C O P Y
Confidential
The policy of Japan consists in restoring the Shantung Peninsula to China in full sovereignty, only retaining the economic privileges which had been granted to Germany as well as the right of establishing a concession at Tsingtao under the usual conditions. So far as the existing railway is concerned, i.e. the Tsingtao-Tsinan railway and its branches, which is to become a mixed Sino-Japanese enterprise, the owners of the railway will use special police only to ensure security for traffic. They will be used for no other purpose. The police force is to be composed of Chinese, and such Japanese instructors as the Directors of the railway may select will be appointed by the Chinese Government.
The Japanese propose to surrender all military control over the Peninsula, including the fifty-kilometer zone round Kiao Chow within which German troops were allowed but not Chinese, and all interference with the civil administration of the territory. Their intention is fully to restore Chinese sovereignty within the leased territory.They further gave assurances that the maintenance of a garrison at Tsinan is a purely provisional measure which will be continured only during the period of transition immediately following peace, and this period it is their intention to make as short as possible. They explained that the troops had previously been lined out along the railway at a number of points, and the concentration at Tsingtao and Tsinanfu had been regarded merely as a step towards their final withdrawal. Although no date was named for the determination of this teransitory arrangement the Japanese gave assurances that the troops would be withdrawn as soon as practicable and that the fortifications built by Germany would not be included in the area of the residential conession to be granted to Japan in the town of Tsingtao.
The German rights which the Japanese propose to retain are economic in their character. They consist in:-
1. A right to claim a residential concession at Tsingtao, which however does not exclude, and was
2. The German rights in the railways already built, and the mines associated with them The railways are built on land which is in full Chinese sovereignty and subject to Chinese law.
3. Concessions granted to the Germans for building two other railways. These railways, viz:- the Kaomi-Hsushowfu and Tsinan-Shuntefu lines, are to be built with Japanese capital, and the Japanese capitalists are at this moment negotiating with the Chinese Government as to the terms on which the necessary money will be provided. The Chinese Government will be able to secure the same position in regard to these railways as it has over other railyways constructed by foreign capital.
Further the Japanese Delegates gave explicit assurances to the effect (a) That any conncession which China gives them at Tsingtao will not exclude other foreign enterprise from the Port. (b) That the economic control of the existing railway, which the possession of the majority of the shares gives them will not be used in any way to discriminate between the trade facilities of different nations.
It should be mentioned that the Japanese Delegates throughout these Conversations made it clear that, in the event of any failure by China to carry out her share of the bargain, if, for example, she refused to co-operate in the formation of the police force or to admit the employment of Japanese instructors, Japan reserved the right to fall back, in the last resort, on the Sino-Japanese Agreements of 1915 and 1918. President Wilson expressed the hope that, in the event of such failure on the part of China, Japan, instead of appealing to the Agreements, should voluntarily apply for mediation by the Council of the League of Nations.The Japanese Delegates pointed out that, if China carried out her obligations loyally, the case would not arise, and that even if the matter were submitted to the League of Nations, Japan nevertheless must reserve her right in the last analysis to base herself on the Agreements.
President Wilson insisted that nothing he had said should be construed as a recognition of the Notes exchanged between Japan and China, because they were based upon original demands against which the Government of the United States had earnestly protestesd.
