Manchuria, the homeland of the Manchus, consists of the “Three Eastern Provinces” of China, Fengtien (Liaoning), Kirin, and Heilungkiang. It has an area approximately the same as the combined areas of Illinois, Michigan, Wisconsin, Minnesota, Iowa, and Missouri, and a population about one-third greater than the total population of those states. Climatically it is somewhat similar to the northern states mentioned. It is traversed by two principal mountain ranges which are rich in mineral and timber resources. Between these ranges, particularly in the southern portion, lies the great Manchurian plain, ideally suited for agriculture, and it is this plain that has caused the area to be called “the granary of Asia.” Until very recently its natural resources have been undeveloped, and its population, formerly approximately stationary, has been increasing rapidly since the beginning of the present century.
Historically, Manchuria has been a part of the fringe of the Chinese Empire which has always been more or less involved in imperial destinies. It was included in the area which was excluded from China proper by the Great Wall, built in the third century, B.C. It has been peopled by hardy nomadic tribes or races, the principal of which, in recent history at least, was the Manchu. In the past its geographical limits have been vague, and no attempt was made to define them until the seventeenth century when the Russians, moving eastward, gradually began to acquire the territory that is now Siberia. Its history, like that of its neighbors in the remainder of the fringe, contains many records of conflict with the empire and it has been, on more than one occasion, the origin of invasions of China. The most important of these invasions took place about the middle of the seventeenth century and resulted in the conquest of China by the Manchus. This conquest established an alien Manchu dynasty upon the throne of China which remained in power until 1911. While Chinese civilization had penetrated into Manchuria to some degree prior to the establishment of the Manchu dynasty, it was through this conquest of China by the Manchus that Manchuria came to be considered a part of China. The attitude of the conquerors with respect to their homeland illustrates this. During the greater part of the reign of the dynasty, Manchuria was reserved exclusively for Manchus. This restriction served both to exclude the Chinese from the land and to retard its development.
China’s time-honored means of conquering conquerors has been to assimilate them, and this explains to a large degree the decay and collapse of the Manchu dynasty. Near its end, in 1907, one of the reforms initiated in an effort to save the dynasty was the opening of Manchuria to Chinese immigration. This opportunity, coupled with the almost constant state of civil war which has existed in China since 1911, has served to encourage a migration of Chinese from China into Manchuria. So effective has this migration been that from an estimated population of from 16 to 20 millions in 1912, the population is now estimated to be about 30 millions, almost all of which is Chinese. Until very recently it was increasing at a rate varying from one half to one million per year. The Manchu race, as such, is now almost non-existent and its numbers total less than a million.
In the earlier contacts between western countries and China, Manchuria, isolated and undeveloped as it was, did not play a prominent part. Due to its geographical position, however, Russia was an exception to this condition. In the sixteenth century the Russians began crossing the Urals in search of furs, and as this movement spread to the eastward clashes with the natives of Manchuria occurred. Resulting from this movement, and the intermittent warfare which ensued, was the first treaty signed between China and any western nation. This treaty, signed in 1689, fixed the boundary of Russian territory to be along the Amur River. The area thus transferred to Russia had never been settled by the Manchus and was comparatively unknown, although it had had some value as a source for furs. The Russian migration continued to the eastward, and in 1860 another treaty was signed which fixed the present boundary of Russian territory and extended the Russian Empire to the Sea of Japan where was founded the port of Vladivostok. Russia obtained title to this wide expanse of territory in return for her efforts in mediation which led to the settlement of the war between China and England and France. Another result of this war, which had a bearing on the development of Manchuria, was the opening of the port of Newchang to foreign trade.
Manchuria’s early contacts with Japan extend back through several centuries. Japan’s line of communication with the mainland naturally passed through Korea and it was by this route that many elements of Chinese civilization, such as the written language, were introduced into Japan. At one time Japan was considered to be a tributary state of China. Kublai Khan, while ruling over China, attempted a conquest of Japan over this route. Japan, at another time, launched a strong invasion of China by way of Korea, which failed after several years of effort. The earlier contacts had little effect on the present course of events, for in the seventeenth century Japan closed itself to foreign intercourse and remained closed for more than 200 years. Not until after 1854 did she renew her interest in the mainland. There followed a long series of troubles which brought the relations between Korea and China on the one hand and Japan on the other to a critical stage.
The principal cause for the Sino-Japanese War, which broke out in 1894, was this deep-rooted controversy which had developed about the independence of Korea. In a single battle the effectiveness of the Chinese navy was destroyed. With the naval threat to communications removed, Japanese armies moved through Korea and quickly occupied the southern part of Fengtien (Liaoning) Province from the mouth of the Yalu River to Newchang. After the capture of Wei-hai-wei and what is now Port Arthur, the Japanese prepared for an advance on Peking. With their capital thus threatened the Chinese sued for peace. Among the provisions of the Treaty of Shimonoseki, which terminated the war, was the cession of a part of Manchuria which had been occupied by Japanese troops, and known as the Kwangtung peninsula, to Japan. Russia, alarmed at this turn of events, enlisted the aid of France and Germany and succeeded in preventing this cession of territory.
Russia was not slow to take advantage of the events of the Sino-Japanese War to further her own interests in Manchuria. The trans-Siberian railway was in process of construction and the idea of running this line directly across Manchuria to Vladivostok was conceived by the Russians. To traverse Manchuria instead of building around it meant a saving of about 600 miles of trackage. Her intervention, which had prevented the cession of Kwangtung to Japan, provided the basis for negotiations which resulted in a secret treaty of alliance between Russia and China, signed in 1896, specifically directed against Japan.
In exchange for assurances of help in the event of another war with Japan, Russia obtained from China formal consent to the building of the trans-Manchurian railway. While Chinese territorial rights were guaranteed in the alliance, the railway concession was clearly indicated as being primarily for military purposes. By the terms of the treaty the Russo-Chinese Bank, known since 1910 as the Russo- Asiatic Bank, was to be given the contract for the construction of the railway. This bank, organized in 1895, appears to have been an agency of the Russian Ministry of Finance and the Foreign Office for the primary purposes of financing the railway and disguising its official character. While French capital was obtained and used for the construction of the line, the French loans were made to the Russian government and were secured by government bonds. The Russian government, in turn, used this money for financing the railway through the bank.
The agreement between the Chinese government and the Russo-Chinese Bank providing for the formation of the Chinese Eastern Railway Company, and for the construction of the railway, is of the greatest importance, for it is the basic agreement upon which the later structure and operation of the railway concessions in Manchuria are based. One reason for the many controversies which have followed this original concession is the fact that the agreement contains many ambiguities and conflicting statements. It was written in the French and Chinese languages and the French text contains one provision which was omitted from the Chinese text. While many controversial points have arisen concerning the operation of the railway under the terms of the remainder of the contract, they have been of minor importance when compared with those which have arisen from the particular provision appearing only in the French text. Because of its extreme importance it should be emphasized that its existence as a binding part of the contract, although appearing in but one text, has been fully recognized by the Chinese government. The provision is: “The company will have the absolute and exclusive right of administration of its lands.”
This provision was interpreted by the Russians as giving the company civil jurisdiction over the railway lands, an interpretation to which the Chinese objected. Subsequent agreements have recognized the Russian interpretation, in principle, at least. Inasmuch as the “company” was a semi-official agency of the Russian government, the provision had the effect of a limited transfer of sovereignty. There can be little doubt that the Chinese negotiators realized that this condition would result when they signed the agreement, and its inclusion can be interpreted as the price that the Chinese were willing to pay for the assurances of help contained in the secret alliance.
Aside from this one provision the agreement is more or less conventional and general in its terms, although favorable to the operating company. In addition to the right of way for the railway itself it was granted lands for the supply of necessary sand, gravel, etc. A later agreement permitted the company to develop and operate mines and it gradually expanded its operations and assumed added powers, in many cases beyond the limits permitted by the agreement. While these practices were objected to at the time by the Chinese government, subsequent agreements have, in general, confirmed the increased activities.
Having been completely successful in her first entry into Manchuria, Russia soon made further advances. Among her desires was an ice-free port, a condition which Vladivostok did not satisfy. When Germany obtained the Kiaochow lease in 1898, Russia joined in the “scramble for concessions” which followed and obtained from China a lease of the Kwangtung peninsula, containing Port Arthur and Dairen, for a period of twenty-five years. Work was commenced at once in building extensive fortifications at Port Arthur and in developing the port of Dairen (called Dalny under the Russian regime). This was the same area which she had, with the help of France and Germany, succeeded in preventing Japan from obtaining but three years before. Also included in the lease convention was authority for the Chinese Eastern Railway to construct a branch line from Harbin to Dairen and Port Arthur under the same conditions as were provided for in the original agreement with the Russo-Chinese Bank.
The Boxer troubles in China indicated more clearly the objects of Russia in the Manchurian area. Upon the outbreak of the Boxer Rebellion, Russia rushed troops into Manchuria and, among other things, established “railway guards,” consisting of troops distributed along the railway, to cope with the bandit situation. Points many miles from the railway were occupied and at one time upwards of 100,000 troops were in Manchuria. Work on the railways was rushed in spite of troubled conditions, and the lines were actually completed ahead of the scheduled time. Russia was slow to remove her troops after the Boxer troubles had been settled, although she had given assurances to several foreign countries, including Japan, Great Britain, and the United States, that she would remove them promptly. Her reluctance to remove her troops, the almost feverish industry with which she rushed to completion her railway enterprises, and her development activities in the newly acquired Kwangtung leased territory demonstrate that she intended to exploit the area to the utmost. In 1903 her troops were still in force in the section and her general attitude was such as to indicate that the annexation of Manchuria was her real objective.
Shortly after the close of the Sino-Japanese War, Japan and Russia reached agreements regarding their respective relations in and with Korea, which had become independent as a result of that war. It is significant that Russia entered into these agreements soon after she had negotiated her secret treaty of alliance with China. Both Russian and Japanese troops were stationed in Korea for several years and both countries struggled for permanent footholds. The history of the ten-year period from 1895 to 1905, so far as Korea is concerned, is largely one of intrigue centering about the efforts of each country to obtain a dominant position. In many ways the Russian became somewhat stronger than the Japanese. The effects of this struggle were felt in other parts of the world and one of the principal reasons for the formation of the Anglo-Japanese Alliance was the Russian expansion in the Orient as evidenced by her efforts to dominate Manchuria and Korea.
Russia showed little inclination to cooperate with Japan and repeatedly disregarded her agreements regarding Korea. After the failure of prolonged efforts on the part of Japan to reach a satisfactory understanding regarding both Manchuria and Korea, the Russo-Japanese War broke out in 1904. This war was unique in that the land operations were conducted entirely on neutral soil, although by the provisions of her secret treaty of alliance of 1896 China should have entered the war on the side of Russia.
In prosecuting the war Japanese forces advanced into Manchuria through Korea and captured Liao-Yang on the south Manchurian branch of the Chinese Eastern Railway. In making this advance a light military railway was constructed across Fengtien which was later to become the Antung-Mukden Railway. After the capture of Liao-Yang, which gave the Japanese a foothold on the railway, operations were directed against Port Arthur. The capture of this fortified stronghold required a long siege which included extremely severe fighting and heavy casualties. Following the reduction of Port Arthur, a general advance was made in the direction of Mukden and, after its capture, the Russians were completely expelled from southern Manchuria. The Japanese were successful in every major operation of this war and their success destroyed the Russian domination of Manchuria, although the war ended before they had advanced beyond Changchun.
The Treaty of Portsmouth, which ended the Russo-Japanese War, transferred to Japan both the Kwangtung lease and the south Manchurian branch of the Chinese Eastern Railway from Changchun to Port Arthur. Transferred with the actual property were all rights and privileges pertaining to the areas concerned and the coal mines in the region which were owned by or operated for the railway. The transfers were to be made subject to the approval of China. China gave her consent in a treaty with Japan signed in Peking in December, 1905. In an additional agreement to this treaty, China formally recognized and sanctioned the presence of railway guards for the protection of the railway property.
Following the Russo-Japanese War, Russian influence in Manchuria gradually diminished in importance even in the northern section which was largely unaffected by the war. The settlement made no important changes in the administration of that part of the Chinese Eastern Railway which was retained by Russia.
The operation of the original contract in connection with the administration of lands was formally brought to the attention of other powers by the establishment of a municipality at Harbin in 1907. It was planned that this municipality, when established, should be administered according to Russian law, and the administration would include such functions as the levying of taxes payable to the railway and the operation of courts of law. Objections by China to this proposal caused prolonged discussion and resulted in agreements which apparently met the Chinese objection, but which actually strengthened the Russian position. The question was made into an international one when the American consul refused to apply to the railway authorities for permission to establish his consulate, basing his refusal on the ground that he was accredited to the Chinese government and that Harbin was Chinese territory. The United States and Germany objected and claimed that the rights of foreigners were being interfered with. Japan was favorable to the Russian position, and other powers were inclined to accept the situation.
The United States has refused to recognize that the original contract granted the railway political and civil administrative rights in the railway areas. In practice, however, the American government has permitted its nationals to pay taxes on the ground that they enjoy the benefits provided by the municipalities and should, therefore, contribute a fair share of the cost of these benefits.
One result of the Russo-Japanese War was the conversion of the Chinese Eastern Railway from a primarily military venture into one commercial in nature. This was specifically provided for in the Treaty of Portsmouth. However, instead of doubletracking the Chinese Eastern, the Russians have since built an additional line around Manchuria entirely in Russian territory.
From 1907 to 1915 Russia entered into several agreements with Japan which were concerned chiefly with the “spheres of influence” of the two countries in Manchuria and in the delineation of these spheres. Until the time of the Russian Revolution both usually have stood together and acted in unison whenever questions involving Manchuria have been raised. Examples of this co-operation will be noted when the activities of Japan in Manchuria are considered.
In 1924 the Soviet government denounced the “unequal” treaties to which China was a party and renounced all of the privileges, such as extra-territoriality, which Russia had previously enjoyed. In a treaty with China, signed at this time, it agreed to a co-operative administration of the Chinese Eastern Railway. This joint administration has not been free from controversy, and one dispute in 1929 resulted in open hostilities. The incident was brought about by the forcible ousting of certain Soviet officials in Manchuria by the Chinese. The officials concerned had, according to Chinese claims, abused their administrative positions and utilized the various agencies of the railway for the dissemination of Soviet doctrines. Diplomatic relations were completely broken off by the two parties and they have not yet been resumed.1 The particular incident was settled by a protocol which re-established the status quo.
Following the acquisition of her new properties after the war with Russia, Japan launched an energetic program of development. The record of her activities from the first indicates that she has been hopeful of reserving the benefits to be derived from the development of Manchuria largely to herself. It is in the prosecution of this policy that questions involving Manchuria, or rather the Japanese activities in that area, frequently have had the attention of world powers. She has resisted the entry of foreign finance into the area and in this she has been practically, if not theoretically, successful. An examination of some of the foreign efforts to obtain a financial interest in railway development, in particular, will serve to indicate the extent of her success.
Immediately after the signing of the Treaty of Portsmouth, Mr. E. H. Harriman, the American railroad builder, made an effort to buy and operate the newly acquired Japanese railway. The negotiations reached an advanced stage, but were broken off when the Japanese decided to retain the line.
In 1907 a British company agreed with China to build a railway from Hsinmintun to Fakumen, both in Manchuria. Japan objected to the project, citing a protocol to the Treaty of Peking, of 1905, in which China had agreed to the transfer of the Russian properties. This protocol provided that no railway paralleling the South Manchurian, and competing with it, should be built without previously consulting Japan. There has long been doubt as to the validity of this protocol, but the Lytton commission, which made a special point of investigating it, found that an understanding, substantially as claimed by Japan, was reached and is binding upon China although it does not have the force of a formal treaty. The principal difficulty in interpretation has been in defining what is meant by “parallel” and “competing.” The British government, then bound by the Anglo-Japanese Alliance, was inclined to be favorable to the Japanese position and did not give its nationals support in this venture.
In 1909 an Anglo-American syndicate agreed with China to construct a railway from Chinchow, on the Peking-Mukden Railway, to Aigun, in northern Manchuria, crossing the Chinese Eastern at Tsitsihar. The execution of this project was delayed by the death of Mr. Harriman who had been one of the leading figures in the syndicate. Shortly afterwards the American State Department put forth a plan for the “neutralization” of the Manchurian railways. This scheme became known as the Knox plan and it grew out of the negotiations in connection with the Chinchow- Aigun project. The British government was lukewarm to the proposal and Russia and Japan, with neither of whom had any preliminary discussions been conducted, flatly rejected it. The Chinchow-Aigun Railway project was abandoned after the failure of the Knox plan to materialize.
In 1910 European and American banking interests combined into a “four-power banking group” for the purpose of jointly financing various projects in China. In this same year the group entered into an agreement with the Chinese government for a loan to be used for currency reform and for industrial development in Manchuria. The objections of Japan and Russia to certain features of this agreement led to lengthy discussions which resulted in the inclusion of these two powers into what then became a six-power consortium. Practically nothing was accomplished by this group and one of the first acts of President Wilson’s administration was the withdrawal of the official support of the United States from the consortium.
The World War transferred the interests of world capital to the European field and matters in China were left largely to Japan. In 1918 the American State Department again became interested in Chinese financial matters and at its suggestion a new consortium was formed consisting of American, Japanese, British, and French banking groups. While this international banking consortium was fully organized, and the negotiations attendant upon its formation contributed materially to removal of certain objectionable elements in the way of joint international financial activities in China, it has been and remains largely a paper syndicate. One principal reason for the failure of this group to underwrite loans of any importance has been the inability of the Chinese to form a stable and responsible government.
While these two banking groups were organized for the joint financing of Chinese undertakings, including railway construction in Manchuria, no foreign capital, other than Japanese, is invested in railways in southern Manchuria, although several new lines have been constructed in that area since 1906. The sole exception is in the case of the Peking-Mukden Railway in which British capital is invested by an agreement entered into prior to 1900.
Included in the agreements incident to the approval by China of the transfer of the Russian rights to Japan, was the right to retain and convert into a standard- gauge commercial line the narrow-gauge military railroad which had been constructed by the Japanese during the Russo- Japanese War from Antung, on the Korean border, to the south Manchurian branch of the Chinese Eastern. Owing to the inability to reach agreement over such matters as the inclusion of this line under the terms of the south Manchurian, the right of Japan to maintain railway guards on the line, and the variations in route from the original line, the actual conversion was delayed for several years. Originally it was to have been completed within three years but it was not until 1909 that a final agreement was reached and then only after Japan had sent an ultimatum to China demanding settlement. Although China finally agreed to the conversion, many questions such as the railway guard issue were left unsettled.
From the time of her initial acquisition of the railway, Japan has been engaged in almost continuous controversy with China over various problems arising from the rights involved. These have been complicated by the lack of precise phraseology, not only in the original Russian agreements, but also in the Treaty of Portsmouth and the agreements which have been entered into subsequently. For example, while the Treaty of Portsmouth transferred certain Russian properties to Japan no exact description of the property transferred was made. In many cases land was involved in which the Russian title either was not clearly defined or was involved in litigation. Thus, at the outset, there was a lack of definiteness concerning just what Japan had acquired. In their own enterprises the Russians had instituted practices which were not definitely permitted by the agreements and which had been the subject of controversy with China. In assuming the administration of these properties the Japanese followed the existing Russian practices and thereby inherited the points of difference and controversy along with the physical property.
Because of her alliance with Great Britain, the World War promptly included Japan among the Allies. Her geographical position naturally gave her, as her principal objective in the war, the capture of the fortified German leasehold at Tsingtao. In accomplishing this capture she suffered heavy losses and was forced to conduct extensive military operations on Chinese soil outside the limits of the leased area. The disposition of the captured German holdings, coupled with her many troubles in Manchuria, led her, in January, 1915, to submit a series of proposals to China in the form of a demand.
These proposals have since been known as the “twenty-one demands.” They were submitted in an unusual manner, being presented direct to the president of China and without previous intimation that their submission was contemplated. An examination of them indicates that they were probably much more severe than the actual conditions warranted. With one exception they were concerned chiefly with the settlement of outstanding differences. The proposals contained in Section V provided, in effect, that Japan would have an active part in the internal administrative affairs of China. The provisions of Section V were not insisted upon and they were completely abandoned after the Washington conference.
After prolonged discussions and in reply to a Japanese ultimatum, a series of treaties and agreements were signed and reached in May, 1915. Many current differences concerned with China proper, including the disposition of the ex-German leased territory, were settled. Several changes in the then existing conditions in Manchuria were made. The periods of the leases of the Kwangtung leased territory, the South Manchuria Railway, and the Antung-Mukden Railway, were extended to ninety-nine years. Originally these were: for the Kwangtung lease twenty-five years; and for the railways, eighty years for the South Manchurian with a provision for repurchase by China after thirty-six years, under specified conditions, and fifteen years for the Antung-Mukden. There were several provisions concerning the free movement of Japanese subjects in Manchuria and the granting of certain trade facilities. Others provided for the transfer of control of the Kirin-Changchun Railway to Japan for ninety-nine years, for exclusive financial activities, for the extension of mining rights, and for the employment of Japanese advisers when required.
Perhaps more than any one incident, the 1915 agreements have been responsible for the continued strained relations between China and Japan. Many Chinese have maintained that, since the agreements were obtained under duress, they are not binding. Such an attitude cannot be given serious consideration, however, because its acceptance would cause the same claim to be made for countless other treaties, such as the Versailles Treaty. The Chinese government has accepted their validity, but has taken the position that they were unjustified and, being obtained under duress, should be abrogated. There is evidence to the effect that the ultimatum, which was responsible for the conclusion of the agreements, was privately requested by Chinese officials for the purpose of preserving their prestige. If this be true, the Chinese position is weakened for the duress claimed was the threat contained in the ultimatum. There are many elements concerned with these agreements which have not yet been explained satisfactorily.
The 1915 agreements represent the last important grant of concessions which has been made by China. In fact this time may be taken as marking a turning point in China’s position, for since then she has regained some features of autonomy which had been withheld from her complete control, and also some of the concessions which she had previously granted.
That the agreements concluded, and more particularly the provisions of the original proposals, were the source of considerable concern to other powers was evident by the attention which they received. Chief among the foreign interests in the negotiations was the question of the maintenance of the open-door policy, one to which all of the powers concerned were committed. Where exclusive rights were granted to Japanese subjects, these rights were apparently in conflict with the principle. The subject of the 1915 agreements was prominent at the Washington conference in 1922, and the Nine Power Treaty, which was signed at this conference, nullified the provisions of the agreements which were most in conflict with the views of other powers.
During the war years, when the attention of the rest of the world was focused in Europe, a series of questionable agreements were concluded between Japanese interests and the Chinese government in Peking. In 1917-18 a series of loans to the Chinese government were arranged through Japanese banks. These have become known as the Nishihara loans and were named for the representative of the Japanese prime minister who negotiated them. The funds were advanced to the military rulers then controlling the government in north China. Two of the loans were for the stated purpose of railway construction in Manchuria, $5,000,000 in one case and $10,000,000 in the other. While ostensibly for railway development, the agreements did not contain any details governing the method of expenditure of the funds, such as might be expected, and they were written in the most general terms. The loans amounted to an unconditional delivery of the funds to the Peking regime and the enemies of that regime have claimed that the money was used to finance military operations against southern factions. Outwardly it appears that these unconditional advances were hardly more than disguised bribes which Japanese interests were willing to pay for the privileges and concessions which they received in return.
One other loan agreement made during this period is illustrative of the attitude of certain Chinese military leaders towards such matters. A loan of fifteen million dollars was made with the gold mines and national forests of Heilungkiang and Kirin Provinces, together with the government’s revenue from these sources, as security. No definite purpose for the loan was stated other than an implied development of the resources listed as security. So far as is known the loan has never been repaid and the control of these resources is now largely in Japanese hands. It may be presumed that the funds were used by the Chinese officials for their own personal purposes.
During this same period an agreement was made between the United States and Japan which is now of little importance but of which much was made at the time. Upon the American entry into the World War, Japan sent a delegation, headed by Viscount Ishii, to congratulate the United States upon its decision and to arrange for co-operation between the two countries. When the appointment of this mission was reported to the State Department it was closely followed by a suggestion that the United States recognize Japan’s position in Manchuria by “appropriate means.” After the arrival of the mission and as a result of a series of conferences between Viscount Ishii and Secretary of State Lansing the views of the two countries were exchanged. In a formal note addressed to Viscount Ishii was the following statement:
The governments of the United States and Japan recognize that territorial propinquity creates special relations between countries, and, consequently, the government of the United States recognizes that Japan has special interests in China, particularly in that part to which her possessions are contiguous.
This was considered to be a notable diplomatic victory in Japan, for it gave formal recognition to a position which Japan had sought to have recognized and it paved the way for claim to the formulation of an “Asia Monroe Doctrine.” While the wording of the statement seems quite clear there has been from the first a difference of opinion as to its actual meaning. The record of the conversations, both preliminary to and subsequent to the writing of the note, indicates differences concerning the intended meaning. Viscount Ishii stated that what he had had in mind was a statement recognizing that Japan’s position with respect to China was similar to that of the United States with respect to Mexico. The American interpretation, on the other hand, was that the term “special interests” had reference only to economic matters attributable to geographical conditions. The essence of the difference was that Japan considered that political matters were also included in the meaning of the term. Following the signature of the nine power pact at the Washington conference whatever significance the exchange of views had had was superseded by that treaty and the Lansing-Ishii agreement was terminated by mutual denunciation in 1923.
At the peace conference of Versailles the Chinese attempted to have the 1915 agreements with Japan abrogated, but in this they were not successful. At the Washington conference, China renewed the attempt and while she was unsuccessful again, she did succeed in having a considerable part of that conference devoted to a study of the Chinese situation with particular reference to Sino-Japanese relations. Several agreements were reached which, on the whole, indicated a more liberal attitude toward China on the part of the powers. One of the most important of any of the agreements was the nine power pact. In this treaty all of the signatories agreed to a rigid adherence to the principle of the open-door policy of equal opportunities for trade to all. This was definitely extended to include Manchuria by virtue of the fact that the treaty also recognized that Manchuria was an integral part of China. By signing and ratifying this treaty Japan renounced any claim which she may have had to any special or preferential position in Manchuria.
Whenever Japan has been involved in international discussions with powers other than China concerning conditions of her activities in Manchuria, the substance of such discussions may be said to revolve about the principle of the open door and the treaty rights of other foreigners. She has been able, however, to secure and retain for herself practically if not theoretically a dominant position in south Manchuria. There is an abundance of reports, some from partisan sources and some of an official character, which indicate that Japanese officials in the railway areas have followed practices which have tended to delay and obstruct the trade activities of non-Japanese foreigners. This condition existed far more noticeably prior to 1922 than since that time.
In indicating some of the steps which Japan has taken to secure her dominant position no mention has been made of the machinery which she has set up in Manchuria to derive for herself the benefits of this position. It is only through an examination of this machine that the character and scope of her position can be understood.
Soon after it had obtained the railway rights from Russia in 1905, the Japanese government chartered the South Manchuria Railway Company to operate the newly acquired property. Since it has been through this organization that the Japanese development of Manchuria has been carried out the articles of incorporation of the company are of particular importance. Of those articles which pertain to purely operational functions little notice need be taken, for they follow accepted practice and have been the source of little trouble. The significant parts are those which determine the official character of the company.
One-half of the capital stock was reserved for the Japanese government and was represented by the physical properties and rights acquired from Russia. It was provided that the president and vice- president were to be appointed by the government and that the board of directors was also to be appointed by the government from the ranks of stockholders having fifty or more shares of stock. These two factors, the ownership of one-half of the capital stock and the power of appointment of the principal officers, gave the government definite control of the company’s policies. For many years the presidency of the South Manchuria Railway Company was a purely political appointment and was considered in Japan to be of importance second only to a cabinet portfolio. Only the Japanese and Chinese governments and nationals of the two countries were permitted to be stockholders. While a small amount of stock is held by individual Chinese, the company is almost entirely Japanese. Certain decisions involving matters of policy were required to be referred to the government for approval.
The field of operations embraced all of the acquired rights concerned with the railway and mines and the company was authorized to administer the areas owned by the railway outside the Kwangtung leased territory. Thus, while it was incorporated as, and in many respects has been, a private corporation, it was actually a semi-official organization of the Japanese government. Aside from the civil administrative functions which it exercises in the railway areas, the actual company is well described in its Second Report of Progress in Manchuria to 1930, published in 1931.
The South Manchuria Railway is more than a railway company. In addition to its railway undertakings in South Manchuria which constitute the main business, the company conducts, as accessory enterprises, coal mines, iron works, wharves, warehousing, and other activities. The company is also engaged in educational, hygienic, and other public works within the railway zone; controls a number of joint-stock companies, hotel undertakings, etc., chiefly in South Manchuria, and acts as a holding company for these concerns. The functions of the corporation and the volume of its business are possibly the largest of their kind in the Orient, and in some respects, are unsurpassed by any other concern in the Pacific area. The story of the company’s development is also, to a great extent, the story of the progress of Manchuria in the last quarter-century, for both are inseparably related.
One of the administrative features continued from the Russian practice was the grouping of the properties into a “railway zone,” over which the right of administration was granted to the railway company. The railway zone is hardly capable of exact description because of its irregular features, the questionable status of some of the properties, and the fact that it is constantly expanding. It embraces the holdings outside the Kwangtung leased territory and roughly consists of about 108 square miles of area which includes the right of way of the railway itself, varying in width from 50 to about 300 feet on either side of the tracks; the enlarged areas in the principal towns along the railway, commonly known as the “Japanese settlements” and “railway areas”; lands acquired by the railway through purchase or lease and used for such activities as mining; and lands owned or leased by individual Japanese in the region. Except in the towns and industrial centers the zone is roughly the railway right of way, aptly described, as one writer has done, by a rule to “follow the white stakes.”
Another operating condition continued from the Russian practice was the maintenance of railway guards along the railway. The Treaty of Peking, sanctioning the transfer of property, contains a provision granting to Japan the right to maintain railway guards to a number not exceeding 10 per kilometer of railway line. The present mileage is such that the total number allowed is about 13,000. Although designated by a special name and in many respects a separate organization, the railway guards have been, in practice, regular Japanese troops under the command of the garrison commander of the Kwangtung leased territory. Normally they are stationed in detachments at various places along the right of way and until recently totalled about 10,000. Japan agreed to remove her railway guards simultaneously with Russia, but the break-up of the Russian Empire and the renunciation of all special rights by the Soviets, coupled with the ever increasing bandit activities, has given Japan justification for retaining them beyond the time that the Russian guards were actually removed.
Prior to 1919 the control of the Kwangtung leased territory, the railway zone, and the affairs of the railway company were in the hands of the governor-general of the Kwangtung leased territory, a military officer directly appointed by the emperor. In that year a reorganization replaced the governor-general with a civil official, the governor of Kwangtung. Since then there have existed four distinct forms of military and police activity in the area under Japanese control. The Kwangtung garrison and the railway guards are under the command of the garrison commander and are independent of the civil administration. The municipal police in the various railway towns are under the control of the governor of Kwangtung. The consular police, having duties restricted to consular activities, are attached to the various consulates. It is a condition difficult to describe, but it is neither as complicated nor as unwieldy as might be supposed, owing to the interlocking organization by which the several officials are involved in administrative affairs. In practice there is one organization, the railway company, which conducts all of its operations, including civil administration, under the general supervision of the governor of Kwangtung. The military in Manchuria, which has the protection of the railway for one of its duties, is entirely independent of the remainder of the organization and is responsible directly to the throne through the ministry of war and the chief of the general staff.
The operation of the railway guards has been one of the most fruitful sources of irritation between the Japanese and the Chinese in Manchuria. Particularly in the earlier stages of Japanese development there were numerous clashes between the railway guards and Chinese troops and civilians. The execution of their duties necessarily led the guards outside the strict limits of the railway zone and such operations on purely Chinese soil provided fertile grounds for the clashes that have occurred.
Aside from their activities of protection to the railway the presence of the guards has enabled Japan to exert strong pressure upon the internal affairs of Manchuria. Manchuria has been relatively free from the almost constant civil warfare existent in the rest of China for the past twenty years. Manchurian leaders have participated in these wars but their military activities have been confined largely to the area south of the Great Wall. When the armies of the present Nanking government were pushing northward, and obtained control of the Peking area in 1928, the Japanese government sent a warning that should the situation become such as to threaten the peace and security of Manchuria the Japanese would interfere. Whether or not this threatened interference was warranted, it had the effect desired.
The Japanese have been careful to avoid incidents within the railway zone which would lead to formal complaint by other powers. The foreigner living in the zone is in a peculiar position because the general extra-territorial treaties give him their protection. At the same time he enjoys the protection and improvements provided by the railway and he can be reasonably expected to contribute his share towards the support of these advantages. Taxes are levied on Japanese subjects as a matter of right. The scale of taxes applied to the Japanese is also applied to the other foreign and Chinese residents of the zone. If such levies should be met by refusal to pay the matter is usually adjusted privately in a manner satisfactory to both parties. By such compromises the Japanese authorities have succeeded in keeping the question of the right to tax all residents of the zone out of diplomatic channels, with the result that taxation of these residents is actually exercised without its legality having been formally challenged.
Most of the problems concerning Manchuria have been, in general, restricted to discussions between China and Japan. Japan has respected the treaty rights of other foreigners in the zone and has, thereby, avoided many other problems which might have arisen. In the long series of quarrels, discussions, and negotiations with China the points at issue have been clouded by misunderstandings and conflicting opinions. These can be traced to the careless manner in which almost all of the pertinent agreements, beginning with the original Russian contract, have been drawn. They contain generalities and statements so phrased that differing and conflicting interpretations can be placed upon them. Added to this are several agreements between the Japanese and local Chinese officials who often have acted independently and without the sanction of the recognized government in China.
This is one of the basic causes of the impasse which exists. Japan has adhered to a rigid exercise of the rights and privileges which she has gained by formal contracts and agreements with China, whether with the central or principal government or with local officials. She has insisted upon her own interpretation of these agreements and has shown little inclination to compromise. China’s objections to Japanese action have been based upon differing interpretations of the agreements and she has frequently attempted to enlist outside support for her contentions. Japan has been largely successful in resisting these efforts.
In less than one hundred years Japan , has transposed herself from a comparatively unknown feudal state, completely cut off from the outside world, to one of the world powers. Immigration barriers in various parts of the world have effectively cut off the disposal of her surplus population. Attempts to use the relatively unsettled Manchuria for this purpose j failed. Consequently she has been forced to turn to industrialization for a solution to this problem. Outside her own territory her largest industrial activity is centered in Manchuria. Her investment in this area, including that in the leased territory of Kwangtung, exceeds $1,000,000,000, an amount which is about one-fiftieth of her national wealth. The South Manchuria Railway Company is one of her largest corporations in which over one-half billion dollars is invested. In view of this huge investment it is not difficult to understand why she considers her Manchurian enterprises to be vital to her economic security. Aside from purely financial considerations her dependence upon Manchuria can be illustrated vividly by one example.
Prior to the World War she imported a industrial steel from England and Belgium. When these two countries entered the war this supply was stopped and iron and steel were imported from the United States. Upon its entry into the war, the United States placed an embargo upon the export of iron and steel. This action cut off Japan’s remaining source of supply. Owing to unobtainable raw materials, work on hundreds of thousands of tons of shipping, then on the building ways in Japan, was suspended and much of the partially completed work became a total loss. She was forced to develop the iron mines of Manchuria and, while these are not sufficient for all of her needs, they form her only dependable source of supply. Similarly, the coal mines provide an industrial necessity, as the deposits in Fengtien Province are the only extensive deposits of coking coal in the Asiatic area. These, together with forests and other mineral resources, provide an abundant supply of raw materials which are vital economically to Japan.
That Japan is primarily responsible for the development of Manchuria from what was a largely unknown area into a highly prosperous section of the world is hardly open to question. In recent years the balance of trade, unlike that of the rest of China, has been favorable to Manchuria. In 1929, for which statistics are available and which may be considered as a typical year, the ratio of export to import was approximately 4:3. For the whole of China (including Manchuria), in the same year, the ratio of export to import was about 2:3. Although unquestionably predominant, Japan has by no means had a monopoly on this trade. In 1908 her share was about 30 per cent of the total (including that with China proper) and in 1929 it was about 35 per cent. For the same years the trade of the United States amounted to approximately 7 and 5 per cent, respectively. In 1929 the American imports from Manchuria amounted to about $6,000,000 and the exports to Manchuria amounted to about $14,000,000, which does not include goods reshipped through China and estimated at about $3,000,000.
Starting with the original Russian railway from Changchun to Dairen the Japanese have either built up, or have been instrumental in building up, a railway network which has opened southern Manchuria to rapid communication. In addition to the Japanese-owned main line and feeders there is a network of joint-owned Sino-Japanese lines and purely Chinese- owned lines. Of the approximately 3,700 miles of railways in Manchuria, the Japanese-owned consist of about 700 miles, the joint Sino-Japanese about 140 miles, and Chinese lines built with Japanese capital 614 miles, making a total of about 1,450 miles in which Japanese capital is invested. The joint Sino-Russian mileage is 1,096, the British financed Peking- Mukden Railway mileage in Manchuria is 388, and the purely Chinese owned is about 765 miles. Although the Japanese railway interests form considerably less than half of the total they predominate because they feed the principal port of Manchuria, Dairen. The lines operated by the Japanese are well equipped and efficiently managed and the service compares favorably with that of any railway in the world.
It is not only in a railway system that Japan has developed the country economically. Through the railway company she has built and operated agricultural experiment stations and through them she has improved both the quality and quantity of agricultural products. Principal among these products is the soy bean, useful as a food and for fertilizer, and exported to various parts of the world. Modern and well-equipped hospitals and schools have been built, and these agencies have contributed to the improvement of general living conditions. Her mining enterprises have been among the most extensive of her operations. These have been the source of much trouble with China, because of the expansion of control over mineral deposits, but through them and forestry operations she has contributed to the economic welfare of the country.
To secure a balanced idea of the Manchurian development and troubles it is necessary to consider the situation from the standpoint of Chinese activities and attitudes.
By the time of the outbreak of the Chinese Revolution in 1911, the Japanese had become firmly established in Manchuria and their presence had a tendency to dampen extensive revolutionary activity which might have occurred otherwise, although Manchuria was slow to join the revolt. In fact, loyal authorities succeeded in checking the revolution by appointing Chang Tso Lin to command imperial troops in resisting the revolutionaries. After the overthrow of the dynasty had been accomplished, the authorities accepted the situation and announced loyalty to the revolutionary government. As in the rest of China the military commanders soon assumed full control and supplanted the nominal civil authority. By 1916 Chang Tso Lin had gained control of most of Manchuria for himself and began a series of operations in China proper. At various times he declared his area independent of China and at one time he conducted all of his foreign affairs independently. At other times he joined with other war lords in controlling the north of China. By 1925 he had gained for himself the control of north China and by 1928 his influence extended as far south as the Yangtze Valley. At this time he was attacked by the Cantonese under Chiang Kai Shek, together with a combination of northern military leaders, and was forced to retire outside the Great Wall. It was at this time that Japan intervened to preserve, peace in Manchuria. Chang’s death occurred during his retirement from Peking and he was succeeded in power by his son, Chang Hsueh-liang, the young marshal. For a time the young marshal apparently made some effort to improve conditions in his domain. Like his father, however, he became involved in the affairs of China proper through a successful attempt to act as peacemaker in a civil war being fought in 1930.
These military operations and interests inside the wall brought the governmental affairs of Manchuria to a low state. The country was forced to support the huge military machine which was built up by Chang Tso Lin and maintained by his son. The military expenditures are estimated to have amounted to about 80 per cent of the whole. This organization was maintained by the levying of excessive taxes and a general bleeding of the country, a practice common throughout China. At Mukden a huge arsenal was built for turning out war munitions in quantity. The currency was inflated with irredeemable paper money and the fiscal system all but collapsed. Maladministration and all of the evils of military rule to be found in other parts of China were present here also. Under this system of misrule, or lack of rule, banditry, always present in some degree, grew to alarming proportions. It was natural that much of the bandit activity should be directed against the one prosperous enterprise in Manchuria, the South Manchuria Railway.
Japan was forced to operate her enterprises in the face of this type of local rule and, lacking other provocations, the situation could not have been satisfactory. Conditions required her to maintain a relatively large force of railway guards to protect her properties. Coupled with the many disputes over interpretation of the agreements, the character of the Chinese administration added to her troubles and the situation became progressively more acute. It became critical during the summer of 1931 when a series of racial disturbances occurred in the Korean-Manchurian borderland. These disturbances were outgrowths of local conditions, but their effect was felt throughout the country. The murder of a Japanese army officer in the interior during the summer added to the tenseness. Finally, on the night of September 18, an explosion along the tracks of the South Manchuria Railway just outside of Mukden precipitated hostilities.
The rapid increase of population in Manchuria can be traced to the civil warfare in China since 1911. To the Chinese farmer, Manchuria has represented a land of relative peace and freedom from molestation in spite of the gradual increase in maladministration. Consequently a steady migration has taken place. This migration has developed political significance for it has established an overwhelming Chinese population. Coincident with the steadily increasing Chinese population the Chinese government has witnessed the Japanese development of the region with a corresponding increase in influence. To counteract this spread of Japanese influence it has employed every means at its command except open warfare. In addition to its efforts to limit or restrict the expansion by means of treaties and agreements, it has launched, from time to time, railway and industrial enterprises.
One project, in particular, has been undertaken with a view to undermining the Japanese influence economically. This is the construction of the port of Hulutao, in process of construction for more than a decade, but only recently showing evidence of nearing completion. Should this port be completed and operated it would absorb a large amount of the trade of Dairen.
In such enterprises, however, as in the preservation of peace and order, the lack of a strong and stable government has served to make Chinese effectiveness more visionary than real. If any one consistent policy has been evident throughout the course of events it has been that China has been desirous of reserving to herself the full benefits of trade in Manchuria. The origin of the existing trade is immaterial for it does exist, and speculation as to whether Manchuria would have been developed to its present state under different conditions is futile.
After the outbreak of hostilities on September 18, 1931, China appealed the case to the League of Nations. After considerable discussion by that body a neutral commission was appointed to investigate the situation and report to the League. This commission, named for its chairman, Lord Lytton of England, made a thorough investigation and has submitted its report. The matter is still an open international question from which comment should be withheld until the League has completed its deliberations, reached its final decision, and the controversy is finally settled.
Whatever may be the final outcome of the controversy the report of the special commission is of permanent value because it contains a formal record of the conditions which have existed in Manchuria for the past quarter century.
The essence of the whole controversy may be summarized by two quotations from this report:
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. . . .
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.
1. Newspapers report that diplomatic relations were fully resumed on December, 12, 1932.