TSINGTAO (KIAOCHAU)
531
Japan's original undertaking, especially as, since that undertaking was given, China had become one of the Allies. As they failed to obtain satisfaction, they declined to sign the Peace Treaty with Germany, which provided that Germany's rights in Shantung should be transferred to Japan. The matter came before the Washington Conference in 1921, and the result was the Shan- tung Treaty, under which it was provided that the territory should be restored to China. A Sino-Japanese Commission was subsequently appointed to give effect to the provisions of the Treaty, and this body met in 1922 and arranged terms which are set forth in the Treaty section of this volume.
While Kiaochau was in German occupation, the special attention of the Administration was devoted to agricultural, commercial and mining deve- lopment in the Protectorate and Shantung. The local administration con- sisted of a Council, composed of all the heads of the several administrative departments under the personal supervision of the Governor and four mem- bers chosen from the civil population and appointed for two years. The Pro- tectorate developed to an unlooked-for extent under this system of admini- stration, which enabled all the vital questions at issue, such as legal rights, landed properties, land-tax assessment, school and church matters, to be sat- isfactorily settled. The object of the Administration in dealing with the land question was to secure for every settler the lasting possession of his plot, thereby opposing unhealthy land speculation. Tsingtao, on the 2nd Septem- 'ber, 1898, was declared a free port. The harbour had all the advantages of a Treaty port, and as a free port especially recommended itself as an em- porium, since the merchant could there store, free of duty, his wares from abroad or his raw materials brought from the interior of China. The Chinese import duties were at first levied only on goods brought to Tsingtao by sea, when they were transported beyond the borders of the Protectorate into Chinese territory. The Chinese export duties were at first levied only on goods brought from the interior of China, when they were shipped, from the German Protectorate to any other place. But in 1906 a new Convention came into force whereby Tsingtao ceased to be a free port, and the Imperial Mari- time Customs began to collect duties there as well as all the other Treaty ports of China. But the Convention stipulated that 20% of the money so collected at Tsingtao should be paid to the Imperial German Government. The Com- missioner of Customs in his report for 1906 commented on the arrangement as follows:-"The principal object of the arrangement, which, moreover, afforded the opportunity of a political rapprochement and material conces- sions for mutual benefit on both sides, was the creation and promotion of trade and commerce between the Pachtgebiet and the Chinese hinterland. The results of the first epoch have conclusively proved the wisdom of this novel arrangement. Under it trade developed beyond expectation and rose from a value of Taels 2,000,000 in 1899 to Tls. 22,000,000 in 1905, and Tsingtao, the former dilapidated fishing village, grew into a handsome city with a flourishing mercantile community and a considerable number of manufactur- ing establishments, giving promise of good profits and further development. Its success emboldened the merchants, foreign and Chinese, to ask for, and the Government to agree to, going a step further and arranging for the limitation of the free area, which formerly comprised the whole Pachtgebiet, to the harbour, on much the same lines as the German free ports Hamburg and Bremen. The chief advantage of this step lies in the removal of Custom -control from the railway stations to the free area, and the consequent free- .dom of goods and passengers to pass in and out, from and to the hinterland, without hindrance or control of any kind-a traffic simplification from which a considerable increase in trade was expected." The new arrangement inspired confidence in the stability and future of the port and attracted artisans, traders, and wealthy Chinese firms, which last, hitherto dealing with Chefoo, had until now kept aloof from the place. The total value of trade increased from Hk. Tls. 30,700,000 in 1906 to Hk. Tls. 39,700,000 in 1909, and reached a total of Hk. Tls. 56,330,321 for the year 1912, or an in- crease of 20% over the previous year, notwithstanding the disadvantageous conditions for trade caused by the revolutionary troubles in China.