CHAPTER Ⅸ　PRINCIPLES AND CONDITIONS OF SETTLEMENT

Review of previous chapters.

In the previous chapters of this Report, it has been shown that, though the issues between China and Japan were not in themselves incapable of solution by arbitral procedure, yet the handling of them by their respective Governments, especially those relating to Manchuria, had so embittered their relations as sooner or later to make a conflict inevitable．A sketch has been given of China as a nation in evolution with all the political upheavals, social disorders and disruptive tendencies inseparable from such a period of transition．It has been shown how seriously the rights and interests claimed by Japan have been affected by the weakness of the authority of the Central Government in China, and how anxious Japan has shown herself to keep Manchuria apart from the government of the rest of China．A brief survey of the respective policies of the Chinese, Russian and Japanese Governments in Manchuria has revealed the fact that the administration of these Provinces has more than once been declared by their rulers to be independent of the Central Government of China, yet no wish to be separated from the rest of China has ever been expressed by their population, which is overwhelmingly Chinese．Finally, we have examined carefully and thoroughly the actual events which took place on and subsequent to September 18th, 1931, and have expressed our opinion upon them.

Complexity of the problem.

A point has now been reached when attention can be concentrated on the future, and we would dismiss the past with this final reflection．It must be apparent to every reader of the preceding chapters that the issues involved in this conflict are not as simple as they are often represented to be．They are, on the contrary, exceedingly complicated, and only an intimate knowledge of all the facts, as well as of their historical background, should entitle anyone to express a definite opinion upon them．This is not a case in which one country has declared war on another country without previously exhausting the opportunities for conciliation provided in the Covenant of the League of Nations．Neither is it a simple case of the violation of the frontier of one country by the armed forces of a neighbouring country, because in Manchuria there are many features without an exact parallel in other parts of the world.

The dispute has arisen between two States, both Members of the League, concerning a territory the size of France and Germany combined, in which both claim to have rights and interests, only some of which are clearly defined by international law; a territory which, although legally an integral part of China, had a sufficiently autonomous character to carry on direct negotiations with Japan on the matters which lay at the root of this conflict.

Conditions in Manchuria unparalleled elsewhere.

Japan controls a railway and a strip of territory running from the sea right up into the heart of Manchuria, and she maintains for the protection of that property a force of about 10,000 soldiers, which she claims the right by treaty to increase, if necessary, up to 15,000．She also exercises the rights of jurisdiction over all her subjects in Manchuria and maintains consular police throughout the country.

Diversity of interpretations.

These facts must be considered by those who debate the issues．It is a fact that, without declaration of war, a large area of what was indisputably the Chinese territory has been forcibly seized and occupied by the armed forces of Japan and has, in consequence of this operation, been separated from and declared independent of the rest of China．The steps by which this was accomplished are claimed by Japan to have been consistent with the obligations of the Covenant of the League of Nations, the Kellogg Pact and the Nine-Power Treaty of Washington, all of which were designed to prevent action of this kind．Moreover, the operation which had only just begun when the matter was first brought to the notice of the League was completed during the following months and is held by the Japanese Government to be consistent with the assurances given by their representative at Geneva on September 30th and December 10th．The justification in this case has been that all the military operations have been legitimate acts of self-defence, the right of which is implicit in all the multilateral treaties mentioned above, and was not taken away by any of the resolutions of the Council of the League．Further, the administration which has been substituted for that of China in the Three Provinces is justified on the ground that its establishment was the act of the local population, who, by a spontaneous assertion of their independence, have severed all connection with China and established their own Government．Such a genuine independence movement, it is claimed, is not prohibited by any international treaty or by any of the resolutions of the Council of the League of Nations, and the fact of its having taken place has profoundly modified the application of the Nine-Power Treaty and entirely altered the whole character of the problem being investigated by the League.

It is this plea of justification which makes this particular conflict at once so complicated and so serious．It is not the function of our Commission to argue the issue, but we have tried to provide sufficient material to enable the League of Nations to settle the dispute consistently with the honour, dignity and national interest of both the contending parties．Criticism alone will not accomplish this: there must also be practical efforts at conciliation．We have been at pains to find out the truth regarding past events in Manchuria and to state it frankly; we recognise that this is only part, and by no means the most important part, of our work．We have throughout our mission offered to the Governments of both countries the help of the League of Nations in composing their differences, and we conclude it by offering to the League our suggestions for securing, consistently with justice and with peace, the permanent interest of China and Japan in Manchuria.

Unsatisfactory suggestions of settlement:

（1）Restoration of the status quo ante.

It must be clear from everything that we have already said that a mere restoration of the status quo ante would be no solution．Since the present conflict arose out of the conditions prevailing before last September, to restore these conditions would merely be to invite a repetition of the trouble．It would be to treat the whole question theoretically and to leave out of account the realities of the situation.

（2）The Maintenance of “Manchukuo”

From what we have said in the two preceding chapters, the maintenance and recognition of the present regime in Manchuria would be equally unsatisfactory．Such a solution does not appeal to us compatible with the fundamental principle of existing international obligations, nor with the good understanding between the two countries upon which peace in the Far East depends．It is opposed to the interests of China．It disregards the wishes of the people of Manchuria, and it is at least questionable whether it would ultimately serve the permanent interests of Japan.

About the feelings of the people of Manchuria towards the present regime there can really be no doubt; and China would not voluntarily accept as a lasting solution the complete separation of her Three Eastern Provinces．The analogy of the distant province of Outer Mongolia is not an entirely pertinent one, as Outer Mongolia is bound to China by no strong economic or social ties, and is sparsely inhabited by a population which is mainly non-Chinese．The situation in Manchuria is radically different from that in Outer Mongolia．The millions of Chinese farmers now settled permanently on the land have made Manchuria in many respects a simple extension of China south of the Wall．The Three Eastern Provinces have become almost as Chinese in race, culture and national sentiment as the neighbouring Provinces of Hopei and Shantung, from which most of the immigrants came.

Apart from this, past experience has shown that those who control Manchuria have exercised a considerable influence on the affairs of the rest of China—at least of North China—and possess unquestionable strategic and political advantages．To cut off these provinces from the rest of China, either legally or actually, would be to create for the future a serious irredentist problem which would endanger peace by keeping alive the hostility of China and rendering probable the continued boycott of Japanese goods.

The Commission received from the Japanese Government a clear and valuable statement of the vital interests of their country in Manchuria．Without exaggerating the economic dependence of Japan on Manchuria beyond the limits ascribed to it in a previous chapter, and certainly without suggesting that economic relationship entitles Japan to control the economic, still less the political, development of those provinces, we recognise the great importance of Manchuria in the economic development of Japan．Nor do we consider unreasonable her demand for the establishment of a stable Government which would be capable of maintaining the order necessary for the economic development of the country．But such conditions can only be securely and effectively guaranteed by an administration which is in conformity with the wishes of the population and which takes full account of their feelings and aspirations．And equally is it only in an atmosphere of external confidence and internal peace, very different from that now existing in the Far East, that the capital which is necessary for the rapid economic development of Manchuria will be forthcoming.

In spite of the pressure of increasing over-population, the Japanese have not as yet fully utilised their existing facilities for emigration, and the Japanese Government has not hitherto contemplated a large emigration of their people to Manchuria．But the Japanese do look to further industrialisation as a means to cope with the agrarian crisis and with the population problem．Such industrialisation would require further economic outlets and the only large and relatively sure markets that Japan can find are in Asia and particularly in China．Japan requires, not only the Manchurian, but the whole Chinese market, and the rise in the standard of living which will certainly follow the consolidation and modernisation of China should stimulate trade and raise the purchasing power of the Chinese market.

This economic rapprochement between Japan and China, which is of vital interest to Japan, is of equal interest to China, for China would find that a closer economic and technical collaboration with Japan would assist her in her primary task of national reconstruction．China could assist this rapprochement by restraining the more intolerant tendencies of her nationalism and by giving effective guarantees that, as soon as cordial relations were re-established, the practice of organised boycotts would not be revived．Japan, on her side, could facilitate this rapprochement by renouncing any attempt to solve the Manchurian problem by isolating it from the problem of her relations with China as a whole, in such a way as to make impossible the friendship and collaboration of China.

It may, however, be less economic considerations than anxiety for her own security which has determined the actions and policy of Japan in Manchuria．It is especially in this connection that her statesmen and military authorities are accustomed to speak of Manchuria as “the life-line of Japan”．One can sympathise with such anxieties and try to appreciate the actions and motives of those who have to bear the heavy responsibility of securing the defence of their country against all eventualities．While acknowledging the interest of Japan in preventing Manchuria from serving as a base of operations directed against her own territory, and even her wish to be able to take all appropriate military measures if in certain circumstances the frontiers of Manchuria should be crossed by the forces of a foreign Power, it may still be questioned whether the military occupation of Manchuria for an indefinite period, involving, as it must, a heavy financial burden, is really the most effective way of insuring against this external danger; and whether, in the event of aggression having to be resisted in this way, the Japanese troops in Manchuria would not be seriously embarrassed if they were surrounded by a restive or rebellious population backed by a hostile China．It is surely in the interest of Japan to consider also other possible solutions of the problem of security, which would be more in keeping with the principles on which rests the present peace organisation of the world, and analogous to arrangements concluded by other great Powers in various parts of the world．She might even find it possible, with the sympathy and good-will of the rest of the world, and at no cost to herself, to obtain better security than she will obtain by the costly method she is at present adopting.

International interests.

Apart from China and Japan, other Powers of the world have also important interests to defend in this Sino-Japanese conflict．We have already referred to existing multilateral treaties, and any real and lasting solution by agreement must be compatible with the stipulations of these fundamental agreements, on which is based the peace organisation of the world．The considerations which actuated the representatives of the Powers at the Washington Conference are still valid．It is quite as much in the interests of the Powers now as it was in 1922 to assist the reconstruction of China and to maintain her sovereignty and her territorial and administrative integrity as indispensable to the maintenance of peace．Any disintegration of China might lead, perhaps rapidly, to serious international rivalries, which would become all the more bitter if they should happen to coincide with rivalries between divergent social systems．Finally, the interests of peace are the same the world over．Any loss of confidence in the application of the principles of the Covenant and of the Pact of Paris in any part of the world diminishes the value and efficacy of those principles everywhere.

Interests of U.S.S.R.

The Commission has not been able to obtain direct information as to the extent of the interests of the U.S.S .R．in Manchuria, nor to ascertain the views of the Government of the U.S.S.R．on the Manchurian question．But, even without sources of direct information, it cannot overlook the part played by Russia in Manchuria nor the important interests which the U.S.S.R．have in that region as owners of the Chinese Eastern Railway and of the territory beyond its north and north-east frontiers．It is clear that any solution of the problem of Manchuria which ignored the important interests of the U.S.S.R．would risk a future breach of the peace and would not be permanent.

Conclusions.

These considerations are sufficient to indicate the lines on which a solution might be reached if the Governments of China and Japan could recognise the identity of their chief interests and were willing to make them include the maintenance of peace and the establishment of cordial relations with each other．As already stated, there is no question of returning to the conditions before September 1931．A satisfactory regime for the future might be evolved out of the present one without any violent change．In the next chapter, we offer certain suggestions for doing this, but we would first define the general principles to which any satisfactory solution should conform．They are the following:

Conditions of a satisfactory solution.

1．Compatibility with the interests of both China and Japan.

Both countries are Members of the League and each is entitled to claim the same consideration from the League．A solution from which both did not derive benefit would not be a gain to the cause of peace.

2．Consideration for the interests of the U.S.S.R.

To make peace between two of the neighbouring countries without regard for the interests of the third would be neither just nor wise, nor in the interests of peace.

3．Conformity with existing multilateral treaties.

Any solution should conform to the provisions of the Covenant of the League of Nations, the Pact of Paris, and the Nine-Power Treaty of Washington.

4．Recognition of Japan's interests in Manchuria.

The rights and interests of Japan in Manchuria are facts which cannot be ignored, and any solution which failed to recognise them and to take into account also the historical associations of Japan with that country would not be satisfactory.

5．The establishment of new treaty relations between China and Japan.

A re-statement of the respective rights, interests and responsibilities of both countries in Manchuria in new treaties, which shall be part of the settlement by agreement, is desirable if future friction is to be avoided and mutual confidence and co-operation are to be restored.

6．Effective provision for the settlement of future disputes.

As a corollary to the above, it is necessary that provision should be made for facilitating the prompt settlement of minor disputes as they arise.

7．Manchurian autonomy.

The government in Manchuria should be modified in such a way as to secure, consistently with the sovereignty and administrative integrity of China, a large measure of autonomy designed to meet the local conditions and special characteristics of the Three Provinces．The new civil regime must be so constituted and conducted as to satisfy the essential requirements of good government.

8．Internal order and security against external aggression.

The internal order of the country should be secured by an effective local gendarmerie force, and security against external aggression should be provided by the withdrawal of all armed forces other than gendarmerie, and by the conclusion of a treaty of non-aggression between the countries interested.

9．Encouragement of an economic rapprochement between China and Japan.

For this purpose, a new commercial treaty between the two countries is desirable．Such a treaty should aim at placing on an equitable basis the commercial relations between the two countries and bringing them into conformity with their improved political relations.

10．International co-operation in Chinese reconstruction.

Since the present political instability in China is an obstacle to friendship with Japan and an anxiety to the rest of the world（as the maintenance of peace in the Far East is a matter of international concern）, and since the conditions enumerated above cannot be fulfilled without a strong Central Government in China, the final requisite for a satisfactory solution is temporary international co-operation in the internal reconstruction of China, as suggested by the late Dr．Sun Yat-sen.

Results which would follow from the fulfilment of these conditions.

If the present situation could be modified in such a way as to satisfy these conditions and embody these ideas, China and Japan would have achieved a solution of their difficulties which might be made the starting-point of a new era of close understanding and political co-operation between them．If such a rapprochement is not secured, no solution, whatever its terms, can really be fruitful．Is it really impossible to contemplate a new relationship even in this hour of crisis Young Japan is clamorous for strong measures in China and a policy of thoroughness in Manchuria．Those who make these demands are tired of the delays and pin-pricks of the pre-September period; they are impetuous and impatient to gain their end．But, even in Japan, appropriate means must be found for the attainment of every end．After making the acquaintance of some of the more ardent exponents of this “positive” policy, and those especially who, with undoubted idealism and great personal devotion, have constituted themselves the pioneers of a delicate undertaking in the “Manchukuo” regime, it is impossible not to realise that, at the heart of the problem for Japan, lies her anxiety concerning the political development of modern China, and the future to which it is tending．This anxiety has led to action with the object of controlling that development and steering its course in directions which will secure the economic interests of Japan and satisfy strategic requirements for the defence of her Empire.

Japanese opinion is nevertheless vaguely conscious that it is no longer practicable to have two separate policies, one for Manchuria and one for the rest of China．Even with her Manchurian interests as a goal, therefore, Japan might recognise and welcome sympathetically the renaissance of Chinese national sentiment, might make friends with it, guide it in her direction and offer it support, if only to ensure that it does not seek support elsewhere.

In China, too, as thoughtful men have come to recognise that the vital problem, the real national problem, for their country is the reconstruction and modernisation of the State, they cannot fail to realise that this policy of reconstruction and modernisation, already initiated with so much promise of success, necessitates for its fulfilment the cultivation of friendly relations with all countries, and above all with that great nation which is their nearest neighbour．China needs, in political and economic matters, the co-operation of all the leading Powers, but especially valuable to her would be the friendly attitude of the Japanese Government and the economic co-operation of Japan in Manchuria．All the other claims of her newly awakened nationalism—legitimate and urgent though they may be—should be subordinated to this one dominating need for the effective internal reconstruction of the State.