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have reverted to her possession on that date. Hence the
reply :

"'I Ik- lease of Kiaochow expired immediately
China's declaration of war against Germany. Now that

Japan is only in military occupation of the leased Inn-



458 PROBLEMS ARISING SINCE THE WAR

tory the latter should be wholly returned to China with-
out conditions. There can he no question of any lease-
hold."



The second proposal offered to surrender the claim
to an exclusive Japanese settlement or an international
concession in Tsingtao as was stipulated in the exchange
of notes, May 25, 1915. This abandonment, however,
was to be made on conditions that would safeguard the
economic interests of the Japanese and other foreigners.
First, China was to "open of its own accord the entire
leased territory of Kiaochow as a port of trade," which
was also a reiteration of a stipulation in the exchange
of notes, May 25, 1915. Second, China was "to permit
the nationals of all foreign countries freely to reside and
to carry on commerce, industry, agriculture or any other
lawful pursuits within such territory," the pursuit of
agriculture being specifically mentioned, which was gen-
erally considered as an occupation open to the citizens
or natives only. Third, China undertook "to respect the
vested interests and rights of all foreigners, regardless
of the validity of acquisition. Fourth, she would like-
wise "carry out forthwith the opening of suitable cities
and towns within the Province of Shantung for residence
and trade of the nationals of all foreign countries," which
was one of the stipulations of the Treaty of May 25,
1915. Fifth, regulations for the opening of places under
the foregoing clauses should be determined by the Chinese
Government with the Powers interested.

In reply, China welcomed the surrender of the claim
to an exclusive settlement or an international conces-
sion and also pointed out that, inasmuch as China had
on previous occasions declared her intention to open Kiao-
chow as a commercial port for the convenience of trade
and residence of the nationals of all friendly nations,
their could be "no necessity for the establishment of any
purely foreign settlement again." She objected partial-



THE SHANTUNG QUESTION 459

larly to the inclusion of agriculture among the pursuits
allowed to foreigners.

"Agricultural pursuits concern the fundamental means
of existence of the people of a country; and according
to the usual practice of all countries, no foreigners are
permitted to engage in them."

She declined to concede indiscriminate recognition to all
vested interests and rights of foreigners, but pointed out
the difference between those legitimately acquired under
the German regime and those illegally possessed during
the Japanese military occupation.

"The vested rights of foreigners obtained through law-
ful processes under the German regime shall of course
be respected, but those obtained by force and compulsion
during the period of Japanese military occupation and
against law and treaties can in nowise be recognized."

She also objected to the idea of being called upon to open
cities and towns in Shantung as commercial ports, and
declared that "the opening of such places should neverthe-
less be left to China's own judgment and selection in
accordance with circumstances," plainly maintaining her
own full sovereignty. She further declined to enter into
previous negotiations as to the regulations governing the
opening of such places, thus again asserting the prin-
ciple of sovereignty, although conceding that she would
"undoubtedly bear in mind the objecl of affording facili-
ties to international trade and formulate them according
to established precedents of self-opened port

In the third proposal, the joint enterprise was pro] I
of the Kiaochow-Tsinanfu Railroad, as stipulated in the
Agreement of September 24, 1918, i ting the con-

trol of the Kiaochow Railway, and also of the mines
appurtenant thereto. To this China strenuously objected



460 PROBLEMS ARISING SINCE THE WAR

(hi the ground not only of the illegal acquisition in con-
sequence of the violation of China's neutrality and sov-
ereignty, but al e undesirability of the foreign con-
trol of railways and the necessity of unification and
nationalization of the same.



"The joint operation of the Shantung railways, that is,
the Kiaochou-Tsinanfu line, by China and Japan is ob-
jected to by the entire Chinese people. It is because in

all countries there ought to be a unified system for rail-
ways, and the joint operation unity of railway
management and impairs the rights of sovereignty; and,
in view of the evils of the previous cases of joint opera-
tion and the impossibility of correcting them, China
can now no longer recognize it as a matter of principle.
The whole line of the Shantung Railway, together with
the right of control and management thereof, should be
completely handed over to China: and after a just valua-
tion of its capital and properties, one-half of the whole
value of the line not returned shall be purchased back
by China within a fixed period. As to the mines a; >i un-
tenant to the Shantung Railway which were already oper-
ated by the Germans, their plan of operation shall be
fixed in accordance with the Chinese Alining Laws."

The fourth proposal offered to renunciate the prefer-
ential rights with regard to foreign assistance in persons,
capital and material, as stipulated in the Sino-Gennan
Treaty of March 6, 1S { >8. This would eliminate the wall
of preferential claims and thus open Shantung to the
enterprise of all foreigners, indicating the desire of the
Japanese to maintain equality of commercial opportuni-
ties. To this favorable proposal China was not opposed,
and hence she made no reply thereto. Upon a closer
examination, however, this apparent renunciation is tan-
tamount to a surrender of something which Japan has

not acquired. Maintaining as we do that the Kiaochow

Convention of March 6, 1898, which embodied the



THE SHANTUNG QUESTION 461

preferential clause, was abrogated by China's declaration
of war against Germany, it is but plain that the German
rights of preference were nullified upon the declaration
of hostility. While Japan might claim that the treaty
of peace with Germany, June 28, 1919, awarded her the
German rights in Shantung, it is to be maintained that
China did not sign that treaty and thus refused to recog-
nize the validity of the award. While voluntary renun-
ciation on the part of Japan might be commendable, her
proposal did not harmonize with the fundamental con-
viction and principle of the Chinese.

In the fifth proposal, the extensions of the Kiaochow-
Tsinanfu Railway, as provided in the agreement of Sep-
tember 24, 1918, respecting the construction of the
Tsinan-Shunteh and Kaomi-Shuchou railways, and the
options for the construction of the Yentai-Weihsien Rail-
way as stipulated in the treaty of May 25, 1915, respect-
ing Shantung, were to be thrown open for the common
activity of the international financial consortium. Inas-
much as the exchange of letters between Thomas W.
Lamont and N. Kajiwara on May 11, 1920, and the
Japanese entrance into the New International Ranking
Consortium placed these railway concessions within the
scope of the New Consortium, this proposal was deemed
as a mere statement of a situation already in existence.
The reply was therefore made :

"With reference to the construction of the extension
of the Shantung Railway, thai is, the Tsinan Shunteh
and Kiaochow-I louchou lines. China will, as a matter of
course, negotiate with international financial bodi<

Bui as the Chefoo-Weihsien Railway concession wa
acted under duress by the treaty of May 25, 1915, which
should he either abrogated or revised, the suggestion
thereaboul was deemed to be "entirely a different •
and could not "be discussed in the same category."



462 PROBLEMS ARISING SINCE THE WAR

The sixth proposal tendered to make the status of the
customs house at Tsingtao as forming an integral part
of the general customs system of China clearer than un-
der the German regime. Inasmuch as the full control of
the customs house at Tsingtao was considered as a natural
consequence of the restoration of Kiaochow Leased Ter-
ritory, China contended that the status of the Tsingtao
Customs House should be the same as that of any other
Chinese customs house.

"When the leased territory is restored, the customs
house thereat should be placed under the complete con-
trol and management of the Chinese Government and
should not be different from the other customs houses in
its system of administration."

In the seventh proposal, public property used for ad-
ministrative purposes within the leased territory of Kiao-
chow was tendered to be transferred to China, but as
to the maintenance and operation of public works and
establishments, special arrangement was to be made be-
tween the Japanese and Chinese governments. This pro-
posal volunteered the transfer of public property used
for administrative purposes, but still insisted on previous
negotiation or special arrangement for the disposal of
public works and establishments, which constituted one
of the four conditions attached to the Japanese pledge
of restoration of Kiaochow as embodied in the exchange
of notes, May 25, 1915. Inasmuch as all public proper-
ties, either for administrative purposes or otherwise,
should be returned with the restoration of the leased
territory without special arrangements, the proposal was
therefore rejected:

"I he extent of public properties is too wide to be
limited only to that portion used for administrative pur-
poses. If it is the sincere wish of Japan to return all
the public properties to China, she ought to hand over
completely the various kinds of official, semi-official, mu-



THE SHANTUNG QUESTION 463

nicipal and other public properties and enterprises to
China to be distributed according to their nature and
kind, to the administrations of the central and local
authorities, to the municipal council and to the Chinese
customs, etc., as the case may be. Regarding this there
is no necessity for any special arrangement."

The eighth item proposed the appointment of repre-
sentative commissioners by the Chinese and Japanese
governments to arrange detailed plans "for carrying into
effect the terms of settlement above indicated and for
the purpose of adjusting other matters not embodied
therein." To this suggestion China made no reply.

The ninth and last term of settlement tendered the
withdrawal of Japanese troops along the Kiaochow-
Tsinanfu Railway upon the organization by China of
a police force to take over the protection of the line.
This offer was, however, accompanied by the reserva-
tion that the question of the organization of a special
police guarding the railway should be reserved for fu-
ture consideration between Japan and China. This
exception signified that Japan still held on to the claim
of establishing a police force trained and controlled by
the Japanese, as stipulated in Article 4 of the Agree-
ment of September 24, 1918, respecting the control of
the Kiaochow-Tsinanfu Railway. As this proposal was
tantamount to the original claim of a police force trained
and controlled by the Japanese, and as the agreement
in question of September 24, 1918, was considered invalid
or voidable, and since the presence of Japanese troops
infringes her sovereignty. I hina could not but decline
the offer :

"The question of the withdrawal of Japanese troops
of Shantung Province bears no connection with the
restoration of the Kiaochow Leased Territory and the

Chinese Government has urged repeatedly fof its actual



464 PROBLEMS ARISING SINCE THE WAR

execution. It is only proper that the entire Japanese
Army of Occupation should now he immediately evacu-
ated. As to the policing of the Kiaochow-Tsinan Kail-
way, t'hina will immediately send a suitable force of
Chinese railway police to take over the duties."



From the ahove terms of settlement as offered by
Japan, it can be seen that what Japan tendered to sur-
render was not hers by right, hut rather what she should
have given up. Inasmuch as the Kiaochow Leased Con-
vention of March 6, 1898, is regarded as abrogated with
the declaration of war, the Kiaochow Leasehold and the
German preferential rights have therewith been nulli-
fied. As the exchange of letters between Thomas \V.
Lamont and N. Kajiwara on May 11, 1920, placed the
extensions of the Shantung Railway within the scope
of the New International Banking Consortium, the rail-
ways in question should have become open to the com-
mon activities of the New Consortium. The only term
of settlement that might be commended and regarded
with favor is the offer to surrender the claim to an
exclusive Japanese settlement or an international con-
cession, hut this is offset by a requirement to recognize
all vested interests and rights acquired during the Japa-
nese military occupation, legitimate or illegitimate.

On the other hand, it is also plain that Japan did
not propose to surrender any vital interests, or to meet
any fundamental objections of the Chinese. She still
insisted on the joint enterprise of the Kiaochow-Tsinanfu
Railway, future negotiation regarding the organization of
the railway police, special arrangement for the disposal
of public works and establishments, clearer definition of
the status of the customs house at Tsingtao, and the rec-
ognition of vested interests acquired by foreigners legiti-
tnately or otherwise. In short, Japan still aims to achieve
economic domination in Shantung. She made no con-
fession of her mistake or crime in landing her troops



THE SHANTUNG QUESTION 465

at Lungkow and then inarching through the Chinese
territory and seizing the Kiaochow-Tsinanfu Railway
and the adjoining mines, and thus failed to recognize and
respect the fundamental principle of the sovereignty of
China. She still ignored the basic contention of the
Chinese that China's declaration of war abrogated all
treaties, conventions and agreements with Germany, in-
clusive of the Kiaochovv Leasehold, and that China thus
recovered to herself all the former German concessions.
She further failed to concede that her possession of Ger-
man rights in Shantung was validated, neither by the
treaty of May 25, 1915. which was concluded under
duress, nor by the Agreement of September 24, 1918,
respecting the control of the Kiaochow-Tsinanfu Kail-
way, which was entered upon for illegal consideration,
nor by the Treaty of Peace with Germany, June 28,
1919, to which China was not a contracting party.

The Chinese Government therefore prefaced the reply
with a declaration of disappointment over the terms of
settlement and the failure of Japan to meet the funda-
mental contentions and objections of the Chinese.

"With reference to the important Shantung Question
which is now pending between China and Japan, China
has indeed been most desirous of any early settlement for
the restitution of her sovereign rights and territory. The
reason why China has not until now hern able to com-
mence negotiations with Japan is because of the fad
that the basis upon which Japan claims to negotiate are
all of a nature either highly objectionable to the Chinese
Governmenl and the Chinese people, or such to which
they have never given their recognition. Furthermore,
in regard to the Shantung Question, although Japan has

mad'- many vague declarations She has in fact had no

plan which is fundamentally acceptable. Therefore, the
case has been pending for many years much to the unex-
pectation of ( hina. ( to September 7 Japan ubmitted

certain proposals for the readjustment of the Shantung

•on in the form of a memorandum together with



466 PROBLEMS ARISING SINCE THE WAR

a verbal statement by the Japanese Minister to the effect
that in view of the great principle of Sino-Japanese
friendship Japan has decided upon this fair and just
plan as her final concession, etc. After careful con-
sideration the Chinese Government feels that much in
Japan's new proposals is still incompatible with the
repeated declarations of the Chinese Government, with
the hopes and expectations of the entire Chinese people,
and with the principles laid down in treaties between
China and the foreign Powers. If these proposals are
to be considered the final concession on the part of Japan,
they surely fall short to prove the sincerity of Japan's
desire to settle the question."

Consequent to the rejection of the terms of settlement,
and anxious to reach a solution of the Shantung Ques-
tion at an early date, the Chinese Government made the
reservation at the conclusion of the reply "of seeking a
solution of the question whenever a suitable occasion
tits itself," apparently giving the hint that, with
a concurrence of the Powers interested, the Shantung
Question might be made a subject for discussion among
the Powers.



NOTES TO CHAPTER XXVII

1. Millard, Our Eastern Question, p. 91.

2. The Chino- Japanese Negotiations, the Chinese Official
Statement, 1915, p. 19.

3. Ibid., p. 53.

4. MacMurray, Treaties and Agreements with and Concerning
China. 1917/7.

5. Questions for Readjustment, submitted by China to the
Paris Peace Conference, 1919, p. 82.

6. Hertslet's China Treaties, Vol. 1, No. 59, p. 351 ; also see
chapter on Leased Territories.

7. Cf. The Shantung Question, p. 40.

8. MacMurray, 1917/7.

9. Cushing, Att. Gen., 1855, 7 op. 367, cited in J. B. Moore,
Vol. 7. p. 1

10. The Shantung Question, submitted by China to the
Paris Peace Conference, published by the Chinese National Wel-
fare Society, March, 1920, p. 40.



THE SHANTUNG QUESTION 467

11. Note from the Ministry of Foreign Affairs to the
Japanese Minister at Peking protesting against violation of neu-
trality, Sept. 27, 1914, The Shantung Question, op. cit., p. 58.

12.' Ministry of Foreign Affairs to Japanese Minister at
Peking, Sept. '30, 1914, The Shantung Question, op. cit.. p. 59.

13. Japanese Minister at Peking to the Chinese Ministry of
Foreign Affairs, Oct. 2, 1914, The Shantung Question, ibid., pp.
59-60.

14. f. B. Moore, International Law Digest, Vol. 7, p. 1101.

15. Ibid., Vol. 5, p. 384.

16. Kent, Comm. I, 176, cited in J. B. Moore, Vol. 5, p. 385n.

17. Fiore's Internatl. Law Codified, translated by E. M.
Borchard, p. 538.

18. Calvo, Droit Int. (4th Ed.), IV, 65, Sec. 1931, cited in
J. B. Moore, Vol. 5, p. 385.

19. J. B. Moore, Columbia Law Review, Apr., 1901, Vol. 1,
No. 4, pp. 209-223, pp. 217-218; J. B. Moore, Int'natl. Law Dig.,
Vol. 5, p. 383.

20. The Chino-Japanese Negotiations, op. cit., p. 49, Art. 1,
Treaty of 1915 respecting Shantung.

21. The Shantung Question, pp. 17-18.

22. J. B. Moore, op. cit., Vol. 5, p. 183.

23. Fiore's Int'natl. Law Codified, op. cit., p. 332.

24. The Chino-Japanese Negotiations, op. cit., pp. 4-5.
24A. Ibid., p. 35.

25. Ibid., pp. 40-41.

26. Cf. Hearings before the Committee on For. Rel., U. S.
Sen., 66th Cong., 1st Sess., Sen. Document No. 106, on Treaty
of Peace with Germany signed at Versailles on June 28, 1919,
pp. 561-562, testimony of Mr. Ferguson.

27. The Shantung Question, pp. 67-68.

28. J. B. Moore, op. cit., Vol. 5, p. 183.

29. The Shantung Question, p. 42.

30. Ibid., p. 42.

31. Cf. Statements by the Chinese Peace Delegation, May 3,
1919, Millard's Review, Supp., July 17. 1920, p. 10.

32. Cf. Hearings, op. cit., pp. 444-445, Mr. T. F. Millard's
testimony.

33. For the text of the agreement, see The Shantung Ques-
tion, op. cit., pp. 66-70.

34. This declaration was officially presented to, and taken
cognizance of, by the Allied and associated Governments — the
statement by the Chinese Peace Delegation, Maj 3, I'd 1 ', Mil-
lard's Review, Supp., July 17, 1920, p 10,

35. Statement by the Chinese Peace Delegation, ibid.

36. It should be further observed thai inasmuch as the Kiao-
chow lease convention stipulated that Germany should engage

n.it to Miblet the leasehold to any other slate, the Shantung
decision violated the sanctity of this treaty obligation.

37. For the seeret agreements, see Millard's Review, Supp.,
July 17, 1920, pp. 1-3.



468 PROBLEMS ARISING SINCE THE WAR

38. Hearings, op. cit, pp. 622-623, the testimony of Professor
E. T. Williams.

39. Cf. Hearings, Conference at White House, Aug. 19, 1919,
pp. S3! 532.

40. Hearings, Senate Doc. No. 106, op. cit., p. 182.

41. X. Y. limes, Aug. 7, 1919; Millard's Review, Supp., July
17, 1920, p. 16; also see Chas. B. Elliott, The Shantung Ques-
tion, American Journal of Internatl. Law, Vol. 13, 1919, p. 728.

42. The Shantung Question, pp. 50-54.

43-44. [bid., pp. 54-56; Sen. Hearings, Sen. Doc. No. 106, op.
cit., p. 561, the testimony of Mr. Ferguson.

45. Copy furnished by the Chicago Daily Xcws, dispatch by
the Associated Press.

( 1 ) The leasehold of Kiaochow and the rights originally
granted to Germany with regard to the fifty kilometer zone
around the Kiaochow Bay shall be restored to China.

(2) The Japanese Government will abandon plans for the
establishment of a Japanese exclusive settlement of an open
international settlement in Tsingtao : Provided that China
engages to open of its own accord the entire leased territory of
Kiaochow as a port of trade and to permit the nationals of all
foreign countries freely to reside and to carry on commerce,
industry, agriculture or any other lawful pursuits within such
territory, and that she further undertakes to respect the vested
rights of all foreigners. China shall likewise carry out forth-
with the opening of suitable cities and towns within the province
of Shantung for residence and trade of the nationals of all for-
eign countries. Regulations for the opening of places under
the foregoing clauses shall be determined by the Chinese Gov-
ernment upon consultation with the powers interested.

(3) The Kiaochow-Tsinanfu Railway and all mines appur-
tenant thereto shall be worked as a joint Sino-Japanese enter-
prise.

(4) Japan will renounce all preferential rights with regard to
foreign assistance in persons, capital and material, stipulated in
the Sino-C rman Treaty of March 6, 1898.

(5) Rights relating to the extensions of the Kiaochow-
Tsinanfu Railway, as well as options for the construction of the
Ventai-Weihsien Railway, will be thrown open for the common
activity of the international financial consortium in China.

(6) The status of the customs house at Tsingtao as forming
an integral part of the general customs system of China shall
be made clearer than under the German regime.

( 7 1 Public property used for administrative purposes within
the leased territory of Kiaochow will, in general, be trans-
ferred to China ; it being understood that the maintenance and
operation of public works and establishments shall be arranged
een the Japanese and Chinese Governments

(8) With a view to arranging detailed plans for carrying into
effect the terms of settlement above indicated ami for the pur-
pose of adjusting other matters not embodied therein, the Jap-



THE SHANTUNG QUESTION' 469

anese and Chinese Governments shall appoint their representative
commissioners as soon as possible.

(9) The Japanese Government have on more than one occasion
declared willingness to proceed to the recall of Japanese troops
now stationed along the Kiaochow-Tsinanfu Railway upon
organization by China of a police force to assume protection
of the railway. As soon as the Chinese Government shall have
organized such a police force and notified the Japanese Govern-
ment to that effect, Japanese troops will be ordered to hand over
to the Chinese police the charge of the railway protection, and
thereupon immediately to withdraw. It is, however, to be under-
Stood that the question of the organization of a special police
guarding the Kiaochow-Tsinanfu Railway shall be reserved for
future consideration between Japan and China.

46. Copy furnished by the Chinese Legation, Washington,
D. C. With reference to the important Shantung Question
which is now pending between China and Japan, China has
indeed been most desirous of an early settlement for the restitu-
tion of her sovereign rights and territory. The reason why
China has not until now been able to commence negotiations
witli Japan is because of the fact that the basis upon which
Japan claims to negotiate are all of a nature either highly
objectionable to the Chinese Government and the Chinese people,
or such to which they have never given their recognition. Fur-



Online LibraryMingchien Joshua BauThe foreign relations of China: a history and a survey → online text (page 36 of 39)