ay was not mentioned in Japan's original proposal.
Subsequently, the Japanese Government alleging that its meaning was
not clear, asked China to cancel the provision altogether. Again,
Japan at first demanded the right of Japanese to carry on farming in
South Manchuria, but subsequently she considered the word "farming"
was not broad enough and asked to replace it with the phrase
"agricultural enterprises." To these requests the Chinese
Government, though well aware that the proposed changes could only
benefit Japan, still acceded without delay. This, too, is a proof of
China's frankness and sincerity towards Japan.

As regards matters relating to Shantung the Chinese Government has
agreed to a majority of the demands.

The question of inland residence in South Manchuria is, in the
opinion of the Chinese Government, incompatible with the treaties
China had entered into with Japan and other Powers, still the
Chinese Government did its best to consider how it was possible to
avoid that incompatibility. At first, China suggested that the
Chinese Authorities should have full rights of jurisdiction over
Japanese settlers. Japan declined to agree to it. Thereupon China
reconsidered the question and revised her counter-proposal five or
six times, each time making some definite concession, and went so
far to agree that all civil and criminal cases between Chinese and
Japanese should be arranged according to existing treaties. Only
cases relating to land or lease contracts were reserved to be
adjudicated by Chinese Courts, as a mark of China's sovereignty over
the region. This is another proof of China's readiness to concede as
much as possible.

Eastern Inner Mongolia is not an enlightened region as yet, and the
conditions existing there are entirely different from those
prevailing in South Manchuria. The two places, therefore, cannot be
considered in the same light. Accordingly, China agreed to open
commercial marts first, in the interests of foreign trade.

The Hanyehping Company mentioned in the third group is entirely a
private company, and the Chinese Government is precluded from
interfering with it and negotiating with another government to make
any disposal of the same as the Government likes, but having regard
for the interests of the Japanese capitalists, the Chinese
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