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them come back to her. It is the same with the submarine cable. I might point out that the railway was a privately owned railway, not a Government State railway, and the mines were owned by the Shantung-Berbou Co.; and only a portion of the capital in the submarine cable—at least it was so stated by the Chinese Government— was German Government property. And this private German property is taken over without any power of the Chinese Government to redeem it in future, as China can do with all other railway concessions in China, and it goes into the hands of Japan and remains acquired by Japan.

Senator MCCUMBER. Doctor, let us see what the words "remain acquired by Japan" refer to.

Mr. FERGUSON. They refer to the German rights, sir. There is no question about that.

Senator MCCUMBER. They refer to the first proposition:

Germany renounces, in favor of Japan, all her rights, title, and privileges-particularly those concerning the territory of Kiaochow-railways, mines, and submarine cables which she acquired in virtue of the treaty concluded by her with China on March 6, 1898, and of all other arrangements relative to the Province of Shantung. Mr. FERGUSON. Yes.

Senator MCCUMBER. All German rights. Then this is descriptive of them

All German rights in the Tsingtau-Tsinanfu Railway, including its branch lines, together with its subsidiary property of all kinds, stations, shops, fixed and rolling stock, mines, plant, and material for the exploitation of the mines, are and remain acquired by Japan, together with all rights and privileges attaching thereto.

Mr. FERGUSON. Yes.

Senator MCCUMBER. The words "are and remain acquired" refer back to the first provision, that Germany renounces all those rights, and of course in the renunciation of those rights they remain in Japan. Now

Mr. FERGUSON. I am sure

Senator MCCUMBER. Let me finish my question, Doctor.

Mr. FERGUSON. Certainly.

Senator MCCUMBER. Remain for how long? They certainly could not remain longer than the 99 years, could they?

Mr. FERGUSON. The Chinese Government so fears.

Senator MCCUMBER. She so fears, but under the wording of the treaty

Mr. FERGUSON. She considers

Senator MCCUMBER. Whatever Japan acquired of the German rights, if the German rights expire at the end of 99 years after 1898, of course the Japanese rights would have to expire with that, would they not?

Mr. FERGUSON. I should hope so; but I myself consider, and have advised the Chinese Government, that I consider the wording of the section to be so indistinct that that is a very dubious question, sir.

Senator MCCUMBER. And if in addition to this acquiring simply of the rights of Germany, Japan enters into another treaty with China whereby she agrees to return the territory to China, do you not think she ought to be held strictly to that by the other great nations of the world, and would be so held in case of a league of nations?

Mr. FERGUSON. I should hope so. May I express the reason why the Chinese Government fears as it does?

Senator McCUMBER. Certainly.

Mr. FERGUSON. Under article 4 of the note of May 25, 1915-I think you have a copy of it there-it says:

As regards the disposal to be made of the buildings and properties of Germany and the conditions and procedure relating thereto, the Japanese Government and the Chinese Government shall arrange the matter by mutual agreement before the restoration.

That is what China agreed to in her dealings with Japan. Now Japan takes this matter to Paris, and Paris gives her very much more than she got from China, by taking all this, and without any reference to China turning it over to Japan. Do you see my point, sir? Under article 4 of the note of May 25 the disposal of all this property outside of the leased territory of Kiaochow was to be by mutual arrangement between the Chinese and Japanese Governments. Under articles 156 and 157 it is disposed of without any reference to the Chinese Government, by turning it over directly to Japan, and the wording is "are and remain acquired by Japan;" so that it is very natural that the Chinese Government should fear that the reason of Japan in changing the method of procedure which was provided for in the note which was wrung from China under duress on May 25, 1915, to the terms of articles 156 and 157, would naturally be in the interest of Japan herself, and therefore China entertains the fear that what Japan means by this is that this shall all come under the same heading as article 2 of that same note referring to concessions, that it shall go to the exclusive jurisdiction of Japan without any reference further to China.

Senator MCCUMBER. Doctor, notwithstanding what the Chinese may fear, I think both you and I must give this article a construction in conformity with the theory that Germany transfers to Japan these rights, and whatever Japan receives under article 156 is the German right and nothing but the German right, and that is by virtue of her treaty with Germany. Now if she has another treaty with China whereby in addition to this she agrees to turn back what she does get from Germany under article 156, she must be held to return it; and referring to article 2, there we must assume at least that good faith will be exercised in the making of the agreement with China. If she does not act in good faith, she is breaking her agreement with China.

Mr. FERGUSON. May I call your attention to the reason why it does not seem to me that that is the only possible interpretation of article

156?

Senator MCCUMBER. I shall be very glad to have your view.

Mr. FERGUSON. Because in the first paragraph you will notice, Senator, that Germany renounces in favor of Japan. Now if paragraph 2 and paragraph 3 stated the same thing, there would be no possible doubt that your interpretation of that is the only possible interpretation. But in view of the fact that the first section says she renounces that in favor of Japan, and the next section takes these things all up into a group and says that they are and remain acquired by Japan, surely there is some reason for the difference in the wording, and that gives very serious distress to China, and leaves open the possibility of Japanese claims in that matter; and it is not

invidious to say that Japan has been eager to acquire from China, through every possible loophole of verbiage or transaction, all available opportunity for her own aggrandizement.

Senator MCCUMBER. Doctor, you yourself would not claim that by the use of the word "renounces" Japan would obtain anything in addition to what she would have obtained had they used the words "Germany grants to Japan all her rights?"

Mr. FERGUSON. No, sir, that is quite clear. That part is quite clear the first paragraph.

Senator MCCUMBER. Japan, after all, under whatever the term used may be, can only obtain what Germany obtained.

Mr. FERGUSON. Under the first paragraph, yes, but note that the treaty can give Japan a great deal more than Germany had.

Senator MCCUMBER. It does not give anything more unless the words "remain acquired by Japan" mean that it remains acquired in perpetuity.

Mr. FERGUSON. That is what it seems to me to mean.

Senator MCCUMBER. Then Germany would be renouncing more than she had.

Mr. FERGUSON. No, sir. Germany does her act of renunciation in the first paragraph. The second paragraph is the statement of all the signatory powers to this treaty, not Germany's renunciation. Germany's renunciation is in the first paragraph.

Senator MCCUMBER. I do not believe that any civilized nation will give it the construction that China fears.

The CHAIRMAN. I may not be civilized, but I give it that construction.

Senator MCCUMBER. I do not think any civilized nation would. Mr. FERGUSON. Senator, I may say that China has had experience in this matter in dealing with Japan in reference to Korea and in

Manchuria.

The CHAIRMAN. And so has everybody else.

Mr. FERGUSON. And has had a long line of precedents that cause her to be wary of such phrases, and she has a serious fear of that phrase.

Senator MCCUMBER. We do not blame her for being suspicious. Senator WILLIAMS. I would like to ask a question

Senator FALL. I should like to ask a question when the opportunity

arises.

Senator MCCUMBER. I yield to the Senator.

Senator FALL. I yield to the Senator from Mississippi.

Senator WILLIAMS. On this very point I want to ask you, whatever may be the case as to treaties between China and Japan, and whatever may have been bad faith in the past, we are talking now about this treaty.

Mr. FERGUSON. Yes.

Senator WILLIAMS. In the first clause it says, "Germany renounces," and in the second clause it says, "all German rights," and then the third paragraph says, "the German State submarine cables from Tsingtao to Shanghai and from Tsingtao to Chefoo" and so forth.

Mr. FERGUSON. Yes.

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Senator WILLIAMS. And article 157 says, "the movable and immovable property owned by the German State in the territory of Kiaochow."

Mr. FERGUSON. Yes.

Senator WILLIAMS. Now, how can it mean anything except what Germany owns, when it says so in every clause?

Mr. FERGUSON. But Germany did not own. It is the ipse dixit statement of the Japanese Government, as to whether this property, without any legal review of it, was German state owned, or was privately owned, a thing which I do not think has occurred in the handling of private property in any other part of the treaty. It is the ipse dixit statement that this property does belong to the German State; whereas it has been generally supposed, and as far as I know accurately supposed-because I had a great deal of dealings with the administration of the Tsingtao Railway when I was the chief secretary of the Chinese Railway Administration that it was a privately owned concern, and as far as I know that has never been doubted. That is taken over and has been stated to be German State owned. Senator WILLIAMS. If it says in this treaty "the movable and immovable property owned by the German State in the territory of Kiaochow," then this treaty can not carry any privately owned property, because it is expressly limited to the property owned by the German State.

Mr. FERGUSON. But who is going to determine that?

Senator WILLIAMS. Well, that is another question, that might come up in treaties between China and Japan, and probably come up to the disadvantage of China. I do now know.

The CHAIRMAN. I have no desire to make an argument, but I want to ask a question. Does not the description the TsingtauTsinanfu Railway," and "submarine cable from Tsingtao to Shanghai" describe property that is partly private?

Mr. FERGUSON. Yes.

The CHAIRMAN. And gives it to Japan?

Mr. FERGUSON. Yes; as far as my knowledge goes.
Senator WILLIAMS. That is the submarine cable?

Mr. FERGUSON. The submarine cable and the railways.

The CHAIRMAN. I said both the submarine cable and the railway. Senator FALL. May I ask a question before you get off of this? Is it not your construction, and the fear of the Chinese, as though Germany were making a quitclaim deed to Japan of more property than Germany itself owned, and that that quitclaim deed by virtue of these articles is being turned into what China fears to be a warranty deed to Japan of more than Germany quitclaimed?

Mr. FERGUSON. I think your simile is very much to the point, Senator

Senator JOHNSON of California. Let me call your attention to article 157, to the peculiar language there which may lead to differences in the future:

The movable and immovable property owned by the German State in the territory of Kiaochow, as well as all the rights which Germany might claim in consequence of the works or improvements made or of the expenses incurred by her, directly or indirectly, in connection with this territory, are and remain acquired by Japan.

Mr. FERGUSON. Yes.

Senator JOHNSON of California. You observe the loose language and the elasticity of it, by which any possible claim might be made by Japan now as the successor of Germany.

Mr. FERGUSON. Yes.

Senator JOHNSON of California. By the way, if they want to preserve any promises

Mr. FERGUSON. Before you go on, may I call your attention to the last clause of the first paragraph of article 156?

Senator JOHNSON of California. Yes.

Mr. FERGUSON. "And of all other arrangements relative to the Province of Shantung."

Senator JOHNSON of California. Yes.

Mr. FERGUSON. China also fears that very much. There were certain arrangements there which were wrung from her under duress. There may be arrangements there which were made without the knowledge of the central government, made by provincial or local officials, which if the Chinese Government had been cognizant of them would have been promptly disallowed, but this makes the possibility of bringing them forward as a claim for rights. That is a very serious matter. That is the last clause of the first paragraph of article 156, "and of all other arrangements relative to the Province of Shantung." Arrangements with whom? Arrangements with the central government? The government would feel obliged to stand by arrangements made with the central government, but naturally the Chinese Government does not consider that it ought to be held accountable for arrangements with provincial or municipal authorities which had not been reported to the central government.

Senator JOHNSON of California. And if it had been desired by the powers who executed this treaty to preserve the promise of Japan, do you know of any reason why that promise should not have been inserted in the treaty?

Mr. FERGUSON. No, sir; that is the strange part of the treaty, to my mind, that Japan having made a promise to China to return this, having made this statement in her declaration of war against Germany that she would return it, the treaty itself makes no mention of the promise. As far as I know all the obligations of every nation are included in the treaty, and this obligation to return Kiaochow to China, on the part of Japan, is not mentioned in the treaty. May I add there, Senator-I hope I am not too discursive

Senator JOHNSON of California. No; go ahead.

Mr. FERGUSON. The whole process of restoring Kiaochow to China on the part of Japan could have been such a simple thing that the means which have been adopted since 1914 can only be explained to my mind by the fact that it has been the deliberate policy of Japan to make the return to China as difficult as possible. Japan captured Kiaochow. All she had to do was to turn it back to China at that time and withdraw her forces, and there was no need of reterring to anybody. She would have rid herself of German influence in the Far East, she would have kept faith with the Allies, and there would have been no discussion. But, instead of doing that, she has scattered her troops all over the province of Shantung; she has made a civil administration in the province; she has added every possible obstacle to the keeping of her original promise in the ultimatum of restoring Kiaochow to China. The simple, easy process has been made a complicated and difficult one.

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