Report of the Commission of Enquiry/Chapter 3

by Victor Bulwer-Lytton

Layout 2

Chapter III.

MANCHURIAN ISSUES BETWEEN JAPAN AND CHINA.
(Before September 18th, 1831)

 

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1. Japan's Interest in China.

During the quarter of a century before September 1931, the ties which bound Manchuria to the rest of China were growing stronger and, at the same time, the interests of Japan in Manchuria were increasing. Manchuria was admittedly a part of China, but it was a part in which Japan had acquired or claimed such exceptional rights, so restricting the exercise of China's sovereign rights, that a conflict between the two countries was a natural result.

Japan's Treaty Rights of 1905.By the Treaty of Peking of December 1905. China gave her consent to the transfer to Japan of the Kwantung Leased Territory, which was formerly leased to Russia, and of the southern branch of the Russian-controlled Chinese Eastern Railway as far north as Changchun. In an additional agreement, China granted to Japan a concession to improve the military railway line between Antung and Mukden and to operate it for fifteen years.

South Manchuria Railway Company was organised in August 1906.In August 1906, the South Manchuria Railway Company was organised by Imperial Decree to take over and administer the former Russian Railway, as well as the Antung-Mukden Railway. The Japanese Government acquired control of the company by taking half of the shares in exchange for the railway, its properties, and the valuable coal-mines at Fushun and Yentai. The company was entrusted, in the railway area, with the functions of administration and was allowed to levy taxes; it was also authorised to engage in mining, electrical enterprises, warehousing, and many other branches of business.

Annexation of Korea.In 1910, Japan annexed Korea. This annexation indirectly increased Japanese rights in Manchuria, since Korean settlers became Japanese subjects over whom Japanese officials exercised jurisdiction.

The Treaty and Notes of 1915.In 1915, as a result of the group of exceptional demands made by the Japanese and generally known as the "Twenty-one Demands", Japan and China signed a Treaty and exchanged Notes on May 25th regarding South Manchuria and Eastern Inner Mongolia. By those agreements, the lease of the Kwantung Territory, including Port Arthur and Dalny (now Dairen), which was originally for a period of twenty-five years, and the concessions for the South Manchuria and the Antung-Mukden Railways, were all extended to ninety-nine years. Furthermore, Japanese subjects in South Manchuria acquired the right to travel and reside, to engage in business of any kind, and to lease land necessary for trade, industry and agriculture. Japan also obtained rights of priority for railway and certain other loans in South Manchuria and Eastern Inner Mongolia, and preferential rights regarding the appointment of advisers in South Manchuria. At the Washington Conference, 1921–22, however, Japan relinquished her rights regarding the loans and the advisers.

These treaties and other agreements gave to Japan an important and unusual position in Manchuria. She governed the leased territory with practically full rights of sovereignty. Through the South Manchuria Railway, she administered the railway areas, including several towns and large sections of such populous cities as Mukden and Changchun; and in these areas she controlled the police, taxation, education and public utilities. She maintained armed forces in many parts of the country: the Kwantung Army in the Leased Territory. Railway Guards in the railway areas, and Consular Police throughout the various districts.

Exceptional character of the political, economic and legal relations between Japan and China in Manchuria.This summary of the long list of Japan's rights in Manchuria shows clearly the exceptional character of the political, economic and legal relations created between that country and China in Manchuria. There is probably nowhere in the world an exact parallel to this situation, no example of a country enjoying in the territory of a neighbouring State such extensive economic and administrative privileges. A situation of this kind could possibly be maintained without leading to incessant complications and disputes if it were freely desired or accepted on both sides, and if it were the sign and embodiment of a well-considered policy of close collaboration in the economic and in the political sphere. But, in the absence of those conditions, it could only lead to friction and conflict.

II. Conflict between the Fundamental Interests of Japan and China in Manchuria

Chinese attitude towards Manchuria.The Chinese people regard Manchuria as an integral part of China and deeply resent any attempt to separate it from the rest of their country. Hitherto, these Three Eastern Provinces have always been considered both by China and by foreign Powers as a part of China, and the de jure authority of the Chinese Government there has been unquestioned. This is evidenced in many Sino-Japanese treaties and agreements, as wall as in other international conventions, and has been reiterated in numerous statements issued officially by Foreign Offices, including that of Japan.

Manchuria, China's first line of defence.The Chinese regard Manchuria as their "first line of defence". As Chinese territory, it is looked upon as a sort of buffer against the adjoining territories of Japan and Russia, a region which constitutes an outpost against the penetration of Japanese and Russian influences from those regions into the other parts of China. The facility with which China, south of the Great Wall, including the city of Peiping, can be invaded from Manchuria has been demonstrated to the Chinese from historical experience. This fear of foreign invasion from the north-east has been increased in recent years by the development of railway communication, and has 'been intensified during the events of the, past year.

China's economic interest in Manchuria.Manchuria is also regarded by the Chinese as important to them for economic reasons. For decades they have called it the "granary of China", and more recently have regarded it as a region which furnishes seasonal employment to Chinese farmers and labourers from neighbouring Chinese provinces.

Whether China as a whole can be said to be over-populated may be open to question, but that certain regions and provinces—as, for example, Shantung—are now peopled in such numbers as to require emigration is generally accepted by the most competent authorities on this subject^[1]. The Chinese, therefore, regard Manchuria as a frontier region, capable of affording relief for the present and future population problems of other parts of China. They deny the statement that the Japanese are principally responsible for the economic development of Manchuria, and point to their own colonisation enterprises, especially since 1925, to their railway development, and other enterprises, in refutation of these claims.

Japanese Interests in Manchuria: sentiment resulting from the Russo-Japanese War.Japanese interests in Manchuria differ both in character and degree from those of any other foreign country. Deep in the mind of every Japanese is the memory of their country's great struggle with Russia in 1901–05, fought on the plains of Manchuria, at Mukden and Liaoyang, along the line of the South Manchuria Railway, at the Yalu River, and in the Liaotung Peninsula. To the Japanese the war with Russia will ever be remembered as a life-and-death struggle fought in self-defence against the menace of Russian encroachments. The facts that a hundred thousand Japanese soldiers died in this war and that two billon gold yen were expended have created in Japanese minds a determination that these sacrifices shall not have been made in vain.

Japanese interest in Manchuria, however, began ten years before that war. The war with China, in 1894–95, principally over Korea, was largely fought at Port Arthur and on the plains of Manchuria; and the Treaty of Peace signed at Shimonoseki ceded to Japan in full sovereignty the Liaotung Peninsula. To the Japanese, the fact that Russia. France and Germany forced them to renounce this cession does not affect their conviction that Japan obtained this part of Manchuria as the result of a successful war and thereby acquired a moral right to it which still exists.

Japan's strategic interest in Manchuria.Manchuria has been frequently referred to as the "life-line" of Japan. Manchuria adjoins Korea, now Japanese territory. The vision of a China, unified, strong and hostile, a nation of four hundred millions, dominant in Manchuria and in Eastern Asia, is disturbing to many Japanese. But to the greater number, when they speak of menace to their national existence and of the necessity for self-defence, they have in mind Russia rather than China. Fundamental, therefore, among the interests of Japan in Manchuria is the strategic importance of this territory.

There are those in Japan who think that she should entrench herself firmly in Manchuria against the possibility of attack from the U.S.S.R. They have an ever-present anxiety lest Korean malcontents in league with Russian Communists in the nearby Maritime Province might in future invite, or co-operate with, some new military advance from the North. They regard Manchuria as a buffer region against both the U.S.S.R, and the rest of China. Especially in the minds of Japanese military men, the right claimed, under agreements with Russia and China, to station a few thousand railway guards along the South Manchuria Railway is small recompense for the enormous sacrifices of their country in the Russo-Japanese War, and a meagre security against the possibility of attack from that direction.

Japan's "special position" in Manchuria.Patriotic sentiment, the paramount need for military defence, and the exceptional treaty rights all combine to create the claim to a "special position" in Manchuria. The Japanese conception of this "special position" is not limited to what is legally defined in treaties and agreements either with China or with other States. Feelings and historical association, which are the heritage of the Russo-Japanese War, and pride in the achievements of Japanese enterprise in Manchuria for the last quarter-contury, are an indefinable but real part of the Japanese claim to a "special position", it is only natural, therefore, that the Japanese use of this expression in diplomatic language should be obscure, and that other States should have found it difficult, if not impossible, to recognise it by international instruments.

The Japanese Government, since the Russo-Japanese War, has at various times sought to obtain from Russia, France, the United Kingdom and the United States of America recognition of their country's "special position", "special influence and interest", or "paramount interest" in Manchuria. These efforts have only met with partial success, and, where recognition of such claims has been accorded, in more or less definite terms, the international agreements or understandings containing them have largely disappeared with the passage of time, either by formal abrogation or otherwise—as, for example: the Russo-Japanese secret Conventions of 1907, 1910, 1912 and 1916, made with the former Tsarist Government of Russia; the Anglo-Japanese Conventions of Alliance, Guarantee and Declaration of Policies; and the Lansing-Ishii Exchange of Notes of 1917. The signatories of the Nine-Power Treaty of the Washington Conference of February 6th, 1922^[2], by agreeing "to respect the sovereignty, the independence, and the territorial and administrative integrity" of China, to maintain "equality of opportunity in China for the trade and industry of all nations", by refraining from taking advantage of conditions in China "in order to seek special rights or privileges" there, and by providing "the fullest and most unembarrassed opportunity to China to develop and maintain for herself an effective and stable government", challenged to a large extent the claims of any signatory State to a "special position" or to "special rights and interests" in any part of China, including Manchuria.

But the provisions of the Nine-Power Treaty and the abandonment, by abrogation or otherwise, of such agreements as those mentioned above have led to no change in the attitude of the Japanese. Viscount Ishii doubtless well expressed the general view of his countrymen in his recent Memoirs (Gaiko Yoruku), when he said:

"Even if the Lansing-Ishii agreement is abolished, Japan's special interests unshakenly exist there. The special interests which Japan possesses in China neither were created by an international agreement, nor can they become the objects of abolition."

Japan's claims to a "special postion" in Manchuria in conflict with China's sovereign rights and policies.This Japanese claim with respect to Manchuria conflicts with the sovereign rights of China and is irreconcilable with the aspirations of the National Government, which seeks to curtail existing exceptional rights and privileges of foreign States throughout China and to prevent their further extension in the future. The development of this conflict will be clearer from a consideration of the respective policies pursued by Japan and China in Manchuria.

Japan's general policy towards Manchuria.Until the events of September 1931, the various Japanese Cabinets, since 1905, appeared to have the same general aims in Manchuria, but they differed as to the policies best suited to achieve these aims. They also differed somewhat as to the extent of the responsibility which Japan should assume for the maintenance of peace and order.

The general aims for which they worked in Manchuria were to maintain and develop Japan's vested interests, to foster the expansion of Japanese enterprise, and to obtain adequate protection for Japanese lives and property. In the policies adopted for realising these aims there was one cardinal feature which may be said to have been common to them all. This feature has been the tendency to regard Manchuria and Eastern Inner Mongolia as distinct from the rest of China. It resulted naturally from the Japanese conception of their country's "special position" in Manchuria. Whatever differences may have been observable between the specific policies advocated by the various Cabinets in Japan—as, for example, between the so-called "friendship policy" of Baron Shidehara and the so-called "positive policy" of the late General Baron Tanaka—they have always had this feature in common.

The "friendship policy" developed from about the time of the Washington Conference and was maintained until April 1927; it was then supplanted by the "positive policy", which was followed until July 1929; finally, the "friendship policy" was again adopted and continued the official policy of the Foreign Office until September 1931. In the spirit which actuated the two policies there was a marked difference: the "friendship policy" rested, in Baron Shidehara's words, "on the basis of good will and neighbourliness"; the "positive policy" rested upon military force. But, in regard to the concrete measures which should be adopted in Manchuria, these two polices differed largely on the question as to the lengths to which Japan should go to maintain peace and order in Manchuria and to protect Japanese interests.

The "positive policy" of the Tanaka Ministry placed greater emphasis upon the necessity for regarding Manchuria as distinct from the rest of China; its positive character was made clear by the frank declaration that, "if disturbances spread to Manchuria and Mongolia, and, as a result, peace and order are disrupted, thereby menacing our special position and rights and interests in these regions", Japan would "defend them, no matter whence the menace comes". The Tanaka policy definitely asserted that Japan would take upon herself the task of preserving "peace and order" in Manchuria—in contrast to previous policies which limited their objectives to protecting Japanese interests there.

The Japanese Government has generally pursued a firmer policy in Manchuria than elsewhere in China, in order to preserve and develop those vested interests which are peculiar to that region. Certain of the Cabinets have tended to place great reliance on the use of interventionist methods, accompanied by a threat of force. This was true especially at the time of the presentation of the "Twenty-one Demands" on China in 1915, but as to the wisdom of the "Twenty-one Demands", as well as to other methods of intervention and force, there has always been a marked difference of opinion in Japan.

The effect of the Washington Conference upon Japan's position and policy in Manchuria.The Washington Conference, although it had a marked effect upon the situation in the rest of China, made little actual change in Manchuria. The Nine-Power Treaty of February 6th, 1922, in spite of its provisions with respect to the integrity of China and the policy of the "Open Door", has had but qualified application to Manchuria in view of the character and extent of Japan's vested interests there, although textually the Treaty is applicable to that region. The Nine-Power Treaty did not materially diminish the claims based on these vested interests, although, as already stated, Japan formally relinquished her special rights regarding loans and advisers which had been granted in the Treaty of 1915.

Japan's relations with Chang Tso-lin.During the period from the Washington Conference until the death of Marshal Chang Tso-lin in 1928, the policy of Japan in Manchuria was chiefly concerned with its relations with the de facto ruler of the Three Eastern Provinces. Japan gave him a measure of support, notably during the Kuo Sung-lin mutiny mentioned in the last chapter. Marshal Chang Tso-lin, in return, although opposed to many of the Japanese demands, felt it necessary to give due recognition to Japan's desires, since these might at any time be enforced by superior military power. He also wished to be able, upon occasion, to obtain Japanese support against Russian opposition in the North. Upon the whole, Japanese relations with Marshal Chang Tso-lin were reasonably satisfactory from her point of view, although they became increasingly disturbed towards the end of his life in consequence of his failure to fulfil some of his alleged promises and agreements. Some evidence even of a revulsion of Japanese feeling against him became apparent in the months preceding his defeat and final retreat to Mukden in June 1928.

Japan's claim to maintain peace and order in Manchuria.In the spring of 1928, when the Nationalist armies of China were marching on Peking in an effort to drive out the forces of Chang Tso-lin, the Japanese Government, under the premiership of Baron Tanaka, issued a declaration that, on account of her "special position" in Manchuria, Japan would maintain peace and order in that region. When it seemed possible that the Nationalist armies might carry the civil war north of the Great Wall, the Japanese Government, on May 28th, sent to the leading Chinese generals a communication which said:

"The Japanese Government attaches the utmost importance to the maintenance of peace and order in Manchuria, and is prepared to do all it can to prevent the occurrence of any such state of affairs as may disturb that peace and order, or constitute the probable cause of such a disturbance.

"In these circumstances, should disturbances develop further in the direction of Peking and Tientsin, and the situation become so menacing as to threaten the peace and order of Manchuria, Japan may possibly be constrained to take appropriate effective steps for the maintenance of peace and order in Manchuria."

At the same time, Baron Tanaka issued a more definite statement, that the Japanese Government would prevent "defeated troops or those in pursuit of them" from entering Manchuria.

The announcement of this far-reaching policy brought protests from both the Peking and the Nanking Governments, the Nanking note stating that such measures as Japan proposed would be not only "an interference with Chinese domestic affairs, but also a flagrant violation of the principle of mutual respect for territorial sovereignty".

In Japan itself, this "positive policy" of the Tanaka Government, while it received strong support from one party, was vigorously criticised by another, especially by the Shidehara group, on the ground that the preservation of peace and order over all Manchuria was not the responsibility of Japan.

Strained relations between Japan and Chang Hsueh-liang.Japan's relations with Marshal Chang Hsueh-liang, who succeeded his father in 1928, were increasingly strained from the outset. Japan wished Manchuria to remain separate from the newly established National Government at Nanking, while Marshal Chang Hsueh-Jiang was in favour of recognising the authority of that Government. Reference has already been made to the urgent advice given by Japanese officials that allegiance should not be pledged to the Central Government. When, however, the Mukden Government raised the Nationalist flag over Government buildings in Mukden in December 1928, the Japanese Government made no attempt to interfere.

Japanese relations with Marshal Chang Hsueh-liang continued to be strained and acute friction developed in the months immediately preceding September 1931.

III. Sino-Japanese Railway Issues in Manchuria.

Manchurian international politics largely railway politics.The international politics of Manchuria for a quarter of a century have been largely railway politics. Considerations of a purely economic and railway-operating character have been overshadowed by the dictates of State policies, with the result that Manchurian railways cannot be said to have contributed their maximum to the economic development of the region. Our study of Manchurian railway questions has revealed that in Manchuria there has been little or no co-operation between the Chinese and Japanese railway builders and authorities directed to achieving a comprehensive and mutually beneficial railway plan. In contrast with railway development in such regions as western Canada and Argentina, where economic considerations have in large measure determined railway expansion, railway development in Manchuria has been largely a matter of rivalry between China and Japan. No railway of any importance has ever been constructed in Manchuria without causing an interchange of notes between China and Japan or other interested foreign States.

The South Manchuria Railway served Japan's "Special Mission" in Manchuria.Manchurian railway construction began with the Russian-financed-and-directed Chinese Eastern Railway which, after the Russo-Japanese War, was replaced in the South by a Japanese-controlled system, the South Manchuria Railway, thus making inevitable future rivalry between China and Japan. The South Manchuria Railway Company, although nominally a private corporation, is, in fact, a Japanese Government enterprise. Its functions include, not only the management of its railway lines, but also exceptional rights of political administration. From the time of its incorporation, the Japanese have never regarded it as a purely economic enterprise. The late Viscount Goto, first President of the Company, laid down a fundamental principle that the South Manchuria Railway should serve Japan's "special mission" in Manchuria.

The South Manchuria Railway system has developed into an efficient and well-managed railway enterprise and has contributed much to the economic development of Manchuria, serving at the same time as an example for the Chinese in its numerous services of a non-railway character, such as its schools, laboratories, libraries and agricultural experiment stations. But this has been accompanied by limitations and positive hindrances arising out of the political character of the Company, its connection with party politics in Japan, and certain large expenditures from which no commensurate financial returns can have been expected. Since its formation, the policy of the Railway Company has been to finance the construction of only such Chinese lines as would be connected with its own system; thus, by means of through-traffic agreements, to divert the major part of the freight to the South Manchuria Railway for seaboard export at Dairen in the Japanese leased territory. Very large sums have been expended in financing these lines and it is doubtful if their construction, in certain cases, was justified on purely economic grounds, especially in view of the large capital advances made and the loan considerations involved.

The very existence of such a foreign-controlled institution as the South Manchuria Railway on Chinese soil was naturally looked upon with disfavour by the Chinese authorities, and questions concerning its rights and privileges under treaties and agreements have constantly arisen since the Russo-Japanese War. More particularly, after 1924, when the Chinese authorities in Manchuria, having come to recognise the importance of railway development, sought to develop their own railways independent of Japanese capita], did these problems become more critical. Both economic and strategic considerations were involved. Chinese efforts to build their own railways anteceded Manchuria's allegiance to Nanking.The Tahushan-Tungliao line, for example, was projected to develop new territory and to increase the revenues of the Peking-Mukden Railway, while, on the other hand, the Kuo Sung-lin mutiny in December 1925 demonstrated the possible strategic and political value of independently owned and operated Chinese lines. The Chinese declaration of attempt to overcome the Japanese monopoly, and to place obstacles in the way of its future development, anteceded the period of political influence of the Nationalist Government in Manchuria, the Tahushan-Tungliao, Mukden-Hailungcheng and Hulan-Hailun Railways, for example, having been constructed while Marshal Chang Tso-lin was in power. The policy of Marshal Chang Hsueh-liang, after his assumption of authority in 1928, re-enforced by the widespread movement for "rights recovery" sponsored by the Central Government and the Kuomintang, came into collision with Japan's monopolistic and expansionist policies, centred, as they were, around the South Manchuria Railway Company.

The conflict over "parallel lines".In the Japanese justification of their resort to forceful means in Manchuria, on and after September 18th, 1931, they have alleged violation of Japan's "treaty rights" and have emphasised China's failure to carry out an engagement made by the Chinese Government during the Sino-Japanese Conference held at Peking in November-December 1905, which was to the following effect:

"The Chinese Government engages, for the purpose of protecting the interests of the South Manchuria Railway, not to construct, prior to the recovery by it of the said railway, any main line in the neighbourhood of and parallel to that railway, or any branch line which might be prejudicial to the interests of the above-mentioned railway."

This dispute over the question of so-called "parallel railways" in Manchuria is of long-standing importance. The issue first arose in 1907–08, when the Japanese Government, asserting this claim of right, presented the Chinese from constructing, under contract with a British firm, the Hsinmintun-Fakumen Railway. Since 1924, when the Chinese in Manchuria undertook with renewed vigour to develop their own railways independent of Japanese financial interest, the Japanese Government has protested against the construction by the Chinese of the Tahushan-Tungliao and the Kirin-Hailungcheng lines, although both these lines were completed and opened to traffic in spite of Japanese protests.

The question as to the existence of a "treaty right" or a "secret protocol".Prior to the arrival of the Commission in the Far East, there had been much doubt as to the actual existence of any such engagement as was claimed by Japan. In view of the longstanding importance of this dispute, the Commission took special pains to obtain information on the essential facts. In Tokyo, Nanking and Peiping, all the relevant documents were examined, and we are now able to state that the alleged engagement of the Chinese plenipotentiaries of the Peking Conference of November-December 1905 regarding so-called "parallel railways" is not contained in any formal treaty; that the alleged engagement in question is to be found in the minutes of the eleventh day of the Peking Conference, December 4th, 1905. We have obtained agreement from the Japanese and Chinese Assessors that no other document containing such alleged engagement exists beyond this entry in the minutes of the Peking Conference.

The real question at issue.The real question at issue, therefore, is not whether there exists a "treaty right" whereby Japan is entitled to claim that certain railways in Manchuria have been constructed by the Chinese in violation of such an engagement, but whether this entry in the minutes of the Peking Conference of 1905, whether called a "protocol" or not, is a binding commitment on the part of China, having the force of a formal agreement and without limitations as to the period of circumstances of its application.

The determination of the question whether this entry into the minutes of the Peking Conference constituted, from an international legal point of view, a binding agreement, and whether, if so, there is but one interpretation which may reasonably be placed upon it, was properly a matter for judgment by an impartial judicial tribunal.

the Chinese and Japanese official translations of this entry into the minutes of the Conference leave no doubt that the disputed passage concerning "parallel railways" is a declaration or statement of intention on the part of the Chinese plenipotentiaries.

That there was a statement of intention has not been disputed by the Chinese, but there has, throughout the controversy, been a difference of opinion between the two parties as to the nature of the intention expressed. Japan has claimed that the words employed preclude China from building or allowing to be built any railway which, in the opinion of the South Manchuria Railway Company, was in competition with its system. The Chinese, on the other hand, contend that the only commitment involved in the disputed passage was a statement of intention not to build lines with the deliberate object of unduly impairing the commercial usefulness and value of the South Manchuria Railway. During the exchange of notes of 1907 concerning the Hsinmintun-Fakumen-Railway project, Prince Ching, representing the Chinese Government, stated to Baron Hayashi, the Japanese Minister, in a communication dated April 7th, 1907, that the Japanese plenipotentiaries in the Peking Conference, while refusing to agree to a definition of the term "parallel line" in terms of specific mileage from the South Manchuria Railway, declared that Japan "would do nothing to prevent China from any steps she might take in the future for the development of Manchuria". It would seem, therefore, that the Chinese Government during this period admitted in practice that there was, on their part, an obligation not to construct railways patently and unreasonably prejudicial to the interests of the South Manchuria Railway, though they have always denied that Japan had any valid claim to a right to monopolise railway construction in Southern Manchuria.

There has never been a definition as to what would constitute a parallel railway, although the Chinese desired one. When the Japanese Government opposed the construction of the Hsinmintun-Fakumen Railway in 1906-1908, the impression was created that Japan considered a "parallel" railway one within approximately thirty-five miles of the South Manchuria Railway, but, in 1926, the Japanese Government protested against the construction of the Tahushan-Tungliao Railway as a "competitive parallel line", noting that the distance between the proposed railway and the South Manchuria Railway would be "no more than seventy miles on the average". It would be difficult to make a thoroughly satisfactory definition.

Difficulties in interpretation of a clause phrased so broadly and non-technically.From a railway-operating point of view, a "parallel" line can be considered a "competing line": one which deprives another railway of some part of the traffic which naturally would have gravitated to it. Competitive traffic includes both local and through traffic and, especially when the latter is considered, it is not difficult to see how a stipulation against the construction of "parallel" lines is capable of very broad interpretation. Nor is there any agreement between China and Japan as to what constitutes a "main line" or a "branch line". These terms, from a railway-operating point of view, are subject to change. The Peiping-Mukden Railway line from Tahushan extending north was originally considered by that administration as a "branch line", but, after the line had been completed from Tahushan to Tungliao, it was possible to regard this as a "main line ".

It was only natural that the interpretation of the undertaking in regard to parallel railways should lead to bitter controversy between China and Japan. The Chinese attempted to build their own railways in South Manchuria, but in almost every case met with a protest from Japan.

Issues caused by Japanese loans for construction of Chinese railways in Manchuria.A second group of railway issues which increased the tension bet ween China and Japan before the events of September last were those which arose from the agreement under which the Japanese advanced money for the construction of various Chinese Government Railways in Manchuria. Japanese capital to the present value, including arrears and interests, of 150,000,000 yen had been expended in the building of the following Chinese lines: the Kirin-Changchun, the Kirin-Tunhua, the Ssupingkai-Taonan, and the Taonan-Angangchi Railways, and certain narrow-gauge lines.

The Japanese complained that the Chinese would not pay these loans, nor make adequate provision for them, nor carry out various stipulations in the agreements, such as those respecting the appointment of Japanese railway advisers. They made repeated demands that the Chinese should fulfil the alleged promises made by their Government that Japanese interests should be permitted to participate in the construction of the Kirin-Kwainei Railway. This projected line would extend the Kirin-Tunhua Railway to the Korean border, and would make available for Japan a new short sea-and-rail route from her seaports to the centre of Manchuria, and, in conjunction with the other railways, shorten the communications with the interior.

The Chinese defence.In defence of the failure to repay their loans, the Chinese pointed out that these were not normal financial transactions. They claimed that the loans were made largely by the South Manchuria Railway in order to monopolise railway construction in South Manchuria; that the object was primarily strategic and political; and that, in any case, the new lines had been so heavily over-capitalised that they were, at least for the time being, financially unable to earn the necessary money to repay the construction expenses and loans. They contended that in each instance of alleged failure to fulfil obligations, an impartial examination would show adequate justification for their conduct. As for the Kirin-Kwainei Railway, they denied the moral, and even the legal, validity of the alleged agreements.

The South Manchuria Railway desired a system of branch lines.There were certain conditions which existed in connection with those railway agreements which made it natural for the loan controversy to arise. The South Manchuria Railway had practically no branches and wished to develop a system of feeder lines in order to increase its freight and passenger traffic. The Company was therefore willing to advance money for the building of such new lines, even though there was little likelihood that the loans would be repaid in the near future; it was also willing to continue to make further advances when earlier loans were still outstanding.

In these circumstances, and so long as the newly constructed Chinese lines functioned as feeders to the South Manchuria system and were operated in some measure under its influence, the South Manchuria Railway Company appeared to make no special effort to force payment of the loans, and the Chinese lines operated with ever-increasing debt obligations. But when certain of these lines were connected with a new Chinese railway system, and in 1930-31 started a serious competition with the South Manchuria Railway, the non-payment of the loans at once became a subject of complaint.

The Nishihara loans.Another complicating factor, in the case of certain of these loan agreements, was their political character. It was as a result of the "Twenty-one Demands" that the Kirin-Changchun Railway was placed under the direction of the South Manchuria Railway Company, and the outstanding indebtedness of the line converted into a long-term loan, maturing in 1947. The advance of 20,000,000 yen made in 1918 in consequence of the so-called "Four Manchuria-Mongolia Railways Agreement" was one of the so-called "Nishihara loans", made to the military Government of the "Anfu clique", without any restriction as to the purpose for which it might be used. Similarly, it was from a Nishihara loan that an advance was made of 10,000,000 yen to this clique in connection with the preliminary loan contract agreement of 1918 for the construction of the Kirin-Kwainei Railway. Chinese national sentiment has been greatly aroused over the subject of the "Nishihara loans" ever since their negotiation; but, in spite of this, the Chinese Government has never repudiated them. In these circumstances, the Chinese felt little moral obligation to fulfil the conditions of the loan contracts.

The Kirin-Kwainei Railway project.Especially important in Sino-Japanese relations were the issues over the Kirin-Kwainei Railway project. The first act of issues related to the section of the line from Kirin to Tunhua, the construction of which was completed in 1928. From that time on, the Japanese complained because the Chinese would not convert the Japanese advances for construction purposes into a formal loan secured by the earnings of the railway, and maintained that the Chinese were violating the contract by their refusal to appoint a Japanese accountant for the line.

The Chinese in turn claimed that the construction costs submitted were not only much higher than the estimates of the Japanese engineers, but were greatly in excess of the amount for which vouchers were presented. They refused to take over the line formally until the construction costs should be settled; and contended that, until they should do so, they were under no obligation to appoint a Japanese accountant.

These issues, definite and technical, involving no problems of principle or policy, were obviously suited for arbitration or judicial discrimination, but they remained unsettled and served to intensify the mutual resentment of Chinese and Japanese.

The projected Tunhua-Kwainei line.Of much greater importance, and far more complicated, was the issue over the construction of the railway from Tunhua to Kwainei. This section would complete the railway from Changchun to the Korean border, where it would connect with a Japanese railway running to a nearby Korean port. Such a line, giving direct entrance to Central Manchuria and opening a region rich in timber and mineral resources, would be of economic value as well as of great strategic importance to Japan.

The Japanese were insistent that this line should be built and thai they should participate in its financing. They claimed that China had given treaty assurances to this effect. The Chinese Government had promised, they pointed out, in the Chientao Agreement of September 4th, 1909, to build the line "upon consultation with the Government of Japan", the promise being given in part as a consideration for Japan's relinquishing the old claims of Korea to the Chientao region in Manchuria. Later, in 1918, the Chinese Government and the Japanese banks signed a preliminary agreement for a loan for the construction of this line and, in accordance with the agreement, the banks advanced to the Chinese Government the sum of 10,000,000 yen. This, however, was one of the Nishihara loans, a fact which, in the view of the Chinese, affected the validity of the engagement.

Neither of them, however, was a definitive loan contract agreement, obliging China, without condition and before a specific date, to permit Japanese financiers to participate in the construction of such a line.

The contracts of May 1923.It was alleged that formal, definitive contracts for the construction of this line were signed in Peking in May 1928, but there was much uncertainty regarding their validity. Such contracts were doubtless signed, under very irregular circumstances, on May 13th-15th by a representative of the Ministry of Communications of the Government at Peking, then under Marshal Chang Tso-lin. But the Chinese contend that the Marshal, who was then hard-pressed by the Nationalist Armies and was about to evacuate Peking, gave his consent that this official should sign, under "a duress of compulsion", due to threats of the Japanese that, if he should not sanction the contracts, his retreat to Mukden would be endangered. Whether Marshal Chang Tso-lin himself also signed the contracts has been a matter of dispute. After the death of the Marshal, the North-Eastern Political Council at Mukden and Marshal Chang Hsueh-liang both refused to approve the contracts on the ground that they were faulty in form and negotiated under duress and had never been ratified by the Peking Cabinet or the North-Eastern Political Council.

The underlying reason for the opposition of the Chinese to the contruction of the Tunhua-Kwainei line was their fear of Japan's military and strategic purposes and their belief that their sovereign rights and interests would be threatened by this new Japanese approach to Manchuria from the Japan Sea.

This particular railway issue was not primarily a financial or commercial problem, but involved a conflict between the State policies of Japan and China.

Through-traffic controversies.There were additional issues over through-traffic arrangements between the Chinese and Japanese lines, rate questions and rivalries between the seaport of Dairen and such Chinese ports as Yingkow (Newchwang).

By September 1931, the Chinese had built unaided and were owning and operating railways with a total length of nearly a thousand kilometres, of which the most important were: the Mukden-Hailung, the HailungKirin, the Tsitsihar-Koshan, the Hulan-Hailun and the Tahushan-Tungliao (a branch of the Peiping-Mukden system) lines; and they owned the Peiping-Mukden Railway and the following Japanese-financed lines: the Kirin-Changchun, the Kirin-Tunhua, Ssupingkai-Taonan and Taonan-Angangchi lines. During the two years preceding the outbreak of the present conflict, the Chinese attempted to operate these various lines as a great Chinese railway system and made efforts to route all freight, if possible, exclusively over the Chinese-operated lines, with a seaboard exit at the Chinese port of Yingkow (Kewchwang)- potentially at Hulutao. As a result, the Chinese made through-traffic arrangements for all ports of their railway system and refused in important sections to make similar traffic agreements between their lines and the South Manchuria system. The Japanese claimed that this discrimination deprived the South Manchuria Railway of much freight from North Manchuria which would normally pass over at least a part of its line and would find an outlet at Dairen.

A war of railway rates.Associated with these through-traffic controversies, a bitter rate war sprang up between the Japanese and Chinese lines, which began in 1929–30, when the Chinese reduced their rates after the opening of the Tahushan-Tungliao and the Kirin-Hailung lines. The Chinese lines appeared to have a natural advantage at that time due to the fall in the value of the Chinese silver currency, which made the silver rates on these lines cheaper than the gold-yen rates on the South Manchuria Railway. The Japanese claimed that the Chinese rates were so low that they constituted unfair competition, but the Chinese replied that their aim was not primarily to make profits, as was the case with the South Manchuria, but to develop the country and to enable the rural population to reach the markets as cheaply as possible.

Allegations of national discrimination in favour of native-manufactured goods.Incidental to this rivalry in rate-cutting, allegations were made by each side that the other indulged in rate discrimination or secret rebates in favour of its own nationals. The Japanese complained that the Chinese made railway classifications which enabled Chinese products to be carried over Chinese lines more cheaply than foreign goods, and that they gave lower rates than normal for native goods and for freight shipped over Chinese lines to a Chinese-controlled seaport. The Chinese, on their side, charged the South Manchuria Railway with granting secret rebates, pointing out particularly that a Japanese forwarding agency was quoting rates for freight consigned through them which were lower than the regular scheduled rates of the South Manchuria line.

These issues were highly technical and involved, and it was difficult to determine the justice of the charges which each side was making against the other. It is obvious that such questions as these should normally be settled by a Railroad Commission or by regular judicial determination^[3].

Port controversies.The railway policies of the Chinese authorities in Manchuria were focussed upon the new port development at Hulutao. Yingkow was to be the secondary port and, pending the completion of Hulutao, the principal one. Many new railways were projected which would serve practically all parts of Manchuria. The Japanese claimed that the through-traffic arrangements and the low rates put into effect by the Chinese deprived the port of Dairen of much cargo that would normally have moved to it and that this situation was particularly evident in 1930. They stated that the export freight carried to Dairen by the South Manchuria Railway fell off over a million metric tons in 1930, while the port of Yingkow actually showed an increase over the previous year. The Chinese, however, pointed out that the falling-off in freight at Dairen was due principally to the general depression and to the especially severe slump in soya beans, which constituted a large part of the freight normally carried over the South Manchuria line. They claimed also that the increase at Yingkow was the result of traffic from regions:recently opened by the new Chinese railway lines. The Japanese appeared to be especially concerned over the potential competition of the Chinese lines and the port of Hulutao, and complained that the purpose of the Chinese in planning to construct many new railways and in developing Hulutao Harbour was to make "the port of Dairen as well as the South Manchuria Railway itself as good as valueless ".

Viewing these many railroad issues as a whole, it is evident that a number of them were technical in character and were quite capable of settlement by ordinary arbitral or judicial process, but that others of them were due to intense rivalry between China and Japan which resulted from a deep-seated conflict in national policies.

The Sino-Japanese railway negotiations of 1931.Practically all these railway questions were still outstanding at the opening of the year 1931. Beginning in January and continuing sporadically into the summer, a final but futile effort was made by both Japan and China to hold a conference in order to reconcile their policies with respect to these outstanding railway questions. These Kimura-Kao negotiations, as they were called, achieved no result. There was evidence of sincerity on both sides when the negotiations began in January, but various delays occurred for which both Chinese and Japanese were responsible, with the result that the formal conference, for which extended preparations had been made, had not yet met when the present conflict started.

IV. The Sino-Japanese Treaty and Notes of and Related Issues.

The Twenty-one Demands and the Treaty and Notes of 1915.With the exception of their railway controversies, the Sino-Japanese issues of greatest importance which were outstanding in September 1931 were those which arose from the Sino-Japanese Treaties and Notes of 1915, which in turn were a result of the so-called "Twenty-one Demands". These issues mainly concerned South Manchuria and Eastern Inner Mongolia, since, with the exception of the question of the Hanyehping Mine (near Hankow), the other agreements negotiated in 1915 had either been replaced by new ones or had been voluntarily given up by Japan. The controversies in Manchuria were over the following provisions:

(1) The extension of the term of Japanese possession of the Kwantung Leased Territory to ninety-nine years (1997);

(2) The prolongation of the period of Japanese possession of the South Manchuria Railway and the Antung-Mukden Railway to ninety-nine years (2002 and 2007 respectively);

(3) The grant to Japanese subjects of the right to lease land in the interior of "South Manchuria"—i.e., outside those areas opened by treaty or otherwise to foreign residence and trade;

(4) The grant to Japanese subjects of the right to travel, reside and conduct business in the interior of South Manchuria and to participate in joint Sino-Japanese agricultural enterprises in Eastern Inner Mongolia.

The legal right of the Japanese to enjoy these grants and concessions depended entirely upon the validity of the Treaty and Notes of 1915, and the Chinese continuously denied that these were binding upon them. No amount of technical explanation or argument could divest the minds of the Chinese people, officials or laymen, of their conviction that the term "Twenty-one Demands "was practically synonymous with the "Treaties and Notes of 1915 "and that China's aim should be to free herself from them. At the Paris Conference, 1919, China demanded their abrogation on the ground that they had been concluded" under coercion of a Japanese ultimatum threatening war ". At the Washington Conference, 1921–22, the Chinese delegation raised the question "as to the equity and justice of these agreements and therefore as to their fundamental validity ", and, in March 1923, shortly before the expiration of the original twenty-five-year lease of the Liaotung (Kwantung) Territory which China granted in 1898 to Russia, the Chinese Government communicated to Japan a further request for the abrogation of the provisions of 1915, and stated that "the Treaties and Notes of 1915 have been consistently condemned by public opinion in China". Since the Chinese maintained that the agreements of 1915 lacked "fundamental validity", they declined to carry out the provisions relating to Manchuria except in so far as circumstances made it expedient to do so.

The Japanese complained bitterly of the consequent violations of their treaty rights by the Chinese. They contended that the Treaties and Notes of 1915 were duly signed and ratified and were in full force. To be sure, there was a considerable body of public opinion in Japan which from the first did not agree with the "Twenty-one Demands"; and, more recently, it has been common for Japanese speakers and publicists to criticise this policy. But the Japanese Government and people appeared unanimous in insisting upon the validity of those provisions which related to Manchuria.

The extension of the lease of the Liaotung Territory and of the concessions for the South Manchuria and Antung-Mukden Railway.Two important provisions in the Treaty and Notes of 1915 were those for the extension of the lease of the Kwantung Territory from twenty-five to ninety-nine years, and of the concessions of the South Manchuria and the Antung-Mukden Railways to a similar period of ninety-nine years. For the dual reasons that these extensions were a result of the 1915 agreements and that recovery of the territories originally leased by former Governments was included in the Nationalist "Rights Recovery" movement directed against foreign interests in China, the Kwantung Leased Territory and the South Manchuria Railway were made objects, at various times, of agitation and even diplomatic representation on the part of the Chinese. The policy of Marshal Chang Hsueh-liang of declaring Manchuria's allegiance to the Central Government and of permitting the spread of Kuomintang influence in Manchuria made these issues acute after 1928, although they remained in the background of practical politics.

Associated also with the Treaty and Notes of 1915 was the agitation for the recovery of the South Manchuria Railway, or for stripping that institution of its political character in order to reduce it to a purely economic enterprise. As the earliest date fixed for the recovery of this railway on repayment of the capital and interest outlay was 1939, the mere abrogation of the 1915 Treaties would not in itself have recovered the South Manchuria Railway for China. It was extremely doubtful whether China, in any case, would have been able to obtain the capital for this purpose. The occasional utterances of Chinese Nationalist spokesmen, urging recovery of the South Manchuria Railway, served as an irritant to the Japanese, whose legitimate rights and interests were thereby threatened.

The disagreement between the Japanese and Chinese as to the proper functions of the South Manchuria Railway continued from the time of the railway company's organisation in 1906. Technically, of course, the railway company is organised under Japanese law as a private joint-stock enterprise and is quite beyond the pale of Chinese jurisdiction in practice. Particularly since 1927, there had been an agitation among Chinese groups in Manchuria for divesting the South Manchuria Railway of its political and administrative functions and converting it into a "purely commercial enterprise". No concrete plan for achieving this end seems to have been proposed by the Chinese. The railway company was in fact a political enterprise. It was a Japanese Government agency, the Government controlling a majority of its shares; its administrative policy was so closely controlled by the Government that the company's higher officials were almost invariably changed when a new Cabinet came into power in Japan. Moreover, the company had always been charged, under Japanese law, with broad political administrative functions, including police, taxation and education. To have divested the company of these functions would have been to abandon the entire "special mission" of the South Manchuria Railway, as originally conceived and subsequently developed.

The railway area.Numerous issues arose in regard to the administrative rights of the Japanese within the South Manchuria Railway area, especially as to the acquisition of land, the levying of taxes, and the maintenance of railway guards.

The railway area includes, in addition to a few yards on each side of the railway tracks, fifteen municipalities, termed Japanese "railway towns", situated along the entire system of the South Manchuria Railway from Dairen to Changchun and from Antung to Mukden. Some of these railway towns, such as those at Mukden, Changchun and Antung, comprise large sections of populous Chinese cities.

The right of the South Manchuria Railway to maintain practically complete municipal governments in the railway area rested legally upon a clause in the original Russo-Chinese Railway Agreement of 1896, which gave the railway company "absolute and exclusive administration of its lands". The Russian Government, until the Sino-Soviet Agreement of 1924, and later the Japanese Government, which acquired the original rights of the Chinese Eastern Railway so far as concerned the South Manchuria Railway, interpreted this provision as granting political control of the railway area. The Chinese always denied this interpretation, insisting that other pro·visions in the Treaty of 1896 made it clear that this clause was not intended to grant such broad administrative rights as control of police, taxation, education, and public utilities.

Land disputes.Disputes regarding the acquisition of land by the railway company were common. By virtue of one of the clauses of the original Agreement of 1896, the railway company had the right to acquire by purchase or lease private lands "actually necessary for the construction, operation and protection of the line". But the Chinese cont ended that the Japanese attempted to make improper use of this right, in order to obtain additional territory. The result was almost continuous controversy between the South Manchuria Railway Company and the Chinese local authorities.

Controversies over the right of taxation in the railway areas.Conflicting claims as to the right to levy taxes within the railway area led to frequent controversy. The Japanese based their claim upon the original grant to the railway company of the "absolute and exclusive administration of its lands"; the Chinese, upon the rights of the sovereign State. Speaking generally, the de facto situation was that the railway company levied and collected taxes from Japanese, Chinese and foreigners residing in the railway areas, and that the Chinese authorities did not exercise such authority, although they claimed the legal right to do so.

A type of controversy which was frequently arising was where the Chinese attempted to tax produce (such as soya-bean shipments) which was being carted to the South Manchuria Railway towns for transport by rail to Dairen over the Japanese line. This was described by the Chinese as a uniform tax, necessarily to be collected at the boundaries of the Japanese "railway towns", since to refrain from doing so would have been to discriminate in favour of produce carried by the South Manchuria Railway.

The question of Japan's right to maintain "railway guards" along the South Manchuria Railway.The issues as to Japanese railway guards led to almost continuous difficulty. They were also indicative of a fundamental conflict of State policies in Manchuria already referred to and were the cause of a series of incidents, resulting in considerable loss of life. The legal basis of Japan's alleged right to maintain these guards was the oft-quoted clause in the original Agreement of 1896 which granted to the Chinese Eastern Railway "the absolute and exclusive right of administration of its lands". Russia maintained, and China denied, that this gave the right to guard the railway line by Russian troops. In the Portsmouth Treaty, 1905, Russia and Japan, as between themselves, reserved the right to maintain railway guards "not to exceed 15 men per kilometre". But in the subsequent Treaty of Peking, signed by China and Japan later in the same year, the Chinese Government did not give its assent to this particular provision of the agreement between Japan and Russia. China and Japan, however, did include the following provision in Article II of the Additional Agreement of December 22nd, 1905, which is an annex to the Sino-Japanese Treaty of Peking of that date:

"In view of the earnest desire expressed by the imperial Chinese Government to have the Japanese and Russian troops and railway guards in Manchuria withdrawn as soon as possible, and in order to meet this desire, the Imperial Japanese Government, in the event of Russia's agreeing to the withdrawal of her railway guards, or in case other proper measures are agreed to between China and Russia, consents to take similar steps accordingly. When tranquillity shall have been re-established in Manchuria and China shall have become herself capable of affording full protection to the lives and property of foreigners. Japan will withdraw her railway guards simultaneously with Russia."

Japanese contention.It is this article upon which Japan based her treaty right. Russia, however, long since withdrew her guards and she relinquished her rights to keep them by the Sino-Soviet Agreements of 1924. But Japan contended that tranquillity had not been established in Manchuria and that China was not herself capable of affording full protection to foreigners; therefore she claimed that she still retained a valid treaty right to maintain railway guards.

Japan has appeared increasingly inclined to defend her use of these guards less upon treaty right than upon the grounds of "absolute necessity under the existing state of affairs in Manchuria

Chinese contention.The Chinese Government consistently controverted the contention of Japan. It insisted that the stationing of Japanese railway guards in Manchuria was not justified either in law or in fact and that it impaired the territorial and administrative integrity of China. As to the stipulation in the Sino-Japanese Treaty of Peking, already quoted, the Chinese Government contended that this was merely declaratory of a de facto situation of a provisional character and that it could not be said to confer a right, especially of a permanent character. Moreover, it claimed that Japan was legally obliged to withdraw her guards, since Russia had withdrawn hers, tranquillity had been re-established in Manchuria, and the Chinese authorities were able to give adequate protection to the South Manchuria Railway, as they were doing for other railway lines in Manchuria, provided the Japanese guards would permit them to do so.

Activities at the Japanese railway guards outside at the railway area.The controversies which arose regarding the Japanese railway guards were not limited to their presence and activities within the railway area. These guards were regular Japanese soldiers and they frequently carried their police functions into adjoining districts or conducted manœuvres outside the railway areas, with or without the permission of, and with or without notification to, the Chinese authorities. These acts were particularly obnoxious to the Chinese, officials and public alike, and were regarded as unjustifiable in law and provocative of unfortunate incidents.

Frequent misunderstandings and considerable damage to Chinese farm craps resulted from the manoeuvres, and material remuneration failed to alleviate the hostile feelings thus aroused.

Japanese Consular Police.Closely associated with the question of the Japanese railway guards was that of the Japanese consular police. Such police were attached to the Japanese consulates and branch consulates in all the Japanese consular districts in Manchuria, not only along the South Manchuria Railway, but in such cities as Harbin, Tsitsihar and Manchouli, as well as in the so-called "Chientao District ", the area in which lived a large number of the Koreans resident in Manchuria.

The Japanese justification for stationing Consular Police in Manchuria.The Japanese claimed that the right to maintain consular police was a corollary to the right of extra-territoriality; that it was merely an extension of the judicial functions of the consular courts, these police being necessary to protect and discipline Japanese subjects. In fact. Japanese consular police, in smaller numbers, have also been attached to Japanese consulates in other parts of China, contrary to the general practice of countries having extra-territorial treaties.

As a practical matter, the Japanese Government apparently believed that the stationing of consular police in Manchuria was a necessity under the conditions which prevailed there, especially in view of the importance of the Japanese interests involved and the large number of resident Japanese subjects, including Koreans.

The Chinese denied the Japanese claims.The Chinese Government, however, always contested this position advanced by Japan as justification for stationing Japanese consular police in Manchuria and sent frequent protests to Japan on the subject. She claimed that there was no necessity to station Japanese police officers anywhere in Manchuria, that the question of police could not be associated with extra-territoriality, and that their presence was without treaty basis and a violation of China's sovereignty.

Whether justified or not, the presence of consular police led in a number of cases to serious conflicts between members of their force and those of the local Chinese authorities.

The right of the Japanese to travel, reside and conduct commercial enterprises in interior places in South Manchuria.The Sino-Japanese Treaty of 1915 provided that "Japanese subjects shall be free to reside and travel in South Manchuria and to engage in business and manufacture of any kind whatsoever This was an important right, but one which was objectionable to the Chinese, since in no other part of China were foreigners as a class permitted to reside and to engage in business outside the Treaty Ports. It was the policy of the Chinese Government to withhold this privilege until extra-territoriality should be abolished and foreigners should be subject to Chinese laws and jurisdiction.

In South Manchuria, however, this right had certain limitations: the Japanese were required to carry passports and observe Chinese laws and regulations while in the interior of South Manchuria; but the Chinese regulations applicable to Japanese were not to be enforced until the Chinese authorities had first "come to an understanding with the Japanese Consul".

On many occasions, the action of the Chinese authorities was inconsistent with the terms of this agreement, the validity of which they always contested. The fact that restrictions were placed upon the residence, travel and business activities of Japanese subjects in the interior of South Manchuria, and that orders and regulations were issued by various Chinese officials prohibiting Japanese or other foreigners from residing outside the Treaty Ports or from renewing leases of buildings is not contested in the documents officially presented to the Commission by the Chinese Assessor. Official pressure, sometimes supported by severe police measures, was exerted upon the Japanese to force them to withdraw from many cities and towns in South Manchuria and Eastern Inner Mongolia, and upon Chinese property owners to prevent them from renting houses to Japanese. It was stated by the Japanese that the Chinese authorities also refused to issue passports to Japanese, harassed them by illegal taxes, and, for some years before September 1931, failed to carry out the stipulation in the agreement by which they had undertaken to submit to the Japanese Consul the regulations which were to be binding upon the Japanese.

The defence and the explanation of the Chinese.The object of the Chinese was the execution of their national policy of restricting the exceptional privileges of Japanese in Manchuria and thus strengthening the control of China over these Three Eastern Provinces. They justified their actions on the ground that they regarded the Treaty of 1915 as without "fundamental validity". They pointed out, moreover, that the Japanese attempted to reside and conduct business in all parts of Manchuria, although the treaty provision was limited to South Manchuria.

This controversy was a constant irritant until the events of September 1931.In view of the conflicting national policies and aims of China and Japan, it was almost inevitable that continuous and bitter controversies should arise over this treaty provision. Both countries admit that the situation was a growing irritant in their mutual relations up to the events of September 1931.

The land lease Issue.Closely associated with the right to reside and to do business in the interior of South Manchuria was the right to lease land, which was granted to Japanese by the Treaty of 1915 in the following terms: "Japanese subjects in South Manchuria may, by negotiation, lease land necessary for erecting suitable buildings for trade and manufacture or for prosecuting agricultural enterprises". An exchange of notes between the two Governments at the time of the treaty defined the expression "lease by negotiation" to imply, according to the Chinese version. "a long-term lease of not more than thirty years and also the possibility of its unconditional renewal"; the Japanese version simply provided for "leases for a long term up to thirty years and unconditionally renewable". Disputes naturally arose over the question whether the Japanese land leases were, at the sole option of the Japanese, "unconditionally renewable".

The Chinese interpreted the desire of the Japanese to obtain lands in Manchuria, whether by lease, purchase, or mortgage, as evidence of a Japanese national policy to "buy Manchuria". Their authorities therefore very generally attempted to obstruct efforts of the Japanese to this end, and became increasingly active in the three or four years preceding September 1931, a period during which the Chinese "Rights-Recovery Movement" was at its height.

In making strict regulations against the purchase of land by the Japanese, their ownership of it in freehold, or their acquisition of a lien through mortgage, the Chinese authorities appeared to be within their legal rights, since the treaty granted only the privilege of leasing land. The Japanese, however, complained that it was not in conformity with the spirit of the treaty to forbid mortgages upon land.

Chinese officials, however, did not accept the validity of the treaty and consequently put every obstacle in the way of Japanese leasing land, by orders, provincial and local, calculated to make the leasing of lands to Japanese punishable under the criminal laws; by imposition of special fees and taxes payable in advance on such leases; and by instructions to local officials prohibiting them, under threat of punishment, from approving such transfers to Japanese.

The Japanese have acquired land by lease, manage and purchase in "North Manchuria "as well as in "South Manchuria".In spite of these obstacles, great tracts of land have, as a matter of fact, not only been leased by the Japanese, but actually obtained in freehold—although the titles might not be recognised in a Chinese court—through outright purchase, or by the more usual means of foreclosing a mortgage. These mortgages on land have been obtained by Japanese loan operators, especially large loan associations, certain of which have been organised especially for the purpose of acquiring land tracts. The total area of lands leased to Japanese in the whole of Manchuria, and in Jehol, according to Japanese official sources, increased from about 80,000 acres in 1922–23 to over 500,000 acres in 1931. A small proportion of this total was in North Manchuria, where the Japanese had no legal right under Chinese law and international treaty to acquire land leases.

Sino-Japanese negotiation on the issue of land lease.Due to the importance of this land lease issue, there were at least three attempts during the decade preceding 1931 to reach some agreement by direct Sino-Japanese negotiation. A possible solution, which there is reason to believe was under consideration, would have treated together the two subjects of land leasing and the abolition of extra-territoriality: in Manchuria, the Japanese were to surrender extra-territoriality and the Chinese were to permit the Japanese to lease land freely. But the negotiations were unsuccessful.

This long-standing Sino-Japanese controversy over the right of Japanese to lease land arose, like the other issues already mentioned, out of the fundamental conflict between rival State policies, the allegations and counter-statements concerning violation of international agreements being less consequential in themselves than the underlying objectives of each policy.

5. The Korean Problem in Manchuria.

The presence of about 800,000 Koreans in Manchuria, who possess Japanese nationality under the Japanese law, served to accentuate the conflict of policies of China and of Japan. Out of this situation there arose various controversies, in consequence of which the Koreans themselves were victimised, being subjected to suffering and brutalities^[4].

Chinese opposition to Korean acquisition, by purchase or lease, of land in Manchuria was resented by the Japanese, who claimed that the Koreans were entitled, as Japanese subjects, to the privileges of land-leasing acquired by Japan in the Treaty and Notes of 1915. The problem of dual nationality also arose, as the Japanese refused to recognise the naturalisation of Koreans as Chinese subjects. The use of Japanese consular police to invigilate and protect the Koreans was resented by the Chinese and resulted in innumerable clashes between Chinese and Japanese police. Special problems arose in the Chientao District, just north of the Korean border, where the 400,000 Korean residents outnumber the Chinese by three to one. By 1927, these questions led the Chinese to pursue a policy of restricting the free residence of Koreans in Manchuria—a policy which the Japanese characterised as one of unjustifiable oppression.

Sino-Japanese agreements governing the status of Koreans in Manchuria.The status and rights of Koreans in Manchuria are determined largely in three Sino-Japanese agreements—viz., the Agreement relating to the Chientao Region, September 4th, 1909; the Treaty and Notes of May 25th, 1915, concerning South Manchuria and Eastern Inner Mongolia; and the so-called "Mitsuya Agreement" of July 8th, 1925. The delicate question of dual nationality in the case of the Koreans has never been regularised by Sino-Japanese agreement.

By 1927, the Chinese authorities in Manchuria generally came to believe that the Koreans had become, in fact, "a vanguard of Japanese penetration and absorption "of Manchuria. In this view, so long as the Japanese refused to recognise the naturalisation of Koreans as Chinese subjects, and especially since the Japanese consular police constantly exercised surveillance over Koreans, the acquisition of land by Koreans, whether by purchase or lease, was an economic and political danger "which threatened the very existence of Chinese people in Manchuria".

Chinese contentions.The view was prevalent among the Chinese that the Koreans were being compelled to migrate from their homeland in consequence of the studied policy of the Japanese Government to displace Koreans with Japanese immigrants from Japan, or to make life so miserable for them, politically and economically, especially by forcing them to dispose of their land holdings, that emigration to Manchuria would naturally follow. According to the Chinese view, the Koreans, being an "oppressed race "ruled by an alien Government in their own land, where the Japanese monopolised all the important official posts, were forced to migrate to Manchuria to seek political freedom and an economic livelihood. The Korean immigrants, 90 per cent of whom are farmers, and almost all of whom cultivators of ricefields, were thus at first welcomed by the Chinese as an economic asset and favoured out of a natural sympathy for their supposed oppression. They contended that, but for the Japanese refusal to permit Koreans to become naturalised Chinese subjects and the Japanese policy of pursuing them into Manchuria on the pretext of offering them necessary police protection, this Korean colonisation in Manchuria would have created no major political and economic problems. The Chinese deny that the efforts admittedly made by their officials in Manchuria, especially after 1927, to restrict the free settlement of Koreans on the land in Manchuria, except as mere tenants or labourers, can be regarded as instances of "oppression".

Japanese denial of these Chinese accusations.The Japanese admit that the Chinese suspicion was the principal cause of Chinese "oppression" of the Koreans, but vigorously deny the allegation that they pursued any definite policy of encouraging Korean migration to Manchuria, stating that "Japan having neither encouraged nor restricted it, the Korean emigration to Manchuria must be regarded as the outcome of a natural tendency", a phenomenon uninfluenced by any political or diplomatic motives. They therefore declare that "the fear on the part of China that Japan is plotting the absorption of the two regions by making use of Korean immigrants is entirely groundless".

The Korean problem intensified the Sino-Japanese hostilities, victimising the Koreans themselves.These irreconcilable views intensified such problems as those related to the leasing of land, questions of jurisdiction and the Japanese consular police, these having created a most unfortunate situation for the Koreans and embittered Sino-Japanese relations^[5].

The Koreans and the land lease question.There exist no Sino-Japanese agreements which specifically grant or deny the right of Koreans to settle, reside, and conduct occupations outside the Treaty Ports, or to lease or otherwise acquire land in Manchuria, except in the so-called Chientao District. Probably, however, over 400,000 Koreans do live in Manchuria outside Chientao. They are widely distributed, especially in the eastern half of Manchuria, and are numerous in the regions lying north of Korea, in Kirin Province, and have penetrated in large numbers into the region of the eastern section of the Chinese Eastern Railway, the lower Sungari valley and along the Sino-Russian border from North-Eastern Korea to the Ussuri and the Amur River valleys, their migration and settlement having overflown into the adjoining territories of the U.S.S.R. Moreover, partly because a very considerable group of the Koreans are natives of Manchuria, their ancestors having immigrated generations ago, and partly because others have renounced their allegiance to Japan and have become naturalised Chinese subjects, a great many Koreans to-day actually possess agricultural lands in Manchuria, outside of Chientao, both by virtue of freehold title and leasehold. The vast majority, however, cultivate paddy fields simply as tenant farmers under rental contracts, on a crop-division basis, with the Chinese landlords, these contracts usually being limited to periods from one to three, years, renewable at the discretion of the landlord.

Conflict over the Sino-Japanese agreements concerning the right of Koreans to lease land.The Chinese deny that the Koreans have the right to purchase or lease agricultural lands in Manchuria outside the Chientao District, since the only Sine-Japanese agreement on the point is the Chientao Agreement of 1909, which is restricted in its application to that area. Only Koreans who are Chinese subjects, therefore, are entitled to purchase land, or, for that matter, to reside and lease land in the interior of Manchuria. In denying the claim of right of the Koreans to lease land freely in Manchuria, the Chinese Government has contended that the Chientao Agreement of 1900, which granted Koreans the right of residence with special landholding privileges in the Chientao District alone and specified that the Koreans were to be subject to Chinese jurisdiction, is in itself a self-contained instrument "purporting to settle, by mutual concessions, local issues then pending between China and Japan in that area". The Chientao Agreement contained a quid pro quo, Japan waiving the claim of jurisdiction over the Koreans, China granting them the special privilege of possessing agricultural lands.

Both countries continued to observe the agreement after the annexation of Korea by Japan in 1910, China contending that the Treaty and Notes of 1915 could not alter the stipulations of the Chientao Agreement, especially The Chinese contention.as the new Treaty contained a clause specifying that "all existing treaties between China and Japan relating to Manchuria shall, except as otherwise provided for by this Treaty, remain in force". No exception was made for the Chientao Agreement. The Chinese Government further contends that the Treaty and Notes of 1915 do not apply to the Chientao District, since the latter is not geographically a part of "South Manchuria"—a term which is ill-defined both geographically and politically.

The Japanese contention.This Chinese contention has been contested by the Japanese since 1915, their position being that, inasmuch as the Koreans became Japanese subjects by virtue of the annexation of Korea in 1910, the provisions of the Sino-Japanese Treaty and Notes of 1915 concerning South Manchuria and Eastern Inner Mongolia, which grant Japanese subjects the right to reside and lease lands in South Manchuria and to participate in joint agricultural enterprises in Eastern Inner Mongolia, apply equally to the Koreans. The Japanese Government has contended that the Chientao Agreement was superseded by those provisions of the 1915 agreements in conflict therewith, that the Chinese contention that the Chientao Agreement isa self-contained instrument is untenable, since the right secured by the Koreans in Chientao was actually in consequence of Japan's agreement to recognise that region as a part of Chinese territory. It asserts that it would be discriminatory on its part to refrain from seeking for the Koreans in Manchuria rights and privileges granted to other Japanese subjects.

The Japanese reason for favouring the acquisition of land by Koreans in Manchuria is partly due to their desire to obtain rice exports for Japan, a desire which, so far, has been but partly satisfied, since probably hall the rice production of over seven million bushels in 1930 is consumed locally, and the export of the balance has been restricted. The Japanese assert that the Korean tenants, after having reclaimed waste lands and making them profitable for the Chinese owners, have been unjustly ejected. The effect of these rival contentions on the conditions of the Koreans.The Chinese, on the other hand, while equally desirous of having the cultivable lowlands producing rice, have generally employed the Koreans as tenants or labourers to prevent the land itself from falling into Japanese, hands. Many Koreans have therefore become naturalised Chinese subjects in order to possess land, some of them, however, having acquired such titles, transferring them to Japanese land-mortgage associations. This suggests one reason why there has been a difference of opinion among the Japanese themselves as to whether naturalisation of Koreans as Chinese subjects should be recognised by the Japanese Government.

The problem of dualnationality of Koreans in Manchuria.Under a Chinese Nationality Law of 1914, only aliens who, under the law of their own country, were permitted to become naturalised in another were capable of being naturalised Chinese subjects. The Chinese revised Nationality Law of February 5th, 1929, however, contained no provision by which an alien was required to lose his original nationality in order to acquire Chinese nationality. Koreans were therefore naturalised as Chinese regardless of the Japanese insistence that such naturalisation could not be recognised under Japanese law. The Japanese nationality laws have never permitted Koreans to lose their Japanese nationality and, although a revised Nationality Law of 1924 contained an article to the effect that "a person who acquires foreign nationality voluntarily loses Japanese nationality", this general law has never been made applicable to the Koreans by special Imperial Ordinance. Nevertheless, many Koreans in Manchuria, varying from 5 to 20 per cent of the total Korean population in certain districts, especially where they are relatively inaccessible by the Japanese consular officials, have become naturalised as Chinese. Others, incidentally, when migrating beyond the Manchurian borders into Soviet territory, have become citizens of the U.S.S.R.

Effect of dual nationality of the Koreans on Chinese policy.This problem of dual nationality of the Koreans influenced the National Government of China and the provincial authorities in Manchuria generally to look with disfavour upon indiscriminate naturalisation of Koreans, fearing that they might, by temporarily acquiring Chinese nationality, become potential instruments of a Japanese policy of acquiring agricultural lands, in Regulations issued by the Kirin Provincial Government. September 1930, governing the purchase and sale of land throughout the province, it was provided that "when a naturalised Korean purchases land, investigation must be made in order to discover whether he wants to purchase it as a means of residing as a permanently naturalised citizen or on behalf of some Japanese". The local district officials, however, seem to have wavered in their attitude, at times enforcing the orders of the higher authorities, but frequently issuing temporary naturalisation certificates in lieu of formal certificates requiring the approval of the provincial government and the Ministry of the Interior at Nanking. These local officials, especially in areas far removed from Japanese consulates, often readily consented to the issuing of such certificates to the Koreans who applied for them and, on occasion, no doubt actually compelled the Koreans to become naturalised or to leave the country, their actions being influenced both by the policy of the Japanese and by the revenue derivable from the naturalisation fees. The Chinese have asserted, moreover, that some Japanese themselves actually connived at this business of naturalising Koreans in order to use them as dummy land-owners or to acquire lands by transfer from such naturalised Koreans. Generally speaking, however, the Japanese authorities discountenanced naturalisation of Koreans and assumed jurisdiction over them wherever possible.

Problems arising from conflicting claims to police jurisdiction peculiarly serious, involving the Koreans.The Japanese claim of right to maintain consular police in Manchuria as a corollary of extra-territoriality became a source of constant conflict where the Koreans were involved. Whether the Koreans desired such Japanese interference, ostensibly in their behalf, or not, the Japanese consular police, especially in the Chientao District, undertook, not only protective functions, but also freely assumed the right to conduct searches and seizures of Korean premises, especially where the Koreans were suspected of being involved in the Independence Movement, or in Communist or anti-Japanese activities. The Chinese police, for their part, frequently came into collision with the Japanese police in their efforts to enforce Chinese laws, preserve the peace, or Suppress the activities of "undesirable" Koreans. Although the Chinese and Japanese police did co—operate on many occasions, as provided for in the so-called "Mitsuya Agreement" of 1925, in which it was agreed that, in Eastern Fengtien Province, the Chinese would suppress "the Korean societies" and turn over "Koreans of bad character" to the Japanese on the latter's request, the actual state of affairs was really one of constant controversy and friction. Such a situation was bound to cause trouble.

The special problem of Chientao.The Korean problems and the resulting Sino Japanese relations over the Chientao District had attained a peculiarly complicated and serious character. Chientao (called "Kanto" in Japanese and "Kando" in Korean) comprises the three districts of Yenchi, Holung and Wangching in Liaoning (Fengtien) Province, and, in practice, as evidenced by the attitude of the Japanese Government, includes also the district of Hunchun, which four districts adjoin the north-east corner of Korea just across the Tumen River.

The Japanese attitude and policy towards Chientao.The Japanese, describing the traditional attitude of the Koreans towards the Chientao area, have been disinclined to admit that the Chientao Agreement of 1909 closed once and for all the issue whether this territory should belong to China or to Korea, the idea being that, since the district is predominantly Korean, over half of the arable land being cultivated by them, "they have so firmly established themselves in the locality that it may practically be regarded as a Korean sphere". In Chientao, more than elsewhere in Manchuria, the Japanese Government has been insistent on exercising jurisdiction and surveillance over the Koreans, over 400 Japanese consular police having been maintained there for years. The Japanese Consular Service, in co-operation with Japanese functionaries assigned by the Government-General of Chosen, exercise broad powers of an administrative character in the region, their functions including maintenance of Japanese schools, hospitals and Government-subsidised financing media for the Koreans. The area is regarded as a natural outlet for Korean emigrants who cultivate rice-fields, while politically it has special importance, since Chientao has long been a refuge of Korean independence advocates. Communist groups and other disaffected anti-Japanese partisans, a region where, as evidenced by the Hunchun Rising of Koreans against the Japanese in 1920, after the Independence Outbreak in Korea, the Japanese have had serious political problems intimately associated with the general problem of governance of Korea. The military importance of this region is obvious from the fact that the lower reaches of the Tumen River form the boundary between Japanese, Chinese and Soviet territory.

Conflicts of the Chinese and Japanese interpretations of the Chientao Agreement.The Chientao Agreement provided that "the residence of Korean subjects, as heretofore, on agricultural lands lying north of the River Tumen", should be permitted by China; that Korean subjects residing on such lands should henceforth "be amenable to the jurisdiction of the Chinese local officials"; that they should be given equal treatment with the Chinese; and that, although all civil and criminal cases involving such Koreans should be "heard and decided by the Chinese authorities", a Japanese consular official should be permitted to attend the court, especially in capital cases, with the right to "apply to the Chinese authorities for a new trial" under special Chinese judicial procedure.

The Japanese, however, have taken the position that the Sim-Japanese Treaty and Notes of 1915 override the Chientao Agreement in so far as jurisdictional questions are concerned, and that, since 1915. Koreans, as Japanese subjects, are entitled to all the rights and privileges of extraterritorial status under the Japanese treaties with China. This contention has never been admitted by the Chinese Government, the Chinese insisting that the Chientao Agreement, if applicable in so far as the right granted to Koreans to reside on agricultural lands is concerned, is also applicable in those articles where it is provided that the Koreans should submit to Chinese jurisdiction. The Japanese have interpreted the article permitting Korean residence on agricultural lands to mean the right to purchase and lease such lands in Chientao; the Chinese, contesting this interpretation, take up the position that the article must be interpreted literally and that only Koreans who have become naturalised Chinese subjects are entitled to purchase land there.

The actual situation as to Korean land ownership is anomalous.The actual situation is therefore anomalous, since, as a matter of fact, there are non-naturalised Koreans in Chientao who have acquired lands in freehold title, with the connivance of the local Chinese officials, although as a general rule the Koreans themselves recognise the acquisition of Chinese nationality as a necessary condition of obtaining the right to purchase land in Chientao. Japanese official figures represent over half the arable land of Chientao (including Hunchun) as "owned" by Koreans, their figures admitting that over 15 per cent of the Koreans there have become naturalised as Chinese subjects. Whether it is these naturalised Koreans who "own" those lands is impossible to say. Such a situation naturally gave rise to numerous irregularities and constant differences, often manifested by open clashes between the Chinese and Japanese police.

Japanese allegations of Chinese oppression of the Koreans.The Japanese assert that, about the end of 1927, a movement for persecuting Korean immigrants in Manchuria broke out, under Chinese official instigation, as an aftermath of a general anti-Japanese agitation, and state that this oppression was intensified after the Manchurian provinces declared their allegiance to the National Government at Nanking. Numerous translations of orders issued by the central and local Chinese authorities in Manchuria have been submitted as evidence to the Commission of a definite Chinese policy of oppressing the Koreans by forcing them to become naturalised as Chinese, driving them from their rice-fields, compelling them tore-migrate, subjecting them to arbitrary levies and exorbitant taxation, preventing them from entering into contracts of lease or rental for houses and lands, and inflicting upon them many brutalities. It is stated that this campaign of cruelty was particularly directed against the "pro-Japanese "Koreans, that Korean Residents' Associations, which are subsidised by the Japanese Government, were the objects of persecution, that non-Chinese schools maintained by or for the Koreans were closed, that "undesirable Koreans "were permitted to levy blackmail and perpetrate atrocities upon Korean farmers, and that Koreans were compelled to wear Chinese clothing and renounce any claim of reliance upon Japanese protection or assistance in their miserable plight.

The fact that the Manchurian authorities did issue orders discriminatory against non-naturalised Koreans is not denied by the Chinese, the number and character of these orders and instructions, especially since 1927, establishing beyond a doubt that the Chinese authorities in Manchuria generally regarded the Korean infiltration, in so far as it was accompanied by Japanese jurisdiction, as a menace which d€served to be opposed.

Special attention given to the Korean problem by the Commission. Because of the seriousness of the Japanese allegations and the pitiable plight of the Korean population of Manchuria, the Commission gave special attention to this subject and, without accepting all these accusations as adequately descriptive of the facts, or concluding that certain of these restrictive measures applied to the Koreans were entirely unjustified, is in a position to confirm this general description of the Chinese actions towards the Koreans in certain parts of Manchuria. While in Manchuria, numerous delegations, who represented themselves as spokesmen of Korean communities, were received by the Commission.

It is obvious that the presence of this large minority of Koreans in Manchuria served to complicate the Sino-Japanese controversies over land leasing, jurisdiction and police, and the economic rivalries which formed a prelude to the events of September 1931. While the great majority of the Koreans only wanted to be left alone to earn their livelihood, there were among them groups which were branded by the Chinese or Japanese, or both, as "undesirable Koreans ", including the advocates and partisans of the independence of Korea from Japanese rule, Communists, professional law breakers, including smugglers and drug traders, and those who, in league with Chinese bandits, levied blackmail or extorted money from those of their own blood. Even the Korean farmer himself frequently invited oppression by his ignorance, improvidence and willingness to incur indebtedness to his more agile-minded landlord.

The Chinese explanation of their treatment of the Koreans.Aside from the involvement of the Koreans, however unwittingly, in the controversies which, in the Chinese view, were the inevitable results of the general Japanese policies with respect to Manchuria, the Chinese submit that much of what has been termed "oppression "of the Koreans should not properly be so called, and that certain of the measures taken against the Koreans by the Chinese were actually either approved or connived at by the Japanese authorities themselves. They assert that it should not be forgotten that the great majority of the Koreans are bitterly anti-Japanese and unreconciled to the Japanese annexation of their native land, and that the Korean emigrants, who would never have left their homeland but for the political and economic difficulties under which they have suffered, generally desire to be free from Japanese surveillance in Manchuria.

So-called "Mitsuya Agreement", 1925.The Chinese, while admitting a certain sympathy with the Koreans, draw attention to the existence of the "Mitsuya Agreement" of June-July 1925 as evidence both of a willingness on the part of the Chinese authorities to curb the activities of Koreans whom the Japanese consider "bad characters" and a menace to their position in Korea, and of official sanction on the part of the Japanese themselves for certain of those very acts which the Japanese would have others believe are instances of Chinese "oppression" of the Koreans. This agreement, which has never been widely known abroad, was negotiated by the Japanese Police Commissioner of the Government-General of Chosen and the Chinese Police Commissioner of Fengtien Province. It provided for co-operation between the Chinese and Japanese police in suppressing "Korean societies" (presumably of an anti-Japanese character) in Eastern Fengtien Province, stipulating that "the Chinese authorities shall immediately arrest and extradite those leaders of the Korean societies whose names had been designated by the authorities of Korea", and that Koreans of "bad character" should be arrested by the Chinese police and turned over to the Japanese for trial and punishment. The Chinese assert, therefore, that "it is largely for the purpose of giving practical effect to this agreement that certain restrictive measures have been put into force governing the treatment of Koreans. If they are taken as evidence proving the oppression of Koreans by Chinese authorities, then such measures of oppression, if indeed they are, have been resorted to principally in the interest of Japan". Furthermore, the Chinese submit that, "in view of the keen economic competition with native farmers, it is but natural that the Chinese authorities should exercise their inherent right to take measures to protect the interests of their own countrymen".

6. The Wanpaoshan Affair and the Anti-Chinese Riots in Korea.

The relations of the Wanpaoshan affair to the events of September 1931.The Wanpaoshan affair, together with the case of Captain Nakamura, have been widely regarded as the causes immediately contributing to the Sino-Japanese crisis in Manchuria. The intrinsic importance of the former, however, was greatly exaggerated. The sensational accounts of what occurred at Wanpaoshan, where there were no casualties, led to a feeling of bitterness between Chinese and Japanese and, in Korea, to the serious attacks by Koreans upon Chinese residents. These anti-Chinese riots, in turn, revived the anti-Japanese boycott in China. Judged by itself, the Wanpaoshan affair was no more serious than several other incidents involving clashes between Chinese and Japanese troops or police which had occurred during the past few years in Manchuria.

A lease contract for rice-land between the Chinese landowners and the Chinese broker required the official approval of the Chinese authorities.Wanpaoshan is a small village located some 18 miles (30 kilometres) north of Changchun, adjoining a low marshy area alongside the Itung River. It was here that one Hao Yung-teh, a Chinese broker, leased on behalf of the Chang Nung Agricultural Company, from the Chinese owners, a large tract of land by a contract dated April 16th, 1931. It was stipulated in the contract that it should be null and void in case the District Magistrate refused to approve its terms.

This land was sub-leased by the Chinese broker to the Korean tenants.Shortly after this, the lessee sub-leased this entire plot of land to a group of Koreans. This second contract contained no provision requiring official approval for enforcement and took for granted that the Koreans would construct an irrigation canal with tributary ditches. Hao Young-teh had sub-leased this land to the Korean farmers without first having obtained Chinese formal approval of the original lease contract with the Chinese owners.

The digging of an irrigation ditch by the Koreans across land owned by Chinese farmers was the principal cause of local Chinese opposition.Immediately after the conclusion of the second lease, the Koreans began digging an irrigation ditch or canal, several miles long, in order to divert the water of the Itung River and distribute it over this low marshy area for the purpose of making it suitable for paddy cultivation. This ditch traversed large areas of land cultivated by Chinese who were not parties to either lease transaction, since their lands lay between the river and that leased by the Koreans. In order to provide ample water supply to be deflected through this ditch to their holdings, the Koreans undertook to construct a dam across the Itung River.

The Chinese farmers demanded the cessation of work on the irrigation ditch and the evacuation of the Koreans.After a considerable length of the irrigation ditch had been completed, the Chinese farmers whose lands were cut by the canal rose up en masse and protested to the Wanpaoshan authorities, begging them to intervene in their behalf. As a result, the Chinese local authorities despatched police to the spot and ordered the Koreans to stop excavation work at once and to vacate the area. At the same time, the Japanese Consul at Changchun sent consular police to protect the Koreans. Local negotiations between the Japanese and Chinese representatives failed to solve the problem. Somewhat later, both sides sent additional police, with resulting protests, counter-statements and attempted negotiations.

The Chinese and Japanese authorities at Changchun agreed upon a joint investigation.On June 8th, both sides agreed to withdraw their police forces and to conduct a joint investigation of the situation at Wanpaoshan. This investigation revealed the fact that the original lease contained a clause providing that the entire contract would be "null and void" if it should not be approved by the Chinese District Magistrate, and that this approval was never given.

Inclusive investigation.The joint investigators, however, apparently failed to agree upon their findings, the Chinese maintaining that the digging of the irrigation ditch could not fail to violate the rights of the Chinese farmers whose lands were cut by it and the Japanese insisting that the Koreans should be permitted to continue their work, since it would be unfair to eject them on account of the error in the lease procedure for which they were in no way at fault. Shortly thereafter, the Koreans, assisted by Japanese consular police, continued to dig the ditch.

The incident of July 1st.Out of this train of circumstances came the incident of July 1st, when a party of 400 Chinese farmers whose lands were cut by the irrigation ditch, armed with agricultural implements and pikes, drove the Koreans away and filled in much of the ditch. The Japanese consular police thereupon opened rifle fire to disperse the mob and to protect the Koreans, but there were no casualties. The Chinese farmers withdrew and the Japanese police remained on the spot until the Koreans completed the ditch and the dam across the Itung River.

After the incident of July 1st, the Chinese municipal authorities continued to protest to the Japanese Consul at Changchun against the action of the Japanese consular police and of the Koreans.

The anti-Chinese riots in Korea.Far more serious than the Wanpaoshan affair was the reaction to this dispute in Chosen (Korea). In consequence of sensational accounts of the situation at Wanpaoshan, especially of the events of July 1st, which were printed in the Japanese and Korean Press, a series of anti-Chinese riots occurred throughout Korea. These riots began at Jinsen on July 3rd, and spread rapidly to other cities.

Heavy loss of life and property among the Chinese residents.The Chinese state, on the basis of their official reports, that 127 Chinese were massacred and 393 wounded, and that Chinese property to the value of 2,500,000 Yen was destroyed. They claim, moreover, that the Japanese authorities in Korea were in large measure responsible for the results of these riots, since, it was alleged, they took no adequate steps to prevent them and did not suppress them until great loss of Chinese life and property had resulted. Alleged responsibility of the Japanese authorities in Korea.The Japanese and Korean newspapers were not prevented from publishing sensational and incorrect accounts of the Wanpaoshan incident of July 1st, which were of a character to amuse the hatred of the Korean populace against the Chinese residents.

The Japanese claim, however, that these riots were due to the spontaneous outburst of racial feeling, and that the Japanese authorities suppressed them as soon as possible.

The riots in Korea intensified the anti-Japanese boycott in China.A result of importance was the fact that these outbreaks in Korea served directly to revive the anti-Japanese boycott throughout China.

Shortly after the anti-Chinese riots in Korea and while the Wanpaoshan affair was still unsettled, the Chinese Government made a protest to Japan, on account of the riots, charging Japan with full responsibility for failure to suppress them. The Japanese Government expressed regret for the anti-Chinese riots and offered compensation for the families of the dead.The Japanese Government, in reply, on July 15th, expressed regret at the occurrence of these riots and offered compensation for the families of the dead.

From July 22nd until September 15th, there were negotiations and exchanges of notes between the Chinese and Japanese local and central authorities over the Wanpaoshan affair. The Chinese maintained that the difficulties at Wanpaoshan were due to the fact that the Koreans were living where they had no right to be, since their privileges of residing and leasing of land did not extend outside the Chientao District, in accordance with the Chientao Agreement of September 4th, 1909.

The grounds for Chinese protests concerning the Wanpaoshan affair.The Chinese Government protested against the stationing of Japanese consular police in China and asserted that the despatch of a large force of these police to Wanpaoshan was responsible for the incident of July 1st.

The Japanese position.The Japanese, on the other hand, insisted that the Koreans had a treaty right to reside and lease land at Wanpaoshan, since their privileges were not limited to those specified in the Chientao Agreement, but included the rights, granted to Japanese subjects in general, of residing and leasing land throughout South Manchuria. The status of the Koreans, it was claimed, was identical with that of other Japanese subjects. The Japanese also urged that the Koreans had undertaken their rice cultivation project in good faith and that the Japanese authorities could not assume responsibility for the irregularities of the Chinese broker who arranged the lease. The Japanese Government consented to the withdrawal of the consular police from Wanpaoshan, but the Korean tenants remained and continued to cultivate their rice-lands.

A complete solution of the Wanpaoshan affair had not been reached by September 1931.

7. The Case of Captain Nakamura.

Importance of the Nakamura case.The case of Captain Nakamura was viewed by the Japanese as the culminating incident of a long series of events which showed the utter disregard of the Chinese for Japanese rights and interests in Manchuria. Captain Nakamura was killed by Chinese soldiers in an out-of-the-way region in Manchuria during the mid-summer of 1931.

Captain Nakamura was on a military mission in interior Manchuria.Captain Shintaro Nakamura was a Japanese military officer on active duty and, as was admitted by the Japanese Government, was on a mission under the orders of the Japanese Army. While passing through Harbin, where his passport was examined by the Chinese authorities, he represented himself as an agricultural expert. He was at that time warned that the region in which he intended to travel was a bandit-ridden area, and this fact was noted on his passport. He was armed, and carried patent medicine which, according to the Chinese, included narcotic drugs for non-medical purposes.

Captain Nakamura and companions were killed by Chinese soldiers.On June 9th, accompanied by three interpreters and assistants. Captain Nakamura left Ilikotu Station on the western section of the Chinese Eastern Railway. When he had reached a point some distance in the interior, in the direction of Taonan, he and the other members of his party were placed under detention by Chinese soldiers under Kuan Yuheng, the Commander of the Third Regiment of the Reclamation Army. Several days later, about June 27th, he and his companions were shot by Chinese soldiers and their bodies were cremated to conceal the evidence of the deed.

The Japanese contention.The Japanese insisted that the killing of Captain Nakamura and his companions was unjustified and showed arrogant disrespect for the Japanese Army and nation; they asserted that the Chinese authorities in Manchuria delayed to institute official enquiries into the circumstances, were reluctant to assume responsibility for the occurrence, and were insincere in their claim that they were making every effort to ascertain the facts in the case.

The Chinese contention.The Chinese declared, at first, that Captain Nakamura and his party were detained pending an examination of their permits, which, according to custom, were required of foreigners travelling in the interior; that they had been treated well; and that Captain Nakamura was shot by a sentry while endeavouring to make his escape. Documents, including a Japanese military map and two diaries, they stated, were found on his person, which proved that he was either a military spy or an officer on special military mission.

Investigations.On July 17th, a report of the death of Captain Nakamura reached the Japanese Consul-General at Tsitsihar and, at the end of the month, Japanese officials in Mukden informed the local Chinese authorities that they had definite evidence that Captain Nakamura had been killed by Chinese soldiers. On August 17th, the Japanese military authorities in Mukden released for publication the first account of his death (see Manchuria Daily News, August 17th, 1931). On the same day, Consul-General Hayashi, and also Major Mori, who had been sent by the Japanese General Staff from Tokyo to Manchuria to investigate the circumstances, had interviews with Governor Tsang Shih-yi, of Liaoning Province. Governor Tsang promised to investigate it at once.

Immediately thereafter, Governor Tsang Shih-yi communicated with Marshal Chang Hsueh-liang (who was then ill in a hospital in Peiping) and with the Minister for Foreign Affairs in Nanking and, also, appointed two Chinese investigators, who proceeded at once to the scene of the alleged murder. These two men returned to Mukden on September 3rd. Major Mori, who had been conducting an independent investigation on behalf of the Japanese General Staff, returned to Mukden on September 4th. On that day Consul-General Hayashi called on General Yung Chen, the Chinese Chief of Staff, and was informed that the findings of the Chinese investigators were indecisive and unsatisfactory, and that it would therefore be necessary to conduct a second enquiry. General Yung Chen left for Peiping on September 4th to consult with Marshal Chang Hsueh-liang on the new developments in the Manchurian situation, returning to Mukden on September 7th.

Efforts of Chinese to reach a settlement.Having been informed of the seriousness of the situation in Manchuria, Marshal Chang Hsueh-liang instructed Governor Tsang Shih-yi and General Yung Chen to conduct, without delay and on the spot, a second enquiry into the Nakamura case. Learning from his Japanese military advisers of the deep concern of the Japanese military over this affair, he sent Major Shibayama to Tokyo to make it clear that he wished to settle the case amicably. Major Shibayama arrived in Tokyo on September 12th, and stated, according to subsequent Press reports, that Marshal Chang Hsueh-liang was sincerely desirous of securing an early and equitable termination of the Nakamura issue. In the meantime, Marshal Chang had sent Mr. Tang Er-ho, a high official, on a special mission to Tokyo to consult with the Minister for Foreign Affairs, Baron Shidehara, in order to ascertain what common ground might be found for a solution of various pending Sino-Japanese questions concerning Manchuria. Mr. Tang Er-ho had conversations with Baron Shidehara, General Minami and other high military officials. On September 16th, Marshal Chang Hsueh-liang gave out an interview to the Press which reported him as saying that the Nakamura case, in accordance with the wish of the Japanese, would be handled by Governor Tsang Shih-yi and the Manchurian authorities, and not by the Foreign Office at Nanking.

The second Chinese commission of investigation, after visiting the scene of the killing of Captain Nakamura, returned to Mukden on the morning of September 16th. On the afternoon of the 18th, the Japanese Consul called upon General Yung Chen, when the latter stated that Commander Kuan Yu-heng had been brought to Mukden on September 16th charged with responsibility for the murder of Captain Nakamura and would be immediately tried by a military court-martial. Later, it was made known by the Japanese, after their occupation of Mukden, that Commander Kuan had been detained by the Chinese in a military prison.

Consul-General Hayashi, Mukden, was reported on September 12th–13th to have reported to the Japanese Foreign Office that "an amicable settlement would probably be made after the return of the investigators to Mukden", especially as General Yung Chen had definitely admitted that Chinese soldiers had been responsible for the death of Captain Nakamura. The Mukden correspondent of the Nippon Dempo Service telegraphed a despatch on September 12th stating that "an amicable settlement of the alleged murder case of Captain Shintaro Nakamura of the Japanese General Staff Office by soldiers of the Chinese Reclamation Army Corps is in sight". Numerous statements of Japanese military officers, however, especially those of Colonel K. Doihara, continued to question the sincerity of the Chinese efforts to arrive at a satisfactory solution of the Nakamura case, in view of the fact that Commander Kuan, alleged to have been responsible for the death of Captain Nakamura, had been taken into custody in Mukden by the Chinese authorities, the date of his court-martial having been announced as to occur within a week. Since the Chinese authorities admitted to Japanese consular officials in Mukden, in a formal conference held on the afternoon of September 18th, that Chinese soldiers were responsible for the death of Captain Nakamura, expressing also a desire to secure a settlement of the case diplomatically without delay, it would seem that diplomatic negotiations for attaining a solution of the Nakamura case were actually progressing favourably up to the night of September 18th.

The results of the Nakamura case.The Nakamura case, more than any other single incident, greatly aggravated the resentment of the Japanese and their agitation in favour of forceful means to effect a solution of outstanding Sino-Japanese difficulties in regard to Manchuria. The inherent seriousness of the case was aggravated by the fact that Sino-Japanese relations just at this time were strained on account of the Wanpaoshan affair, the anti-Chinese riots in Korea, the Japanese military manœuvres across the Tumen River on the Manchurian-Korean frontier, and the Chinese mob violence committed at Tsingtao, in protest against the activities of the local Japanese patriotic societies.

Captain Nakamura was an army officer on active service, a fact which was pointed to by the Japanese as a justification for strong and swift military action. Mass meetings were held in Manchuria and in Japan for the purpose of crystallising public sentiment in favour of such action. During the first two weeks of September, the Japanese Press repeatedly declared that the army had decided that the "solution ought to be by force ", since there was no other alternative.

The Chinese claimed that the importance of the case was greatly exaggerated and that it was made a pretext for the Japanese military occupation of Manchuria. They denied the contention of the Japanese that there was insincerity or delay on the part of the Chinese officials in dealing with the case.

By the end of August 1931, therefore, Sino-Japanese relations over Manchuria were severely strained in consequence of the many controversies and incidents described in this chapter. The claim that there were 300 cases outstanding between the two countries and that peaceful methods for settling each of them had been progressively exhausted by one of the parties cannot be substantiated. These so-called "cases" were rather situations arising out of broader issues, which were rooted in fundamentally irreconcilable policies. Each side accuses the other of having violated, unilaterally interpreted, or ignored the stipulations of the Sino-Japanese agreements. Each side had legitimate grievances against the other.

The account here given of the efforts made by one side or the other to secure a settlement of these questions at issue between them shows that some efforts were being made to dispose of these questions by the normal procedure of diplomatic negotiation and peaceful means, and these means had not yet been exhausted. But the long delays put a severe strain on the patience of the Japanese. Army circles in particular were insisting on the immediate settlement of the Nakamura case and demanded satisfactory reparation. The Imperial Ex-Soldiers' Association, amongst others, was instrumental in rousing public opinion.

In the course of September, public sentiment regarding the Chinese questions, with the Nakamura case as the focal point, became very strong. Time and again the opinion was expressed that the policy of leaving so many issues in Manchuria unsettled had caused the Chinese authorities to make light of Japan. Settlement of all pending issues, if necessary by force, became a popular slogan. Reference was freely made in the Press to a decision to resort to anned force, to conferences between the Ministry of War, the General Staff and other authorities for the discussion of a plan with this object, to definite instructions regarding the execution, in case of necessity, of that plan to the Commander-in-Chief of the Kwantung Army and to Colonel Doihara, Resident Officer at Mukden, who had been summoned to Tokyo early in September and who was quoted by the Press as the advocate of a solution of all pending issues, if necessary by force and as soon as possible. The reports of the Press regarding the sentiments expressed by these circles and some other groups point to a growing and dangerous tension.

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1. See also special study No. 3, annexed to this Report.
2. The nine Powers were: the United States of America, Belgium, the British Empire, China, France, Italy, Japan, the Netherlands, Portugal.
3. See special study No. 1, annexed to this Report.
4. See special study No. 9, annexed to this Report.
5. See special study No. 9, annexed to this Report.