CHINA'S REPLY TO REVISED DEMANDS

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

GROUP I

The Chinese Government and the Japanese 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 assent to all matters upon which the Japanese 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.

The Japanese Government declares that when the Chinese Government give their assent to the disposition of interests above referred to, Japan will restore the leased territory of Kiaochow to China; and further recognize the right of the Chinese Government to participate in the negotiations referred to above between Japan and Germany.

Article 2. The Japanese Government consents to be responsible for the indemnification of all losses occasioned by Japan'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 Japan for military purposes are to be removed forthwith. The Japanese troops now stationed outside the original leased territory of Kiaochow are now to be withdrawn first, those within the original leased territory are to be withdrawn on the restoration of the said leased territory to China.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 Japanese 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 Japanese Minister must be consulted before making a decision.

Article 6. If the Japanese 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 Japanese Government, with a view to developing their economic relations in South Manchuria, agree to the following articles:—

Article 2. Japanese 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. Japanese 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 Japanese subjects referred to in the preceding two articles, besides being required to register with the local authorities passports 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 Japanese subjects and mixed cases between Japanese or Chinese, relating to land or disputes arising from lease contracts, shall be tried and adjudicated by Chinese Authorities and the Japanese 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 Japanese 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 Japanese 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 Japan and the Hanyehping Company being very intimate, if the said Company comes to an agreement with the Japanese 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 Japanese.

Letter to be addressed by the Japanese 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 Fukien 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 Japanese 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 Fukien 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 passage-at-arms of the 1st May it was understood in Peking that Japan 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 Japan from proceeding to extremities. Accordingly there was little real surprise when on the 7th May Japan 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 Japan 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.