hob. 4.
Mx. HuGHes's welcome announcement that the Shantung question has been settled is in such startling contrast with earlier prospects that w sur-mary of events, as shown in the cables, should be welcome. It is most remarkable and a tribute to the ultimate good sense of the various delegates that this result has been achieved within less than a month of the news that the negotiations had been adjourned sine die, the Chinese delegates declaring that, unless Japan would consent to (China's repurchasing the Tsinanfu Railway without a loan from Japan, it was useless to discuss the question further. And the Japanese delegates are said to have retorted that if China could raise money to buy a railway, there was no reason why she could nob.raise money to pay off her loans from Japan. All this happened about January 6. Exactly what took place after that we do not know. But it is evident that Mr. Balfour and Mr. Hughes must have worked strenuously to bring about 4 resumption of the negotiations in a more reasonable spirit. The method seems to have been adopted of clearing away bit by bit the points at issue more easily settled, so as to pave the way to the grand crux, that is, the railway question, by convincing the Chinese of the really conciliatory mood of Japan. And we know that the final scheme of railway repurchase was accompanied by pretty strong hint from the British and American delegates that China would sacrifice all the Powers' sympathy if she persisted in rejecting a very fair offer.
The first intimation of discussions being renewed was on January 12 when a Sino-Japanese agreement was announced for the construction of three branches of the Tsinanfu Railway, namely, the Tsinanfu-Shunteh and Kaomi-Hsuchowfu lines, these probably to be built by the Consortium; and the Chefoo-Weihsien line which China is to build herself. This latter concession, be it observed, is one to which Germany never would agree, fearing the competition of Chefoo with Tsingiao, and Chins will only have herself to thank if she does not benefit herself and \Chefoo by converting the few miles of mud road recently delved by famine labour from Chefoo inland into a much needed railway. On January 18 China declared her readiness to open Kiaochou to the trade of all nations, should a settlement of the whole question be reached. This stipulation attached to all subsequent agreements down to that of the railway, which was the key to the whole. On Jan-mary 14 Japan announced that she would transfer to China the administration of Kiaochou, together with the documents belonging to it, while the question of the disposition of public build-i simultaneously settled.
n of the Kiaochou coal and iron mines began on January 17 and forty-eight hours later an agreement was reached to put these mines under the control of a chartered company promoted by the Chinese Government but in which Japanese were to be allowed to invest capital equally with Chinese. On January {9 Japan renounced all claim to control the Tsingtao-Chefoo and Tsingtao-Shanghai cables but retained an interest in that between Tsingtao and Sasebo. On January 24 it was announced that China was to buy back the Shantung salt mines ata fair price, to be fixed later.
Only the railway question now remained. With whom the honour of inventing the method of repurchase finally agreed upon rests is not quite clear, but it is fair to recall that something very much like it was suggested by Mr. Hanihara, the Japanese leader, just before the deadlock on January 6. President Harding was reported, we have no doubt correctly, to have taken an unofficial hand in the discussions on January 26. The following day an official announcement was made from Peking that the Chinese delegates had reported final and specific proposals by the British and American delegations, coupled with the strong hint referred to above that China should accept them. These proposals—in default of contrary information, we can only conclude that they are the ones included in the grand announcement of an agreement between China and Japan on all the principles involved in the return of Shantung to China ''—wera as follows (1) The Chinese Government ta issue Treasury notes with a currency of 15 years, redeemable alter five years for the redemption of the Shantung railway (2) A_ Chinese © director-general of the Shantung railway (to be immediately appointed (3) Under him to be a Japanese traffic manager, with Chinese and anese accountants 4) After two and uw half years an assistant Chinesd quamager te be appointed ts acquaint himself thoroughly with the working the railway so that China at the end of five years can tak" over completely every portion of the railroad and retire, if she wishes, all outstanding Treasury notes. The official statement from Peking plainly indicated that these terms would not be refused. As & sop to public opinion, it was explained that if funds were collected to repurchase the railway, the money could always be turned to good account in Kiaochou or set aside for the retirement of the Treasury notes at the earliest permissible date.
Doubtless some superheated patriots in China will denounce the settlement as a treason to the nation. But the good sense of the business community cannot fail to recognize it a8 a mori: notable diplomatic and business success for China. Looking st
Text read from the printed page and cleaned; old type leaves the occasional error.