The relations between j.a.pan and the Hanyehping Company being very intimate, if those interested in the said Company come to an agreement with the j.a.panese capitalists for co-operation, the Chinese Government shall forthwith give its consent thereto. The Chinese Government further agrees that, without the consent of the j.a.panese 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 j.a.panese.

GROUP IV

China to give a p.r.o.nouncement by herself in accordance with the following principle:--

No bay, harbour, or island along the coast of China may be ceded or leased to any Power.

Notes to be Exchanged

A

As regards the right of financing a railway from Wuchang to connect with the Kiu-kiang-Nanchang line, the Nanchang-Hangchow railway, and the Nanchang-Chaochow railway, if it is clearly ascertained that other Powers have no objection, China shall grant the said right to j.a.pan.

B

As regards the rights of financing a railway from Wuchang to connect with the Kiu-kiang-Nanchang railway, a railway from Nanchang to Hangchow and another from Nanchang to Chaochow, the Chinese Government shall not grant the said right to any foreign Power before j.a.pan comes to an understanding with the other Power which is heretofore interested therein.

[Ill.u.s.tration: The Original Const.i.tutional Drafting Committee of 1913, photographed on the steps of the Temple of Heaven, where the Draft was completed.]

[Ill.u.s.tration: A Presidential Review of Troops in the Southern Hungtung Park outside Peking: Arrival of the President.]

NOTES TO BE EXCHANGED

The Chinese Government agrees that no nation whatever is to be permitted to construct, on the coast of f.u.kien Province, a dockyard, 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 considers this step necessary, engage numerous j.a.panese advisers.

2. Whenever, in future, j.a.panese subjects desire to lease or purchase land in the interior of China for establishing schools or hospitals, 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 j.a.pan to negotiate with j.a.panese military authorities the matter of purchasing arms or that of establishing a joint a.r.s.enal.

Mr. Hioki, the j.a.panese 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.

An ominous silence followed the delivery of this doc.u.ment. The Chinese Foreign Office had already exhausted itself in a discussion which had lasted three months, and pursuant to instructions from the Presidential Palace prepared an exhaustive Memorandum on the subject. It was understood by now that all the Foreign Offices in the world were interesting themselves very particularly in the matter; and that all were agreed that the situation which had so strangely developed was very serious. On the 1st May, proceeding by appointment to the Waichiaopu (Foreign Office) the j.a.panese Minister had read to him the following Memorandum which it is very necessary to grasp as it shows how solicitous China had become of terminating the business before there was an open international break. It will also be seen that this Memorandum was obviously composed for purpose of public record, the fifth group being dealt with in such a way as to fix upon j.a.pan the guilt of having concealed from her British Ally matters which conflicted vitally with the aims and objects of the Anglo-j.a.panese Alliance Treaty.

MEMORANDUM

Read by the Minister of Foreign Affairs to Mr. Hioki, the j.a.panese Minister, at a Conference held at Wai Chiao Pu, May 1, 1915.

The list of demands which the j.a.panese Government first presented 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 Hanyehping Company, the fourth asking for non-alienation of the coast of the country, and the fifth relating to the questions of national advisers, national police, national arms, missionary propaganda, Yangtsze Valley railways, and f.u.kien Province. Out of profound regard for the intentions entertained by j.a.pan, the Chinese Government took these momentous demands into grave and careful consideration and decided to negotiate with the j.a.panese Government frankly and sincerely what were possible to negotiate. This is a manifestation to j.a.pan 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 conferences a week. As regards the articles in the second group, the Chinese Government being disposed to allow the j.a.panese Government to develop the economic relations of the two countries in South Manchuria, realizing that the j.a.panese Government attaches importance to its interests in that region, and wishing to meet the hope of j.a.pan, 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 Manchurian 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 j.a.pan.

As to the right of opening mines in South Manchuria, the Chinese Government has already agreed to permit j.a.panese to work mines within the mining areas designated by j.a.pan. China has further agreed to give j.a.pan a right of preference in the event of borrowing foreign capital for building railways or of making a loan on the security of the local taxes in South Manchuria. The question of revising the arrangement for the Kirin-Changchun Railway has been settled in accordance with the proposal made by j.a.pan. The Chinese Government has further agreed to employ j.a.panese 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 j.a.pan's original proposal.

Subsequently, the j.a.panese Government alleging that its meaning was not clear, asked China to cancel the provision altogether. Again, j.a.pan at first demanded the right of j.a.panese to carry on farming in South Manchuria, but subsequently she considered the word "farming"

was not broad enough and asked to replace it with the phrase "agricultural enterprises." To these requests the Chinese Government, though well aware that the proposed changes could only benefit j.a.pan, still acceded without delay. This, too, is a proof of China's frankness and sincerity towards j.a.pan.

As regards matters relating to Shantung the Chinese Government 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 had entered into with j.a.pan and other Powers, still the Chinese 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 j.a.panese settlers. j.a.pan declined to agree to it. Thereupon China reconsidered the question and revised her counter-proposal five or six times, each time making some definite concession, and went so far to agree that all civil and criminal cases between Chinese and j.a.panese should be arranged according to existing treaties. Only cases relating to land or lease contracts were reserved to be adjudicated 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 prevailing 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 entirely a private company, and the Chinese Government is precluded from interfering with it and negotiating with another government to make any disposal of the same as the Government likes, but having regard for the interests of the j.a.panese capitalists, the Chinese Government agreed that whenever, in future, the said company and the j.a.panese capitalists should arrive at a satisfactory arrangement for co-operation, China will give her a.s.sent thereto. Thus the interests of the j.a.panese capitalists are amply safeguarded.

Although the demand in the fourth group asking for a declaration not to alienate China's coast is an infringement of her sovereign rights, yet the Chinese Government offered to make a voluntary p.r.o.nouncement so far as it comports with China's sovereign rights.

Thus, it is seen that the Chinese Government, in deference to the wishes of j.a.pan, 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 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 j.a.panese 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 principle of equal opportunity. Although j.a.pan did not indicate any difference between this group and the preceding four in the list which she presented to China in respect to their character, the Chinese Government, in view of their palpably objectionable features, persuaded itself that these could not have been intended by j.a.pan as anything other than j.a.pan's mere advice to China. Accordingly China has declared from the very beginning that while she entertains the most profound regard for j.a.pan's wishes, she was unable to admit that any of these matters could be made the subject of an understanding with j.a.pan. Much as she desired to pay regard to j.a.pan'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 refusing to negotiate on any of the articles in the fifth group, yet in view of j.a.pan's wishes China has expressed her readiness to state that no foreign money was borrowed to construct harbour work in f.u.kien Province. Thus it is clear that China went so far as to see a solution for j.a.pan of a question that really did not admit of negotiation. Was there, then, evasion, on the part of China?

Now, since the j.a.panese Government has presented a revised list of demands and declared at the same time, that it will restore the leased territory of Kiaochow, the Chinese Government reconsiders the whole question and herewith submits a new reply to the friendly j.a.panese 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 relating to land and lease contracts the Chinese Government now permits the j.a.panese Consul to send an officer to attend the proceedings.

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 j.a.pan.

It is hoped that the j.a.panese Government will appreciate the conciliatory spirit of the Chinese Government in making this final concession and forthwith give her a.s.sent thereto.

There is one more point. At the beginning of the present negotiations it was mutually agreed to observe secrecy but unfortunately a few days after the presentation of the demands by j.a.pan 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-j.a.panese 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 newspaper campaign and the Chinese Minister of Foreign Affairs has repeatedly declared this to the j.a.panese Minster.

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 entertain toward the present situation may be quickly dispelled.

The Peking Government, although fully aware of the perils now confronting it, had dared to draft a complete reply to the revised Demands and had reduced j.a.panese redundancy to effective limits. Not only were various articles made more compact, but the phraseology employed conveyed unmistakably, if in a somewhat subtle way, that China was not a subordinate State treating with a suzerain. Moreover, after dealing succinctly and seriously with Groups I, II and III, the Chinese reply terminates abruptly, the other points in the j.a.panese List being left entirely unanswered. It is important to seize these points in the text that follows.

CHINA'S REPLY TO REVISED DEMANDS

China's Reply of May 1, 1915, to the j.a.panese Revised Demands of April 26, 1915.

GROUP I

The Chinese Government and the j.a.panese Government, being desirous of maintaining the general peace in Eastern Asia and further strengthening the friendly relations and good neighbourhood existing between the two nations, agree to the following articles:--

Article I. The Chinese Government declares that they will give full a.s.sent to all matters upon which the j.a.panese and German Governments may hereafter mutually agree, relating to the disposition of all interests, which Germany, by virtue of treaties or recorded cases, possesses in relation to the Province of Shantung.