The j.a.panese Government declares that when the Chinese Government give their a.s.sent to the disposition of interests above referred to, j.a.pan will restore the leased territory of Kiaochow to China; and further recognize the right of the Chinese Government to partic.i.p.ate in the negotiations referred to above between j.a.pan and Germany.

Article 2. The j.a.panese Government consents to be responsible for the indemnification of all losses occasioned by j.a.pan's military operation around the leased territory of Kiaochow. The customs, telegraphs and post offices within the leased territory of Kiaochow shall, prior to the restoration of the said leased territory to China, be administered as heretofore for the time being. The railways and telegraph lines erected by j.a.pan for military purposes are to be removed forthwith. The j.a.panese troops now stationed outside the original leased territory of Kiaochow are now to be withdrawn first, those within the original leased territory are to be withdrawn on the restoration of the said leased territory to China.

Article 3. (Changed to 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 4. The Chinese Government consent 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 willing to abandon the privilege of financing the Chefoo-Weihsien line, China will approach j.a.panese capitalists for a loan.

Article 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 j.a.panese Minister must be consulted before making a decision.

Article 6. If the j.a.panese and German Governments are not able to come to a definite agreement in future in their negotiations respecting transfer, etc., this provisional agreement contained in the foregoing articles shall be void.

GROUP II[15]

The Chinese Government and the j.a.panese Government, with a view to developing their economic relations in South Manchuria, agree to the following articles:--

Article 2. j.a.panese subjects in South Manchuria may, by arrangement with the owners, lease land required for erecting suitable buildings for trade and manufacture or agricultural enterprises.

Article 3. j.a.panese 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 j.a.panese subjects referred to in the preceding two articles, besides being required to register with the local authorities pa.s.sports 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 nationality and an officer can be deputed to attend the proceedings.

But all cases purely between j.a.panese subjects and mixed cases between j.a.panese or Chinese, relating to land or disputes arising from lease contracts, shall be tried and adjudicated by Chinese Authorities and the j.a.panese 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 j.a.panese subjects shall be tried entirely by Chinese law courts.

RELATING TO EASTERN INNER MONGOLIA

(To be Exchanged by Notes)

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 a foreign loan.

2. The Chinese Government declare that China will herself provide funds for building the railways in the part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and the Jehol Intendency; if foreign capital is required, China will negotiate with j.a.panese capitalists first, provided this does not conflict with agreements already concluded with other Powers.

The Chinese Government agree, 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 Manchurian and the Jehol Intendency, as Commercial 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 j.a.pan and the Hanyehping Company being very intimate, if the said Company comes to an agreement with the j.a.panese capitalists for co-operation, the Chinese Government shall forthwith give their consent thereto. The Chinese Government 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 j.a.panese.

Letter to be addressed by the j.a.panese Minister to the Chinese Minister of Foreign Affairs.

Excellency: I have the honour to state that a report has reached me that the Chinese Government have given permission to foreign nations to construct, on the coast of f.u.kien Province, dock-yards, coaling stations for military use, naval bases and other establishments for military purposes; and further, that the Chinese Government are borrowing foreign capital for putting up the above-mentioned constructions or establishments. I shall be much obliged if the Chinese Government will inform me whether or not these reports are well founded in fact.

Reply to be addressed by the Chinese Minister of Foreign Affairs to the j.a.panese Minister.

Excellency: I have the honour 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 construct, on the coast of f.u.kien Province, dock-yards, coaling stations for military use, naval bases or other establishments for military purposes; nor do they contemplate to borrow foreign capital for putting up such constructions or establishments.

Within forty-eight hours of this pa.s.sage-at-arms of the 1st May it was understood in Peking that j.a.pan was meditating a serious step. That vague feeling of unrest which so speedily comes in capitals when national affairs reach a crisis was very evident, and the word "ultimatum" began to be whispered. It was felt that whilst China had held to her rights to the utmost and had received valuable indirect support from both England and the United States, the world-situation was such that it would be difficult to prevent j.a.pan from proceeding to extremities. Accordingly there was little real surprise when on the 7th May j.a.pan filed an ultimatum demanding a satisfactory reply within 48 hours to her Revised Demands--failing which those steps deemed necessary would be taken. A perusal of the text of the Ultimatum will show an interesting change in the language employed. Coaxing having failed, and j.a.pan being _now convinced that so long as she did not seek to annex the rights of other Foreign Powers in China open opposition could not be offered to her_, states her case very defiantly. One significant point, however, must be carefully noted--that she agrees "to detach Group V from the present negotiations and to discuss it separately in the future." It is this fact which remains the sword of Damocles hanging over China's head; and until this sword has been flung back into the waters of the Yellow Sea the Far Eastern situation will remain perilous.

j.a.pAN'S ULTIMATUM TO CHINA

j.a.pan's Ultimatum delivered by the j.a.panese Minister to the Chinese Government, on May 7th, 1915.

The reason why the Imperial Government opened the present negotiations with the Chinese Government is first to endeavour to dispose of the complications arising out of the war between j.a.pan and China, and secondly to attempt to solve those various questions which are detrimental to the intimate relations of China and j.a.pan 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 effectually and permanently preserved. With this object in view, definite proposals were presented to the Chinese Government in January of this year, and up to to-day as many as twenty-five conferences have been held with the Chinese Government in perfect sincerity and frankness.

In the course of the negotiation the Imperial Government have consistently explained the aims and objects of the proposals in a conciliatory 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 the 17th of the last month. The Imperial Government, taking a broad view of the negotiation and in consideration of the points raised by the Chinese Government, modified the original proposals with considerable concessions 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 Kiaochow territory, in the acquisition of which the Imperial Government had made a great sacrifice.

On the 1st of May, the Chinese Government delivered the reply to the revised proposals of the j.a.panese Government, which is contrary 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 j.a.panese Government to restore Kiaochow to the Chinese Government the latter did not manifest the least appreciation for j.a.pan's good will and difficulties.

From the commercial and military point of view Kiaochow is an important place, in the acquisition of which the j.a.panese 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 countries, they went to the extent of proposing its restoration, yet to their great regret, the Chinese Government did not take into consideration the good intention of j.a.pan and manifest appreciation of her difficulties. Furthermore, the Chinese Government not only ignored the friendly feelings of the Imperial Government in offering the restoration of Kiaochow Bay, but also in replying to the revised proposals they even demanded its unconditional restoration; and again China demanded that j.a.pan should bear the responsibility of paying indemnity for all the unavoidable losses and damages resulting from j.a.pan's military operations at Kiaochow; and still further in connection with the territory of Kiaochow China advanced other demands and declared that she has the right of partic.i.p.ation at the future peace conference to be held between j.a.pan and Germany.

Although China is fully aware that the unconditional restoration of Kiaochow and j.a.pan's responsibility of indemnification for the unavoidable losses and damages can never be tolerated by j.a.pan yet she purposely advanced these demands and declared that this reply was final and decisive.

Since j.a.pan could not tolerate such demands the settlement of the other questions, however compromising it may be, would not be to her interest. The consequence is that the present reply of the Chinese 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 j.a.pan particularly has geographical, commercial, industrial and strategic relations, as recognized by all the nations, and made more remarkable in consequence of the two wars in which j.a.pan was engaged the Chinese Government overlooks these facts and does not respect j.a.pan's position in that place. The Chinese Government even freely altered those articles which the Imperial Government, in a compromising spirit, have formulated in accordance with the statement of the Chinese Representatives thereby making the statements of the Representatives an empty talk; and on seeing them conceding with the one hand and withholding with the other it is very difficult to attribute 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 ammunition and the establishment of a.r.s.enals and railway concessions in South China in the revised proposals they were either proposed with the proviso that the consent of the Power concerned must be obtained, or they are merely to be recorded in the minutes in accordance with the statements 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 incompatible with their sovereign rights and treaties with Foreign Powers, defeat the expectations of the Imperial Government. However, in spite of such att.i.tude of the Chinese Government, the Imperial Government, though regretting to see that there is no room for further negotiations, 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 circ.u.mstances which admitted no patience, they have reconsidered the feelings of the Government of their neighbouring country and, with the exception of the article relating to f.u.kien 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 negotiation and discuss it separately in the future. Therefore the Chinese Government should appreciate the friendly feelings of the Imperial Government by immediately accepting without any alteration all the articles of Group I, II, III, and IV and the exchange of notes in connection with f.u.kien 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 declared that if no satisfactory reply is received before or at the specified time, the Imperial Government will take steps they may deem necessary.

EXPLANATORY NOTE

Accompanying Ultimatum delivered to the Minister of Foreign Affairs by the j.a.panese Minister, May 7th, 1915.

1. With the exception of the question of f.u.kien to be arranged by an exchange of notes, the five articles postponed for later negotiation refer to (a) the employment of advisers, (b) the establishment of schools and hospitals, (c) the railway concessions in South China, (d) the supply of arms and ammunition and the establishment of a.r.s.enals and (e) right of missionary propaganda.

2. The acceptance by the Chinese Government of the article relating to f.u.kien may be either in the form as proposed by the j.a.panese Minister 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 in the Ultimatum the offer of the j.a.panese Government to restore Kiaochow 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 the terms "temporary lease" and "perpetual lease" or "lease on consultation,"

which means a long-term lease with its unconditional renewal.

Article 4 of Group II relating to the approval of police laws and Ordinances and local taxes by the j.a.panese Council may form the subject of a secret agreement.