Tokyo, Jan. 20.
"Mr. Toshio Shiratori, late Minister to Sweden and possible Vice-Minister for Foreign Affairs in the next Cabinet, has set forth what he believes to be the proper terms of peace on which Japan should settle "the present China affair" He outlines them as follows:
l—Japan must make China promise to effect a fundamental reform of her domestic administration. To this end, it may be advisable for Japan to secure China's undertaking io the effect that she will seek the necessary advice and aid from Japan.
2.—Japan must make China reduce her "armaments as far as possible. Chinese armaments should be reduced until they are sufficient merely for policing purposes.
$.—lt is necessary to arrange ior perfect Sino-Japanese ce-operation so that China may be free from "thought" and political machinations from outside.
4—China must be made to abandon her -"anti-alien" policy, and to adopt a policy of friendship towards Japan especially, with whom she should forge an inseparable relationship. For this purpose, "it is essential that the persons and organizations which have hitherto been directing anti-Japanese activities and movements should be liquidated."
"All Foreigners"
5.—The whole of China should be thrown open to the peaceful activities of all foreigners. China must be made to promise not to set up any obstruction whatever against economic intercourse with any foreign country. This condition will naturally give rise to the question of the abolition of extraterritoriality and the*'abandonment of foreign concessions.
6—Japan must cause China to recognize Manchoukuo and the inde-pent Administration of Inner Mongolia as a political unit.
7.—Japan must be given the right to station her troops at key positions in China until the execution of the afore-mentioned terms by China has been assured and order restored.
8.—China must be made to bear the losses and expenditure incurred by Japan in the "present expenditure incurred by Japan in the "present affair" and part of the expenditure in which Japan may be involved in future.
Text read from the printed page and cleaned; old type leaves the occasional error.