This was the state of affairs when the Peace Conference assembled at Paris. Germany had by force compelled China in 1898 to cede to her certain rights in the Province of Shantung. Japan had seized these rights by force in 1914 and had by threats forced China in 1915 to agree to accept her disposition of them when they were legally transferred by treaty at the end of the war. China in 1917 had, on entering the war against Germany, denounced all treaties and agreements with Germany, so that the ceded rights no longer existed and could not legally be transferred by Germany to Japan by the Treaty of Peace, since the title was in China. In fact any transfer or disposition of the rights in Shantung formerly belonging to Germany was a transfer or disposition of rights belonging wholly to China and would deprive that country of a portion of its full sovereignty over the territory affected.

While this view of the extinguishment of the German rights in Shantung was manifestly the just one and its adoption would make for the preservation of permanent peace in the Far East, the Governments of the Allied Powers had, early in 1917, and prior to the severance of diplomatic relations between China and Germany, acceded to the request of Japan to support, "on the occasion of the Peace Conference," her claims in regard to these rights which then existed. The representatives of Great Britain, France, and Italy at Paris were thus restricted, or at least embarrassed, by the promises which their Governments had made at a time when they were in no position to refuse Japan's request. They might have stood on the legal ground that the Treaty of 1898 having been abrogated by China no German rights in Shantung were in being at the time of the Peace Conference, but they apparently were unwilling to take that position. Possibly they assumed that the ground was one which they could not take in view of the undertakings of their Governments; or possibly they preferred to let the United States bear the brunt of Japanese resentment for interfering with the ambitious schemes of the Japanese Government in regard to China. There can be little doubt that political, and possibly commercial, interests influenced the attitude of the European Powers in regard to the Shantung Question.

President Wilson and the American Commissioners, unhampered by previous commitments, were strongly opposed to acceding to the demands of the Japanese Government. The subject had been frequently considered during the early days of the negotiations and there seemed to be no divergence of views as to the justice of the Chinese claim of right to the resumption of full sovereignty over the territory affected by the lease and the concessions to Germany. These views were further strengthened by the presentation of the question before the Council of Ten. On January 27 the Japanese argued their case before the Council, the Chinese delegates being present; and on the 28th Dr. V.K. Wellington Koo spoke on behalf of China. In a note on the meeting I recorded that "he simply overwhelmed the Japanese with his argument." I believe that that opinion was common to all those who heard the two presentations. In fact it made such an impression on the Japanese themselves, that one of the delegates called upon me the following day and attempted to offset the effect by declaring that the United States, since it had not promised to support Japan's contention, would be blamed if Kiao-Chau was returned directly to China. He added that there was intense feeling in Japan in regard to the matter. It was an indirect threat of what would happen to the friendly relations between the two countries if Japan's claim was denied.

The sessions of the Commission on the League of Nations and the absence of President Wilson from Paris interrupted further consideration of the Shantung Question until the latter part of March, when the Council of Four came into being. As the subject had been fully debated in January before the Council of Ten, final decision lay with the Council of Four. What discussions took place in the latter council I do not know on account of the secrecy which was observed as to their deliberations. But I presume that the President stood firmly for the Chinese rights, as the matter remained undecided until the latter part of April.

On the 21st of April Baron Makino and Viscount Chinda called upon me in regard to the question, and I frankly told them that they ought to prove the justice of the Japanese claim, that they had not done it and that I doubted their ability to do so. I found, too, that the President had proposed that the Five Powers act as trustees of the former German rights in Shantung, but that the Japanese delegates had declared that they could not consent to the proposition, which was in the nature of a compromise intended to bridge over the existing situation that, on account of the near approach of the completion of the Treaty, was becoming more and more acute.

On April 26 the President, at a conference with the American Commissioners, showed deep concern over the existing state of the controversy, and asked me to see the Japanese delegates again and endeavor to dissuade them from insisting on their demands and to induce them to consider the international trusteeship proposed. The evening of the same day the two Japanese came by request to my office and conferred with Professor E.T. Williams, the Commission's principal adviser on Far Eastern affairs, and with me. After an hour's conversation Viscount Chinda made it very clear that Japan intended to insist on her "pound of flesh." It was apparent both to Mr. Williams and to me that nothing could be done to obtain even a compromise, though it was on the face favorable to Japan, since it recognized the existence of the German rights, which China claimed were annulled.

On April 28 I gave a full report of the interview to Mr. White and General Bliss at our regular morning meeting. Later in the morning the President telephoned me and I informed him of the fixed determination of the Japanese to insist upon their claims. What occurred between the time of my conversation with the President and the plenary session of the Conference on the Preliminaries of Peace in the afternoon, at which the Covenant of the League of Nations was adopted, I do not actually know, but the presumption is that the Japanese were promised a satisfactory settlement in regard to Shantung, since they announced that they would not press an amendment on "racial equality" at the session, an amendment upon which they had indicated they intended to insist.

After the meeting of the Conference I made the following memorandum of the situation:

"At the Plenary Session of the Peace Conference this afternoon Baron Makino spoke of his proposed amendment to the Covenant declaring 'racial equality,' but said he would not press it.

"I concluded from what the President said to me that he was disposed to accede to Japan's claims in regard to Kiao-Chau and Shantung. He also showed me a letter from —— to Makino saying he was sorry their claims had not been finally settled before the Session.