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Commander Cheung Wa-fu, in uniform, accompanied by an Aide-de-camp and by a civilian deputy from the Canton Ministry for Foreign Affairs went on board H.M.S. "Dauntless" and stated that he had come to apologize for firing on the "Luneshan". Captain K.D.W.Macpherson, R.N., accepted the apology.

19. There remained the questions of punishing the offenders, and payment of compensation, neither of which had been settled to Mr. Brenan's satisfaction, but to neither of which Sir R. Tyrwhitt's telegram of the 21st May made any reference. The position of

affairs was reported to Sir R. Tyrwhitt by Rear-Admiral Boyle on the 22nd May, and the former replied that

nothing was to be done until Mr. Brenan had reported to

him. Next day, however, on the 23rd May at the time

fixed for expiration of the ultimatum, Mr. Brenan telegraphed that all his demands had been complied

with in full and that the incident was closed.

20. I have set out in detail the circumstances

of this affair, because there are several important

principles involved to which I have the honour to

invite your special attention. In the first place,

I think this episode affords a remarkable illustration of the excellent results which can always be obtained in China by firmness in support of a just cause. The Canton Authorities knew very well that they had a bad case. The attack on the s.s. "Tungshan was outrageous

and indefensible. The Canton Authorities also knew

very well that ample naval and military forces at

Hong Kong were available for retribution, if they mis-

behaved. During the past week a British brigade has reinforced the Hong Kong garrison. The First Cruiser

Squadron

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