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 already been effected, when in April last year there was a sudden change in her attitude, and not only were the withdrawal of her forces from Manchuria and the restitution of the administration to China suspended, but also various additional conditions were demanded from China. This action is believed to have been due to divided counsels in Russian Government circles regarding the solution of the Manchurian question, and to the subsequent ascendency of the party in favour of permanent occupation.

The development of affairs in Manchuria received the most careful attention at the hands of the Imperial Government. The maintenance of the independence and territorial integrity of Corea is of the utmost importance to the safety and repose of this Empire and is in fact our traditional policy; while in the event of the absorption of Manchuria by Russia, the separate existence of Corea would be constantly menaced and the firm establishment of peace in the Far East would become impossible. The Imperial Government, therefore, having regard to the future well-being of the Empire, deemed it necessary for consolidating the peace of the Extreme East and for securing the rights and interests of the Empire to open, as soon as possible, negotiations with Russia with a view to a friendly definition of the interests of the two countries in Manchuria and Corea where those interests meet, and thereby to remove every cause of future conflict between Japan and Russia. The Japanese Government, therefore, instructed their Representative at St. Petersburg on July 28th, 1903, to bring their wishes to the attention of the Russian Government and to request the latter's concurrence. The Russian Government willingly assented, and the Russian Minister for Foreign Affairs announced that he had obtained Imperial authority to open negotiations on the subject. Accordingly, on the 12th August last, the Imperial Government presented to the Russian Government, through their Minister at St. Petersburg, as a basis of negotiations, proposals substantially as follows:

1. Mutual engagement to respect the independence and territorial integrity of China and Corea.

2. Mutual engagement to maintain the principle of equal opportunity for the commerce and industry of all nations in China and Corea.