At first, however, it seemed as if the Japanese would have things all their own way. The Chinese wished to raise the question before the Conference, while the Japanese wished to settle it in direct negotiation with China. This point was important, because, ever since the Lansing-Ishii agreement, the Japanese have tried to get the Powers to recognize, in practice if not in theory, an informal Japanese Protectorate over China, as a first step towards which it was necessary to establish the principle that the Japanese should not be interfered with in their diplomatic dealings with China. The Conference agreed to the Japanese proposal that the Shantung question should not come before the Conference, but should be dealt with in direct negotiations between the Japanese and Chinese. The Japanese victory on this point, however, was not complete, because it was arranged that, in the event of a deadlock, Mr. Hughes and Sir Arthur Balfour should mediate. A deadlock, of course, soon occurred, and it then appeared that the British were no longer prepared to back up the Japanese whole-heartedly, as in the old days. The American Administration, for the sake of peace, showed some disposition to urge the Chinese to give way. But American opinion was roused on the Shantung question, and it appeared that, unless a solution more or less satisfactory to China was reached, the Senate would probably refuse to ratify the various treaties which embodied the work of the Conference. Therefore, at the last moment, the Americans strongly urged Japan to give way, and we took the same line, though perhaps less strongly. The result was the conclusion of the Shantung Treaty between China and Japan. By this Treaty, the Chinese recover everything in Shantung, except the private property of Japanese subjects, and certain restrictions as regards the railway. The railway was the great difficulty in the negotiations, since, so long as the Japanese could control that, they would have the province at their mercy. The Chinese offered to buy back the railway at once, having raised about half the money as a result of a patriotic movement among their merchants. This, however, the Japanese refused to agree to. What was finally done was that the Chinese were compelled to borrow the money from the Japanese Government to be repaid in fifteen years, with an option of repayment in five years. The railway was valued at 53,400,000 gold marks, plus the costs involved in repairs or improvements incurred by Japan, less deterioration; and it was to be handed over to China within nine months of the signature of the treaty. Until the purchase price, borrowed from Japan, is repaid, the Japanese retain a certain degree of control over the railway: a Japanese traffic manager is to be appointed, and two accountants, one Chinese and the other Japanese, under the control of a Chinese President.