use of the Chi- nese Eastern Railway, the provision in the original Treaty regard- ing the management and protection of the said railway shall be re- spected. The methods of transportation shall be decided upon at the time. 9. Regarding the enforcement of the details in this agreement, it shall be decided upon by delegates appointed by the military au- thorities of the two countries. APPENDICES 423 10. This agreement and the supplementary articles therein shall not be published by the two Governments, but shall be considered as military secrets. 11. This agreement shall be signed and sealed by the military delegates of the two countries and recognised by the two Govern- ments before it becomes operative. The time for commencing ac- tual military operations shall be decided by the highest military organs of the two countries. This Agreement and all the details arising from this agreement 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. 12. Two copies of this Agreement shall be written in the Chinese language, and two corresponding copies in the Japanese Language, and each party shall keep one copy of the Agreement in each language. (TEXT OF THE NAVAL AGREEMENT BETWEEN CHINA AND JAPAN, signed 19, 1918, translated from the Chinese) 1. (Same as Article 1 of Military Agreement.) 2. CSame as Article 2 of Military Agreement.) 3. When the time comes to take action in accordance with this Agreement the two countries shall instruct their naval officers and all officials and people to adopt a friendly attitude toward those of the other country in the military areas, and mutually assist each other with a view to overcoming the enemy. 4. A separate agreement shall be drawn up regarding the field of activity and the duties of the participants when the time comes for taking action against the enemy. 5. When the time comes for action the naval authorities of China and Japan co-operate with a view to taking efficient measures as follows : (a) (Same as 7 (a) of the Military Agreement.) (b) (Same as 7 (b) of the Military Agreement.) (c) In all matters relating to ship-building and repaiis and naval equipment and supplies, both countries shall mu- tually assist each according to its power. This also ap- plies to necessary military articles. (d) (Same as Section (f) of Article 7 of Military Agreement.) (e) (Same as Section (g) of Article 7 of Military Agreement. Substitute "naval" for "military" whenever used.) (f) (Same as Section (h) of Article 7 of Military Agreement.) 424 APPENDICES 6. (Same as Article 9 of Military Agreement, except that "naval" should be substituted for "military" whenever used.) 7. (Same as Article 10, with "naval" substituted for "military.") 8. (Same as Article 11, with "naval" substituted for "military.") 9. (Same as Article 12.) 7th Year of the Chinese Republic, 5th Month, 19th day; 7th Year of the Japanese Ta Cheng, 5th Month, 19th day. Signed by: Chairman of Delegates (Chung Chiang) Shen Shen-k'un; Delegates: (Shao Chiang) Wu Chen-nan; Delegates: (Shao Chiang) Ch'en-En-tae ; (Chung Hsiao) Wu Kung-tsung; Chairman of Delegates: (Shao Chiang) Chi T'ien Tseng Tz'u Liang; Delegates : (Tao Tso) I Chi Yuan Chun; (Tao Tso) Hua Shan K'o Yeh. EXPLANATORY NOTES REGARDING THE NAVAL AGREEMENT FOR MUTUAL ACTION AGAINST THE ENEMY I (Signed May 19, 1918) The navies of the two countries of China and Japan, looking to- ward the accomplishment of their mutual efforts in the War, in order mutually to carry out their purpose as outlined in Article 1, are agreed to render each other mutual assistance in the hope that these military efforts may be fully accomplished. II Article 5 of the Agreement is explained as follows: The term "deputies" used in Clause (a) of Article 5 of the Naval Agreement is defined as naval attaches of each Legation, and naval officers stationed in other places, and others to be mutually ap- pointed in case of necessity. In Clause (c) of Article 5 the term "necessary supplies" shall be defined as "metallic articles." "Necessary military articles" shall be defined as "combustibles, provisions, ammunition such as are required in military operations." They shall be supplied by each country according to its power. APPENDICES 425 With reference to Clause (e) of Article 5 charts are to be sup- plied upon the request of either country. In a place within which military operations are taking place, should it be found necessary by both sides to make surveys and soundings of any bays, such surveys and soundings shall be done by the naval authorities of the country in which the bays are situated. (Signatures same as on Naval Agreement.) APPENDIX D MEMORIAL OF THE "BLACK DRAGON" (JAPANESE) SOCIETY CONCERNING JAPAN'S POLICY IN CHDsA THE CHINESE QUESTION AND THE DEFENSIVE ALLIANCE It is a very important matter of policy whether the Japanese Government, in obedience to its divine mission shall solve the Chi- nese question in a heroic manner by making China voluntarily rely upon Japan or by forcing her to a position where she is obliged to rely upon Japan. To force China to such a position there is nothing else for the Imperial Japanese Government to do but to take advantage of the present opportunity to seize the reins of political and financial power and to enter by all means into a de- fensive alliance with her under secret terms as enumerated below: The Secret Terms of the Defensive Alliance The Imperial Japanese Government, with due respect for the sovereignty and integrity of China, and with the object and hope of maintaining the peace of the far East, undertakes to share the re- sponsibility of cooperating with China to guard her against internal trouble and foreign invasion, and China shall accord to Japan special facilities in the matter of China's national defense, or the protection of Japan's special rights and privileges, and for these objects the following treaty of alliance is entered into between the two contracting parties : 1. When there is internal trouble in China or when she is at war with another nation or nations, Japan shall send her army to render assistance, to assume the responsibility of guarding Chinese terri- tory, and to maintain peace and order in China. 2. China agrees to recognize Japan's privileged position in South Manchuria 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. 3. After the Japanese occupation of Kiaochou, Japan shall acquire all the rights and privileges hitherto enjoyed by the Germans in regard to railways, mines, and all other interests, and after peace and order is restored in Tsingtao, the place shall be handed back to China to be opened as an international treaty port. 426 APPENDICES 427 4. For the maritime defense of China and Japan, China shall lease strategic harbors along the coast of the Fukien Province to Japan to be converted into naval bases, and grant to Japan in the said province all railway and mining rights. 5. For the reorganization of the Chinese army, China shall en- trust the training and drilling of the army to Japan. 6. 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. 7. With the object of creating and maintaining a Chinese Navy, China shall entrust the training of her navy to Japan. 8. With the object of reorganizing her finances and improving the methods of taxation, China shall entrust the work to Japan, and the latter shall elect competent financial experts who shall act as first class advisors to the Chinese Government. 9. China shall engage Japanese educational experts as educational advisors, and extensively establish schools in different parts of the country to teach Japanese, so as to raise the educational standard of the country. 10. China shall first consult with and obtain the consent of Japan before she can enter into an agreement with another power for mak- ing loans, the leasing of territory, or the cession of the same. From the 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. This will relieve China of all future anxieties and enable her to proceed energetically with her reforms, and, with a sense of territorial security, she may wait for her na- tional development and regeneration. Even after the present European War is over and peace is restored China will absolutely have nothing to fear in the future of having pressure brought against her by the foreign powers. It is only thus that permanent peace can be secured in the far East. But before concluding this defensive alliance, two points must first be ascertained and settled. (1) Its bearing on the Chinese Govern- ment. (2) Its bearing on those Powers having intimate relations with and great interests in China. In considering its effect on the Chinese Government, Japan must try to foresee whether the position of China's present ruler Yuan SJiih K'ai, shall be permanent or not; whether the present Govern- ment's policy will enjoy the confidence of a large section of the Chinese people; whether Yuan Shih K'ai will readily agree to the 428 APPENDICES Japanese Government's proposal to enter into a treaty of alliance with us. These are points to which we are bound to give a thorough consideration. Judging by the attitude hitherto adopted by Yuan Shih K'ai, we know he has always resorted to the policy of ex- pediency in his diplomatic dealings, and although he may outwardly show a friendliness toward us, he will in fact rely upon the in- fluence of the different Powers as the easiest check against us, and refuse to accede to our demands. Take for a single instance, his conduct toward us since the Imperial Government declared war against Germany, and his action will then be clear to all. Whether we can rely upon the ordinary friendly methods of diplomacy to gain our object or not, it does not require much wisdom to decide. After the gigantic struggle in Europe is over, leaving aside Amer- ica which will not press for advantages, China will not be able to obtain any loans from the other Powers. With a depleted treasury, without means to pay the officials and the army, with local bandits inciting the poverty-stricken populace to trouble, with the revolu- tionists waiting for opportunities to rise, should an insurrection actually occur while no outside assistance can be rendered to quell it, we are certain it will be impossible for Yuan Shih K'ai, single- handed, to restore order and consolidate the country. The result will be that the nation will be cut up into many parts beyond all hope of remedy. That this state of affairs will come is not difficult to foresee. "When this occurs, shall we uphold Yuan's Government and assist him to suppress the internal insurrection with the cer- tain assurance that we could influence him to agree to our demands, or shall we help the revolutionists to achieve a success and realize our object through them? This question must be definitely decided upon this very moment, so that we may put it into practical ex- ecution. If we do not look into the future fate of China, but go blindly to uphold Yuan's Government, to enter into a defensive al- liance with China, hoping thus to secure a complete realization of our object by assisting him to suppress the revolutionists, it is ob- viously a wrong policy. Why? Because the majority of the Chi- nese people have lost all faith in the tottering Yuan Shih K'ai, who is discredited and attacked by the whole nation for having sold his country. If Japan gives Yuan the support, his Government, though in a very precarious state, may possibly avoid destruction. Yuan Shih K'ai belongs to that school of politicians who are fond of employing craftiness and cunning. He may be friendly to us for a time, but he will certainly abandon us and again befriend the other Powers when the European War is at an end. Judging by his past, we have no doubt as to what he will do in the future. For APPENDICES 429 Japan to ignore the general sentiment of the Chinese people and support Yuan Shih K'ai with the hope that we can settle with him the Chinese question, is a blunder indeed. Therefore, in order to secure the permanent peace of the far East, instead of supporting a Chinese Government which can neither be long continued in power nor assist in the attainment of our object, we should rather sup- port the 400,000,000 Chinese people to renovate their corrupt Gov- ernment, to change its present form, to maintain peace and order in the land, and to usher into China a new era of prosperity, so that China and Japan may in fact as well as in name be brought into the most intimate and vital relations with each other. China's era of prosperity is based on a Chino-Japanese alliance, and this alliance is the fundamental power for the repelling of the foreign aggression that is to be directed against the far East at the con- clusion of the European War. This alliance is also the foundation stone of the peace of the world. Japan therefore should take this as the last warning and immediately solve this question. Since the Imperial Japanese Government has considered it imperative to support the Chinese people, we should induce the Chinese revolu- tionists, the Imperialists, and other Chinese malcontents to create trouble all over China. The whole country will be thrown into dis- order and Yuan's Government will consequently be overthrown. We shall then select a man from amongst the most influential and most noted of the 400,000,000 of Chinese and help him to organize a new form of government and to consolidate the whole country. In the meantime our army must assist in the restoration of peace and order in the country, and in the protection of the lives and proper- ties of the people, so that they may gladly tender their allegiance to the new Government which will then naturally confide in and rely upon Japan. It is after the accomplishment of only these things that we shall without difficulty gain our object by the conclusion of a defensive alliance with China. For us to incite the Chinese revolutionists and malcontents to rise in China, we consider the present to be the most opportune moment. The reason why these men cannot now carry on an active campaign is because they are insufficiently provided with funds. If the Im- perial Government can take advantage of this fact to make them a loan and instruct them to rise simultaneously, great commotion and disorder will surely prevail all over China. We can then intervene and easily adjust matters. .The progress of the European War warns Japan with greater urgency of the imperative necessity of solving this most vital of questions. The Imperial Government cannot be considered as em- 430 APPENDICES barking on a rash project. This opportunity will not repeat itself for our benefit. We must avail ourselves of this chance and under no circumstances to hesitate. Why should we wait for the spon- taneous uprising of the revolutionists and malcontents f Why should we not think out and lay down a plan beforehand? When we examine into the form of government in China, we must ask whether the existing Republic is well suited to the national tempera- ment and well adapted to the thoughts and aspirations of the Chinese people. From the time the Republic of China was established up to the present moment, if what it has passed through is to be com- pared to what it ought to be in the matter of administration and unification, we find disappointment everywhere. Even the revolu- tionists themselves, the very ones who first advocated the republican form of government, acknowledge that they have made a mistake. The retention of the republican form of government in China will be a great future obstacle in the way of a Chino-Japanese alliance. And why must it be so? Because, in a republic the fundamental principles of government as well as the social and moral aims of the people are distinctly different from that of a constitutional monarchy. Their laws and administration also conflict. If Japan acts as a guide to China and China models herself after Japan, it will only then be possible for the two nations to solve by mutual effort the far East question without differences and disagreements. Therefore to start from the foundation for the purpose of recon- structing the Chinese Government, of establishing a Chino-Tapanese alliance, of maintaining the permanent peace of the far East, and of realizing the consummation of Japan's Imperial policy, ice must take advantage of the present opportunity to alter China's repub- lican form of government into a constitutional monarchy which shall necessarily be identical, in all its details, to the constitutional monarchy of Japan, and to no other. This is really the key and first principle to be firmly held for the actual reconstruction of the form of government in China. If China changes her renublican form of government to that of a constitutional mnnarrhi/, shall we, in the selection of a new ruler, restore the Emperor Hsuan T'ung to his throne, or choose the most capable man from the monarchists, or select the most worthy member from among the revolutionists f We think, however, that it is advisable at present to leave this question to the exigency of the future when the matter is brought up for decision. But we must not lose sight of the fact that to act- ually put into execution this policy of a Chino-Japanese alliance and the transformation of the Republic of China into a constitu- APPENDICES 431 tional monarchy is, in reality, the fundamental principle to be adopted for the reconstruction of China. We shall now consider the bearing of this defensive alliance on the other Powers. Needless to say, Japan and China will in no way impair the rights and interests already acquired by the Powers. At this moment it is of paramount importance for Japan to come to a special understanding with Russia to define our respective spheres of influence in Manchuria and Mongolia so that the two countries may cooperate with each other in the future. This means that Japan, after the acquisition of sovereign rights in South Man- churia and Inner Mongolia, will work together with Russia after her acquisition of sovereign rights in North Manchuria and Outer Mongolia, to maintain the status quo, and endeavor by every effort to protect the peace of the far East. Russia, since the outbreak of the European "War, has not only laid aside all ill feelings against Japan, but has adopted the same attitude as her allies and shown warm friendship for us. No matter how we regard the Manchurian and Mongolian questions in the future, she is anxious that we find some way of settlement. Therefore we need not doubt but that Russia, in her attitude toward this Chinese question, will be able to come to an understanding with us for mutual cooperation. The British sphere of influence and interest in China is centered in Tibet and the Yangtze Valley. Therefore if Japan can come to some satisfactory arrangement with China in regard to Tibet and also give certain privileges to Great Britain in the Yangtze Valley, with an assurance to protect those privileges, no matter how powerful Great Britain might be, she will surely not oppose Japan's policy in regard to this Chinese question. While this pres- ent European War is goin? on. Great Britain has even asked Japan to render her assistance. That her strength will certainly not enable her to oppose us in the future need not be doubted in the least. Since Great Britain and Russia will not oppose Japan's policy toward China, it can readily be seen what attitude France will adopt in regard to the subject. What Japan must now reckon with is America. But America in her attitude toward us regarding our policy toward China has already declared the principle of maintain- ing China's territorial integrity and equal opportunity, and will be satisfied if we do not impair America's already acquired rights and privileges. We think America will also have no cause for com- plaint. Nevertheless, America has in the East a naval force which can be fairly relied upon, though not sufficiently strong to be feared. Therefore in Japan's attitude toward America there is nothing really for us to be afraid of, APPENDIX E EXTRACTS FROM "A MEMORIAL FOR THE ADVANCE- MENT OF GERMAN INTERESTS IN CHINA ISSUED BY THE GERMAN ASSOCIATION OF SHANGHAI." TABLE OF CONTENTS. 1. The Chinese Market. 1 China's charge of front. 2 Possibilities in China's economic development. 3 The importance of the Chinese Market. 4 The fight for the Chinese Market. (a) Natural advantages of our opponents. (b) Achievements of our opponents. (c) Aid of the Schools. (d) Gradual loss of German influence. (e) Our mistakes. (f) Our prospects. II. Measures, to win the Chinese Market. 1 Diplomatic and Consular service. 2 Finance. 3 The German Language. 4 A German Chinese School System. (a) Middle schools. (aa) Middle schools in open ports. (bb) Mission middle schools. (cc) Point of contact with Chinese elementary schools. (dd) Development (of certain schools to the grade of the "Arbiturium" e. g. graduation from German Gym- nasium). (ee) Number of scholars. (ff) Classes for teachers. (gg) Schools for girls. (b) Technical schools. 432 APPENDICES 433 5 Students to Germany. 6 Chinese Government schools. (a) The German language in Chinese government schools. (b) German teachers in Chinese Government schools. 7 General remarks. 8 A translation Bureau. 9 Museums and Industrial expositions. 10 The Chinese Press. 177. Organization and Cost. 1 Organization. (a) A head office in Berlin. (b) A central Committee in China. (c) Promotes. (d) Private nature (of the enterprise). (e) Centralization in Leadership. Decentralization in the work. 2 Costs. (a) Amount. (b) Method of securing. IV. Closing remarks. 1 The German Merchant in China and his trade. 2 The last opportunity. APPENDIX 1 Germany's export and import trade with China 1900-1911. 2 Development of German trade with China 1900-1911. 3 China's imports from Germany, England, America and Japan 1905-1911 with percentage of each. 4 German exports to China 1908-1910 grouped by classes of articles. 5 Possibilities for developing German trade. 6 Export trade of Hankow. 7 Antecedents of the higher Chinese officials of the Central Gov- ernment and of the Provinces. 8 Cost of the technical schools. 9 Cost of the Museums and Industrial expositions. 10 Irritating article regarding Germany from the "Eastern En- gineering News." Of special interest and importance to us as missionaries are the 434 APPENDICES paragraphs dealing with education. (At times I shall translate, at other times summarize.) After speaking of the national advantages of Germany's Chief Competitors (England, the United States and they say that in a very special degree England, the United States and even Japan, have during the past ten years been carrying on "School and Cul- ture politics." They have spent countless millions (of marks) in these endeavors. Bands of Missionaries and of teachers have in- vaded the Country. China is flooded with English and American school books. Educational specialists from America travel sys- tematically through China and acquaint the Chinese with the won- ders of Modern science as seen through American eyes. The Chi- nese Press is to a large degree under the influence of our opponents. The English language is to become obligatory in Chinese govern- ment schools above the lower elementary grade. Most striking is the comparison of the German with the British and American schools in China. The figures mentioned are: FOR PROTESTANT MISSIONS: Lower Schools Middle and High Schools. Schools Scholars Schools Scholars English 1445 32303 241 7552 American 1992 44354 286 23040 German 164 4862 15 523 As if this were not enough, England, and America have gathered ten Million Marks more for Universities in Shantung, Hankow and Hongkong. FOR CATHOLIC MISSIONS. Lower Middle and High Schools Scholars Schools Scholars 6877 1263-5 157 6545 A further advantage of America is that 500 Chinese students must yearly be sent to American Universities on the Boxer indemn- ity fund. England and America can advance their political ends by Culture and Schools, on this liberal scale because they have ap- parently boundless wealth to draw upon, and because the idealism of their Missionaries and teachers is founded not less on patriotism than on religion. The paper goes on to say that during the last ten years there has been a noticeable loss in German influence; that ten years ago APPENDICES 435 there was still a chance to extend the German language alongside of English; but that Germany had done nothing to stop the triumphal march of the English language. There is, however, still a chance of stopping it. Under "Our prospects" it is said the English language has not yet spread so far that Germany cannot hope to catch up with it. Our diplomacy ought to be able to assure the German language of that place in the Chinese Government schools that is its due, and to increase again German influence with the Chinese Government. By a better quality of schools Germany can make up for the quan- tity of English-American schools. The thoroughness of German methods of work is known to the Chinese, and is witnessed to by the flocking of students to the college in Tsingtau and to the medical and technical schools in Shanghai, that are this year (1913) three or four times as large as last year. Moreover, China will learn to understand more and more, that besides the United States Germany is the only one of the great powers that does not follow a political policy that looks to the annexation of Chinese territory. MEASURES TO GAIN CONTROL OF THE CHINESE MARKET. After speaking of the need of reorganization of the diplomatic and consular service, and a more liberal financial policy on the part of Germany the paper turns to the question of the German language. Under this heading it is said : "The important matter in attaining our goal of capturing the Chinese Market for German Industry, lies in the question whether or not we are determined to take up the fight against the dominance of the Enirlish language. One may think what one will about the general truth of the saying that 'trade follows language;' but the truth of the statement regarding China has already been sufficiently proved. Germany can, therefore, not delay in spreading the Ger- man language and German culture in influential Chinese circles. Only so can the caricature of Germany, which thanks to the lack of scrupulousness of our competitors, has become firmly fixed in the minds of the Chinese, be destroyed and place be made for the view that many needs to stand behind no one in the world, but, is called to play a leading part in the life of the world. "The situation is not yet one in which our endeavors need to be looked on as without a prospect of success. It is true that the English language has a decided advantage, but the dominance of the English is, in comparison with the greatness of the Chinese na- tion only in the elementary schools, and can still be overcome by 436 APPENDICES timely opposition measures. The prospects favorable to the spread of the German language lie chiefly that Germany is recognized by all as the language of science, and therefore seems to be destined rather than other languages to furnish China with the means for completing her internal organization. It is true that there is no immediate prospects of our securing a number of teachers and scholars, equal to those of England and America, for organizations of this kind are not procurable on demand ; but up to a certain de- gree we are in a position, by an education of better quality to equalize the advantage gained by the larger quantity of the schools of our opponents. The strength of English and American schools has thus far consisted more in the number than in the quality of the culture given. Moreover, these schools have wasted much val- uable energy by drawing without distinction from all classes of society. We would confine ourselves to those circles which are destined to play a leading part, namely to the upper strata of the intellectual and commercial classes, and to take into our field of endeavor only those provinces, on which depend the future economic development of the country, and which produce the strongest men both in intelligence and character. In this we can overcome, at least in part, the quantitative advantages of our opponents. From this point of view the following ten provinces would be those prob- ably to be dealt with: Chili, Shantung, Shansi, Hunan, Hupeh, Szechuen Kiangsu, Chekiang, Yunnan and Kwangtung. We should formally as far as it accords with our aim fall in line with the general plan, curricula, and regulations of the Chinese government schools, so as to smooth the way for recognition by the Chinese Government. There follows an outline of a German School System for China and the cost of maintaining the same. Expenses Initial Annual 1. Nine Middle Schools in Treaty Ports $ 380,000 $ 162,000 (Shankhai, Hankow, Tientsin, Tsinanfu, Canton, Nanking, Chungking, Changsha, Peking) 2. Thirty-five Mission Middle Schools 1,050,000 420,000 (in case the Missions will fall in with the general plan) 3. Subsidy to ninety Elementary schools in cities (that would teach German) 20,250 4. Subsidy to 350 Elementary schools in the country 35,000 APPENDICES 437 Expenses Initial Annual 5. Extra expenses to develop to college grade ("Arbiturium") three of the Middle schools 6. Extra expenses for normal education of teachers (in three centers) 7. Schools for girls 8. Five technical school $ 900,000 9. Maintaining- 300 students in Germany and 10 traveling to and fro each year 10. Teachers in Chinese Schools 11. Translation Bureau 40,000 12. Eight Museums and Industrial exposi- tions 144,000 13. Traveling Lecture Ships 14. Press 15. Organization, Head Office, Office in China, Promoters $ 30,000 30,000 25,000 270,000 235,000 150.000 70,000 80,000 40,000 150,000 50,000 $2,514,000 $1,769,250 PROPOSED MEANS FOR SECURING THE MONET The difficulty of raising this money is not minimized, but it is thought to contain no unsurmountable difficulties. Two plans are proposed. Either the formation of an "Auslands Kultur Verein" which should seek to secure small subscriptions from a very large number of members throughout German, or failing the successful launch- ing of such an organization the reliance on Government action. It is suggested that a portion of the annual payment of ten million marks to Germany from the Boxer Indemnity could be devoted to this end. The reason for desiring to work through the Missions in estab- lishing Middle and Elementary schools is that this course is neces- sitated by the fact that only missionaries can reside and carry on work in the interior away from the treaty ports. The paper says: "Only in their outward form should they be really Mission Schools, in their inner organizations they could be something between a mission school and another kind of school." Professional teachers will be necessary and they will divide the work in a suitable way with the missionaries. Moreover, these schools would have to stand 438 APPENDICES in a special relation to the Mission, as they would be under a spe- cial organization with its school inspector, and also because the re- ligious element would be of secondary importance to the national. If participation in the religious instruction is made obligatory it is to be feared that just those classes of society, upon which we lay special emphasis, will not send their children to these schools. From the purely religious point of view the standpoint here put forward may seem somewhat questionable, but from our point of view it does not make so much difference, to gain new adherents to the Christian Church, but, much more to develop strong moral per- sonalities. We recognize that in asking the missions to take this concep- tion of their work we are requiring them to make a sacrifice, but on the other hand, the American and British Missionaries go con- siderably farther than this in placing national before religious ends, going at times so far that the Commercial point of view stands in the foreground; and on the other hand our German mis- sionaries recognize their duties to propagate German national ideas. Moreover, the Missionaries, without doing violence to their calling, could take part in the system of schools herein proposed, inasmuch as an objective education which emphasizes above all a thorough moral instruction, prepares the way for Christian teach- ing. Thus the Y. M. C. A. admit many non-Christians to their mem- bership. Fortunately also the Catholic Mission in Shantung and several of the Protestant Missions do not make the participation of their scholars in religious instruction a sine qua non of admis- sion to their schools. We should give up our existing prejudices against the Missions. It has been a serious mistake that we have thus far co-operated so little with them. On no account can we dispense with the Capital of idealism developed in Missionary circles." Speaking of the German language in Government schools it is said that one must start from the premise that foreign schools in China, as in Japan, are only temporarj 7 in their nature and will before long be forced out by the Chinese Government or be taken over by it. If the German Schools are developed into Model in- stitutions, as is planned, could count on their being taken over in a reasonable time by the Chinese. "But we shall be able to reap the fruit of our Endeavors only if we take care NOW that the Ger- man language is accorded the same place in Government schools as the English language. Otherwise, as soon as our direct con- trol of the institutions founded by us, ceases, we shall have to see APPENDICES 439 England and America reap where we have sowed. The question of how we can at the present time assure to the German language that place in Chinese government schools, which belongs to it, ap- pears to us to be of the utmost importance, and of at least equal significance with the development of our whole German Chinese school system. Our diplomacy should, therefore, leave no means untried, to put through our endeavors in this domain. It is very evident, what all of this means for us. With one blow would be secured to the German language a determining influence, if we could in this way gain a foothold in China's widely branching school system set about this is really a political question, that cannot be judged from here, but it can be seen with certainty, that we could meet the Chinese in many other fields, if we could only gain success here. In this matter too much is at stake for us to be satisfied with Compromises. Whoever thinks that anything of value has really been gained with the recently promulgated school regulations, in ac- cordance with which German is to be made the leading language in the Medical Schools and of equal importance with English in the technical schools and in Agriculture and Forestry, shows that he is not sufficiently acquainted with the situation. Such conces- sions are easy to make on paper, but are of no real significance in practice. So long as English is made the only obligatory language in the middle schools, the scholars will study German only in exceptional cases. Of what value is it then to us, that in the universities or technical schools German is taught in certain branches, when there is a lack of scholars, adequately prepared in this language. The heart of the question lies in the fight for the Middle schools. What must be gained is that the German Lan- guage be given an equal place with English as obligatory in mid- dle and technical schools, in colleges and normal schools. We think we can ignore the Elementary schools in which the students remain only until the llth. year. Under the head of the Chinese Press, after speaking of the Anti-German tone of other papers, and commending for its good work the "Hsieh Ho Pao" a German paper published in Chinese, the pamphlet advocates that a telegraphic service be established to some twenty places in the interior of China and counteract the influence of Renter's service. Under the "concluding remarks" it is said: "Once more, and probably for the last time is the opportunity afforded us to take a hand in the course of events. If advantage is not taken now, England, America and Japan will obtain such a lead that we may 440 APPENDICES as well give up the competition. To call attention to the serious- ness of the situation, and to the heavy dangers, which the situation offers for Germany is the object of this pamphlet. To work with small and insufficient means is valueless and means only waste of time, strength and money. It is very plain that we have the choice of only two alternatives, either to look at the Chinese market as a lost position, where Germany, like to a state of second rank, can carry on a limited trade through the medium of the English lan- guage, or else we must put forth our strength to the utmost, main- tain a "School and propaganda politic" on a large scale, and so safeguard for ourselves a part in China's economic development in keeping with our importance and the demands of our own future." German Association: C. MICHELAU RUD. MAHNFELD Chairman Secretary. Shanghia, April, APPENDIX F 9 January 1915 No. 10 First Part Index : 69 Regarding the Ygreement of the treatment of the British Subjects dealing in the Zone of the Chinese-Eastern Rail- way, as per Municipal Orders and Obligations. His Majesty's Rescript for the Ruling Senate by the ministry of Justice. The Minister of Foreign Affairs has informed the Minister of Justice, that regarding His Majesty's Rescript of the 12th Nov- ember 1914, our minister in Peking has an exchange of Notes 20 November/9 December with the minister of Great Britain, regard- ing the Agreement worked out at Harbin for the treatment of British Subjects dealing in the Zone of the Chinese-Eastern Rail- way as per Municipal Orders and Obligations. According to it the Minister of Justice has offered to the Ruling Senate for the publication of the copies of the Notes with the Text of the Harbin Agreement (Our Note in Russian and French languages and the Note of Great Britain in English and Russian). The Note of the minister of Great Britain at Peking to the Rus- sian minister in the same town, dated 20 November/9 December 1914. Sir and dear Colleague, I have the honor to inform Your Excellency that the British Majesty's Government have had under consideration the draft Agreement recently negotiated and signed in English and Russian languages on the 17/30 April 1914 by the British Consul at Har- bin and the local Russian Authorities respecting the inclusion of British Subjects and their property within the scheme of the 441 442 APPENDICES Municipal Administration and Taxation established in the Zone of the Chinese-Eastern Railway. I have now received instructions from Sir E. Grey stating that His Majesty's the Great Britain Government approved this Agree- ment. I therefore have the honour to inform you that as soon as I learn that the Imperial Russian Government on their part have approved this Agreement I will undertake the necessary steps to enforce its regulations upon the British subjects concerned in same, beginning from the 1st January next. (This Agreement was made applicable to British subjects by "King's Regulations" (No. 20 of 1914) published by the British Minister at Peking, December 5th 1914.) I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration. (signed) J. N. JORDAN. The Note of the Russian minister at Peking to the minister of Great Britain in the same town, dated 20 November/9 Decem- ber 1914. Sir Ambassador and dear Colleague, I have the honour to inform Your Excellency of the receipt in due course of your Note of even date in which you have informed me, that the Government of Great Britain has approved the pro- ject of Agreement, which recently was worked out in Russian and English languages and signed at Harbin 17/30 April a. c. by the local Authorities and British Consul in said town, respecting the inclusion of British Subjects and their property within the scheme of the Municipal Administration and Taxation established in the Zone of the Chinese-Eastern Railway. At the same time you have informed me that your Government will undertake the necessary measures in view to facilitate the enforcement of the regulations of the present Agreement upon the British Subjects interested in same, beginning from January 1st next, as soon as you will re- ceive from me the information that the Imperial Russian Govern- ment has confirmed said Act. Taking into consideration this information, I have the honour to inform you, that I am entitled by the Imperial Russian Gov- ernment to inform Your Excellency that the same has likewise confirmed the said project of Agreement. Please accept, Sir Ambassador and dear Colleague, my best con- sideration and respect. (signed) B. KROUPENSKY. APPENDICES 443 AGREEMENT Between the Russian and British Governments respecting i. inclusion of British subjects within the scheme of Municipal Ad- ministration and Taxation established in the area of the Chinese- Eastern Railway. ARTICLE 1. The Imperial Russian Government having declared that all taxes and dues collected in the Railway Settlement at Harbin and in other Settlements situated in the area of the Chinese-Eastern Railway shall be exclusively devoted to municipal and public pur- poses for the common benefit of the inhabitants of these places, His Britannic Majesty's Government agrees to the payment by British Subjects residing in the Railway Settlement at Harbin and in other Settlements situated in the area of the Chinese East- em Railway of the same dues and taxes, whether levied in money or in kind, which are paid by Russian Subjects. His Britannic Majesty's Government further agrees that the payment of the said dues and taxes and the observance of the local Regulations and Byelaws, of which a list is hereunto annexed, shall be made ob- ligatory upon the aforesaid British Subjects from 1 January 1915, and, in like manner, undertakes to make binding upon British Sub- jects from the day upon which they take effect for Russian Sub- jects any additional or amended Regulations and Byelaws of a similar kind, provided that due notice of their intended introduc- tion is given and that nothing is contained therein which conflicts with the extra territorial rights of British Subjects. It is agreed that the length of such notice shall in the case of new or amended Regulations be two months and in that of new or amended Bye- laws two weeks. ARTICLE 11 In consideration of the foregoing, British Subjects residing in the Railway Settlement at Harbin and in other Settlements sit- uated in the area of the Chinese Eastern Railway shall have the active and passive right of election to the local Municipal Ad- ministrations, both those now existing and those hereafter es- tablished, and shall exercise this right, like Russian Subjects, in accordance with the stipulations of the local Municipal Regula- tions. At Harbin, also, there shall be introduced into the Muni- 444 APPENDICES cipal Council consisting, in all, of six members, the term of whose office is three years, a representative of the foreign (non-Russian) community who shall be a foreign (non-Russian) resident of good standing, the manner of whose election shall be as follows : The resident representatives, having full Consular jurisdiction, of those Foreign Powers exclusive of Russia who have obliged their nationals to pay taxes and observe the local Regulations and Bye- laws in accordance with the stipulations to this Agreement shall in consultation amongst themselves, the opinion of the majority to prevail prepare and present in good time to the Manager of the Chinese Eastern Railway for transmission to the Municipal Council a list containing the names of not less than three and not more than five persons from amongst whom the Assembly of Dele- gates shall elect by an ordinary majority vote lots to be cast in case of even ballot the representative in the Municipal Council of the foreign (non-Russian) community. The election of this Councillor shall be simultaneous with that of other members of the Council and the term of his office shall be concurrent with theirs. Should he resign or be dismissed before the expiration of this period, the Assembly of Delegates shall at the ordinary meet- ing occurring next after the preparation by the aforesaid Consular representatives of a new list, elect in the manner before stated, another member to serve for the remainder of the current term. The dismissal before his period of service has expired of a mem- ber of the Council elected in the method above described shall not be effected except with the consent of a majority of the Consular representatives aforesaid. The member of the foreign community for the present triennial period shall be elected in the manner before stated at a supple- mentary election which shall be held not later than two weeks after the presentation to the Manager of the Chinese Eastern Rail- way by the Consular representatives of the prescribed list of names. ARTICLE III British Subjects residing in the Railway Settlement at Harbin and in other Settlements situated in the area of the Chinese East- ern Railway shall as regards all matters of an economic char- acter, more especially such as relate to trade and industry and leases of land lots enjoy the same rights and privileges as Rus- sian Subjects. This equality shall also avail should, in the future, the present restricted rights to land be at any time enlarged or should lessees of land lots or owners of houses be the recipients, APPENDICES 445 on the lapse or termination of the Chinese Eastern Railway Com- pany's holding, of compensation of whatever kind. ARTICLE IV It is agreed that, should objections be raised by British Sub- jects regarding the amount of the assessment tax on commercial and industrial enterprises exploited by them, their affidavits made before the British Consular Representative as to the size and char- acter of the said enterprises shall be accepted in definite proof. It is agreed, also, that permission shall not be given to British Subjects to open, establish or maintain hotels, boarding or eating houses, houses of entertainment or shops for the sale of liquors except on production of a permit issued for the purpose by the British Consulate. ARTICLE V It is agreed that the Police Authorities in Harbin and in other Settlements situated in the area of the Chinese Eastern Railway shall give prompt effect to any requests preferred by the British Consular Representative for the adoption of coercive measures against British Subjects, but Officers of the force shall not, on their own initiative and in the absence of such requests, take any coercive action against British Subjects except in cases involving a breach of the peace. ARTICLE VI British Subjects shall be entitled to the benefit of any more favoured treatment which may be accorded by the Imperial Rus- sian Government to the Subjects or Citizens of other Foreign Powers resident in the Railway Settlement at Harbin or in other Settlements situated in the area of the Chinese Eastern Railway. ARTICLE VII The Imperial Russian Government undertakes that the Regula- tions and Byelaws, of which a list is hereunto annexed, shall be brought into accord with the stipulations of this Agreement by the date mentioned in Article I. We, the undersigned, hereby certify that the foregoing is the Draft Agreement concluded between us regarding the inclusion of British Subjects within the Scheme of Municipal Administration 446 APPENDICES and Taxation established in the Area of the Chinese Eastern Rail- way. Harbin, April 17/30 1914. (Signed): W. TRAUTSCHOLD, Imperial Russian Consul General. E. DANIEL, Delegate of the Chinese Eastern Railway Adminis- tration. H. E. SLY, His Britannic Majesty's Consul. OUR NATION IN THE BUILDING By HELEN NICOLAY Author of " The Book of American Wars, " etc. Of the period of national shaking together and development the author writes almost as if she were an eye-witness. Leaving cheerfully behind the old, dry, statistical method of writing history, Miss Nicolay tells about what happened, who did it, and what the rest thought of it as informally as if she were gossiping over the teacups. The reader looks on at great movements and at great blunders, gets a feeling of tremendous ideals side by side with comical absurdities, catches glimpses of the new Capital Washington in the making; sees society under the Adamses and other early Presidents, with its rivalries and jealousies; the beginnings of invention, the approach of the Civil War, etc. Miss Nicolay, as the daughter^ of Lincoln's famous secretary and biographer, has mingled all her life in the political society of the Capital, and has an instinctive understanding of public affairs. She describes the romance of our early days, their men and women, their events, develop- ments, causes, movements, with the sure eye and hand of a witty and pene- trating woman of the world, who knows how to distil from old documents all that is quintessentially human. She cares less for dates than happen- ings, less for specific happenings than for movements and currents of feeling. Her reason for writing this book is to emphasize the fact that there is nothing mummy-like about American history, however much his- torians may have made it seem so, but that it is full of inspiring incident and brimming with human nature. Some of the chapter-titles are: "An Idol's Successor," "A Baleful Don Quixote," "The Opening West," "A Democratic Despot," "Giants in Congress," "As Others Saw Us," "Roads of the Promised Land," "The Red Menace," "Women in a Free Country," "Religion in a Republic," "America's War of Conquest," "The Seers and the Prophets." The book contains sixteen full-page illustrations. Octavo, 521 pages, illustrated Price $2.50 At All Bookstores TTIE 1 fTNTTTPY C(\ 353 Fourth Avenue Published by * IlEi VxEill 1 U I\ 1 \AJ. N ew York City PEKING DUST By ELLEN N. LA MOTTE Author of "The *Back