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were coal, cement, hard wood, and soft wood.

Walker D. Hines, Director General of Railroads, issued a statement May 6, in which he invited attention to the results of the Government operation of the railroads during the first three months of 1919 by asserting that the aggregate deficit incurred during those months, after deducting the rental due the railroad companies for that period, was $192,000,000.

ARMY OF OCCUPATION

It was announced on April 26 that Lieut. Gen. Hunter Liggett would succeed Major Gen. Joseph T. Dickman as commander of the American Army of Occupation. General Dickman was to become the head of a board to consider lessons to be learned from the war in so far as they concern tactics and organization.

General Liggett was commander of the first American army corps to be formed, and also commander of the First American Army. After General Pershing relinquished field command of it, General Liggett directed the First Army in the Meuse-Argonne drive. When American General Headquarters is disbanded, the Third Army will become the sole American command in Europe. General Liggett, who has been without a command since the dissolution of the First Army, is second in rank to General Pershing, and, having assumed command of the Third Army, will, of course, be the highest commanding General in the American Expeditionary Forces when General Pershing leaves for home. Lieut. Gen. Robert L. Bullard, who has been without a command since the dissolution of the Second Army, will be returned to the United States.

SECRETARY BAKER"S MESSAGE

General Dickman commanded the Third Army on its march to the Rhine, and has held that command since. The Third Army was formed as the Army of Occupation, and is composed of some of the best troops of the American Expeditionary Forces.

Secretary of War Baker visited the zone of occupation during his stay abroad and issued the following message to the men of the American Third Army:

I am happy to have the opportunity to congratulate the men of the Third Army for the great record they have made as fighting men during the war. and also for the spirit with which they are performing the delicate duties of an army of occupation. All I have heard and all I have seen of the Third Army fills me, as it will fill the country at home, with pride and satisfaction.

The men of the army are anxious to know what conditions they will find at home when they return, and I am glad to be able to tell them that the processes of demobilization have been speeded up, so that within three or four days after an organization reaches its demobilization camp the records are completed and the men paid and discharged.

Industry and business In the country are becoming normal and discharged men are finding employment In civil life. The Department of Labor, various Chambers of Commerce and all branches of industry are co-operating, and the War Department has a system of its own which consults the desires of tile men and aids them to find the sort of work they desire.

REVIEW BY SECRETARY DANIELS

On April 18 Secretary of the Navy Daniels reviewed the 2d Division, including a brigade of marines, the troops passing before him in mass formation, 25,000 strong.

On the hilltop parade grounds near Vallendar, where the former German Emperor is said to have reviewed German divisions on their way to the front in 1914, Secretary Daniels presented several decorations and addressed the entire division, telling the soldiers of the appreciation felt by America for what the army had done for the cause of liberty, and the welcome which awaited them when they returned home.

Mr. Daniels was taken through the underground passages of the Ehrenbreitstein fortress, which were built partly by labor paid for by 20,000,000 francs of the sum which the Germans exacted from France, and saw the accommodations of American- artillerymen, where but a few months ago thousands of German soldiers had been Quartered.

Japan's Claims in China Conceded

Text of Secret Compacts With Entente Regarding Shantung, and of China's Formal Protest

THE conflict between Italy and Jugoslavia over Fiume and Dalmatia was closely paralleled in the Peace Conference by the conflict between China and Japan over the possession of the Chinese Province of Shantung. Just as Italy based her Adriatic claims primarily upon the Treaty of London of 1915, so Japan rested her claims upon a similar arrangement made through official correspondence which passed between Viscount Motono, Japanese Minister of Foreign Affairs, and the British, French, and Russian Ambassadors at Tokio in February, 1917. Italy also agreed to the arrangement at about the same time.

When President Wilson and the Chinese delegates went to the Peace Conference they knew nothing about these secret compacts with four Entente powers concerning the future possession of Shantung. The secret was revealed at a session of the Council of Ten when the fate of the German islands in the Pacific was being discussed. President Wilson proposed that the mandatory system be applied to these islands; Mr. Lloyd George then admitted the existence of a prior arrangement, which Baron Makino, at his request, explained to the President. It appeared that certain compacts had been made, giving to Japan outright all the German islands north of the equator on condition that Australia should have all those to the south. President Wilson asked whether there were other secret compacts of a similar nature. This brought out the fact that the agreement with Japan included the British, French, and Italian promises to support Japan's claims to Shantung, in consideration of Japan's undertaking to allow China to enter the war.

It was at this juncture that the world became fully aware of the fact—mentioned in the preceding issue of Current History—that Japan had repeatedly re

fused to permit China to take part in the European war; that she had barred China from participating in the recapture of Kiao-Chau from the Germans in 1914, and that in November, 1915, when China had tried to enter the European conflict at the request of the European powers, Japan, through Baron Ishii, had again refused consent. Another opportunity came to China early in 1917, when the United States broke off diplomatic relations with Germany and invited all the neutral countries of the world to follow her example. Realizing that China could no longer be kept neutral, Japan at once set to work to insure her Shantung claims in the Peace Conference in anticipation of China's presence at that conference to plead her own cause. Viscount Motono first took up the matter with the British Ambassador at Tokio. This, with other secret correspondence in the second half of February, 1917, is given below:

TEXT OF THE CORRESPONDENCE

British Embassy, Tokio, Fob. 18, 1817.

My Dear Excellency: With reference to the subject of our conversation of the 27th ultimo, when your Excellency informed me of the desire of the Imperial Government to receive an assurance that on the occasion of a Peace Conference his Britannic Majesty's Government will support the claims of Japan in regard to the disposal of Germany's rights in Shantung and possessions in the islands north of the equator, I have the honor, under instructions received from his Britannic Majesty's principal Secretary of State for Foreign Affairs, to communicate to you the following message from his Britannic Majesty's Government:

His Britannic Majesty's Government accede with pleasure to request of the Japanese Government for an assurance that they will support Japan's claims in regard to the disposal of Germany's rights in Shantung and possessions in the islands north of the equator on the occasion of the Peace Conference; it being understood that the Japanese Government will in the eventual peace settlement treat in the same spirit Great Britain's claims to the German islands south of the equator.

I avail myself of this opportunity, M. le Ministre, to renew to your Excellency the assurance of my highest consideration. CONYNGHAH GREENE, His Britannic Majesty's Ambassador.

To his Excellency, Viscount Ichiro Motono, his Imperial Japanese Majesty's Minister for Foreign Affairs.

In his reply to the above communication from the British Ambassador, Motono, after the usual diplomatic exchange of courtesies, wrote:

The Japanese Government is deeply appreciative of the friendly spirit in which your Government has given assuranc? and happy to note it as fresh proof of the close ties that unite the two allied powers. I take pleasure in stating that the Japanese Government on its part is fully prepared to support in the same spirit the claims which may be put forward at the Peace Conference by his Majesty's Britannic Government in regard to the German possessions in the islands south of the equator.

The date of this letter is Feb. 21, 1917. JAPAN'S OVERTURES TO FRANCE

On Feb. 19 Motono wrote notes to the Russian and French Ambassadors at Tokio, as follows:

The Imperial Japanese Government has not yet formally entered into conversations with the Entente powers concerning the conditions of peace I propose to present to Germany, because it is guided by the thought that such questions ought to be decided in concert between Japan and the said powers at the moment when the peace negotiations begin. Nevertheless, in view of recent developments in the general situation, and in view of the particular arrangements concerning peace conditions, such as arrangements relative • to the disposition of the Bosporus, Constantinople, and the Dardanelles, being already under discussion by the powers interested, the Imperial Japanese Government believes that the moment has come for it also to express Its desires relative to certain conditions of peace essential to Japan and to submit them for the consideration of the Government of the French Republic.

The French Government is thoroughly informed of all the efforts the Japanese Government has made in a general manner to accomplish its task in the present war, and particularly .'o guavantee for the future the peace of Oriental Asia and the security of the Japanese Empire, for which it is absolutely necessary to take

from Germany its bases of political, military, and economic activity in the Far East.

Under these conditions the Imperial Japanese Government proposes to demand from Germany at the time of the peace negotiations the surrender of the territorial rights and special interests Germany possessed before the war in Shantung and the islands situated north of the equator in the Pacific Ocean.

The Imperial Japanese Government confidently hopes the Government of the French Republic, realizing the legitimacy of these demands, will give assurance that, her case being proved, Japan may count upon its full support on this question.

It goes without saying that reparation for damages caused to the life and property of the Japanese people by the unjustifiable attacks of the enemy, as well as other conditions of peace of a character common to all the Entente powers, are entirely outside the consideration of the present question.

FRENCH REPLY TO MOTONO Twelve days later the French Ambassador replied to the Japanese Foreign Office as follows:

The Government of the French Republic is disposed to give the Japanese Government its accord in regulating at the time of the peace negotiations questions vital to Japan concerning Shantung and the German islands in the Pacific north of the equator. It also agrees to support the demands of the Imperial Japanese Government for the surrender of the rights Germany possessed before the war in this Chinese province and these islands.

M. Briand demands, on the other hand, that Japan give its support to obtain from China the breaking of its diplomatic relations with Germany, and that it give this act desirable significance. The consequences of this in China should be the following:

First, handing passports to the German diplomatic agents and Consuls.

Second, the obligation of all under German jurisdiction to leave Chinese territory.

Third, the internment of German ships In Chinese ports and the ultimate requisition of these ships in order to place them at the disposition of the Allies following the example of Italy and Portugal. According to the information of the French Government there are fifteen German ships in Chinese ports totaling about 40.000 tons.

Fourth, requisition of German commercial houses established in China; forfeiting the right of Germany in the concessions she possesses in certain parts of China.

On receipt of the above Motono wrote expressing profound thanks for the friendly sentiments inspiring the French Government, and in behalf of Japan promised compliance with Briand's request to get China to break relations with Germany, adding that it had spared no effort in that direction from the beginning.

The Russian Ambassador wrote very briefly to Motono Feb. 20 committing his Government also to the support of the Japanese claims at the Peace Conference.

So far as Italy was concerned, this same business was transacted, not at Tokio, but at Rome, where the Italian Minister of Foreign Affairs on March 23 gave the Japanese Ambassador assurance that Italy would offer no objections in the matter.

Thus Japan, by obtaining the previous agreement of England, France, Russia, and Italy, made her individual position before the Peace Conference unassailable, profiting by the disadvantageous position in which she had found herself at the Portsmouth Conference, when the Russians insisted on retroceding to China the rights they had previously been granted by the Chinese Empire in connection with the leased territory of Port Arthur.

ISHirS EXPLANATION Viscount Ishii, the Japanese Ambassador to the United States, issued at Washington on April 24, 1919, a statement in contradiction of a press dispatch from a well-known foreign correspondent, which had pointed out that Viscount (then Baron) Ishii had been opposed to Chinese participation in the war, and had credited him as saying to the European Ambassadors at Tokio that " Japan could not view without apprehension the moral awakening of 400,000,000 Chinese, which would result from their entering the war." Denying this in his statement, Viscount Ishii said:

Was I apprehensive of the moral awakening of the 400,000.000 Chinese? The idea is fantastic. It is to effect this very awakening of the Chinese that Japan has been putting forth all efforts for these many years; sending professors to China

and welcoming Chinese students to Japan. So long as China remains in a state of lethargy, she is in danger of her existence. And that danger is at the same time Japan's danger. Japan's security lies in the awakening and rising to power of China.

But inducing China to participate in the war of 1915 was another affair, which 1 could not in conscience indorse. China was then passing through a most critical period. Yuan Shih-kai, President of the young republic, who was fitly called the Huerta of China, had just started his monarchical movement and sought to nip China's new-born liberty in the bud by assuming the title of Emperor, with all that that title meant in China. An armed opposition had sprung up in Yunnan and was gathering strength from day to day.

The whole country was on the verge of revolution and anarchy. China was, moreover, utterly destitute of arms and ammunition. What could we expect from her in such a condition?

The military value to the Entente of the proposed Chinese participation was almost nil. The mere fact of a declaration of war by China would have immensely added to the excitement of the people, and rendered confusion worse confounded throughout the whole country. The greatest sufferer from such a condition in China would be, next after China herself, her neighbor, Japan. Again, from a humanitarian point of view, it was the duty of every belligerent to endeavor to restrict the spheres of war calamity, unless substantial military advantage were to accrue from their extension.

I know my successor at the Foreign Office. Tokio, took two years later a different view on this question. He had probably his own reason in the presence of the changed situation.

VICTORY FOR JAPAN

The question of Japan's claims to the Shantung Peninsula was taken up by the Council of Three, in the absence of Premier Orlando, on April 23. Japan's case was presented by Viscount Chinda and Baron Makino at the morning session, and the case of China by Dr. Wellington Koo and other Chinese delegates at the afternoon session. It was Japan's desire that the adjustment should be written into the peace treaty. It was understood that the two delegations were not far apart upon China's obtaining ultimate control of Kiao-Chau, but that the main difference was over accomplishing this by cession through Japan or by immediate recognition of China's territorial control.

It was officially announced on April 30 that an agreement regarding the Shantung Peninsula and Kiao-Chau had been reached between the Council of Three and the Japanese delegates, providing for the transfer of these territories without reserve to Japan, which voluntarily engaged to withdraw all military forces and hand the Shantung Peninsula back to China. Japan, as an economic concessionaire, received only such rights, under the agreement, as are possessed by one or two others of the great powers. The whole future relation between Japan and China, as well as the territorial integrity and political independence of China, was to come at once under the guarantee of the League of Nations. Commenting upon the announcement the Reuter correspondent said:

The Kiao-Chau settlement is a clear victory for Japan. The Council of Three, after hearing both Chinese and Japanese delegates, arrived at the conclusion that the Japanese demands must be satisfied. Japan receives free disposition of Kiao-Chau in accordance with her treaty with China in 1915.

It was added that Japan's other agreements with China were not to be affected. It was left to the Chinese and Japanese Governments to agree upon the details of the carrying out of the treaty of 1915 and also of the agreements made in 1918.

SOVEREIGNTY TO BE RESTORED

The agreement was stated to be a compromise, inasmuch as Japan must restore to China full sovereignty and political rights over Kiao-Chau and the whole Shantung Province. Besides the railroad and other concessions which she already holds, Japan is to be allowed to establish a settlement at Tsing-tao, south of Kiao-Chau, and to restore those political rights which, she holds, came to her as Germany's successor in this region, in her own way and as a free agent, instead of being compelled to surrender them summarily to China through the Peace Conference. The time of this surrender was not stated. Two periods had been suggested, one year, and eighteen months. Japan objected to

a time limit as a reflection on her good faith.

Among the circumstances said to have influenced the decision was the fact that' Japan was strong enough economically to withdraw from the League in case she lost everything, in which event China would have gained nothing, as Japan would then have simply carried out her full program of annexation and political and economic control.

Both houses of the Chinese Parliament in Peking passed a resolution on April 30, protesting, through the Foreign Office, to the delegates of the five great powers at Paris against the transfer of the control of Kiao-Chau to Japan. Both houses requested that Kiao-Chau be restored direct to China without condition. They also asked that concessions in connection with the Kiao-Chau-Chinan Railway, which were exacted from the Chinese Government, by Germany, and protocols of agreement relative to the Kaomi and Tsing-Chowfu and other extensions of the Kiao-Chau Railway be canceled.

TEXT OF CHINA'S PROTEST

The Chinese delegation in Paris issued a statement on May 2 expressing dissatisfaction with the decision. The statement in full reads:

The Chinese delegation has been Informed orally on behalf of the Council of Three of the outline of the settlement proposed regarding the Shantung question. Under this .settlement all rights to Kiao-Chau, formerly belonging to Germany, are transferred to Japan. While Japan voluntarily engages to hand back the Shantung Peninsula in full sovereignty to China, she is allowed to retain the economic privileges formerly enjoyed by Germany.

These privileges, the delegation is informed, refer to the Tsing-tao-Chlnan Railway, 280 miles long; the mines connected with it, and the two railways to be built connecting Shantung with the two trunk lines from Peking to the Yangtse Valley. In addition, she obtains the right to establish a settlement at Tsing-tao, and, although the Japanese military forces, it ia understood, will be withdrawn from Shantung at the earliest possible moment, the employment of special railway police is permitted.

Such being the outline of the proposed settlement, the Chinese delegation can

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