Ch 31 - Prelude to War

Over the River and Through the Woods

The Russian acquisition and development of special timber concessions along Korea's northern border ultimately revealed the aggressive character of Japanese and Russian ambitions concerning Korea and Manchuria.

In 1896, while King Kojong was living in the Russian Legation, a Russian merchant from Vladivostok named Iulii Ivanovich Briner secured an exclusive concession from the Korean government to exploit timber tracts on Ullung-do in the East Sea (Sea of Japan) and in the vast forests along the Tumen and Yalu rivers for a period of twenty years. The Korean government would receive one fourth of the company's assets and one fourth of its profits in exchange for a guarantee it would not have to pay taxes or tariffs. The only catch was that Briner had to commence operations within one year after the agreement took effect.

Long on expectations, short on capital and frequently reminded that he had to begin operations by December 1897 or lose the concession, Briner could not meet the deadline. In the meantime, Russia withdrew its financial and military missions from Seoul in 1898 in the face of growing hostility from Korean officials and intellectuals. With no hope of further support, Briner decided to sell his timber rights to international interests headed by a relative of the House of Rothschilds, a wealthy European banking family.

Russian minister N.G. Matiunin, recently appointed to the Russian Legation in Seoul, took a keen interest in Briner's company. When news of the impending sale leaked in early 1898, Matiunin contacted former Russian army colonel V.M. Vonarliarsky about the company. Vonarliarsky, a well known developer, contacted his friend, Aleksandr Mikhailovich Bezobrazov, a retired army cavalry officer with extensive political contacts in St. Petersburg. Bezobrazov, in turn, attracted the interest of Count Illarion Ivanovich Vorontsov-Dashkov, a diplomat with extensive experience in East Asia and head of the Ministry of the Imperial Court. Unlike Finance Minister Witte, Foreign Minister Lamsdorff and War Minister Aleksei Kuropatkin, who sought to halt Russian expansion in Manchuria, this small group of Russian financiers and speculators strongly advocated the extension of Russian influence on the Korean peninsula. Together, they resolved to take over Briner's vast timber concession and use it to expand Russian interests in Korea.

Bezobrazov and Count Vorontsov-Dashkov first tried to interest the Russian Minister of Foreign Affairs Count Mikhail Nikolayevich Muraviev in their plans. They failed. In February 1898, the two men turned to Tsar Nicholas II. They argued that it would be in Russia's interest to take over Briner's concessions in the Yalu and Tumen river region. They proposed to create the East Asian Development Company, modelled after the old British East India Company, which would serve as a vehicle that would enable Russia to gain complete control over Korea. They persuaded the tsar that the venture would both expand Russian influence in Korea and create an obstacle to thwart Japanese influence on the peninsula.

The idea of saving Korea for Russia greatly impressed Tsar Nicholas II, who decided to acquire Mr. Briner's timber concessions and personally invested some £200,000 in the venture. The East Asian Development Company required investors "who would not demand immediate dividends" and who would be prepared to "render a service to the Tsar." The existence of the company would provide "the pretense of economic exploitation," and allowing the participation of American and European investors would help screen the operation's true intent. Grand Duke Mikhail N. Muraviev and other influential government officials soon developed an interest in the project.

A Russian expedition financed with Imperial Cabinet funds set out for northern Korea in June 1898 in pursuit of "political ends." Over the next three years, survey teams drafted detailed military, economic and climatic descriptions of northern Korea, surveyed large tracts of land and studied possible railroad routes into the region. They also ensured that the Korean population was not hostile and that Japanese had not yet penetrated the area. In addition, the company reached an agreement with the Korean government to extend the original deadline for commencing operations to the spring of 1903.

Bezobrazov and his group set out to compete with American companies in the international timber industry and hoped to expand the East Asian Development Company into one of the three largest private enterprises in Korea's three northern provinces. Despite getting off to a good start however, the company's future plans never materialized and the company was liquidated in 1902. The company's demise was in large part due to direct opposition from Finance Minister Sergei Witte, who had never been informed of the undertaking and stood for a more moderate policy in the Far East at this stage.

The Russian position in Manchuria came under increasing pressure from all sides, especially Japan. Emboldened by the Anglo-Japanese Alliance and supported by Great Britain and the United States, Japan demanded that the Russian army withdraw from Manchuria. Admiral Yevgenii Alekseev, commandant of Kwantung in southern Manchuria, opposed any idea of evacuating Manchuria. A staunch supporter of Russian expansion in the Far East, Alekseev reportedly told War Minister Alexei Nikolayevich Kuropatkin that any sign of Russian weakness would only encourage China to make new demands. Under mounting pressure from all sides, Russia relented and dropped negotiations with China seeking a monopoly of concessions in Manchuria. On April 4, 1902, Russia signed an agreement with the Chinese in which it promised to leave Manchuria in three stages over a period of eighteen months.

In St. Petersburg, Aleksandr Bezobrazov and his supporters loudly protested to Tsar Nicholas II that the withdrawal agreement amounted to a confession of weakness and an abandonment of Russian interests. Such a move would menace Russia's position not only at Port Arthur, but across the entire Far East. Russia's new interior minister, Vyacheslav Konstantinovich von Pleve, with an eye on Finance Minister Witte's position, sought to address public unrest over the withdrawal plans by advancing his own theory of the "little victorious war." With von Pleve's support, Bezobrazov again pushed his own ideas on a Russian foreign policy based on energy, determination and a unity of purpose.

In order to silence opposition, Bezobrazov proposed that instead of withdrawing from Manchuria, Russia should greatly strengthen its forces in the area and create real economic interests in the Far East. Russia needed to increase its military presence along the Yalu River to defend against a possible Japanese attack and to threaten the Japanese should they become belligerent. Bezobrazov suggested these goals could be achieved through the East Asian Development Company, which could become the basis for obtaining other concessions Korea. By attracting American investors to the enterprise, Russia could benefit from the sympathy and support of the United States. America had already decided not to interfere in a matter currently being pursued by the Japanese government, which had serious questions about the reasoning behind Russia's approaches to America. The United States, acting in full support of the Anglo-Japanese Alliance and hoping to thwart Russian actions in Manchuria, demanded the adoption of the "Open Door" policy in China.

Germany felt more than a little satisfied with developments surrounding Manchuria. With Britain and Russia preoccupied in East Asia, Russia would be less concerned with the Balkans and Great Britain might be less able to oppose German plans for a buildup of its naval strength in the North Sea. The rise of Japan as a major world power caused a new level of anxiety for some Europeans, particularly Germany. Japan's stunning defeat of China in 1895 astonished Germany's Kaiser Wilhelm II, who proclaimed to anyone who would listen his expectation that Japan would become a world power in the near future. An unabashed racist, he also declared their presence as a "Yellow Peril" (gelbe Gefahr in German). The Kaiser popularized the expression by circulating a lurid engraving that depicted a menacing Buddha riding a flying dragon trailing thunder clouds and carving a path of destruction across Asia towards Europe.

In September 1902, Kaiser Wilhelm II wrote a letter to his cousin, Tsar Nicholas II, in which he noted the assignment of the former Japanese commander in China as military attaché at the Japanese Legation in Beijing. The Kaiser considered the move to be very serious, thinking that it signaled Japan's intention of "driving every other foreigner out of China." He wrote,

20 to 30 Million of trained Chinese helped by half a dozen Jap. Divisions and led by fine, undaunted Christian hating Jap. Officers, is a future to be contemplated not without anxiety;  and not impossible. In fact it is the coming into reality of the "Yellow Peril" which I depicted some years ago, and for which engraving I was laughed at by the greater mass of the People.

Russia punctually completed the first stage of its evacuation from Manchuria as planned in October 1902. At the time, it seemed possible that Russia might indeed remove itself from Manchuria. Japan attempted to reopen negotiations with Russia over Korea in January 1903, when the Japanese Minister in St-Petersburg, Kurino Shinichiro, submitted a new draft proposal to Foreign Minister Lamsdorff. The proposal restated the idea that both sides should respect Korea's independence and territorial integrity and neither side should use Korea to advance their own strategic objectives. Kurino also proposed that Japan should be granted the right to send troops into Korea to reinforce its military presence whenever necessary and that previous agreements with Russia regarding Korea should be abrogated.

The Russian Foreign Ministry concluded that, while Russia was ready to resume negotiations with Japan over Korea, none of the preferential rights agreed to in earlier talks with Japan would be abrogated under any circumstances. In Tokyo, Russian Ambassador Baron Roman Rosen received a diplomatic dispatch that clearly laid out the details of Russia's negotiating strategy. The Russian government would allow the Japanese to advise the Korean government on internal matters and allow them to build and maintain railroads and telegraph systems in Korea. In exchange, Japan had accept Russia's right to maintain the same number of troops in Korea as Japan and to mutually guarantee Korean independence and territorial integrity. Ambassador Rosen was also told that the prior agreement not to use Korea for strategic purposes must be part of any new agreement with the Japanese.

The Japanese remained suspicious. Tokyo's concerns deepened in February 1903 with the arrival of the scheduled second phase of the Russian troop withdrawals from Manchuria. The Russians balked. Not only did they refuse further troop reductions, they resorted to the not so subtle deception of dressing their troops in the uniforms of "railway guards." Russia's direct challenge to the Open Door Policy greatly angered not only Japan, but the United States, which was particularly handicapped in dealing with the Russian occupation of Manchuria. American statesmen quickly learned that neither American force nor diplomacy could preserve the territorial and administrative integrity of China. They could only harass the Russians with inquiries and openly protest their actions.

Secretary of State John Milton Hay and President Theodore Roosevelt bore deep and lasting suspicions and animosity towards Russia. Secretary Hay soon accepted the fact that Manchuria had become a Russian province and was no longer an integral part of the Chinese Empire and conceded in frustration that America would not fight to uphold the principles of its Open Door Notes.

In a letter to President Roosevelt on April 28, 1903, he wrote, "Russia knows as we do that we will not fight for Manchuria, for the simple reason that we cannot." Just two days later, on April 30, the Sydney Morning Herald reported that Russia's Minister in Beijing, Paul Mikhaelovich Lessar, had informed a Japanese newspaper correspondent that Great Britain and Japan had no right to interfere in Manchuria, and that Russia, weary of its undefined status, was determined to annex the three Manchurian provinces of Fengtien, Kirin and Helung-kiang.

Determined to preclude any other nation from acquiring concessions in Manchuria, Russian troops reoccupied a number of Manchurian towns that had been previously evacuated. The Russian government demanded new monopolistic rights over Manchuria's economic and natural resources from Qing China. Japan came to the realization that a defiant Russia intended to follow a policy of expansion in Manchuria and Korea. In March 1903, acting with British support, Japan's Minister to Korea, Hayashi Gonsuke, officially demanded that Seoul open the Yalu River ports of Uiju and Yongamp'o to international trade as compensation for the decision to grant Russia timber concessions in Korea. Emperor Kojong refused to accept the Japanese demands. Expecting Russian support on the matter, he conveyed his hopes to Russian chargé d'affaires Aleksandr Pavlov that if Korea's decision to refuse the Japanese demands caused a conflict, Russia would not abandon Korea.

Aleksandr Bezobrazov's imaginative plan to create "Russian interests" in the Far East so moved the Tsar that he sent him to the Far East in the spring of 1903 to reorganize Russian activities in the region. Bezobrazov went not only with the Tsar's blessing, but with 2,000,000 rubles appropriated by the Ministry of Finance "for purposes known to His Imperial Majesty." The following month, Bezobrazov and a number of the original well-connected shareholders of the former East Asian Development Company revived Korean timber operations along the Yalu River under the name of the Yalu River Timber Company. The new company was chartered to "develop timber concessions, mining, hunting and fishing, maritime transportation, and commercial trade in Korea, Manchuria and the Maritime province of Siberia."

In May 1903, Tsar Nicholas appointed Aleksandr Mikhailovich Bezobrazov to the rank of State-Secretary in order to expedite communication between the Yalu River Timber Company and St. Petersburg. Not wasting any time, Bezobrazov opened offices at Port Arthur and in Seoul to establish "real Russian interests" of an "economic nature." In addition, the Bezobrazov group began seeking lucrative timber rights for themselves along the Manchurian side of the Yalu River. In time however, Bezobrazov's ill-timed and ill-advised adventures managed to undermine Russia's position in East Asia.

The issue of timber concessions along the Yalu River became an increasingly hot topic of discussion among government officials in St. Petersburg. Two special foreign policy conferences held on April 8 and May 20, 1903, led to the creation of a "New Course Policy" for Manchuria and Korea. This new policy held that, first, Russia would maintain its dominance in Manchuria and not draw down its troop strength;  second, Russia would not allow foreign influence or capital investments in Manchuria;  and third, Russia would use the Yalu River Timber Company to strengthen its position in Korea.

With all the power attendant to a State Secretary, Bezobrazov began setting in place political and military plans to reach the goals he had set for the Yalu River Timber Company. In May 1903, Russian troops dressed as civilians entered Yongamp'o without the approval of the Korean government. They brought with them a large number of Chinese laborers and guards, most of whom were Russian-hired Chinese bandits dressed as Koreans. The small harbor near the mouth of the Yalu River was a long way from Russian timber operations, but it afforded a good control point and a potential rail junction between the Trans-Siberian Railway and the projected Seoul-Uiju rail line.

Timber cutters and woodsmen, under the command of Russian reserve officers, began logging in earnest along the Korean side of the river. Russian managers of the Yalu River Timber Company began buying land from local Koreans around Yongamp'o with plans to build a major lumber mill. The Russians began stringing new telegraph lines between Yongamp'o and Uiju to enable communications, building military roads throughout the area and erecting new housing, military barracks and structures described as "timber warehouses." An American visitor to Yongamp'o in December 1903 reported the Russians had built a breakwater in the harbor and numerous brick buildings, including large barracks and stables. With few exceptions, all the Russians in town were military men and it was no secret they were planning even more construction by the following spring.

The Russian's renamed Yongamp'o to "Port Nicholas," in honor of the tsar, and created a virtual Russian enclave with its own laws administered by Russian managers of the Yalu River Timber Company. Under the pretext of providing protection for workmen and property, the Russian government dispatched four groups of hunters and 600 cavalrymen into the area along the Yalu River. The Japanese government became even more annoyed with the Yalu River Timber Company, seeing it as a direct threat to their economic hegemony in Korea. Everything about the incursion confirmed Japanese suspicions that Yongamp'o was under a semi-political, semi-military permanent Russian occupation, a perception that made the situation even more volatile.

The Korean government took a dim view of all this Russian activity, particularly the presence of Russian troops along the Yalu River. In response, Seoul banned the sale of land to any Russian citizen, demanded that Russia cease construction of telegraph lines and requested the immediate withdrawal of all Russian troops from the Korean side of the river.

Bezobrazov's opponents in St. Petersburg warned of the dangerous political consequences of moving into Yongamp'o. There were already open clashes along the Yalu between Russian and Japanese timber men. Finance Minister Sergei Witte, Foreign Secretary Count Lamsdorff and War Minister General Aleksei Kuropatkin favored the evacuation of Manchuria and opposed any further advance towards the Yalu River and Korea. They urged the Tsar to remove the troops from Korean soil, resume negotiations with Japan over the Korean question and reduce economic projects to a strictly private commercial basis. Tsar Nicholas however, had little patience with "long-winded conference reports." Bezobrazov, a persuasive man intimate with Russia's Grand Dukes, China's Empress Dowager Tz'u Hsi and Tsar Nicholas, merely painted the withdrawal as a great blow to the aspirations of "Holy Mother Russia." The Tsar, who envisioned the acquisition of half of Asia, found Bezobrazov's enthusiasm and exuberance far more to his liking.

In early June 1903, a number of influential Russians gathered in Port Arthur to discuss Russia's overall policy in the Far East. Among those in attendance were Admiral Alekseev, promoted to the rank of full admiral on June 6, War Minister Kuropatkin and Russia's Minister to China, Paul Lessar. Also in attendance was State-Secretary Aleksandr Bezobrazov, who made numerous indiscreet and self-aggrandizing statements regarding East Asian affairs. In Bezobrazov's mind, withdrawing from Manchuria would leave the immensely valuable Korean timber concession without Russian protection.

The Port Arthur Conference agreed that Russia should provide all necessary support to Korea, short of going to war with Japan, and reject demands to open new trade ports along the Yalu River to Japan. In addition, the Russian government should clearly inform the Japanese Foreign Ministry that if Yalu River ports were opened to the Japanese, Russia would make an "appropriate response." They also agreed that the Russian government should not make any promises to come to Korea's defense should Japan push the issue further.

While the Port Arthur conference focused on Russo-Japanese relations, conflicts began to emerge over the applicability of the United States' Open Door Policy with regards to Manchuria. Admiral Alekseev, intent on keeping the United States out of Manchuria altogether, telegraphed the government in St. Petersburg,

"the execution of the American demands for the opening of ports and consulates ... is for us unquestionably harmful" ... "it is necessary to explain to the American government that at the present time the economic interests of the United States in Manchuria have not developed to such a point that they can insist on the immediate establishment there of consuls and ports."

The conference decided that while it would make some small concessions to the Americans, Russia would maintain economic and political primacy in the region. They also decided that, in order to reduce tensions and maintain good relations with Japan, all Russian military personnel and government officials should leave the Yalu River concession. Given Russia's military weakness in the Far East at the time, they decided that nothing be done that would risk a war with Japan.

State-Secretary Bezobrazov attempted to bolster his position by obtaining a similar timber concession along the Manchurian side of the Yalu River from the local Chinese governor. Bezobrazov's action alarmed both Russian and foreign observers and only served to further increase tensions in the region. The attendant publicity did little to endear him to the tsar. Admiral Alekseev, who was in large part responsible for the Yalu River concessions and conducted the timber enterprise as an imperial undertaking, endorsed Bezobrazov's views, but it had no effect on government policy.

After retuning to St. Petersburg, Bezobrazov reported to Tsar Nicholas II on the outcome of the Port Arthur Conference. In that report, he advocated the appointment of Admiral Evgenii Ivanovich Alekseev as viceroy in the Far East to bring some unity to Russian foreign policy. The Tsar decided to support Bezobrazov's position and in August 1903 he installed Admiral Alekseev as Viceroy of the Far East. As viceroy, Alekseev now commanded the Viceroy of Vladivostok, the Military Office of the Russian Maritime Province and all ground and naval forces stationed in the Russian Far East. In addition Alekseev took on the responsibility for diplomatic affairs with China, Japan and Korea and the civil administration of the local population.

Russia's State Ministers Witte, Lamsdorff and Kuropatkin, who opposed the tsar and the Bezobrazov group's activities, convened a special meeting on August 14, 1903, to develop several new policy options for Manchuria and Korea. They concluded that the Russian government should not withdraw any of its troops from Manchuria, a position that ran counter to the April 1902 agreement with China to exit Manchuria. Second, the Russian government should not undertake any policy in Korea that risked creating a conflict with Japan. They did agree that Russia should respect any current agreements with Korea and do its part to ensure Korean independence. Finally, with regard to the Yalu River Timber Company, Russia should limit its support to providing commercial assistance and terminate all forms of military and political support. They felt it would be better to convert the operation into a private company that received support from the government.

By the summer of 1903, events in East Asia had laid bare the aggressive character of Japanese and Russian ambitions concerning Korea and Manchuria for all to see. Japan may have hesitated to go to war with Russia over just Manchuria, but Japanese statesmen considered the "commercial" operations in Korea an entirely different matter. They viewed the Yalu River Timber Company and similar timber enterprises as nothing more than a facade for Russian political and military ambition. The company's stockholders did not demand or expect immediate dividends. The timber cutters were, for the most part, Russian soldiers. The entire operation, largely financed by the Tsar's secret political funds, was never intended to return a profit, but to establish what Russia called "real interests." Russia had crossed the Yalu, not for promoting or protecting private investments, but in a blatant attempt to extend its Manchurian policy into Korea.