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Now, since the Japanese Government has presented a revised list of demands and declared at the same time, that it will restore the leased territory of Kiaochow, the Chinese Government reconsiders the whole question and herewith submits a new reply to the friendly Japanese Government. In this reply the unsettled articles in the first group are stated again for discussion.

After the Russo-Chinese Bank and the Manchurian railway business, there was the Kiaochow affair, then the Port Arthur affair, the Weihaiwei and Kwangchowwan affairs, nothing but "affairs" all tending in the same direction the making of a very grave political situation.

As a matter of fact, the Japanese publicly announced their intention to adhere to the League of Nations two days before a decision was reached respecting their claims to Kiaochow. This adverse note on Mr.

After the Japanese occupation of Kiaochow, Japan shall acquire all the rights and privileges hitherto enjoyed by the Germans in regard to railways, mines and all other interests, and after peace and order is restored in Tsingtao, the place shall be handed back to China to be opened as an International Treaty port.

From the commercial and military point of view Kiaochow is an important place, in the acquisition of which the Japanese Empire sacrificed much blood and money, and, after the acquisition the Empire incurs no obligation to restore it to China.

When the world-war broke out China was still in the throes of her domestic troubles and without any money at all in her Central Treasury; and although Yuan Shih-kai, on being suddenly confronted with an unparalleled international situation, did initiate certain negotiations with the German Legation with a view to securing a cancellation of the Kiaochow lease, the ultimatum which Japan dispatched to Germany on the 15th August, 1914, completely nullified his tentative proposals.

The campaign against Kiaochow was unpopular from the outset among the Japanese public because it was felt that they were not legitimately called upon to interest themselves in such a remote question as the balance of power among European nations, which was what British warfare against Germany seemed to them to be.

Furthermore, the Chinese Government not only ignored the friendly feelings of the Imperial Government in offering the restoration of Kiaochow Bay, but also in replying to the revised proposals they even demanded its unconditional restoration; and again China demanded that Japan should bear the responsibility of paying indemnity for all the unavoidable losses and damages resulting from Japan's military operations at Kiaochow; and still further in connection with the territory of Kiaochow China advanced other demands and declared that she has the right of participation at the future peace conference to be held between Japan and Germany.

The Chinese delegation, which worked vigorously and indefatigably and won over a considerable number of backers, argued that Kiaochow had ceased to belong to Germany on the day when China declared war on that state, inasmuch as all their treaties, including the lease of Kiaochow, were abrogated by that declaration, and the ownership of every rood of Chinese territory held by Germany reverted in law to China, and should therefore be handed over to her, and not to Japan.

Furthermore, the Chinese Government not only ignored the friendly feelings of the Imperial Government in offering the restoration of Kiaochow Bay, but also in replying to the revised proposals they even demanded its unconditional restoration; and again China demanded that Japan should bear the responsibility of paying indemnity for all the unavoidable losses and damages resulting from Japan's military operations at Kiaochow; and still further in connection with the territory of Kiaochow China advanced other demands and declared that she has the right of participation at the future peace conference to be held between Japan and Germany.