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 North and the anti-Japanese propaganda of the Kuomintang in the South made the desire to impose between the two a Manchuria which should be free from both increasingly felt in Japan. Japanese misgivings have been still further increased in the last few years by the predominant influence acquired by the U.S.S.R. in Outer Mongolia and the growth of Communism in China.

The Convention concluded between Japan and the U.S.S.R. in January 1925 served to establish regular relations, but did not revive the close co-operation of the pre-revolution period.

During the quarter of a century before September 1931, the ties which bound Manchuria to the rest of China were growing stronger and, at the same time, the interests of Japan in Manchuria were increasing. Manchuria was admittedly a part of China, but it was a part in which Japan had acquired or claimed such exceptional rights, so restricting the exercise of China's sovereign rights, that a conflict between the two countries was a natural result.

By the Treaty of Peking of December 1905. China gave her consent to the transfer to Japan of the Kwantung Leased Territory, which was formerly leased to Russia, and of the southern branch of the Russian-controlled Chinese Eastern Railway as far north as Changchun. In an additional agreement, China granted to Japan a concession to improve the military railway line between Antung and Mukden and to operate it for fifteen years.

In August 1906, the South Manchuria Railway Company was organised by Imperial Decree to take over and administer the former Russian Railway, as well as the Antung-Mukden Railway. The Japanese Government acquired control of the company by taking half of the shares in exchange for the railway, its properties, and the valuable coal-mines at Fushun and Yentai. The company was entrusted, in the railway area, with the functions of administration and was allowed to levy taxes; it was also authorised to engage in mining, electrical enterprises, warehousing, and many other branches of business.

In 1910, Japan annexed Korea. This annexation indirectly increased Japanese rights in Manchuria, since Korean settlers became Japanese subjects over whom Japanese officials exercised jurisdiction.

In 1915, as a result of the group of exceptional demands made by the Japanese and generally known as the "Twenty-one Demands", Japan and China signed a Treaty and exchanged Notes on May 25th regarding South Manchuria and Eastern Inner Mongolia. By those agreements, the lease of the Kwantung Territory, including Port Arthur and Dalny (now Dairen), which was originally for a period of twenty-five years, and the concessions for the South Manchuria and the Antung-Mukden Railways, were all extended to ninety-nine years. Furthermore, Japanese subjects in South Manchuria acquired the right to travel and reside, to engage in business of any kind, and to lease land necessary for trade, industry and agriculture. Japan also obtained rights of priority for railway and certain other loans in