Shantung

PART IV.
SECTION VIII.

(SHANTUNG)

ARTICLES 156 and 157.

August 13th, 1919.
(H.O. Nixon)
PART IV. SHANTUNG (SECTION VIII.)

ARTICLES 156 and 157.
(NOTE: Of the three articles of this Section, Art. 158 was not offered with Articles 156 and 157. Art. 158 stipulates for the transfer of documents, archives, records, etc., conforming to a principle applied to other sections on transfer of territory tby Germany.)References:
Council of Ten:
BC-12.
BC-13.Foreign Ministers:
FM-4.
FM-5.Council of Four:
I.C.175 C.
I.C.175 E.
I.C.176 C., App. 11.
I.C.176 F.
I.C.177 A.
I.C.177 B.
I.C.177 F.
C.F.62
C.F.76.
C.F.80.PART IV. SHANTUNG
ARTICLES 156 AND 157.The following statement of the Japanese claims was read by Baron Makino before the Council of Ten on January 27th:

(See: Notes of a conversation in M. Pichon's room at the Quai d'Orsay, January 257.-BC-12.)In this statement Baron Makino also mentioned the taking of the leased territory as well as the railway line connecting Tsingtau with Chinanfu, which the Germans used for military purposes, by Japanese forces, in conjunction with British contingents, after failure on the part of the German Governjment to reply to the notice to surrender the leased territory of Kiaochow with a view to its restoration to China, such notice having been made by the Japanese Government, in consultation with the British Government conformably with the agreement of 1911. After other remarks, mainly with reference to the Islands, he made the following termination of the statement:

He added that a documentary statement of the Japanese claims would be handed in by him at a later date.Dr. Thomas Wang expressed the hope that the Great Powers would reserve decision until the views of China had been heard, and this was agreed to.Statement on behalf of China was made on the following day. (See: Notes of a Conversation in M. Pichon's room at the Quai d'Orsay, January 28. BC-13).Mr. Koo said the Chinese Delegation would ask the Peace Conference for restoration to China of the leased territory of Kiao-chow, the railway in Shantung, and all other rights Germany possessed in that province before the war. The territories were an integral part of China, were part of a province containing 36 million inhabitants, Chinese in race, language and religion. The lease to Germany had been wrung out of China by force. If the Conference were to take a different view from restoration, were to transfer those territories to any other power, it would be, in the eyes of the Chinese Delegation, adding one wrong to another. The Shantung province was the cradle of Chinese civilization, the birth place of Confucius and Mencius, and a Holy Land for the Chinese. The density of its population made it unsuitable for colonization; and the introduction of a foreign power could only lead to the exploitation of the inhabitants, not to genuine colonization. Strategically, Kiao-chow comamanded one of the main gateways of North China. China was cognizant of the services rendered to her by Japanese Army and Navy in rooting out German power from Shantung, was deeply indebted to Great Britain for helping in this task, and was not forgetful of the services rendered by other Allies whose troops in Europe held in check an enemy who might otherwise have sent reinforcements to the Far East. But the Chinese Delegation felt it false to their duty to China and to the world not to object to paying debts of gratitude by selling the birthright of their countrymen and thus sowing seeds of discord for the future. The Chinese Delegation trusted the Conference would give full weight to the rights of China, the rights of piolitical sovereignty and territorial integrity, and her desire to serve the cause of universal peace.Baron Makino, at this point, read the words of the Japanese ultimatum to Germany of 1914, and said since the occupation of Kiao-chow, Japan had been in actual possession. In view of all that had passed between the Governments of China and Japan he thought China fully realized the import of Japanese occupation. A friendly interchange of views on this subject had been entered into, and Japan had agreed to restore Kiao-chow as soon as Japan had free disposal of the place. Agreements had also been reached with regard to leased railways. As notes had been exchanged, he thought that a statement of these engagements might be worth the consideration of the members of the Council.Asked by President Wilson whether he proposed to lay these notes before the Council, Baron Makino said he did not think the Japanese Government would object, but he would have to ask its permission. Asked by President Wilson if he would do likewise, Mr. Koo said the Chinese Government had no objefction to raise.M. Clemenceau asked both the Japanese and Chinese delegates to state whether they would make known to the Council the conditions of restoration agreed between them.Baron Makino said he would do so provided his Government would make no objection. He did not think it would. There was, however, one point he wished to make clear:- Japan was in actual possession fof the territory under consideration; it had taken it from Germany by conquest; before disposing of it to a third party it was necessary that Japan obtain the right of free disposal from Germany.President Wilson pointed out that the Council was dealing with territories and cessions previously German without consulting Germany at all.Baron Makinao said the work now in hand was one of preparation for presentment of the case to Germany. It followed that the cession of Kiao-chow would have to be agreed upon by Germany before it was carried out. What should take place thereafter had already been the subject of an interchanegge of views with China.Mr. Koo said China did not hold quite the same view as Baron Makino regarding the restoration of Kiao-chow. He was far from desiring to intimate that Japan after obtaining the leased territory and other rights in Shantung from Germany, would not return them to China, he had every confidence in Japan's assurances that she would not retain them herself; and he was glad to hear Baron Makino confirm these assurances before the Conference. But there was a choice between a direct and indirect restitution. Of the two, China would prefer the first.As to arrangements referred to by the plenipotentiary from Japan, Mr. Koo presumed that reference was made to the treaties and notes in consequence of the negotiations on the twenty-one demands in 1915. The circumstances were, to say the least, divsconcerting to the Chinese Government, as the latter was constrained to agree to them only after an ultimatum from Japan. Apart from these circumstances, they were, in view of the Chinese Government, only provisional and temporary arrangements subject to the fianal review of this Conference, being questions arising from the war. Furthermore, if the treaties and notes had been entirely valid, the fact of China's declaration of war on Germany had altered the situation in such a way that on the principle of rebus sic stantibus they could not be enforced today. China had been made to agree that she would give full assent to whatever arrangements Japan might make with Germany on the disposal of Germany's rights, privileges and concessions in Shantung. But the provisions did not preclude China's joining the war, nor did it prevent China from participating in this Conference as a belligerent, nor did it prevent her from demanding from Germany direct restitution of her rights. In declaring war against Germany, China stated that all treaties and conventions concluded between China and Germany should be considered nullified by the state of war between them. If, then, the leased conventions had been terminated, the leased territory of Kiao-chow and such other rights and privileges enjoyed by Germany in Shantung had all reverted to China as the territorial sovereign. Even if the lease had not been terminated by declaration of war, Germany would be incompetent to transfer it to another power.(The mefeting then adjourned.)The question was touched again, April 15th, at a meeting of the Foreign Ministers. (See ; Notes of a conversation in M. Pichon's room at the Quai d'Orsay, April 15th,-F.M.-4.) With reference to Mr. Lansing's proposal for a “blanket” article of renuniciation by Germany of territory and territorial rights outside her European fronters (Cf. Art. 118 of Treaty), Baron Makino said the question of disposal of German territory in China could not be dealt with in a general clause of renunciation, since the territory in question was a leased territory and not a purely German one; and furthermore, in regard to the disposition of that territory, a treaty had been entered into between Japan and China. In consequence, he maintained, the question required special treatment. Upon mention by Mr. Lansing that China had prayed the Conference that the territory in question be restored to her, Baron Makino explained that the treat between Japan and China to which he had referred dealt with the restitution of the territory to China, that it had been agreed the areas leased by Germany should positively be restored to China.Mr. Lansing enquired in view of this statement as to restitution whether Japan would object to the Five Great Powers acting as trustees. (No answer is recorded in the minutes: Mr. Pichon said the discussion seemed to be getting away from the subject.)In connection with additional discussion of the “blanket” article, at the same meeting, Baron Makino said if the proposal were adopted, it would be necessary to make reservation in the case of Kiau-chow, which could not be included in a general clauzse.At the next meeting of the Foreign Ministers, when the drafts of the “blanket” article was read, Baron Makino insisted on the reservations by the Japanese delegation with respect to Shantung and Kiau-chow, saying that he had on a preivous occasion drawn attention to the fact that Japan claimed all the rights acquired by Germany from China. (Notes of a conversation in M. Pichon's room at the Quai d'Orsay, April 17th.-FM-5).Mr. Lansing enquired whether these rights were claimed from Germany or from China.Baron Makino replied that they were claimed from Germany.Mr. Lansing said in the event of special treatment being required for Shantung, he would ask the Japanese delegation to propose a special clause; with a precise text, it would be possible to debate on the reservation, the purport of which he was not aware.Baron Makino referred to the fact that in January he had made a general statement of the Japanese claims (Meetings of Council of Ten cited above) and had stated that the claims would subsequently be presented in such form as to be introduced into the treaty. He proposed to bring forward a few articles embodying these claims. All he meant by recalling the reservations was to give notice that he proposed to put forward these articles.Mr. Lansing then suggested that these draft articles be submitted with the agenda for the next meeting.Baron Makino observed that the Japanese statement had been made before the Council of Ten, and he thought it would be right that the Council of Ten should take this matter into consideration.When it was pointed out that meetings of the Council of Ten had become rare and the procedure proposed might delay decision for some time, Baron Makino said that he was engaged in certain pourpsarlers which might, he thought, lead to an early settlement of the question.Baron Makino agreed, with reservation previously stated, to the adoption of the “blanket” article of renunciation.On April 22nd, Baron Makino toffered two draft adrticles on the subject of Shantung, at a meeting of the Council of Four. (Notes of a meeting at President Wilson's house, April 22nd, 11:30 a.m.- I.C. 175 C, British Index and reference.) Those articles did not contain the expression, “free and clear of all charges and encumbrances”, which occurs at the end of Art. 156 and Art. 157 of the Treaty and was added at the instance of the Japanese; otherwise there is no variation between the two draft articles submitted and the text of Art. 156 and 157 aside from such changes as may have been made by the drafting committee for the sake of uniformity. At this meeting, Baron Makino undertook to explain more fully the Japanese claims relating to the leased territory of Kiao-Chow and the rights in respect of Shantung province. After reviewing his statement made before the Council of Ten in January (quoted in part above), he made a statement on the negotiations between Japan and China.Baron Makino said, in statement read at this meeting, that Japan approached China in January, 1915, with a view to reaching before the termination of the war, an agreement as to the basis of restitution to China of the leased territory of Kiao-Chow and of dispsing of other German rights in relation to Shantung, so that Germany might find no pretext to refuse acquiescence in Japan's demands at the fianal peace conference and that she might not find it possible to recover her influence in China, thereyby becoming again a grave menace to the peace of the Far East. He mentioned the treaty made between China and Japan in 1915 and summarised the exchange of notes that accompanied it, and said that early in 1917 Japan began, in conjunction with her Allied Powers to direct her efforts to induce China to sever relations with Germany and, if possible, declare war against her; that China's declaration of war against Germany came more than two years after the signing of the aforementioned treaty between Japan and China.On the 24th of September, 1918, says Baron Makino's statement, the Chinese minister at Tokyo exchanged with the minister of foreign affairs of Japan a series of notes, which provided, among other things, for the withdrawal of the Japanese civil administration, the management of the Tsingtao-Chinan Railway as a joint Sino-Japanese undertaking upon determination of its ownership, and the guarding and policing of the railway. The Chinese minister also solicited the aid of the Japanese government in the matter of arranging loans for building two railway lines connecting with the Tsingtao-Chinan Railway and practically coincidoing with the lines projected by Germany. To this the Japanese government consented. The prelimary contract covering those loans was made between the Chinese government and the Japanese bankers, and the Chinese government actually received from the bankers an advance of twenty million yen according to the terms of the contract. It was contended:

“To these summaries and decductions, I may add that as between Japan and China there is a well-defined course laid out, for effecting the restitution. Any other course could (would?) be against the definite arrangement which has been agreed to between the two governments concerned. What Japan now seeks is to obtain from Germany the rights of free disposal of the leased territory and Germany's rights, privileges and concessions in relation to Shantung for carrying out the provisions of the treaty of 1915 as well as of the arrangements of 1918.”Baron Makino's statement opposed on the basis of international law the claim that the declaration of war abrogates ipso facto treaties of lease of territory, and said further, “I feel firmly convinced that full justice will be done to the claims of Japan based upon her sacrifices and achievment and upon the fact of actual occupation, involving the sense of national honor.”Baron Makino handed around the draft of clauses which the Japanese wished included in the Treaty with Germany. Upon question by President Wilson, he explained that the cables Tsingtao-Shanghai and Tsingtao-Chefoo, mentioned in Art. 1 (156 of Treaty) were German concession, though not in the original concession. He said they were government cables.President Wilson said he had already described as well as he could to M. Clemenceau and Mr. Lloyd George what had happened in his conversation with Baron Makino and Viscount Chinda.Mr. Lloyd George said that so far as Great Britain was concerned they were in the same position towards Japan as towards Italy. They had a defintite engagement with Japan, as recorded in the note of the British ambassador at Tokio, dated 16th February, 1917. (A copy of this letter is attached as Appendix II, to I.C. 175 C, the minutes of the meeting. It conveys the message, “His Majesty's Government accede with pleasure to request of Japanese Government for assurance that they will support Japan's sclaims in regard to disposal of Germany's rights in Shantung and Island North of Equator on occasion of Peace Conference, it being understood that Japanese Government will, in eventual peace settlement, treat in same spirit Great Britain's claims to German Islands South of Equator”. Hence, so far as Great Britain was concerned there was a definite engagement. The only doubt he felt as to whether the ultimate destination of Kiauchau was a matter for inclusion in the Treaty with Germany. In the case of other German possessions in the Far East the Japanese Government had undertaken to support the British claims south of the equator, and the British Government had undertaken to support the Japanese claims in the islands north of the equator. So far as Great Britain was concerned it was not proposed to press for the immediate allocation of the mandates for these islands, but only for their surrender to the Allied and Associated Powers. The allocation was left for settlement afterwards. When the time came, we should have to press the claims of Australia and New Zealand to the islands south of the equator.Baron Makino said that Japan had expressed her willingness to support the British claims.Mr. Lloyd George said if Japanese claims for the surrender by Germany of Kiauchau were put in the Treaty, Australia and South Africa might demand the same treatment with reference to territorial claims. There was hardly time to settle all these details before the Treaty.Viscount Chinda said if Mr. Lloyd George had in mind that Kiauchau should be placed on the basis of the mandatory system as the South Pacific Islands, the Japanese delegation thought that Kiauchau ought to be on a definite basis. The mandatory system rested on the basis that these islands were in a state of civilization rnecessitating their being taken care of by other people. This did not apply in the case of Kiauchau.Mr. Lloyd George said this was true.Viscount Chinda said the Japanese Government had a duty to perform to China in this matter, and they could not carry out their obligation to China unless Kiauchau was handed over to them. The Japanese delegates were under an express instruction from their Government that unless they were placed in a position to carry out Japan's obligation to China, they were not allowed to sign the Treaty. They had no power to agree to postponement of this question.President Wilson asked if it would be possible for the Japanese Government more particularly to define the arrangements she would expect to maintain with China in Shantung province. In the paper he had been given, the statements were sufficiently explicit as regards the town of Kiauchau and the bay of Kiauchau, but not so explicit in regard to the railway and the administration.Viscount Chinda said the notes explained that the railway administration would be a pjoint undertaking.President Wilson said that it was not very explicit. Some further definition was required of the term “joint administration”. The document was explicit about the establishment of a police force by China towards the cost of which the railway would make a contribution. He understood that at each station, by which he supposed was meant, railway station, as well as at the training school, there would be Japanese. The document did not explain the position taken by these Japanese.Upon remark by Viscount Chinda that they were only intended to be instructors, he thought, and that there were many foreign instructors in the Chinese administration; followed by remark by Mr. Lloyd George that there were, in the SCustoms, for example; President Wilson said this was part of a series of things which had been imposed on China. With further remark by Mr. Lloyd George that they had asked for the Customs officials, President Wilson said they had done so after a certain experience. He was fairly clear about the railway concession. He asked if there were not included in the lease to Germany certain concessions about exploitation.Viscount Chinda suggested mines.Baron Makino said the mines were amalgamated into the railway.Viscount Chinda said there were three mines.Baron Makino said the mines had not paid, and had been amalgamated into the railway, mainly for the use of the railway. The coal was not of cvery good quality. Germany had given up their concessions. One of the mines was not of much value.President Wilson asked if there were any great iron deposits.Mr. Lloyd George suggested they had not been made much use of.President Wilson agreed, not up to the present.With remark byo by Mr. Lloyd George that if this arrangment were included in the Treaty, the question of mandatories would have to be settled and this might create delays and difficulties, President Wilson cited Viscount Chinda's statement about Kiauchau's being in a different condition from the islands. President Wilson asked Viscount Chinda's if the railway was a joint enterprise with China.Viscount Chinda replied in the affirmative.Baron Makino said Japan had already worked joint enterprises very well with China. In the case of the Sino-Japanese Timber Company, for example, where jJapan and China had the same number on the directorate and where dividends were paid in equal proportions. There were several similar concerns, the directorates always consisting of equal numbers of both nationals.President Wilson asked if there were any restrictions on these railways. His interest was to keep open the door with China.Baron Makino said there was nothing in the agreement with China against the open door.President Wilson pointed out that, as had happened in many instances, he was the only one present whose judgement was independent. His colleagues (M. Clemenceau and Mr. Lloyd George) were both bound by treaties, although perhaps he might be entitled to question whether Great Britain and Japan had been justified in handing round the islands in the Pacific. This, however, was a private opinion.Mr. Lloyd George pointed out that they were only the German islands.President Wisllson hare made a statement that is given a summary of more than three hundred words in the minutes. He said he would like to repaet the point of view he had urged on the Japanese delegation a few days before. Peace of the Far East centered upon China and Japan. He did not like to see complex engagements that fettered free determination. He was anxious that Japan show to the world as well as to China that she wanted to give the same independence to China as other nations possessed, that she did not want China to be held in manacles.... What he feared was that Japan, by standing merely on her treaty rights, would create the impression that she was thinking more of her rights than of her duties to China.... he wished to emphasize the importance in future that States should think primarily of their duties toward each other. The central idea of the League of Nations was that States must support each other even when their interests were not oinvolved.... he would like to see Japan in the position of leader in the Far East standing out for these new ideas..... When he had seen the Japanese delegates two days ago he had said that he was not proposing that Kiauchau should be detached from the treaty engagements but that it should be ded the powers as trustees with the understanding that all they were going to do was to ask how the treaties were to be carried out and to offer advice as to how this could be done by mutual agreement.... What he was after was to attain a more detailed definition as to how Japan was tgoing to help China as well as to afford an opportunity for investment in railways etc. He had hoped that by pooling their interest the several nations that had gained a footbhold in China (a foothold that was to the detriment of China's position in the world) Mmight forego the special position they had acquired and that China might be put on the same footing as other nations.... There was a lot of combustible material in China and if flames were put to it the fire could not be quenched for China had a population of four hundred million people. It was symptoms of that which filled him with anxiety.... He did not wish to interfere with treaties.... the war had been partly undertaken to establish the sanctity of treaties. Although he yielded to no one in this sentiment there were cases he felt where treaties ought not to have been entered into.Baron Makino, referring to President Wilson's remarks on the larger ideas of international relationship, said the best opinion in Japan favored that point of view. For China the best opinion in Japan wanted equal opportunties or the open door”. He was glad of it. He recalled, however, that international affairs in China had not always been conducted on very just lines. (Mr. Lloyd George interjected that this was undoubtedly the case) Baron Makino shared the views of one of the LJapanese eleder statesmen who had remarked that Japan would have to enter into a good many joint undertakings with China and must be content to share equally, haluf in half, in them.President Wilson said he was satisfied on that point. He wanted that principle, however, to be shown in a concrete way to China.Baron Makino, referring to remarks on Shantung, said that there Japan had only entered into an agreement, whereas Germany had assumed almost complete sovereignty. All Germany's concessions over and above the agreement between Japan and China would now fall through. There remained only the concession mentioned in the Treaty which had already been discussed. Reverting to the larger views expressed by President Wilson, he stated that the Minister of Foreign Affairs at the opening of the session (in January he thought), had said that the Japanese Government was ready to mcontribute towards anything just that was proposed in China. As regards more concrete matters, as extra-territoriality, maintenance of foreign troops, spheres of influence and the Boxer Indemnity - four principal points China had most at heart - he gathered from the speech of the Minister of Foreign Affairs that the Japanese Government was ready to discuss them with the Great Powers, Japan would be glad to discuss these questions. Extra territoriality was a matter which would take some time. Japan had accomplished it and China could follow in her footsteps.President Wilson asked what was the idea of Japan as to extra territoriality in the settlement contemplated at Kiauchau.Baron Makino said extra territoriality was considered as an established principle all through China. If the principle changed, Kiauchau would form no exception.President Wilson said he felt he realized the situation in fuller light than ever before. He asked whether the Japanese delegates would prefer to draw the Chinese into conference. As China was a full member of the Peace Conference final judgment could not be passed without seeing them.Baron Makino did not object to China being heard but did not want to enter into discussion with them. It was difficult to discuss with people who had preconceived to dispel them in one or two conversations.(After some further discussion, it was agreed that Japan would not exercise her right to be present and that the best plan would be for discussion with the Chinese to take place in their absence.)Baron Makino said before the meeting ended he wished to say a word about the form of restitution of Kiauchau to Japan. The Japanese Government attached supreme importance to the form which had been submitted that morning (draft articles cited above). To-day fresh instructions had been received from Government, and he could not too much stress the matter.On the afternoon of April 22nd, the question of Shantung was discussed with the Chinese. (See: Notes of a meeting at President Wilson's house, April 22nd, 1919, at 4:30 P.M.-I.C.175 E)President Wilson mentioned the conference he had with the Japanese ion the previous day and the meeting with the Japanese in the morning. Since last seeing Mr. Koo he had read the documents. He mentioned the exchange of notes between Japan and China, in which Japan had laid down certain conditions, which the Chinese Government had accepted. Great Britain and France (Mr. Lloyd George said this had occurred between the two exchanges of nates between China and Japan) had entered into a similar but not identical agreement with Japan that they would support the claims of the Japanese Government on the Continent and in the islands north of the equator. In the case of the British Government it had been on the understanding that Japan supported her claims to German islands south of the equator. Great Britain and France were much in the same position ion the matter.Mr. Lloyd George expallained that at the time the submarine campaign was very formidable. There was a shortage of torpedo-boat-destroyers in the Mediterranean. Japanese help was urgently required, and Japanese had asked for this arrangement to be made. We had been hard pressed and had agreed.President Wilson, after reading extracts from the notes exchanged between China and Japan, said the Chinese delegation would see the embarrassing position which had been reached. Mr. Lloyd George and M. Clemenceau were bound to support the claims of Japan. Alongside of them the Chinese had their exchange of naotes with Japan. Mr. Koo, before the Council of Ten, had maintained that the war cancelled the agreement with the German Government. It did not cancrel the agreement between China and Japan, made before the war. He had urged upon the Japanese that the leased territory of Kiauchau, as in case of Pacific Islands, be settled by being put into the hands of the Five Powers as trustees. He fdid not suggest the breaking of treaties, but it might be possible to modify the Treaty and bring about an agreement. He had also proposed that all Governments renounce the special rights they had acquired in China. The Japanese were not willing to have Kiauchau handed over to the Five Powers; British and French Governments were bound by treaties. Pdressed for meaning of their agreement, the Japanese had replied that the exploitation of two coal mines and one iron mine, not proving successful, were now bound up with the railway; they stated that they would withdraw the civil administration, would maintain troops only on the termini of the railway, and if a general agreement was reached would withdraw their extra territoriality. He said the Japanese had urged that they wanted a communitey of interest with the Chinese in the railway, and the only reserve they made was for a residential district in Kiauchau. Mr. Koo explained that the Treaties of 1915 and the subsequent exchange of notes were the outcome of 21 demands which Japan had made on China and all were part and parcel of one transaction. He felt that the treaties and notes which had been exchanged after Japan had delivered an ultimatum stood outside of the regular procedure and course of treaties. They dealt with matters arising out of the war... On the 7th of May (1915) the Japanese sent China an ultimatum in regard to the majority of the demands giving China only 48 hours within which to accept....This caused absolute consternation to the Chinese Government which eventually had to submit to force majeure.Mr. Lloyd George asked if they had not appealaledd to the United States.Presiddeent Wilson said they had and the United States had intervened in regard to the infringement of sovereignty and political independence. The whole transaction, however, had been kept extremely secret, and the United States only learned of it in a roundabout way. Mr. Koo said secrecy had been imposed upon China by Japan under severe penalties...The Chinese Government felt that treaties and notes exchanged as a result of these 21 demands followed by an ultimatum were on a different footing from the ordinary....Fror the last four years since they had captured Kiauchau, Japanese troops had penetrated far into the province of Shantung. The Chinese Government had protested and asked Japan to withdraw her troops whereho were stationed 250 mioles up the railway, but they had refused and had established civil administration bureaux in the interior of Shantung and extended their control even over the Chinese people by levying taxes on Chinese people and asserting judicial power over them. Feelings of Chinese people against extension of Japanese control were so strong that the Chinese Government was constrained to take some immediate step to induce Japan to withdraw troops and remove civil administration bureaux, to relieve the situation until final settlement at the Peace Conference.Mr. Lloyd George said it lookred that by the Treaty with China, Japan would get more than the Germans had had. He asked Mr. Koo which he would prefer, the Treaty with Japan or the transference to...Japan of the German rights.Mr. Koo said the situation was so difficult jhe must speak frankly. The Japanese position was so close to China, especially in Manchuria, where they occupied a railway which was xconnected with Pekin; that to transfer the German rights would create a serious situation. With the Japanese on the Manchurian railway and the Shantung railway, Pekin would be, as it were, in pincers. At this point, President Wilson remarked that the Japanese claimed that the administration of the railway would be a joint aone and that they proposed to withdraw the Japanese administration. Further comment by him and by Mr. Lloyd George brought out that possibly Japan aswas claiming greater rights than Germany had exercised; that as the British and French Governments had to support the Japanese claims to what Germany had had, they wanted to know whether China would be better off according as Japan could exercise the rights that Germany had or those she obtained by her Treaty, whetheer the Treaty with Japan was better for China than Germany's rights.Mr. Koo, after consulting his colleague, said he couuld make no choice, because both alternatives were unacceptable; he would merely compare them; the Treaty and Notes with Japan rpprovided for restoration of the leased territory to China on certain conditions, but such restrooration would be only nominal. Between the two, he thought that the German rights were more limited.President Wilson, after emphasixzing that he had put the Chinese case as well as he could to the Japanese delegationk, said what he asked now awas only a means of getting out of a position that was extremely difficult. In this Conference the United States was the only poerwer entirely unbound. Great Britain, France, China and Japan were all bound by treaties; bound to keep these treaties because the war had largely been fought to show that treaties could not be violated.Mr. Lloyd George said he would lilke to have the two positions examined by British, French and American experts. Mr. Clemenceau said he had no objection.President Wilson read extracts from the Treaty and from groups IV. and V. of the 21 demands, recalling that there were demands designed to exclude other powers from the commercial and industrial development. Then he asked if the following point of view would appeal to the Chinese plenipotentiaries: Hereafter, whatever aggrragngments wefre made both Japan and China would be members of the League of Nations, which would guarantee their territorial integrity and political independence. China would receive a kind of porotection she had never had before and other nations would have a right they had never had before to intervene. He, himself, was prepared to advocate at the Council of the League of Nations and at the Body of Delegates that the special positions occupied by the various nations in China should be abandoned. Japan declared she would suppfort this. There would be a forum for advocating these matters. The interests of China would nlot overlbe overlooked...While there was doubt as to the Treaty and Notes between China and Japan, there was no doubt as to the agreements entered into by France and Great Britain. Even if the agreements between China and Japan were abandoned, these Governments were bound to support Japan in getting whatever rights in Shantung Germany had. The question for the Chinese to consider was, would they prefer to retain the rights secured by the latter in Treaty with China or would they prefer Japan should inherit the German rights in Shantung.Mr. Koo said the Chinese people were at the parting of the ways. The policy of the Chinese Govdernment was one of cooperation with Europe and the United States as well as with Japan. If, however, they did not get justice, China might be driven into the arms of Japan. There was a small section of in China which believed in Asia for the Asiatics and wanted the closest co-operation with Japan. If the Government, believing the justice of the West and that their future lay there, failed to get justice there, the consequential reaction might be very great. Further he wished to say the validity of the arrangements was questionable, since they had arisen out of the war, which Cinhina subsequently entered, and since new principles had now been adopted by all nations as the basis of peace and the agreements with Japan appeared to be in conflict with them.President Wilson said these were srerious considerations, but he would not like Mr. Koo to entertain idea that there was injustice in an arrangement based on treaties which Japan had entered into. He emphasized the sacrednedss of treaties, and said the unjust treatment of China in the past had not by any means been confined to Japan. He hoped the quandary in which the Powers were would be stated to the Chinese people, that it would be shown to them that the undoing of the trouble depended on China uniting in reality with other nations, including western nations. The heart of the world went out to China's 400 millions of people. Any statesman who ignored their fortunes were playing a dangerous game. But it would not do to identify justice with unfortunate engagments that had been entered into.Mr. Koo thought it would be gbetter to undo unfortunate engagements now if they endangered the permanence of the future peace.Mr. Lloyd George said the object of the war was not that. It had been fought as much for the eEast as for the West, China had been protected by the victory that had been won, the doctrine of the mailed fist had been propounded in relation to China. The engagements had been entered into with Japan at a time when support of that country was urgently needed......Kiauchau couold not have been captured without Japanese support. It was a solemn treaty and Great Britain could not turn around and say the treaty was a bad one and wshould not be carried out. Within treaties he would go to the utmost limits to protect the position of China. On the League of Nations he would always be prepared to stand up for China against oppression, if there was oppression. It would be of no service to herself for China to regard treaties as mere scraps of paper.Mr. Clemenceau said Mr. Koo could take veryevery ordword Mr. Lloyd George had said as if he had said it also.No decision was recorded at this meeting. Mr. Koo made an additional remark that the engagements just considered had been made to meet a European situation, not one in the Far East, while President Wilson and Mr. Lloyd Gelorge emphasized idea that they were to meet a world situation, to prevent German domination of the Far East as well as to save Europe. Mr. Lloyd George wished to consider further, and President Wilson asked the Chinese to consider the question further and espressed the hope it would be taken up again soon.In compliance with suggestions made at the afternoon meeting on April 22nd at President Wilson's house, the Shantung situation was examined by M. Jean Gout, Mr. E.T. Williams and Mr. Macleay, who were directed to express an opinion as to whether it would be more advantageous for China if Japan were merely to inherit the rights possessed by Germany in Shantung and Kiauchau or if she were to accept the position created by the Sino-Japanese Treaties and Agreements of 1915 and 1918. (See Report of Committee on Shantung and Kiauchau. Appendix II. to Notes of a meeting at President Wilson's house April 24th, at 4 P.M. I.C.176C?) They found that either alternative presented serious disadvantages for China. But they were of opinion that it would be more advantageous for China to accept the first alternative and to agree to Japan succeeding to the rights and the position which Germany possessed in Kiauchau and the province of Shantung in 1914 on the outbreak of the war, provided that Japan's rights, both in the leased territory and in the province, were confined strictly to those secured to Germany by the Treaty of March 6, 1898, and by subsequent Sino-German agreements in regard to mines and railways. They noted that those treaties and agreements did not confer right to establish outside the leased territory any form of civil administration in the province of Shantung, or maintain troops in any district or town in the province, or to employ German troops or police to guard the Kiauchau-Tsinanfu railway. They noted further that by terms of Agreement between Germany and China on the 31st December 1913, the two railways in province of Shantung, which Germany obtained concession to build in place of lines originally contemplated in the 1898 Convention, were to be constructed as Chinese Government railways, would become property of the Chinese State, not of the concessionaires. No comment on this report was recorded in the minutes to which it was attached as Appendix II.(This report was also attached as Appendix III, to I.C. 176 F, notes of a meeting at President Wilson's house, April 25th. A Chinese Statement was fbefore the Council of Four at the meeting at President Wilson's houseApril 25th, 6:3)0 P.M. (See* I.C. 176 F and Appendix IV). This summarized the remarks made in previous meetings by the Chinese; and as to the question which alternative China would prefer - the Treaty with Japan or the transfer to Japan of the German rights, the Chinese rfound neither acceptable because of the difficulties in both. Following the review of the difficulties, the Chinese delegates here submitted the following four propositions as a settlement:

This report, prepared on April 23rd, and the report of the committee on Shantung and Kiauchau (just cited above) led to additional discussion of the question by the Council of Four (more particularly of Three at the time) at the meeting of the 25th.President Wilson, after calling attention to the reports, asked Mr. Lloyd George if the British and French were bound to transfer Kiauchau and Shantung to Japan.Mr. Lloyd George said that sooner or later they were.Georges Clemenceau agreed.Mr. Lloyd George had discussed the question with Mr. Balfour, who had suggested that we talk over the terms on which Japan would hand the German rights in Shantung and Kiauchau back to China. That would meet the Japanese sentiments of pride, which compelled them to insist on the transfer of Kiauchau and Shantung to them and not to the Allied and Associated Powers. There was something to be said for Japan in this respect, since the Far East was the only sphere in which Japan was greatly concerned. Mr. Balfour thought the Japanese might accept the Chinese suggestion except for their first proposal. Mr. Lloyd George said we ought to discuss with Japan the conditions in which she would cede the territory back to China.There was other discussion, particularly on the role Japan had played in the war. President Wilson, commenting on Mr. Lloyd George's suggestion that the best plan would be for some one to sound the Japanese before they saw the Supreme Council, said they should be told that the Allied and Associated Powers could not consent to the return of Kiauchau and Shantung on the terms on which they had agreed with China. He suggested that Mr. Lloyd George and Mr. Balfour should see Baron Makino and Viscount Chinda.(Mr. Lloyd George undertook that Mr. Balfour should see the Japanese representatives.)A summary by Mr. Balfour of the results of this conversation with the Japanese as arranged was before the Council at a meeting at President Wilson's house, April 28th, 11 a.m.; it was discussed at this meeting, at which Mr. Balfour was present with supplementary remarks; and Mr. Balfour was instructed to write a letter to Baron Makino, according to Mr. Balfour's own suggestion. (See: Notes of a meeting at President Wilson's house, April 28th, I.C.177 A. and letters attached - Appendix VI. and Appendix VII.)Mr. Balfour stated that the Japanese denied that they intended to modify in their own favor the conditions which the Germans had imposed upon the Chinese in connection with the Shantung Peninsula, or that their treaties with China would have that effect; they said they proposed surrendering all military control over the Peninsula, that it was their intention fully to restore Chinese sovereignty in the leased territory; the provisions in the Treaty of 1918, with regard to maintaining a garrison at Tsinan and guarding the railway with Japanese troops were purely provisional, referring only to the period of transition after peace; they intended to make this period as short as possible but named no date for termination of this transitory arrangement. The Japanese proposed to retain German rights of an economic character consisting in: 1. A right to claim a concession at Tsingtau, not excluding the right also for other countries to organise an international concession if desired; 2. The German rights in the railways already built and the mines associated with them, the railways were built on land which is in full Chinese sovereignty; 3. Concessions granted to the Germans for building two other railways, to be built with Japanese capital, concerning which negotiations were in process between the Chinese Government and the Japanese capitalists; the Chinese Government would be able to secure the same position in regard to these two railways as it has over other railways constructed by foreign capital. The Japanese, for reasons of national dignity, were unwilling to modify the letter of treati with China, but were ready, Mr. Balfour understood, to fgive complicit assurances: (a) That any concession given them by China at Tsingtau would not exclude other foreign enterprise from the port; (b) That the economic control of the railway, which the possession of the majority of the shares give them, would be used in any to discriminate between trade facility of different nations. (It was stated by Mr. Lloyd George that Baron Makino, on behalf of the Japanese, had accepted Mr. Balfour's memorandum, just summarised in this paragraph.) President Wilson, in connection with the Balfour memorandum of conversation with the Japanese, asked what would be the effect of saying to the Japanese, - “We transfer to you the German rights but we do not confirm any arrangement you made with the Chinese earlier in the war and we do this provided that you give a definite assurance that you will not exercise your provisional rights for employing military forces in Shantung”. There was nothing on which public opinion of the United States was firmer than on this question that China should not be oppressed by Japan. Public opinion expected him to take the same line for Japan as he had taken for Italy. There was some difference between the two cases inasmuch as there was a definite understanding by China to transfer territory to Japan.(After an interval devoted to other subejcts, Mr. Balfour was introduced and reviewed the circumstances of the memorandum and of a conversation had with the Japanese after the one dealt with in the memorandum.)Mr. Balfour said Baron Makino had come again to see him on Sunday evening. With great delicacy but perfect clearness he had indicated that Japan wanted a decision on the Japanese claims as a whole, had pointed out that Japan was asked to agree to the League of Nations although she could not obtain recognition of her claims for equality of treatment. He had said that public opinion in Japan was much concerned on this question, that if Japan was to receive one check as regards Shantung and another check as regards the League of Nations the position would be very serious. Consequently, it was very important to obtain a decision on the question of Shantung before the Plenary Meeting to be held the same afternoon on the subject of the League of Nations. He understood that if Japan received what she wanted in regard to Shantung, her representatives at the Plenary Meeting would content themselves with a survey of the inequality of races and move some abstract resolution which would probably be rejected. Japan would then merely make a protest. If, however, she regarded herself as illtreated over Shantung, he was unable to say what line the Japanese delegates might take.President Wilson could not abandon China, he had told the United States' delegation, “If Japan will return Kiauchau and Shantung to China and relinquish all sovereign rights and will reduce her claims to more economic concessions foregoing all military rights, I would regard it as returning these possessions to China on better terms than Germany had held them”Mr. Balfour said there was no doubt Japan was doing this, (President Wilson said his experts did not agree.)President Wilson drew attention to the fact that Japan had retained the right to keep troops in Shantung, while Germany had had no such rights, even temporarily; and said if the Japanese would concede all military rights and make their agreement a purely economic one, he would agree to what they desired. He referred to mention by himself at previous meetings that when the League of Nations was set up he would make a proposal for the cession by all the Powers concerned, including Japan, of their rights of extra territoriality.Mr. Balfour thought the present Japanese Government more liberal than that of 1915, said the Japanese had made it clear that the right to keep troops in Shantung was only to be exercised temporarily, and felt the Japanese would be willing to limit themselves to purely economic claims.(At Mr. Balfour's suggestion it was agreed that he write a letter to Baron Makino according to the discussion as to the line it should take. It was also agreed that Japanese representatives should be asked to meet the Council on the following day.)In Mr. Balfour's letter to Baron Makino, dated April 28th (attached as Appendix VII. to I.C. 177 A.), stated that the Council was satisfied as to the permanent arrangements come to between Japan and China on the subject of Shantung, accepting the view as represented by Mr. Balfour in his memorandum of conversation with Baron Makino and Mr. Balfour's remarks supplementary to it. These arrangements were for Japan to hand back to China the whole of the leased territory in complete sovereignty after cession by Germany, retaining only the economic rights enyumerated in the Balfour memorandum, and carrying out the policy of the open door in spirit and letter. It was stated that anxiety was expressed on the temporary arrangements with regard to guarding the line and garrisoning Tsinan. These were interferences with Chienese sovereignty in excess of anything the Germans could claim under their Shantung arrangments. “They hoped you would consent to discuss this relatively unimportant aspect of the Shantung tommorrow at 11 o'clock. They quite recognise, and greatly regret, the inconvenience to which you may have been put owing to the fact that the Plenary Conference (on the League of Nations) will, under this arrangement, precede the Shantung discussion.... but hope you will forgive the inevitable postponement.....”On April 29th, the question was again discussed, with Japanese present. (See: Notes of a meeting at President Wilson's house, April 29th, at 11 a.m. - I.C. 177 B., revised.) Most of the discussion hinged on the question of police for the guarding the railway. President Wilson made strong objections to any arrangement by which the Japanese Government might exercise any such rights as being in excess of rights exercised by Germany and being an infringement of Chinese sovereignty. It was difficult for him to face public opinion in the United States on the question, and it would greatly increase his difficulty if the transfer of rights to Japan was greater than those exercised by Germany; he was not willing to admit the right of the Japanese Government to exercise supervision over the police force. After extensive discussion, Mr. Balfour made proposals, which were amended and fgiven to the Japanese for consideration. These provided in substance that it be the declared policy of Japan to hand back to China in full sovereignty the Shantung Peninsula, retaining only the economic privileges possessed by Germany; that the intention of the clauses relating to police on the railway was only to give the owners security for traffic; such Japanese instructors as may be required to assist in policing the railway may be selected by the company. President Wilson made the following proposal: “Surrender to China of all right of sovereignty and retention with regard to the railway and the mines only of the economic rights of a concessionaire, retaining, however, the privilege of establishing a non-exclusive settlement at Singtau”. The Japanese undertoolk to consider these formulae and report as soon as possible.The Japanese were at the meeting of the Council on April 30th (See: Notes of a meeting at President Wilson's house, April 30th, 12:30 P.M. I.C.177 F -revised.) In reply to question by President Wilson, the Japanese delegates declared that:

At this point thesre was a prolonged conversation between President Wilson and the Japanese which developed into a general discussion. The Japanese attached validity to the arrangements with China, and wanted the policy here declared before the Council of Four to appear clearly as the voluntary expression of the Japanese delegates' interpretation of the policy of their government, that no impression be given that this decision was forced. This last expression came as a result of a remark by President Wilson that he supposed, as the Japanese representatives proposed to make public the policy declared at the outset of the meeting, he was at liberty to use that part of it which most concerned him. President Wilson said frankly he must insist that nothing he said should be construed as any admission of the recognition of the Notes exchanged between Japan and China. At another part of the conversation, he pointed out that the League of Nations would provide means of mediation in the case of issues between Japan and China that might arise, when the Japanese mentioned the possibility of friction in Shantung.Upon question by Sir Maurice Hankey as to what he was to send to the Drafting Committee, Viscount Chinda produced a draft of clauses to be inserted in the Treaty, including alterations agreed on the previous day. As do Articles 156 and 157 of the Treaty, the two articles here submitted contain at their ends the phrase, “free of all charges and encumbrances”. Viscount Chinda said the modifications of the draft previously submitted were added because “instructions from the Japanese Government state expressly that surrender of the German public property should be unconditional and without compensation”. The articles were approved and directed to be forwarded for information of the Drafting Committee.These articles (156 and 157 of Treaty) were not changed between May 7th and June 28th; but (2) of the Protoclol, signed on June 28th, deals with Art. 156. The Germans made a criticism of these articles (See: Comments by the German delegation on the dconditions of peace, Second Part, II., 11 - Kiauchau.) The Allied Reply stated that though holding the railway and mines to be public property they “would be prepared, in event of Germany adducing proof to the contrary to apply to such private rights as German nationals may be able to establish in the matter, the general principles laid down in the conditions of peace in respect of compensation of this character”. (Approved by Council on June 12th, at President Wilson's house. See: C.F.62 and Appendix IV.) For an additional discussion see Notes of meetings at pPresident Wilson's house on June 21st, (C.F.76 and C.F.60)Shantung.
24.Appendix to Part IV. Section VIII.In connection with refusal by the Chinese delegates to sign the Treaty with Germany, see statement of formal protest against the settlement of the Shantung question, made by the Chinese Delegation before the Plenary Session of the Preliminary Peace Conference, May 6 (Protocol No.6).