New-York tribune., 1921-12-22
Hughes-Balfour
Mediation Seen
For Shantllng
These Leaders Ready to Act
as Arbitrators if Toxic
Rules Against Offers Sub
nitted i'm Cllina's Behalf
Adjustment Still Possible
Desire Is to Avoid Putting
Questions Involved Di-
rectly Up to Conference
BY Thomas Steep

WASHINGTON. Dec. 21.--Secretary
Hughes and Arthur J. Balfour, it be-
came known to-day, are ready to step
in as mediatOrs on the Shantung con-
troversy the minute it appears that the
Japanese and Chinese delegates cannot
agree in their direct negotiations. OBJ
servers for Great Britain and the
United States have reported that the
differences between China ard Japan
appeared still to be susceptible of ad-
justment when the negotiations were
temporarily suspended yesterday over
the question of railway control.
Mr. Hughes and Mr.. Balfour, who
proposed the direct negotiations as an
expeditions method of disposing or the
Shantung question outside of the Ar
nament Limitation Conference, are de-
termined, it was learned to-day, that
no technical detail shall prevent the
province being handed back to China
as Japan has agreed.
Two courses still are open. The
Japanese delegates have reported the
situation to Toxic for instructions.
They expect reply by next Monday
Should Toxic decline the offers made
by China as representing her maxi
mum concession in the way of per-
mltting Japan to control the railway
for period of years, then Mr. Hughes
an1 Mr.. Balfour will tender their Of
fees to ascertain whether settlement
can be reached. The second is to
permit China to present her demand
for the restoration of Shantung di-
rcctlV to the conference.
Dr. koO's Stand Backed
Mr.. Balfour and Mr.. Hughes favor
the latter plan only as n last resort.
They have made it plan why the con-
troyersy should be settled outside Of
the conference if possible. The rea-
son is that Germany's interests in
Shantung were awarded to Japan un-
der the Versailles Treaty. France,
Japan and Great Britain, having signed
the treaty, do not desire to xeview
the international settlements they have
thus agreed to. At all events, the
United States stands squarely pack OF
DR.. Wellington Koo and HIS colleagues
that the japanese occupation Of shan
tung constitutes one of the discern
IDLE sources of controversy likely to
disturb the peace of the Far East"
and that as such it should be pre-
sented by China as properly coming
within the conference agenda.
''lt would be disastrous for China if
the Washington conference failed to
achieve settlement of the Shantung
controversy satisfactory to both China
and Japan" said a spokesman for the
American delegation. "China withdrew
from the treaty drawn up by the Paris
peace conference over Shantung. She
would be equally justified in with
drawing from this conference if she
were given no more consideration here
than she received at Paris. The Amer
ican Congress made known where the
American people stand on the Shan
tung award when it refused to sanction
the treaty"
Japanese Investments
DR.. Koo and his colleagues explained
to-day why China had gone as far as
she could in the interest Of q settle
ment." To the Japanese proposal that
the railway running through the heart
of the province remain under the man
agement of Japanese traffic manager,
a Japanese accountant and japanese
chief engineer, China answered in the
negative, because, it was said, Japa-
Chinese people were trying to get
rid of.
The issue then resolved itself into
one of payment for japanese invest
ncnts. The total value of Japan's
property is estimated at $4,000 900 in
American money. NJ. Hanihara, the
Japanese Vice Minister for Foreign At
airs, inquired whether China was pre-
pared to deposit the sum at once, pend
ing the working out of details as to
their proposal for joint control. The
Chinese delegates refused to agree TO
make deposit on these terms. In
stead they proposed that the deposits
should extend over period of nine
months, at the end of which period the
railway was to revert to Chinese con-
troll
The payments were to be in three
iinstallments, two-ffths Of the sum to
months, one-tifth at the end of six
months and two-fifths before the end
OF nine months. An alternative plan
WAS to agree to make payments over