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Japanese Government kept the United States, Russian and French Embassies informed of the progress of negotiations during the Antung-Mukden Railway crisis. This Embassy was always the first to be informed, the three Embassies mentioned above usually receiving their information a few hours before the official communiqués made to the press.

I have forwarded a copy of this despatch to His Majesty's Minister at Peking.

I have, &c.

HORACE RUMBOLD.

[This Document is the Property of His Britannic Majesty's Government.j

[B]

AFFAIRS OF CHINA.

CONFIDENTIAL.

[35889]

No. 1.

646

[September 27.]

SECTION 3.

Sir J. Jordan to Sir Edward Grey.-(Received September 27.)

(No. 323.) Sir,

Peking, September 8, 1909. THE publication of the text of the two agreements regarding Manchurian affairs which were signed here between China and Japan on the 4th instant has, on the whole, made a favourable impression, and there is a marked feeling of relief at the removal of the tension which has so long affected the relations of the two neighbouring Empires.

The settlement of the Chientao question has given especial satisfaction, as it concedes the main points for which China contended. Sovereignty and jurisdiction formed from the outset the basis of the Chinese claim, and she has recovered both without any sacrifice of principle. While she opens four trade marts, at which Japanese consuls may reside and protect their own nationals and Coreaus, she has declined to surrender her jurisdiction over Coreans living in other parts of Chientao, and clause 9 of the Thibet Trade Regulations no doubt furnished her with a useful precedent in connection with this point.

The only part of this agreement which causes any misgiving is article 6, which provides for the extension of the Kirin-Ch'angch'un Railway to the Yenchi district to form a connection with the projected Corean railway system at Hui Ning. It is felt that this is purely a strategical line to cover the territory behind Possiet Bay in the event of a future war over Manchuria, but as the concession was, it is believed, agreed to in principle some time ago between the Wai-wu Pu and the late Japanese Minister, it is recognised that its confirmation could not be withheld.

The agreement in settlement of the Manchurian questions is regarded as a com- promise honourable to both sides.

China has been obliged to undertake not to construct the Hsinmuntun-Fakumen Railway without first obtaining the assent of Japan. On the other hand, after a stubborn struggle lasting over three hours, the Wai-wu Pu succeeded in vindicating one of its cherished principles by recovering Chinese sovereignty over the Fushun and Yentai coal mines.

The branch line, 14 miles in length, from Tashihchiao to Ninchiatum was originally constructed by the Russians for the conveyance of materials to the Chinese Eastern Railway, and was to be removed within a term of years. The agreement now concluded secures not only its retention, but its extension for some 3 miles to the treaty port of Yingkow.

The Mukden station of the Imperial Chinese Railways is inconveniently situated some 3 miles from the city. Under the fifth article China can now carry the line across the South Manchurian Railway and remove the terminus to the city.

The only mines along the Antung-Mukden line, to which reference is made in article 4, are, I understand, the P'enhsihu coal mines, which formed the subject of my despatch No. 560 of the 14th December last.

In conclusion, I should mention that China made an effort in the course of these negotiations to obtain from Japan an admission of Chinese sovereignty over the South Manchurian Railway land similar to that embodied in the Russo-Chinese agreement of the 10th May, 1909, but entirely failed.

[2418 dd-

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I have, &c.

J. N. JORDAN,

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