793.94/1300a
The Secretary of State to the Minister in China (Schurman)
Sir: As you will be aware from your knowledge of affairs in Peking, the Chinese Delegation to the Conference on the Limitation of Armament were from the outset desirous of bringing the Shantung question before the Committee on Pacific and Far Eastern Questions with a view to its discussion and settlement by that body, while the Japanese Delegation, in accordance with the policy of direct negotiations with China, which has been pursued all along by the Tokyo Government, were averse from any such arrangement.
With this situation in mind, I had an exchange of views with Mr. Balfour, who was acting as head of the British Empire Delegation, following which Mr. Balfour and I together consulted separately with Admiral Baron Kato of the Japanese Delegation and with Mr. Sze, the head of the Chinese Delegation, explaining the tactical inexpediency of China’s presenting the Shantung question to the Conference, and urging the desirability of the resumption here of the discussion of the question between the representatives of China and Japan. We suggested that to this end we should be prepared to use our good offices in any way that might be acceptable to the two parties, in order to assist towards a just and permanent resolution of the question, and I took occasion in my telegram No. [Page 961] 303 of November 25th, last,31 to acquaint you with the foregoing and to request you to impress upon the Chinese Government that the only practicable way to attain an equitable and durable understanding on this subject would be to renew the recent discussions between the two Governments which appeared to have been discontinued at a moment when the substantial points of difference seemed in fact to have been narrowed to a small margin. Mr. Balfour, as you were informed in this telegram, at the same time requested the British Foreign Office to issue instructions in a similar sense to Sir Beilby Alston.
A satisfactory understanding having been reached with the Delegates of the Governments of China and Japan then in Washington, Mr. Balfour and I brought together the representatives of the two countries on December 1st, last, to initiate discussions of the Shantung question collaterally with the Conference, as you were informed in my telegram No. 206 [310].32 After convening the meeting and making an offer of our good offices in the matter, Mr. Balfour and I withdrew, leaving the discussion to be carried on by the respective representatives consisting, for China, of Mr. Sze, Mr. Wellington Koo and Mr. Wang accompanied by their secretaries: and for Japan, of Admiral Baron Kato, Prince Tokugawa and Mr. Hanihara, together with their secretaries. Baron Kato attended only the first meeting and was then replaced by Mr. Debuchi. Prince Tokugawa attended the meetings until December 10th, after which he was replaced by Baron Shidehara.
There were thirty-six meetings in all, which were attended by two American observers, Mr. J. V. A. MacMurray, Chief of the Division of Far Eastern Affairs of this Department, and Mr. Edward Bell, formerly Counselor of the Embassy at Tokyo, and by two British observers, Sir John Jordan, formerly Minister at Peking, and Mr. Miles Lampson of the Foreign Office. During the month of January, Sir John Jordan was obliged to return to England and his place was taken by Mr. F. Ashton-Gwatkin of the Foreign Office, formerly attached to the British Embassy at Tokyo. The conversations, at all of the meetings, were conducted in the English language without the aid of an interpreter.
It became evident at once that the most difficult matter to settle in connection with the Shantung question would be the Tsingtao–Tsinanfu Railway, the Japanese Delegation being desirous of settling the minor questions first and returning to the railway question at the end of the discussions, while the Chinese Delegation evinced a desire from the beginning to confront as soon as possible the issue in regard to the railway question. Several minor questions were disposed of at the earlier meetings, and the matter of [Page 962] the railway was then taken up, the Japanese Delegation proposing joint Sino-Japanese control of the railway in accordance with the understanding reached between Japan and China in 1918, while the Chinese Delegation insisted on cash payment by China for the railway and its properties. Under pressure from the Chinese Delegation, Baron Shidehara, speaking on behalf of his Delegation, tentatively receded from his position and offered as a substitute, subject to the consent of the Japanese Government, a proposal that the railway should be paid for by means of a long-term loan to be made by Japanese capitalists, with a further understanding that Japan should have the right to nominate a Japanese Traffic Manager, Chief Accountant and Chief Engineer for the line. The Chinese Delegation met this with a tentative counter-proposal for payment by means of Chinese Government Treasury Notes, coupled with the appointment of one Japanese expert only, namely, a Chief Engineer. On December 20th the Japanese Delegation announced that, the Chinese Delegation having declined to accept the tentative proposal for a long-term loan, they would be obliged to refer the whole question to Tokyo for further instructions. This situation was communicated to you in the Department’s telegram No. 335 of December 21st.33
While the Japanese Delegation in Washington were awaiting instructions from their Government, the latter appears to have directed the Japanese Minister in Peking to take up directly with the Chinese Prime Minister, and with the Minister for Foreign Affairs, the question of the Shantung Railway, and I understand that Mr. Obata reported to his Government that Mr. Liang, on December 29th, had indicated in conversation that he was personally disposed to accept an arrangement for the purchase of the railway by means of a Japanese long-term loan. Whether Mr. Obata ultimately received a formal communication from the Chinese Prime Minister or Minister for Foreign Affairs tending to confirm this understanding I am not aware, but at all events no such instructions appear to have been issued by the Chinese Government to the Chinese Delegation in Washington. On January 4th the conferences were resumed and the Japanese Delegation announced that their Government were willing to ratify the tentative proposal which Baron Shidehara had previously made that the railway should be paid for by means of a Japanese long-term loan. The Chinese Delegation, however, stated that their instructions to refuse such a proposal had been repeated from Peking and after three days’ discussion the Conference adjourned on January 6th sine die.
[Page 963]A situation had now arisen which made it necessary to review the course of the negotiations and to explore every avenue which might lead the Chinese and Japanese Delegations from the tangle of proposal and counter-proposal, doubt and suspicion, in which they appeared to have become involved. Under the instructions of Mr. Balfour and myself, the American and British observers, therefore, in unofficial conversations with members of the Chinese and Japanese Delegations, suggested on their personal responsibility certain possible bases of compromise, designated for convenience A, B, C and D respectively, of which copies are enclosed herewith. These suggestions were communicated by the Japanese and Chinese Delegations to their respective Governments and, pending the receipt of replies, the conversations were resumed on January 11th for the purpose of considering the remaining unsettled questions, other than the railway. On January 18th Mr. Balfour and I had an informal conversation with the Japanese Delegates and, on January 19th and 22nd, with the Chinese Delegates, with a view to impressing upon them the seriousness of the situation and the necessity for reaching an understanding on this all-important question. Copies of the notes taken of these meetings by Sir Maurice Hankey of the British Delegation, together with a memorandum of the meeting of January 22nd, which was furnished to the Chinese Delegation by Mr. Balfour and myself, are enclosed herewith.34 I had meanwhile received your telegram No. 16, of January 16th, and on January 22nd sent you my telegram No. 10 instructing you to communicate with the Chinese Government in the same sense as Mr. Balfour and I had addressed the Chinese Delegation. Mr. Balfour, as you are aware, sent similar instructions to your British colleague. Your telegrams in reply, No. 23 of January 24th, No. 28 of January 26th and No. 31 of January 27th were very satisfactory, and the instructions which you indicated would be sent to the Chinese Delegation arrived in due course. Meanwhile, the Chinese Minister having sought an interview with the President, I took Mr. Sze to the White House on January 25th when the President said to him that it would be a colossal blunder in statecraft if China were not to take advantage of the opportunity now offered her for the settlement of the Shantung question, as the alternative might involve the risk of losing the Province. On January 30th Mr. Balfour and I had a final meeting with the Chinese Delegation, notes of which, compiled by Mr. Lampson of the British Delegation, are enclosed herewith.34 Instructions having been received from Tokyo permitting favorable consideration by the Japanese Delegation of the Treasury Notes scheme, the railway question was finally disposed of at meetings held on January 30th and 31st, [Page 964] and the Japanese Ambassador and the Chinese Minister communicated to me the substance of their agreements in notes of which copies are enclosed.35 As stated in my telegram No. 17 of February 1st,36 I read this agreement at the Fifth Plenary Session of the Conference on that day and caused it to be spread upon the record of the Conference.
The Chinese and Japanese Delegates signed the Treaty on the afternoon of Saturday, February 4th, at the Pan-American Union Building, in the presence of Mr. Balfour and myself. The text, which varies but slightly in the order of the clauses and in the wording from the earlier draft, is enclosed herewith.37 I should add for your information that a number of understandings not found in the Treaty or its Annex were recorded in the minutes of the meetings of the Chinese and Japanese Delegations, and that copies of them will be forwarded to you in due course when agreement has been reached on their wording.
It should be borne in mind that while the Shantung question was closely interwoven with the fabric of the Conference, these negotiations did not form an integral part thereof, special full-powers having been exchanged between the Japanese and Chinese Delegates for the purpose of signing the Shantung Treaty.
In acquainting you with the foregoing record of these negotiations for your confidential information and the files of the Legation, I desire once more to express my appreciation of the manner in which you have dealt with such phases of the question as have come before you, and to assure you that your services in this matter have been of great assistance to me. This record is intended primarily for your own guidance, but the information contained therein may be used in your discretion, should necessity arise, to counteract the impression which appears to exist in some quarters that pressure was exerted on the Chinese Government or on its Delegates in Washington to induce them to accept a settlement unfavorable to China, In connection with the foregoing I take pleasure in acquainting you that on February 5th the President received the following telegraphic communication from the President of China: “I am most happy to learn that during the Conference at Washington, through the untiring friendly interest taken by your Excellency and by all the American Delegates, a solution of the long outstanding Shantung question has been made possible. Thus the peace of the Far East is further ensured. On behalf of the Government and people of the Republic of China, I have the honor to extend to your Excellency our sincere thanks and felicitations.”
[Page 965]A copy of this instruction with its enclosures is being forwarded to the American Ambassador at Tokyo and I should feel obliged if you would arrange that Mr. Warren may be furnished with the texts of all telegrams exchanged between this Department and yourself on the subject of these negotiations.
I am [etc.]