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principal lieutenants. The campaign was (so far as can be seen at the time of writing) finally brought to a close by Ch'i's flight to Japan towards the end of January, leaving the Mukden generals in military control of the situation from Nanking to Shanghai. The part played by Sun Ch'uan-fang in the affair and his present position and future prospects remain obscure. The Provisional Government at Peking professed to consider that he was not party to Ch'i's coup against Lu Yung-hsiang, and, while a mandate was issued ordering the arrest and punishment of Ch'i, no such steps were taken against Sun, who was on the contrary confirmed in his governorship of Chekiang. It seems probable that Sun moved in the first instance rather against his local rival Chang Yun-ming, than against the Peking Government, and that he was subsequently to some extent awaiting developments in Ch'i's campaign against Lu before definitely siding with the former against Peking.
5. The first month of the new year has therefore been marked outwardly, at any rate, by further successes for the Provisional Government, whose influence, or rather that of its Mukdeu and Anfu elements, has been extended to Nanking and Shanghai. In Peking itself the situation continues unchanged, and the capital remains under the military control of the other element responsible for the establishment of the Provisional Government, namely. Kuo Min Tang influences, as represented by the forces of General Feng Yu-hsiang, who also occupy the Peking-Kalgan-Suiyuan Railway in accordance with a mandate issued on the 4th January abolishing General Feng's post of inspector-general of the army and appointing him director-general of North-Western Frontier Defence. General Feng himself is at present at Kalgan or somewhere in the neighbourhood, arranging the disposition of his forces in that locality. The troops of General Feng's two Kuo Min Tang allies, Generals Sun Yueh and flu Ching-vi, occupy the Chihli and Honan sections of the Peking-Hankow Railway respectively, the latter in virtue of his appointment as Tupan of Honan, and the former for no other apparent reason than that his forces are stationed in that region. On the other hand, Marshal Chang Tso-lin's Manchurian armies now exercise undisputed control along the northern railways from Mukden to Tien-tsin and thence to Nanking and Shanghai. As for the Anfu party themselves, they occupy no railways and control no armies, but by the astute diplomacy of their leader, the Provisional Chief Executive, they exercise for the moment the principal influence in the Government of the country. Of the former provincial supporters of Wu Pei-fu and the Chihli party, Hsiao Yao-nan, Governor of Hupei, Cheng Shih-ch'i, Governor of Shantung. Sun Chuan-fang, Governor of Chekiang, and Chon Yin-jen. Governor of Fukien, all remain for the time being in power, and have been confirmed in their offices under the new title of Tupan (Director-General) of Military Affairs, doubtless with the object of securing their loyalty to the new régime. The same steps have been taken cis-à-cis the tulis and tuchuns of the more remote provinces which remained more or less neutral during the recent war, such as Shansi, Shensi. Kansu and Hsinkiang, the Governors of which have been reappointed as tupans.
6. The railways remain greatly disorganised owing to the continuance of military occupation and control, especially the Peking -Hankow line, on which Hu Ching-yi has massed his troops to overawe Hupei, to the very grave prejudice of commercial interests, including particularly the big mining concerns, such as the Peking Syndicate, who, in spite of the constant efforts made by this Legation to assist them, are threatened with the necessity of closing down their Honan mines owing to the lack of rolling-stock to move the coal they produce.
7. Dr. Sun Yat-sen's arrival in Peking has been reported on in separate despatches. As reported in my telegram No. 23 of the 27th January, he is now grievously ill from a malignant growth on the liver and not expected to survive. Dr. Sun's illness, combined with the success of the Manchurian armies on the Yang-tsze, seem to have deferred for the time being the danger of the overthrow of the Provisional Government by a Kao Min Tang coup and an open breach between the latter and Chang Tso-lin.
8. The Provisional Government, under Tuan Chi'i-jui, opened the new year by issuing on the 1st January a mandate proclaiming a general amnesty, on the lines of that announced by Yuan Shih-kai at the time of the revolution of 1911. for all prisoners. whether sentenced or under detention, with the exception of the case of Ts'ao K'un, whose trial had been ordered, and of those cases concerning the bribery of members of Parliament, which were being enquired into and would eventually be dealt with by the People's Conference, and of cases of brigandage, murder. rape, arson and breaking of dykes. At the same time, another mandate was issued
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abolishing the "Court of Marshals" (Chiang Chun Fu), and announcing that other means of recognising distinguished services would in due course be evolved.
9. The Reorganisation Conference (see paragraph 10 of my despatch above referred to) is due to open to-morrow, the 1st February. The Kuo Min Tang have announced their intention to abstain from all participation therein, and the prospects 652 of its leading to the formation of a truly representative national Government are therefore not bright.
10. The recurrence of fighting round Shanghai brought again to the fore several issues of great local importance to the foreign community of the commercial metropolis of the Far East, such as the defence of the settlements, the exclusion therefrom of Chinese military and political leaders and the removal of the arsenal. 11. The first of these questions, the defence of the settlements, arose through the fact that the opening hostilities between Ch'i Hsieh yuan's troops and those of Chang Yun-ming had taken place in close proximity to the boundaries of the French Concession, into which many thousands of defeated soldiery were permitted to retire for internment, there being at one time over 10.000 disarmed Chinese soldiers While the interned in the French concession and international settlement. subsequent hostilities on a larger scale were in progress between ('hi Hsieh-yuan and Lu Yung-hsiang along the Shanghai-Nanking Railway, considerable anxiety was naturally felt at the possibility of Ch'i's troops being driven back in disorder on to the boundaries of the settlements, the more so as a precedent had now been created for defeated soldiery taking refuge in bulk within the boundaries of the foreign- controlled areas. Feeling on the subject at one time became so high that the principal consuls, who had at first considered that the volunteer and naval forces available were fully capable of dealing with the situation, decided that the time had come to recommend to their Ministers the desirability of despatching foreign troops to Shanghai to occupy certain strategic points outside the settlement boundaries with the object of enforcing a warning which they were addressing to the belligerent leaders to keep all Chinese troops away from, and out of rifle shot of. the boundaries of the international settlement and French concession. I decided, and my American colleague held the same view, that the occupation with foreign troops of points outside the settlement boundaries to the extent suggested amounted in effect to forcible intervention, and was therefore a step which His Majesty's Government, and still more the American Government, would feel unable to entertain unless convinced from a naval and military point of view that such intervention was an imperative necessity for the protection of foreign life and property at the treaty port, and 1 therefore approached the problem as one of the defence of the actual boundaries of the foreign settlements and the preservation of their neutrality, for which purpose we should, it seemed to me, rely as far as possible on the naval forces available from the foreign men-of-war in the harbour, assisted by the foreign volunteer corps. Subsequently, however, the necessity of further considering recommending to His Majesty's Government the despatch of British troops from Hong Kong for this purpose was deferred by Ch'i's fight to Japan, followed by the peaceful occupation of the neighbourhood of Shanghai by the Manchurian forces. I understand that the General Officer Commanding at Tiong Kong was prepared to place 400 men at our disposal for the reinforcement of the foreign forces at Shanghai. But I was reluctant to move in the matter because I was unconvinced of the necessity and because I felt that it was improbable that the other Powers could be induced to take similar action, my American colleague having been given to understand by his naval and military advisers that there was no real need of reinforcements, and my Japanese and other colleagues showing no great interest in the matter and apparently con sidering that the naval and police and volunteer forces available were sufficient, as on former occasions, to protect the settlements. The Commander-in-chief had, of course, already furnished all the naval forces he could spare, and two British cruisers had proceeded to Shanghai at the commencement of the trouble, as well as the usuai complement of men-of-war of other countries, thus furnishing a total naval force of 1,200 strong to assist an equal number of well-organised volunteers and police. I should add that the Diplomatic Body had supported the consuls' warning against the presence of Chinese troops in the neighbourhood of the settlements by addressing similar representations to the Wai-chiao Pu, while the Chinese Government had themselves already taken nominal action in the matter in the manner described in paragraph 13 below.
12. The question of the exclusion of Chinese military and political leaders from the international settlement and French concession naturally arose through the fact a few months before, organised his that Ch'i Hsieh-yuan had, like "Little Hsü
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